18
NESTOR, INC.
One Richmond Square
Providence, Rhode Island 02906
(401) 331-9640
April 26, 2000
To Our Stockholders:
You are cordially invited to attend the annual meeting of
stockholders of Nestor, Inc. (the "Company") to be held at the
DAYS HOTEL, located at 220 INDIA STREET, PROVIDENCE, RI, on
Wednesday, May 24, 2000, at 1:00 p.m., local time. The
accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe the matters to be acted upon at the annual
meeting.
A proxy card is also enclosed. Whether or not you plan to
attend the annual meeting, it is important that your shares be
represented and voted at the annual meeting. Accordingly, after
reading the enclosed proxy statement, you are urged to complete,
date, sign and return the enclosed proxy in the envelope
provided, which requires no postage if mailed in the United
States. If you attend the annual meeting, you may then revoke
your proxy by voting in person.
We look forward to greeting personally as many of our
stockholders as possible at the annual meeting.
Sincerely yours,
/S/ David Fox
President and
Chief Executive Officer
Directions to Days Hotel:
Function Room: Bayview
South (from New North (from Boston) East (from Cape Cod)
York) 95 South 195 West
95 North 195 East (Cape Cod) Exit 3 (Gano Street)
195 East (Cape Cod) Exit 3 (Gano Street) Left off exit ramp
Exit 3 (Gano Street) Left off exit ramp Second right into
Left off exit ramp Second right into hotel parking lot
Second right into hotel parking lot
hotel parking lot
NESTOR, INC.
One Richmond Square
Providence, Rhode Island 02906
(401) 331-9640
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 24, 2000
To the Stockholders of Nestor, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of the
stockholders of Nestor, Inc., a Delaware corporation (the
"Company"), will be held at the DAYS HOTEL located at 220 India
Street, Providence, Rhode Island, on May 24, 2000, at 1:00 p.m.
local time, to act upon the following:
1. To consider and vote upon the election of nine
directors, each to hold office until the next annual meeting and
until their successors are elected and qualified;
2. To approve the selection of independent auditors
for the Company for the year ending December 31, 2000; and
3. To transact such other business as may properly
come before the meeting or any adjournments or postponements
thereof.
Only stockholders of record as of the close of business
on March 31, 2000, will be entitled to vote at the meeting.
By Order of the Board of Directors,
/S/ Herbert S. Meeker, Secretary
Providence, Rhode Island
April 26, 2000
IMPORTANT: THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES
OF COMMON STOCK AND SERIES B CONVERTIBLE PREFERRED STOCK, VOTING
AS A GROUP, MUST BE REPRESENTED AT THE ANNUAL MEETING IN PERSON
OR BY PROXY IN ORDER TO HAVE A QUORUM. THEREFORE, WE URGE YOU TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD AS
PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON. IF YOU ATTEND THE MEETING, YOU MAY THEN
REVOKE YOUR PROXY BY VOTING IN PERSON.
PROXY STATEMENT
NESTOR, INC.
One Richmond Square
Providence, Rhode Island 02906
(401) 331-9640
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 24, 2000
This proxy statement is being furnished to holders of
shares of (i) common stock, par value $.01 per share (the "Common
Stock") and (ii) the Series B Convertible Preferred Stock, par
value $1.00 per share (the "Convertible Preferred Stock"), of
Nestor, Inc., a Delaware corporation (the "Company"), in
connection with the solicitation of proxies by the Company's
Board of Directors for use at the annual meeting of stockholders
to be held May 24, 2000, at 1:00 p.m. local time at the DAYS
HOTEL located at 220 India Street, Providence, Rhode Island.
This proxy statement and the enclosed form of proxy are first
being mailed on or about April 26, 2000 to stockholders of the
Company entitled to vote.
PROXIES
The shares represented by each properly executed and
dated proxy that is not revoked as set forth below will be voted
at the annual meeting in accordance with the instructions given.
If no instructions are given on the proxy, the proxy will be
voted FOR each of the nominees for director listed herein FOR the
approval of the selection of independent auditors and, in the
discretion of the proxy holders, on such other business as may
properly come before the annual meeting or any adjournments or
postponements thereof, as further described herein.
