<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 Section 240.14a-11(c) or Section 240.14a-12
Environmental Power Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[_] 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:
-------------------------------------------------------------------------
[_] 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:
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(4) Date Filed:
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Notes:
<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 28,
1999 at 11:00 a.m. local time, at Courtyard Marriott, 1000 Market Street,
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, 1999.
3. 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 May 6, 1999 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
May 11, 1999 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
May 11, 1999
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 28, 1999 at 11:00 a.m. local time, at Courtyard Marriott,
1000 Market Street, 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-fact in the proxies are officers of the
Company.
Only stockholders of record as of the close of business on the record date
of May 6, 1999 will be entitled to notice of and to vote at the Meeting and any
adjournments thereof.
As of May 6, 1999 there were 11,406,783 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. If a stockholder
1
<PAGE>
ENVIRONMENTAL POWER CORPORATION
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
________________________________________________________________________________
returns a proxy withholding authority to vote the proxy with respect to a
nominee for director, then the shares of the Common Stock covered by such proxy
shall be deemed present at the Meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to each nominee, but shall not
be deemed to have been voted for such nominee. If a stockholder abstains from
voting with respect to any matter, then the shares held by such stockholder
shall be deemed present at the Meeting for purposes of determining a quorum and
for purposes of calculating the vote with respect to such matter, but shall not
be deemed to have been voted in favor of such matter. If a broker returns a
non-vote proxy, indicating a lack of authority to vote on any matter, then the
shares covered by such non-vote shall be deemed present at the Meeting for
purposes of determining a quorum but shall not be deemed to be present and
entitled to vote at the Meeting for purposes of calculating the vote with
respect to such matter.
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.
2
<PAGE>
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of April 23, 1999 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 PERCENTAGE
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
---------------- ------------------------ --------
<S> <C> <C>
Joseph E. Cresci 4,747,348 (2)(4) 41.62%
c/o Environmental Power Corporation
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
Donald A. Livingston 2,461,739 21.58%
c/o Environmental Power Corporation
500 Market Street, Suite 1-E
Portsmouth, New Hampshire 03801
James F. Powers, as Trustee 1,000,000 (3) 8.77%
c/o Vitale Caturano and Company
210 Commercial Street
Boston, MA 02109
</TABLE>
(1) Information with respect to beneficial ownership is based upon information
furnished by such stockholders. Except as indicated in notes 2, 3 and 4 all
shares are held beneficially and of record.
(2) Includes 3,687,618 shares held in a revocable trust for the benefit of
members of Mr. Cresci's family, of which Mr. Cresci is the trustee, and
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, as to which shares Mr.
Cresci has neither voting nor investment power and as to which shares he
disclaims beneficial ownership.
(3) Consists of 1,000,000 shares which Mr. Cresci deposited into a voting trust
(the "Voting Trust") on November 20, 1996 and in which Mr. Powers has
beneficial ownership in his capacity as trustee with sole voting power.
Mr. Cresci also has beneficial ownership in such shares which are evidenced
by voting trust certificates held by The Cresci Family Limited Partnership
of which Mr. Cresci is the sole general partner with sole dispositive
power.
(4) Includes 1,000,000 shares held by the Voting Trust (See Note 3).
3
<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 23, 1998. 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
striking 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, 1998. 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 did not meet
in 1998. 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 1998. 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 1998. The Stock
Option Committee, which consists of Messrs. Blampied, Koehler and Weisberg,
administers the 1990 Stock Plan and did not meet in 1998. Each member of the
Board of Directors attended at least 75% of the aggregate of the total number of
meetings of the Board of Directors and any Committee on which he served.
The following table sets forth the number and percentage of outstanding
shares of Common Stock beneficially owned by each nominee for Director as of
April 23, 1999. The nominees include all current Directors and Named Executives
(as defined below).
4
<PAGE>
<TABLE>
<CAPTION>
NOMINEE'S NAME POSITIONS AND AMOUNT & NATURE
AND DATE FIRST OFFICES WITH OF BENEFICIAL PERCENT OF
BECAME A DIRECTOR THE COMPANY OWNERSHIP (1) CLASS
----------------- ----------- ------------- -----
<S> <C> <C> <C>
Joseph E. Cresci Chairman, Chief Executive 4,747,348 (2) 41.62%
1982 Officer and Director
Donald A. Livingston President, Chief Operating Officer 2,461,739 21.58%
1982 and Director
Peter J. Blampied Director 110,300 (3) .97%
1988
Robert I. Weisberg Director 90,000 (4) .79%
1994
All directors and officers as a group (6 persons) 7,409,387 (5) 64.84%
</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, and 4, all shares are held beneficially and of record.
