<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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
ENVIRONMENTAL POWER CORPORATION
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________
[X] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________
(3) Filing Party:
________________________________________________________________________
(4) Date Filed:
________________________________________________________________________
<PAGE>
ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Our Stockholders:
The Annual Meeting of Stockholders of Environmental Power Corporation,
a Delaware corporation (the "Company" or "EPC"), will be held on Monday, June 3,
1996 at 11:00 a.m. local time, at One Harbour Place, Suite 400, Portsmouth, New
Hampshire, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year and until
their respective successors have been duly elected and qualified. The
nominees the Board proposes to present for election are Joseph E.
Cresci, Donald A. Livingston, Peter J. Blampied, Edward B. Koehler and
Robert I. Weisberg.
2. To consider and act upon a proposal to ratify the selection of the
firm of Deloitte & Touche LLP as auditors for the Company for the
fiscal year ending December 31, 1996.
3. To consider and act upon a proposal to ratify and approve the grant of
non-qualified stock options to Peter J. Blampied, Edward B. Koehler
and Robert I. Weisberg.
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record on the books of the Company at the close
of business on April 12, 1996 will be entitled to notice of and to vote at the
meeting.
Please sign, date and return the enclosed proxy in the enclosed
envelope at your earliest convenience. If you return your proxy, you may
nevertheless attend the meeting and vote your shares in person.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
/s/ William D. Linehan
Portsmouth, New Hampshire WILLIAM D. LINEHAN
April 15, 1996 Secretary
________________________________________________________________________________
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND MAIL THE ENCLOSED PROXY IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IN THE UNITED STATES.
________________________________________________________________________________
<PAGE>
ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
- --------------------------------------------------------------------------------
PROXY STATEMENT
April 15, 1996
Proxies in the form enclosed with this proxy statement are solicited
by the Board of Directors of Environmental Power Corporation, a Delaware
corporation (the "Company" or "EPC"), for use at the Annual Meeting of
Stockholders to be held on Monday, June 3, 1996 at 11:00 a.m. local time, at One
Harbour Place, Suite 400, Portsmouth, New Hampshire, and any adjournments
thereof (the "Meeting").
Any stockholder may revoke a proxy at any time prior to its exercise
by filing a later-date proxy or a written notice of revocation with the
Secretary of the Company, or by voting in person at the Meeting. If a
stockholder is not attending the Meeting, any proxy or notice should be returned
in time for receipt no later than the close of business on the day preceding the
Meeting. The persons named as attorneys in the proxies are officers of the
Company.
Only stockholders of record as of the close of business on the record
date of April 12, 1996 will be entitled to notice of and to vote at the Meeting
and any adjournments thereof.
As of April 12, 1996 there were 11,026,783 shares of Common Stock of
the Company outstanding and entitled to vote. The shares of Common Stock are the
only outstanding voting securities of the Company. Stockholders are entitled to
cast one vote for each share held of record. The presence of a majority of the
outstanding shares of Common Stock represented in person or by proxy at the
meeting will constitute a quorum. All matters to be voted on will be decided by
the vote of a majority of those shares present or represented at the meeting and
entitled to vote.
All properly executed proxies returned in time to be cast at the
Meeting will be voted and, with respect to the election of the Board of
Directors, will be voted as stated under "Election of Directors" below. Where a
choice has been specified on the proxy with respect to a proposal, the shares
represented by the proxy will be voted in accordance with the specification and
will be voted FOR if no specification is indicated.
The Board of Directors of the Company know of no other matters to be
presented at the Meeting. If any other matter should be presented at the
Meeting upon which a vote properly may be taken, shares represented by all
proxies received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named in the proxies.
This proxy statement and the form of proxy were first mailed to
stockholders on or about the date hereof.
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of April 15, 1996 the name of each
person who, to the knowledge of the Company, owned beneficially more than 5% of
the shares of Common Stock of the Company outstanding at such date, the number
of shares owned by each of such persons and the percentage of the class
represented thereby.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
---------------- ----------------------- --------
<S> <C> <C>
Joseph E. Cresci 4,747,348 (2)(3) 43.05%
c/o Environmental Power Corporation
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
Donald A. Livingston 2,524,639 (3) 22.90%
c/o Environmental Power Corporation
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
</TABLE>
(1) Information with respect to beneficial ownership is based upon information
furnished by such stockholders. Except as indicated in notes 2 and 3, all
shares are held beneficially and of record.