REVOCABILITY OF PROXIES
A proxy executed in the form enclosed may be revoked at
any time prior to its exercise by notifying in writing the
Secretary of the Company of such revocation at the Company's
principal executive offices, by delivering a duly executed proxy
bearing a later date or by attending the annual meeting and
voting in person.
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited on behalf of
the Company's Board of Directors. In addition to mailing the
proxy materials, solicitation may be made in person or by
telephone or telegraph by directors, officers or regular
employees of the Company, none of whom will receive additional
compensation in connection with such solicitation. The expense
of the solicitation of proxies for the annual meeting will be
borne by the Company. The Company will request banks, brokers
and other nominees to forward proxy materials to beneficial
owners of the Common Stock and Convertible Preferred Stock held
by them and will reimburse such banks, brokers and other nominees
for their reasonable out-of-pocket expenses in doing so.
VOTING SECURITIES
The Common Stock and the Convertible Preferred Stock
are the only outstanding classes of securities of the Company
entitled to vote at the meeting. Holders of record of the Common
Stock and the Convertible Preferred Stock at the close of
business on March 31, 2000, (the "Record Date") will be entitled
to vote on the matters to be voted upon at the annual meeting.
At the close of business on the Record Date, the Common Stock and
Series B Convertible Preferred Stock are entitled to vote as a
group the equivalent of an aggregate of 17,924,034 shares of
Common Stock on the basis of one vote per share of Common Stock.
See "Security Ownership of Certain Beneficial Owners and
Management."
The presence, in person or by proxy, of the holders of
a majority of the outstanding shares of the Common Stock and
Convertible Preferred Stock voting as a group will constitute a
quorum for the transaction of business at the annual meeting.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 31, 2000,
the beneficial ownership of shares of the Common Stock and
Convertible Preferred Stock of (i) any person who is known by the
Company to own more than 5% of the voting securities of the
Company, (ii) the Chief Executive Officer and each of the
Company's other four most highly compensated executive officers
whose salary and bonus exceed $100,000 for the calendar year
ended December 31, 1999 (collectively, the "Names of Executive
Officers"), (iii) each director, and (iv) all directors and
Executive Officers of the Company as a group. Except as
otherwise herein indicated, the Company believes, based on
information furnished by such owners, that the beneficial owners
of shares of the Company's Common and Convertible Preferred Stock
described below have sole investment voting power with respect to
such shares, subject to any applicable community property laws:
Name and address Amount and nature of Percent
of beneficial owner beneficial ownership of class
Entities associated with
Wand Partners, Inc. 6,769,996(1) 33.4
Bruce W. Schnitzer
Chairman
630 Fifth Avenue
Suite 2435
New York, NY 10111
Transaction Systems
Architects, Inc. 5,000,000(2) 24.5
Thomas H. Boje,
Vice President
Corporate Development
224 South 108 Avenue
Omaha, Nebraska 68154
Charles Elbaum 884,594(3) 4.9
85 Lorraine Avenue
Providence, RI 02906
Leon Cooper 883,095(3) 4.9
49 Intervale Road
Providence, RI 02906
David Fox 746,347(4) 4.1
29 Orchard Avenue
Providence, RI 02906
Herbert S. Meeker 273,113(5) 1.5
233 Reeder Street
Easton, PA 18042
Douglas L. Reilly 253,761 (6) 1.4
9 Island View Road
Narragansett, RI 02882
Thomas F. Hill 137,500 (7) *
320 East 57th Street
New York, NY 10022
Jeffrey B. Harvey 134,733 (8) *
114 Woodbury Drive
Amherst, NY 14226
Sushmito Ghosh 100,369 (6) *
25 Brookway Road
Providence, RI 02906
Nigel P. Hebborn 74,500 (6) *
84 Coolidge Road
Greenville, RI 02828
Sam Albert 16,596 (9) *
27 Kingwood Road
Scarsdale, NY 10583
All executive officers 15,316,274 (10) 64.6
and directors as a group
(15 persons)
* Less than 1%.