(2) Includes 3,687,618 shares held in a revocable trust for the benefit of
members of Mr. Cresci's family, of which Mr. Cresci is the trustee, and
1,000,000 shares held by the Voting Trust (see "Principal Holders of Voting
Securities") and 59,730 shares held in trust for the benefit of Mr. Cresci
and his children; but does not include 20,000 shares owned by Mr. Cresci's
wife as to which shares he disclaims beneficial ownership. Mr. Cresci has
shared voting and investment power with respect to the 59,730 shares held
in trust for the benefit of himself and his children but no voting power
with respect to the shares held in the Voting Trust.
(3) Includes 10,000 shares which Mr. Blampied has the right to acquire pursuant
to stock options which are all currently exercisable.
(4) Includes 10,000 shares which Mr. Weisberg has the right to acquire pursuant
to stock options which are all currently exercisable.
(5) Includes 20,000 shares which Messrs. Blampied and Weisberg have the right
to acquire pursuant to stock options which are all currently exercisable.
5
<PAGE>
OCCUPATIONS OF DIRECTORS
The following table sets forth the age and principal occupation of each of
the nominees for director during the past five years. Except for Mr. Blampied
who is a director for Access Capital Strategies, 124 Mount Auburn Street,
Cambridge, MA 02138 and Mr. Weisberg who is a trustee for Monterey Mutual Fund,
1299 Ocean Avenue, Suite 210, Santa Monica, California 90401, none of the
nominees for director holds any other directorships 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
- ---- --- --------------------
<S> <C> <C>
Joseph E. Cresci 56 Chairman and Chief Executive Officer of
the Company (1982 to present).
Donald A. Livingston 56 President and Chief Operating Officer
of the Company (1991 to present);
Executive Vice President of the Company (1982-1991).
Peter J. Blampied 56 President, Corcoran Management Company (1998-Present);
Director, Access Capital Strategies (1997 - present);
Director, A.W. Perry Inc. (1998 - present); Director,
Citizens Bank of Massachusetts (1996 to present);
Director, Nellie Mae (1982 - present); Director,
Citizens
Financial Group, Inc. (1994-1996); Vice Chairman,
Citizens Bank of Massachusetts (1993 - 1994);
Chairman, President and Chief Executive Officer, Boston
Five Bancorp (1989 - 1993).
Edward B. Koehler, Esq. 45 Partner, Hunton & Williams, New York
(1990 to present; Associate, 1982 - 1990).
Robert I. Weisberg 52 President and Chief Executive Officer, Alco Financial
Services LLC (1997 - present); President and Chief
Executive Officer, Pro-Care Financial Group, Inc.
(1994 - 1997); President, Tower Financial Corporation
(1993-1994); President, Fleet Credit Corporation
and Executive Vice President, Fleet Bank (1985-1993).
</TABLE>
6
<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, Chief Operating Officer and each other executive officer
earning in excess of $100,000 in salary and bonus in 1998 (the "Named
Executives") for the three fiscal years ended December 31, 1998.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- -------------
NAME AND RESTRICTED
PRINCIPAL POSITION YEAR SALARY BONUS STOCK AWARDS OPTIONS
- ------------------ ---- ------ ----- ------------ -------
<S> <C> <C> <C> <C> <C>
Joseph E. Cresci 1998 $ 67,584 (1) -- -- --
Chairman of the Board and 1997 200,000 -- -- --
Chief Executive Officer 1996 120,000 -- -- --
Donald A. Livingston 1998 $ 90,569 (1) -- -- --
President and 1997 200,000 -- -- --
Chief Operating Officer 1996 200,000 -- -- --
</TABLE>
(1) Reflects repayment by the Named Executive of a portion of 1998 salary as
described in the Report of the Compensation Committee below.
Stock Options: There were no options granted during 1998 to the Named
Executives. As of December 31, 1998, there were no unexercised options held by
the Named Executives.
Defined Benefit Pension Plan: In December 1998, the Company established a
noncontributory defined benefit pension plan (the "Pension Plan") covering all
eligible employees of the Company. The Pension Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974. Employees
aged 21 or older who have completed twelve months of service during which they
worked a minimum of 1,000 hours are eligible to participate. Employees earn a
year of service for vesting purposes in each employment year in which they
complete at least 1,000 hours of employment. Employees become vested in the
Pension Plan over a 6 year period (20% after 2 years and 20% per year
thereafter, to 100% after 6 years). Benefits are based upon the participant's
annual compensation (including bonuses and similar special pay), as more fully
defined in the Pension Plan, over the number of years of service up to a maximum
of 25 years.
7
<PAGE>
The following table shows the estimated annual pension benefits payable
upon retirement to a participant of the Pension Plan for various salary levels
and years of service.