(2) Includes 59,730 shares held in trust for the benefit of Mr. Cresci and his
children, as to which Mr. Cresci has shared voting and investment power;
but does not include 20,000 shares owned by Mr. Cresci's wife, 18,000
shares owned by Mr. Cresci's mother, 100,000 shares owned by Mr. Cresci's
children, 244,896 shares held in trust for the benefit of Mr. Cresci's
children and 30,000 shares held in trust for the benefit of Mr. Cresci's
nieces and nephews, as to which shares Mr. Cresci has neither voting nor
investment power and as to which shares he disclaims beneficial ownership.
(3) Includes 297,178 restricted shares which Mr. Cresci and Mr. Livingston each
own subject to their continued employment by the Company until December 24,
1996 and January 7, 1997, respectively.
2
<PAGE>
ELECTION OF DIRECTORS
The directors of the Company are elected annually and hold office for
the ensuing year and until their successors have been elected and qualified.
Joseph E. Cresci, Donald A. Livingston, Peter J. Blampied, Edward B. Koehler and
Robert I. Weisberg have been nominated by management for election at the
Meeting. All nominees are presently directors of the Company and were elected at
the Annual Meeting of Stockholders held on June 29, 1995. The Company's by-laws
presently state that the number of directors constituting the entire Board of
Directors shall be determined by resolution of the Board of Directors. The
number of directors currently fixed by the Board of Directors is five. This
number may be changed by resolution of the Board of Directors.
No proxy may be voted for more people than the number of nominees
listed below. Shares represented by all proxies received by the Board of
Directors and not so marked as to withhold authority to vote for any individual
director (by writing that individual director's name where indicated on the
proxy) or for all directors will be voted (unless one or more nominees are
unable or unwilling to serve) FOR the election of all the nominees named below.
The Board of Directors knows of no reason why any such nominee would be unable
or unwilling to serve, but if such should be the case, proxies may be voted for
the election of some other person.
The Board of Directors of the Company held four meetings during the
fiscal year ended December 31, 1995. The Compensation Committee, which consists
of Messrs. Blampied, Koehler and Weisberg, determines the compensation of the
Company's Chief Executive Officer and Chief Operating Officer and met once in
1995. The Audit Committee, which consists of Messrs. Blampied, Koehler and
Weisberg, oversees the accounting and financial functions of the Company,
including matters relating to the appointment and activities of the Company's
independent auditors, and met once in 1995. The Executive Committee, which
consists of Messrs. Cresci and Livingston, can act in place of the full Board of
Directors to the extent permitted by law and did not meet in 1995. The Stock
Option Committee, which consists of Messrs. Blampied, Koehler and Weisberg,
administers the 1990 Stock Plan and did not meet in 1995.
The table on the following page sets forth the positions presently
held by each nominee with the Company, the number and percentage of outstanding
shares of Common Stock beneficially owned by each nominee, and by all directors
and officers as a group, as of April 15, 1996.
3
<PAGE>
<TABLE>
<CAPTION>
NOMINEE'S NAME POSITIONS AND AMOUNT & NATURE
AND DATE FIRST OFFICES WITH OF BENEFICIAL PERCENTAGE OF
BECAME A DIRECTOR THE COMPANY OWNERSHIP (1) CLASS
- ----------------- ----------- ------- -----
<S> <C> <C> <C>
Joseph E. Cresci (1982) Chairman, Chief Executive Officer 4,747,348 (2)(3) 43. 05%
and Director
Donald A. Livingston (1982) President, Chief Operating Officer 2,524,639 (3) 22. 90%
and Director
Peter J. Blampied (1988) Director 80,300 (4) . 72%
Edward B. Koehler (1992) Director 30,000 (5) . 27%
Robert I. Weisberg (1994) Director 60,000 (6) . 54%
All directors and officers as a group (6 persons) 7,442,287 (7) 66. 47%
- ------------------------------------------------
</TABLE>
(1) Except as otherwise indicated, the named person has sole voting and
investment power with respect to the shares. Except as indicated in notes
2, 3, 4, 5, 6 and 7, all shares are held beneficially and of record.
(2) Includes 59,730 shares held in trust for the benefit of Mr. Cresci and his
children, as to which Mr. Cresci has shared voting and investment power,
but does not include 20,000 shares owned by Mr. Cresci's wife, 18,000
shares owned by Mr. Cresci's mother, 100,000 shares owned by Mr. Cresci's
children, 244,896 shares held in trust for the benefit of Mr. Cresci's
children and 30,000 shares held in trust for the benefit of Mr. Cresci's
nieces and nephews as to which shares he disclaims beneficial ownership.