________________
(1) Bruce W. Schnitzer is the Chairman and owns 66% of the
outstanding common stock of Wand (Nestor) Inc., a Delaware
corporation, which, as a general partner, controls
Wand/Nestor Investments L. P., Wand/Nestor Investments II
L. P. and Wand/Nestor Investments III L.P., Delaware
limited partnerships, which hold an aggregate of 4,446,860
shares of Common Stock, and Common Stock Purchase Warrants
to acquire 2,109,040 shares of Common Stock of the
Company at prices from $.65 to $2.00. Bruce W. Schnitzer
disclaims beneficial ownership of these securities except
to the extent of his "pecuniary interest," as such term is
defined in Rule 16a-1 of the Securities Exchange Act,
therein as owner of a 10.7103% limited partnership
interest in Wand/Nestor Investments L.P. and as the owner
of 66% of Wand (Nestor) Inc.'s 1% general partnership
interest in Wand/Nestor Investments L. P. Common Stock
totaling 305,869 shares is held by holders subject to the
Bank Holding Company Act of 1958, as amended, and have no
voting rights.
Bruce W. Schnitzer holds 6,596 vested stock options
directly, and is the Chairman and owns 66% of the
outstanding Common Stock of Wand Partners Inc., a
Delaware corporation, which, as general partner controls
Wand Partners L. P., a Delaware limited partnership, which
has been granted by the Company a Common Stock Fee
Purchase Warrant to acquire 207,500 shares of Common Stock
of the Company exercisable until April 1, 2004 at a price
of $2.00 per share. Bruce W. Schnitzer disclaims
beneficial ownership of this Warrant except to the extent
of his "pecuniary interest," as defined in Rule 16a-1,
therein, as the indirect owner of a 33% partnership
interest in Wand Partners L. P.
(2) Includes a Common Stock Purchase Warrant to acquire
2,500,000 shares of Common Stock of the Company,
exercisable until March 1, 2002, at a price of $3.00 per
share. Thomas H. Boje, Vice President, Corporate
Development of Transaction Systems Architects, Inc. is a
director of the Company since April 2000.
(3) Includes 4,575 shares of Common Stock that each may
acquire on a fully vested basis upon the exercise of
options granted under the Company's Incentive Stock Option
Plan.
(4) Includes 350,873 shares of Common Stock which Mr. Fox may
acquire on a fully vested basis upon the exercise of
options granted under the Company's Incentive Stock Option
Plan.
(5) Includes 50,000 shares of Common Stock which Mr. Meeker
may acquire on a fully vested basis upon the exercise of
options granted under the Company's Incentive Stock Option
Plan.
(6) Includes 183,750, 100,086 and 67,500 shares of Common
Stock which Messrs. Reilly, Ghosh and Hebborn,
respectively, may acquire on a fully vested basis upon the
exercise of options granted under the Company's Incentive
Stock Option Plan.
(7) Includes 7,500 vested stock options and a Common Stock Fee
Purchase Warrant to acquire 130,000 shares of the Common
Stock of the Company exercisable until August 1, 2004, at
a price of $2.00 per share issued to Thomas F. Hill, Inc.
of which Mr. Hill is President and sole owner.
(8) Includes 17,500 shares of Common Stock which Mr. Harvey
may acquire on a fully vested basis upon the exercise of
options granted under the Company's Incentive Stock Option
Plan.
(9) Includes 16,596 shares of Common Stock which Mr. Albert
may acquire on a fully vested basis upon exercise of
options granted under the Company's Incentive Stock Option
Plan.
(10) Includes 5,797,761 vested options and warrants owned or
controlled by officers and directors of the Company,
including 2,500,000 warrants owned by TSAI and 2,316,540
controlled by Wand partnerships.
ELECTION OF DIRECTORS
At the Annual Meeting, nine directors will be elected to
hold office until their successors have been duly elected and
qualified as provided in the Company's Certificate of
Incorporation and By-Laws. The following persons have consented
to be nominated and, if elected, to serve as directors of the
Company: Sam Albert, Thomas H. Boje, Leon N Cooper, Charles
Elbaum, David Fox, Jeffrey B. Harvey, Thomas F. Hill, Herbert S.