(3) Includes 297,178 restricted shares which Mr. Cresci and Mr. Livingston each
own subject to their continued employment by the Company until December 24,
1996 and January 7, 1997, respectively.
(4) Includes 80,000 shares which Mr. Blampied has the right to acquire pursuant
to stock options of which 70,000 are currently exercisable and 10,000 are
subject to approval by stockholders at the Meeting.
(5) Consists of 30,000 shares which Mr. Koehler has the right to acquire
pursuant to stock options of which 20,000 are currently exercisable and
10,000 are subject to approval by stockholders at the Meeting.
(6) Consists of 60,000 shares which Mr. Weisberg has the right to acquire
pursuant to stock options of which 40,000 are currently exercisable and
20,000 are subject to approval by stockholders at the Meeting.
(7) Includes 170,000 shares which the directors as a group have the right to
acquire pursuant to stock options of which 130,000 are currently
exercisable and 40,000 are subject to approval by stockholders at the
Meeting. No Named Executive (as hereinafter defined) or other officer,
other than Messrs. Cresci and Livingston, beneficially owns Common Stock as
of April 15, 1996.
4
<PAGE>
OCCUPATIONS OF DIRECTORS
The following table sets forth the age, the principal occupation of
each of the nominees for director during the past five years and any other
directorships held by such person in any company subject to the reporting
requirements of the Securities Exchange Act of 1934 or in any company registered
as an investment company under the Investment Company Act of 1940:
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTORSHIPS
- ---- --- -------------------- -------------
<S> <C> <C> <C>
Joseph E. Cresci 53 Chairman and Chief Executive Officer
of the Company (1982 to present) __
Donald A. Livingston 53 President and Chief Operating Officer
of the Company (1991 to present);
Executive Vice President (1982-1991) __
Peter J. Blampied 53 Director, Citizens Bank of Massachusetts
(1996 to present); Director, Citizens
Financial Group, Inc. (1994 to present);
Vice Chairman, Citizens Bank of
Massachusetts (1993 - 1994); Chairman,
President and Chief Executive Officer,
Boston Five Bancorp (1989 - 1993) __
Edward B. Koehler, Esq. 42 Partner, Hunton & Williams, New York
(1990 to present; Associate, 1982 - 1990) __
Robert I. Weisberg 49 President and Chief Executive Officer
Freemont Medical Financial Services
(1996 to present); President and
Chief Executive Officer Pro-Care
Financial Group, Inc. (1994 - 1995);
President, Tower Financial Corporation
(1993-1994); President, Fleet Credit
Corporation and Executive Vice
President, Fleet Bank (1985-1993) __
</TABLE>
5
<PAGE>
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table. The following table sets forth certain information
with respect to the annual and long-term compensation of the Company's Chief
Executive Officer and each other executive officer earning in excess of $100,000
in salary and bonus in 1995 (the "Named Executives") for the three fiscal years
ended December 31, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION> LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------- ---------------------------------
NAME AND RESTRICTED
PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS (1) OPTIONS(2)
- ------------------ ---- ----- ---- ---------------- ----------
<S> <C> <C> <C> <C> <C>
Joseph E. Cresci 1995 $250,000 $100,000 -- --
Chairman of the Board and 1994 250,000 -- -- --
Chief Executive Officer 1993 250,000 350,000 $185,736 275,000
Donald A. Livingston 1995 250,000 100,000 -- --
President and 1994 250,000 -- -- --
Chief Operating Officer 1993 250,000 350,000 185,736 275,000
Bayard R. Kraft III (3) 1995 110,000 -- -- --
Secretary, Treasurer and 1994 110,000 -- -- --
Chief Financial Officer 1993 92,345 25,000 -- --
</TABLE>
(1) Represents the dollar value of 297,178 restricted shares granted to the
named officer for 1993, calculated by multiplying the closing market price
of the Company's Common Stock on the date of grant by the number of shares
awarded. As of year-end 1995, the market value of the restricted stock held
by Messrs. Cresci and Livingston was $92,868 each, based on the year-end
market price for Common Stock of $.3125 per share.
(2) Represents total number of shares subject to options granted in 1993 for
the named officer, at a per share exercise price of $.625, which was the
closing market price of the Common Stock on the date of the grant.
(3) On March 29, 1996, Mr. Kraft resigned his position with the Company. See
"Other Transactions".
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS (CONTINUED)
Stock Options. There were no options granted during 1995 to the Named
Executives. At December 31, 1995 there were no unexercised options held by the
Named Executives. The following table sets forth information concerning all
stock options that were exercised by the Named Executives in 1995.
<TABLE>
<CAPTION>
SHARES ACQUIRED
NAME ON EXERCISE VALUE REALIZED (1)
---- ----------- ------------------
<S> <C> <C>
Joseph E. Cresci 275,000 ($ 120,313)
Donald A. Livingston 1,038,244 ( 7,719) (2)
</TABLE>
(1) Calculated by subtracting the exercise price of the options from the market
value of the shares received as of the date of exercise. Market value used
was the last sale price on the date of exercise.
(2) Consists of a value of $95,406 and a value of ($103,125), both of which
were realized on December 15, 1995. See "Other Transactions".
COMPENSATION OF DIRECTORS
Each director of the Company who is not an officer or employee of the
Company receives $2,000 (plus expenses) for each scheduled meeting of the Board
of Directors or non-coincident meeting of a board committee which he attends.
During 1995, Messrs. Blampied and Koehler received option grants to
purchase 10,000 shares each under the Company's Director Option Plan which are
exercisable at per share prices of $.4375 and $.25, respectively, based on the
market prices of the Common Stock on their respective anniversary dates of
becoming directors. During 1995, Mr. Weisberg received an option grant outside
the Company's Director Option Plan to purchase 10,000 shares at $.25 per share,
the market price on the date of the grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is now an officer or an
employee of the Company or any of its subsidiaries or has been at any time an
officer or employee of the Company or any of its subsidiaries.
Edward B. Koehler, a member of the Compensation Committee, is a
partner with Hunton & Williams, New York, a law firm which provided services to
the Company in 1994 and 1995.
7
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") of the Board of Directors
determines the Company's executive compensation policy and sets compensation for
the Chief Executive Officer (the "CEO") and Chief Operating Officer (the "COO").
The Compensation Committee is comprised of Messrs. Blampied, Koehler and
Weisberg.
The Committee's policy is to offer the CEO and COO competitive
compensation packages that will permit the Company to attract and retain
individuals with superior abilities and to motivate and reward such individuals
on the basis of the Company's performance in an appropriate fashion in the long-
term interests of the Company and its stockholders. Currently, executive
compensation is comprised of salary, annual cash bonuses and long-term incentive
opportunities in the form of stock options under the Company's 1990 Stock Plan
and Restricted Stock.
The Committee takes into account various qualitative and quantitative
indicators of corporate and individual performance in determining the level and
composition of compensation for the CEO and COO. The Committee does not utilize
any specific quantitative formula or targets in making compensation decisions.
While the Committee considers corporate performance measures such as
net income, earnings per share, return on assets and return on equity, the
Committee also appreciates the importance of achievements that may be difficult
to quantify, and accordingly recognizes qualitative factors, such as successful
supervision of major projects and demonstrated leadership ability. For 1995, an
important qualitative factor in determining annual cash bonuses to the CEO and
COO was the Committee's assessment of their contribution in fulfilling a primary
corporate goal of selling a major asset on favorable terms.
Base salaries for the CEO and COO are established at levels considered
appropriate in light of the duties and scope of responsibilities of each
officer's position. Salaries are generally reviewed periodically and adjusted
as warranted to reflect individual officer performance. The Committee focuses
primarily on total annual compensation, including incentive awards, rather than
base salary alone, as the appropriate measure of executive officer performance
and contribution.
In December 1995, the Compensation Committee, upon the recommendation
of the CEO and COO, reduced their annual base salaries, effective January 1,
1996, for the CEO from $250,000 to $120,000, and for the COO from $250,000 to
$200,000. Such reductions are based upon such officers' anticipated reduced
workloads and constitute part of the Company's effort to reduce costs and
overhead for 1996.
Compensation decisions regarding executive officers other than the CEO
and COO are made by the CEO and COO.
The 1990 Stock Plan authorizes the Committee to make grants of stock
options to executive officers of the Company. No such grants were made in 1995.
8
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE (CONTINUED)
In 1993, Congress enacted Section 162(m) of the Internal Revenue Code,
which prevents publicly held corporations from deducting compensation in excess
of $1 million paid to CEO's and the four highest compensated officers unless the
compensation is performance-based. The Company's compensation program currently
is not of a level such that this limit would apply.