Meeker and Bruce W. Schnitzer. None of the nominees is related
by blood, marriage or adoption to any other director, executive
officer or nominee.
Directors and Executive Officers
The following table sets forth information, regarding
the directors, nominees and executive officers of the Company:
Director/ Capacities
Officer in which
Name Age Since Served
Sam Albert 66 1991 Director*
Thomas H. Boje 49 2000 Director*
Leon N Cooper 70 1983 Co-Chairman and
Director*
Charles Elbaum 73 1983 Co-Chairman and
Director*
David Fox 64 1983 President,
Chief Executive Officer
and Director*
Jeffrey B. Harvey 50 1993 Director*
Thomas F. Hill 54 1994 Director*
Herbert S. Meeker 75 1983 Secretary and Director*
Bruce W. Schnitzer 55 1994 Director*
Nigel P. Hebborn 41 1996 Exec. Vice President
and CFO
Sushmito Ghosh 41 1995 President
NestorCommerce Division
Douglas L. Reilly 48 1983 Senior Vice President
Strategic Analysis &
Technology
* Nominee
Sam Albert became a Director of the Company as of April
1991. Mr. Albert is currently President of Sam Albert
Associates, an independent management consulting firm
specializing in developing marketing strategies and facilitating
strategic relationships for the information technology industry.
Mr. Albert is a former IBM Corporation executive who retired
after thirty years in 1989, as IBM Director of Business and
Management Services Industries. These segments included the CPA,
legal and consulting professions and the software and services
industries. Mr. Albert also serves on the Boards of the
Outsourcing Institute, the Information Technology Services
Division of the Information Technology Association of America
(ITAA), the Computer Museum (Boston) as well as the Advisory
Board of Cross Access Corporation. He is also a member of the
Executive Committee of the New York Venture Group and a member of
the Independent Computer Consultants Association (ICCA). Mr.
Albert also writes Albert's Analysis for Midrange Systems and is
the creator, producer and on-air talent for CompuTips carried on
the CBS radio New York affiliate, 1010 WINS.
Thomas H. Boje became a Director of the Company as of
April 2000. Mr. Boje joined Applied Communications, Inc. (ACI)
in 1983 as Director of Software Development. From 1983 to 1991
he held various positions, including Director of Customer Support
and Vice President of Customer Services. From 1991 through 1993
he was an independent consultant in the electronic payment
market, working on various domestic and international projects.
Mr. Boje rejoined the company in 1994 as Vice President of
Business Development of Transaction Systems Architects, Inc.
(TSAI), the parent company of ACI. He was Managing Director of
Applied Communications Ltd., based in London, for the Europe,
Middle East and Africa (EMEA) region from 1996 through 1998. Mr.
Boje returned to the United States as Vice President of Corporate
Development. Mr. Boje earned a Bachelor's degree in Business
Administration from the University of Nebraska in Omaha,
Nebraska.
Leon N Cooper is the Thomas J. Watson Senior Professor
of Science at Brown University, his principal occupation. He
specializes in theoretical physics including low-temperature
physics, and has also done theoretical work in modeling neural
networks, which are networks of nerve cells. Dr. Cooper is the
Director of the Brown University Institute for Brain and Neural
Systems and Brain Science program which consist of a group of
scientists applying various disciplines to the study of the brain
as well as Professor in the Departments of Physics and
Neuroscience. He was awarded the Comstock Prize by the National
Academy of Science in 1968 and the Nobel Prize in Physics in 1972
for his contributions to the theory of superconductivity. He is
a Fellow of the American Physical Society and the American
Academy of Arts and Sciences, a member of the American
Philosophical Society and the National Academy of Sciences, and
is the author of many publications. He is chairman of Nemogen,
Inc. a company that specializes in products that affect the
process of memory storage and is also chairman of the Scientific
Advisory Board of Spectra Science, a company that commercializes
innovative laser products. Professor Cooper was a general
partner of Nestor Associates ("Nestor"), the predecessor of the
Company, from its inception until May 1983, and is currently a
part-time consultant to the Company.