COMPENSATION COMMITTEE
Peter J. Blampied Edward B. Koehler Robert I. Weisberg
STOCK PERFORMANCE GRAPH
The following graph compares the Company's cumulative stockholder
return on its Common Stock with the return on the NASDAQ Market Index and with
the SIC Code 4911 (Electric Services) Index for the five year period ended
December 31, 1995.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ENVIRONMENTAL POWER CORP.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -------------------------------------------FISCAL YEAR ENDING ------------------
COMPANY 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
ENVIRONMENTAL POWER CORP 100 299.68 1597.44 1597.44 1597.44 1211.40
INDUSTRY INDEX 100 129.38 139.04 157.36 138.99 183.80
BROAD MARKET 100 128.38 129.64 155.50 163.26 211.77
</TABLE>
9
<PAGE>
OTHER TRANSACTIONS
In December 1985, the Company loaned $55,000 to Mr. Livingston. This
loan bears interest at a bank's floating prime rate plus 1/2% and was due and
payable on December 31, 1995. In 1995 the Company extended the due date of the
loan to December 31, 1996. As of March 31, 1996, total principal and accrued and
unpaid interest on this loan was approximately $105,000.
In December 1995, Mr. Livingston exercised his options to purchase
275,000 shares of Common Stock at $.625 per share and 763,244 shares at $.125
per share. As payment for the aggregate exercise price Mr. Livingston issued a
$267,281 promissory note to the Company which is payable upon demand by the
Company. Interest is payable monthly at the Applicable Federal Rate.
In December 1995, Mr. Cresci exercised his option to purchase 275,000
shares of Common Stock at $.625 per share. As payment for the exercise price
Mr. Cresci issued a $171,875 promissory note to the Company which is payable
upon demand by the Company. Interest is payable monthly at the Applicable
Federal Rate.
In March 1996, in connection with his resignation, the Company
purchased 520,540 shares of Common Stock from Mr. Kraft for $287,876,
representing all of Mr. Kraft's holdings in the Company. The Company's note
receivable from Mr. Kraft in the amount of $72,876 was deducted from the
purchase price. The $215,000 balance of the purchase price was paid by delivery
of $160,000 in cash and the Company's $55,000 installment note maturing in
September 1996.
Edward B. Koehler is a partner with Hunton & Williams, New York, a law
firm which provided services to the Company in 1994 and 1995.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
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
initial statements of beneficial ownership (Form 3), and statements of changes
in beneficial ownership (Forms 4 or 5), of Common Stock and other equity
securities of the Company with the Securities and Exchange Commission (the
"SEC"). Officers, directors and greater than ten percent stockholders are
required by SEC regulation to furnish the Company with copies of all such forms
they file.
To the Company's knowledge, based solely on its review of the copies
of such forms received by it, or written representations from certain reporting
persons that no additional forms were required for those persons, the Company
believes that during 1995 all filing requirements applicable to its officers,
directors and greater than ten-percent beneficial owners were complied with,
except that Mr. Weisberg filed a late Form 4 for the month of June.
10
<PAGE>
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of Deloitte & Touche LLP,
independent certified public accountants, to serve as auditors for the fiscal
year ending December 31, 1996. The Board of Directors recommends a vote FOR the
ratification of this selection.
It is expected that a member of the firm of Deloitte & Touche LLP, the
independent certified public accountants who reported on the Company's financial
statements included in the 1995 Annual Report, will be available either by
telephone or present at the Meeting with the opportunity to make a statement if
so desired and will be available to respond to appropriate questions.
PROPOSAL TO APPROVE THE GRANT OF NON-QUALIFIED STOCK OPTIONS TO
PETER J. BLAMPIED, EDWARD B. KOEHLER AND ROBERT I. WEISBERG
The Board of Directors of the Company, on June 23, 1995 granted,
subject to the approval of the stockholders, a non-qualified stock option to
Robert I. Weisberg to purchase 10,000 shares of Common Stock at $.25 per share,
the option to expire 10 years from the date of grant. The closing price for a
share of the Common Stock on the NASDAQ on June 23, 1995 was $.25.
The Board of Directors of the Company, on March 4, 1996 granted,
effective as of April 15, 1996 and subject to the approval of the stockholders,
non-qualified stock options to Peter J. Blampied, Edward B. Koehler and Robert
I. Weisberg to each purchase 10,000 shares of Common Stock, at an exercise price
equal to the April 15, 1996 closing price for a share of the Common Stock on the
NASDAQ, such options to expire 10 years from the effective date. Such options
are in addition to options to purchase 10,000 shares of Common Stock each of
such persons has or will receive in 1996 pursuant to the 1993 Director Option
Plan. The closing price for a share of the Common Stock on April 8, 1996 was
$.6875.