Charles Elbaum is the Hazard Professor of Physics at
Brown University. He has been a Professor of Physics at Brown
University since 1963, specializing in experimental solid-state
physics, including the design of circuits and information-
processing systems, which represents his principal occupation.
He was also Chairman of the Physics Department at Brown. He is a
Fellow of the American Physical Society, a member of several
scientific and professional societies and is the author of many
publications. Professor Elbaum was a general partner of Nestor
Associates ("Nestor"), the predecessor of the Company from its
inception until May 1983, and is currently a part-time consultant
to the Company.
David Fox was President of Container Transport
International, a container leasing concern, from 1971 to 1982.
Mr. Fox was President of Cognitive Systems, Inc. ("CSI"), a
computer software company, from 1983 until 1986 and a director of
CSI from 1983 until 1987. A director of Nestor, Inc. since 1983,
Mr. Fox was appointed President and Chief Executive Officer of
the Company in July 1989. He has also served as President of the
Company's subsidiary, Nestor Traffic Systems, Inc. since its
inception in January 1997.
Jeffrey B. Harvey joined the Company's Board of
Directors in September 1993. Mr. Harvey has been in the
brokerage business since 1976 and is currently Division Vice
President of Paine Webber. He is a graduate of the Massachusetts
Institute of Technology where he received his Master of Science
Degree in Nuclear Engineering. Mr. Harvey is also a director of
Nova American Group an insurance underwriter in Buffalo, NY.
Nigel P. Hebborn, Executive Vice President and Chief
Financial Officer, joined the Company in October 1996. He is
responsible for the Company's financial and corporate development
activities, including working with the Company's management in
the development and roll-out of commercial applications. He was
most recently President of Wolffish Consulting Services, Inc., a
consulting and background reporting firm. Prior to forming
Wolffish Consulting Services, Inc., Mr. Hebborn served as Vice
President Finance of Nova American Group, Inc., in Buffalo, New
York and as President of various subsidiaries of this insurance
and banking holding company. Earlier in his career, Mr. Hebborn,
a CPA, was associated with Price Waterhouse.
Thomas F. Hill joined the Company's Board of Directors
in August 1994. He is President of Thomas F. Hill, Inc., a
consulting firm with broad experience in marketing, sales and
business planning. Thomas F. Hill, Inc. is an operating
affiliate of Wand Partners. Mr. Hill's clients during his
twenty-five year career have included Marsh & McLennan, Bristol
Meyers, Royal Dutch Shell, CBS, Nestle, Procter & Gamble, Toyota
and Unilever. Mr. Hill serves as a director of Diagraph
Corporation, a manufacturer of automated product identification
systems; Information Management Associates, a customer
interaction software provider; and Yankelovich Partners, a
marketing and social research company.
Herbert S. Meeker is an attorney and partner in the law
firm of Baer Marks & Upham, which is general counsel to the
Company. Mr. Meeker was a general partner of Nestor from its
inception until May 1983, and is a director and Secretary of the
Company.
Bruce W. Schnitzer joined the Company's Board of
Directors in August 1994 and has been Chairman of the Executive
Committee of the Board of the Company since December 1996. Mr.
Schnitzer is Chairman of Wand Partners, a private equity
investment firm, specializing in businesses engaged in e-
commerce. Mr. Schnitzer's experience prior to establishing Wand
in 1987 includes having served as President and CEO of Marsh &
McLennan, Inc. and head of the Merger and Acquisition Advisory
Department of J. P. Morgan. Mr. Schnitzer presently serves as
director of the following U. S. companies with publicly quoted
securities: Penn Corp. Financial Group (a life insurance holding
company); and AMRESCO Inc. (real estate investment manager).
Sushmito Ghosh, President, NestorCommerce Division,
joined the Company in 1986 and was named an officer in 1995. He
is responsible for the strategic positioning, business
development and delivery of Nestor's products in the e-commerce
and financial services market segments. Mr. Ghosh has an in-
depth knowledge of Nestor's technology and its value proposition
to customers and strategic partners. He holds a Masters Degree
in Engineering from the University of Rhode Island and has co-
authored a number of papers and technical publications.