Federal Income Tax Consequences. - Options granted under the Director
Plan and outside the Director Plan will be non-qualified stock options. No
taxable income is recognized by the optionee upon the grant of a non-statutory
stock option. Generally, the optionee must recognize as ordinary income in the
year in which the option is exercised the amount by which the fair market value
of the purchased shares on the date of exercise exceeds the option price. The
Company will be entitled to a business expense deduction equal to the amount of
ordinary income recognized by the optionee. Any additional gain or any loss
recognized upon the subsequent disposition of the purchased shares will be a
capital gain or loss, and will be a long-term gain or loss if the shares are
held for more than one year.
The Board of Directors recommends a vote FOR the proposal to ratify
and approve the grant of non-qualified stock options to Peter J. Blampied,
Edward B. Koehler and Robert I. Weisberg.
11
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy
statement to be furnished to all stockholders entitled to vote at the 1997
Annual Meeting of Stockholders of the Company must be received at the Company's
principal executive offices not later than December 6, 1996. In order to curtail
controversy as to the date on which a proposal was received by the Company, it
is suggested that proponents submit their proposals by certified mail-return
receipt requested. Such proposals must also meet the other requirements
established by the Securities and Exchange Commission for stockholder proposals.
OTHER BUSINESS
The Board of Directors knows of no business that will be presented for
consideration at the Meeting other than that stated above. If any other
business should come before the Meeting, votes may be cast pursuant to proxies
in respect to any such business in the best judgment of the person or persons
acting under the proxies.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company.
Proxies will be solicited principally through the mail. Further solicitation of
proxies from some stockholders may be made by directors, officers and regular
employees of the Company personally, by telephone, telegraph or special letter.
No additional compensation, except for reimbursement of reasonable out-of-pocket
expenses, will be paid for any such further solicitation. In addition, the
Company may request banks, brokers, and other custodians, nominees and
fiduciaries to solicit customers of theirs who have shares of the Company
registered in the name of a nominee. The Company will reimburse any such persons
for their reasonable out-of-pocket costs.
12
<PAGE>
NOTES
________________________________________________________________________________
<PAGE>
NOTES
________________________________________________________________________________
<PAGE>
[LOGO APPEARS HERE]
ENVIRONMENTAL POWER
CORPORATION
<PAGE>
PLEASE MARK VOTES
[X] AS IN THIS EXAMPLE
With- For All
For hold Except
1.) To elect a Board of Directors to [_] [_] [_]
serve the ensuing year and until
their respective successors have
been duly elected and qualified.
Nominees:
Joseph E. Cresci, Donald A. Livingston,
Peter J. Blampied, Edward B. Koehler and Robert I. Weisberg
If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through that nominee(s) name. Your
shares shall be voted for the remaining nominees.
RECORD DATE SHARES:
-------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ------Stockholder sign here--------------------------Co-owner sign here---------
For Against Abstain
2.) To ratify the selection of the firm of [_] [_] [_]
Deloitte & Touche LLP as auditors for
the Company for the fiscal year ending
December 31, 1996.
For Against Abstain
3.) To ratify and approve the grant of [_] [_] [_]
non-qualified stock options to Peter J.
Blampied, Edward B. Koehler and
Robert I. Weisberg.
4.) To transact such other business as may properly come before
the meeting or any adjournments thereof.
Mark box at right if comments or an address change
have been noted on the reverse side of this card. [_]
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD
ENVIRONMENTAL POWER CORPORATION
Dear Stockholder:
Please take note of the important information enclosed with this Proxy
Ballot. There are a number of issues related to the management and
operation of your Company that require your immediate attention and
approval. These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall
be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
June 3, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Environmental Power Corporation
<PAGE>
ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, N.H. 03801
The undersigned hereby appoints Joseph E. Cresci and William D. Linehan, and
each of them, proxies, with full power of substitution, to vote all shares of
stock of the Corporation which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of Environmental Power Corporation to be held on Monday,
June 3, 1996 at 11:00 a.m., at One Harbour Place, Suite 400, Portsmouth, N.H.,
and at any adjournments thereof, upon matters set forth in the Notice of Annual
Meeting of Stockholders and Proxy Statement dated April 15, 1996.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE
PROPOSALS IN ITEMS 2 AND 3 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL
4.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- --------------------------------------- ---------------------------------------
- --------------------------------------- ---------------------------------------
- --------------------------------------- ----------------------------------ENVCM
DETACH CARD