Douglas L. Reilly is Senior Vice President Strategic
Analysis & Technology. From 1989 to 1994, he served as Vice
President for Product Development and Financial Applications for
the Company and served as its Vice President for Research and
Development from 1983 until 1989. He is currently responsible
for marketing, sales and research activities for Nestor Traffic
Systems, Inc. Dr. Reilly received his Doctoral Degree in Physics
from Brown University in 1980, working with Leon Cooper and
Charles Elbaum to design neural network systems for pattern
recognition. Dr. Reilly continued this work as a Research
Associate until 1982 and as Assistant Professor for Research at
Brown from 1982 to 1983, and co-authored a patent with Dr. Cooper
and Dr. Elbaum on the RCE neural network paradigm. Dr. Reilly
became the Company's first full time employee in 1983, with
responsibility for the hiring, development and day-to-day
management of the Company's technical organization. He
developed the first prototype systems of the Company's technology
in character recognition, and led all research and development of
the Company from 1983 until 1989, producing prototypes and
products for character recognition, machine vision, and
applications of the technology to decision making and risk
assessment in financial services. He is a co-author on four of
the Company's patents and has written numerous articles in the
field of neural network design and application.
Committees and Meetings of the Board of Directors
The Company's Board of Directors held six meetings
during the year ended December 31, 1999. The incumbent directors
attended all of these meetings. In 1999, the Directors did not
receive fees for attending meetings of the Board. The Company
does not have a Nominating Committee.
The Company has an Audit and Finance Committee. This
committee generally selects and reviews recommendations made by
the Company's independent public accountants. The Audit and
Finance Committee, consisting of Herbert Meeker and Sam Albert
met once during the year ended December 31, 1999. The Company
also has a Management Compensation Committee consisting of
Jeffrey B. Harvey, Sam Albert and Herbert S. Meeker. The
Committee meets periodically to review and consider compensation
matters relating to employees of the Company.
Compensation of Executive Officers
The following table sets forth information for the calendar
years ended December 31, 1999, 1998, and 1997compensation paid by
the Company to the chief executive officer and to each of the
officers of the Company whose total annual salary and bonus
exceed $100,000.
<TABLE>
<CAPTION>
Other Restricted All
Name and Calendar Salary Bonus Annual Stock Options/ Other
Principal Position Year ($) ($) Compensation (1) Awards SARs Payouts Comp ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
David Fox 1999 165,000 0 1,615 0 0 0 0
President and CEO 1998 156,875 0 340 0 0 0 24,551 (2)
1997 150,000 0 1,193 0 40,000 0 0
Sushmito Ghosh 1999 175,067 0 153 0 0 0 0
President 1998 118,205 36,000 265 0 30,000 0 0
NestorCommerce Div. 1997 105,000 67,876 73 0 60,000 0 0
Nigel P. Hebborn 1999 110,000 0 122 0 0 0 0
Executive VP 1998 101,875 0 239 0 0 0 0
and CFO 1997 95,000 0 112 0 30,000 0
Douglas Reilly 1999 115,000 0 226 0 0 0 0
Senior VP 1998 106,875 0 252 0 20,000 0 0
1997 100,000 0 102 0 30,000 0 0
(1) Payment of group term life insurance premiums.
(2) Reimbursement of relocation expenses
</TABLE>
Options and Warrants
The shareholders of the Company approved on May 6,
1997, the 1997 Stock Option Plan ("1997 Plan") of the Company
authorizing the granting to employees, officers, directors, and
others options to acquire up to a maximum of 1,000,000 shares of
Common Stock of the Company. The shares issued by the Company
upon the exercise of the options granted under the 1997 Plan were
registered on June 6, 1997 on Form S-8 (Registration No. 333-
27271) under the Securities Act of 1933 as amended. During the
year ended December 31, 1999, 62,500 options were granted under
the 1997 Plan and 9,308 options were cancelled or expired. No
options were exercised and there was an aggregate of 609,275
options outstanding on December 31, 1999 of which 363,315 were
vested as of that date. There were, in addition, 1,054,999
options of which 979,750 were vested and outstanding as at
December 31, 1999 granted to employees under an option plan
previously adopted by the Company. No options were exercised
under this plan and 4,000 options were canceled or expired in
1999. The shares issued under such previously adopted plan were
registered on Form S-8 under the Securities Act of 1933 as
amended pursuant to Registration No. 01-12965. No new options
have been issued under such plan since the adoption of the 1997
Plan.
PROPOSAL TO APPROVE THE SELECTION
OF INDEPENDENT AUDITORS
The accounting firm of Ernst & Young LLP is recommended
for election to serve as the Company's independent auditors for
the year ending December 31, 2000.
Representatives of Ernst & Young LLP are expected to be
present at the annual meeting.
ANNUAL REPORT
THE ANNUAL REPORT TO STOCKHOLDERS CONCERNING THE
OPERATIONS OF THE COMPANY FOR THE YEAR ENDED DECEMBER 31, 1999,
INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY STATEMENT.
STOCKHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Stockholder proposals for consideration at the 2000
annual meeting, expected to be held in May 2001, must be received
by the Company no later than December 31, 2000 and must comply
with the Rules and Regulations of the Securities and Exchange
Commission in order to be included in the proxy statement for the
2000 annual meeting.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF
1933
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers,
directors and greater than ten-percent shareholders are required
by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on review of the copies of such forms
furnished to the Company, or written representations that no
Forms 5 were required, the Company believes that during the
period from January 1, 1999 through December 31, 1999, all
Section 16(a) filing requirements applicable to its officers,
directors and greater than ten-percent beneficial owners were
complied with.
OTHER MATTERS
The Board of Directors is not aware of any other
matters to be presented at the annual meeting. However, if any
other matter should properly come before the annual meeting, the
persons entitled to vote on that matter will be given the
opportunity to do so.
The above notice and proxy statement are sent by order
of the Board of Directors.
/S/ Herbert S. Meeker
Secretary
Providence, Rhode Island
April 26, 2000
PROXY CARD
NESTOR, INC.
PROXY: This proxy is solicited on behalf of the Board of
Directors
The undersigned hereby appoints David Fox and Charles Elbaum, and
each of them (with the full power of substitution), proxies for
the undersigned to represent and to vote, as designated on this
proxy card, all shares of common stock, par value $.01 per share,
and all shares of Series B Convertible Preferred Stock, par value
$1.00 per share, of Nestor, Inc. (the "Company") which the
undersigned would be entitled to vote if personally present at
the annual meeting of the Company's stockholders to be held on
May 24, 2000, and at any and all adjournment or postponement
thereof.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1.ELECTION OF DIRECTORS TO SERVE FOR A TERM EXPIRING AT THE NEXT
ANNUAL MEETING OF STOCKHOLDERS
INSTRUCTIONS: To withhold authority to vote for any
individual nominee, write that nominee's name in the space
provided below.
_______________________________________________________
NOMINEES: Sam Albert, Thomas H. Boje, Leon N Cooper, Charles
Elbaum, David Fox, Jeffrey B. Harvey, Thomas F. Hill, Herbert
S. Meeker, Bruce W. Schnitzer
FOR all nominees listed except as noted to the contrary:
________________________________________
WITHHOLD AUTHORITY to vote for all nominees listed:
______________________________________
2.PROPOSAL TO APPROVE THE SELECTION OF ACCOUNTANTS
____FOR ____AGAINST ____ABSTAIN
3 In their discretion, the proxies are authorized to vote upon
such other business as may properly come before the annual
meeting.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
The undersigned hereby acknowledges receipt of a copy of the
notice of the meeting of stockholders and of the related proxy
statement
PLEASE DATE, SIGN AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.
SIGNATURE:__________________________________________________
PRINT NAME/TITLE:___________________________________________
DATE:_______________________________________________________
IMPORTANT: Please date and sign as your name appears above and
return in the enclosed envelope. When signing as executor,
administrator, trustee, guardian, etc., please give full title as
such. If the stockholder is a corporation, the proxy should be
signed in full corporate name by a duly authorized officer whose
title is stated.