<TABLE>
<CAPTION>
AVERAGE YEARS OF SERVICE
----------------
ANNUAL COMPENSATION 10 15 20 25
------------------- -- -- -- --
<S> <C> <C> <C> <C>
100,000 22,000 33,000 44,000 55,000
150,000 33,000 49,500 66,000 82,500
200,000 35,200 52,800 70,400 88,000
250,000 35,200 52,800 70,400 88,000
</TABLE>
During fiscal year 1998, the maximum amount of annual compensation which
may be included for Pension Plan purposes was $160,000. The figures shown above
apply under the Pension Plan as of December 31, 1998. The benefit amounts
listed are not subject to any deduction for Social Security or other offset
amounts. As a result of limitations imposed under the Federal income tax law,
the maximum annual benefit payable under the Pension Plan for the fiscal year
ending December 31, 1998 is $130,000, although the amount will be actuarially
adjusted in accordance with Federal income tax regulations if payments commence
prior to or following the date that unreduced Social Security benefits become
payable. As of December 31, 1998, Messrs. Cresci and Livingston each had sixteen
years of credited service under the Pension Plan.
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 1998, Messrs. Blampied, Koehler and Weisberg received option grants
to purchase 10,000 shares each under the Company's Director Option Plan which
are exercisable at per share prices of $1.688, $1.625 and $1.50, respectively,
based on the market prices of the Common Stock on their respective anniversary
dates of becoming Directors. Mr. Koehler, under the policies of the law firm in
which he is a partner, which law firm provides services to the Company, is
prohibited from owning shares in the Company. As such, in August 1998, Mr.
Koehler surrendered his existing option grants to purchase 60,000 shares under
the Company's Director Option Plan and any future options which may be granted
under such Plan.
8
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised of Peter J. Blampied, Edward B.
Koehler and Robert I. Weisberg. 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.
Mr. Koehler is a partner with Hunton & Williams, New York, a law firm which
provided services to the Company in 1998.
Mr. Weisberg, as payment for the exercise price of certain stock options,
delivered a promissory note in the amount of $48,575 to the Company in September
1997.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation 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'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 shareholders. Currently, executive
compensation is comprised of salary and annual cash bonuses which may be awarded
from time to time. In previous years, the Company offered its executive
officers long-term incentive opportunities in the form of stock options under
the Company's 1990 Stock Plan and Restricted Stock. Presently, there are no
shares available for grant under the Company's 1990 Stock Plan and no additional
shares reserved for restricted stock awards. However, in the future, the Board
of Directors may consider whether it is in the best interest of the Company to
establish another stock plan, reserve additional shares for restricted stock
awards or establish other long-term incentive opportunities for executive
officers.
As discussed in the section "Compensation of Executive Officers", the
Company established in December 1998 a Pension Plan to provide retirement
benefits to all of its eligible employees including the CEO and COO. The Company
expects to fund its 1998 contribution to the Pension Plan of $255,062 during
1999, which contribution is expected to benefit the CEO and COO in the amounts
of $132,416 and $109,431, respectively. In December 1998, in anticipation of
receiving this benefit from the Pension Plan, the CEO and COO each elected to
repay to the Company a portion of their 1998 compensation in an amount equal the
benefit they would receive from the 1998 contribution to the Pension Plan. As a
result, the 1998 annual compensations of the CEO and COO were reduced from
$200,000 and $200,000, respectively, to $67,584 and $90,569, respectively.
9
<PAGE>
In March 1999, the Compensation Committee ratified the establishment of the
Pension Plan and decided to decrease the annual base salaries for the CEO and
COO from $200,000 to $150,000. The Compensation Committee considered the lower
base salaries, when combined with the estimated benefits that the CEO and COO
would receive from the Pension Plan, to be an appropriate compensation package
for the CEO and COO in light of their present duties and responsibilities.
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 (such as the buy-out of the Milesburg contract in 1997) and
demonstrated leadership ability.
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 and benefits
derived from other fringe benefits such as the Pension Plan, rather than base
salary alone, as the appropriate measure of executive officer performance and
contribution. Compensation decisions regarding executive officers other than the
CEO and COO are made by the CEO and COO.
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.
RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE:
Peter J. Blampied Edward B. Koehler Robert I. Weisberg
10
<PAGE>
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, 1998.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ENVIRONMENTAL POWER CORP.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
----------------------FISCAL YEAR ENDING-----------------------------------
COMPANY/INDEX/MARKET 12/31/1993 12/30/1994 12/29/1995 12/31/1996 12/31/1997 12/31/1998
<S> <C> <C> <C> <C> <C> <C>
Environmental Powr 100.00 100.00 75.83 283.30 800.05 470.68
Electric Services 100.00 88.32 116.80 120.74 148.97 169.49
NASDAQ Market Index 100.00 104.99 136.18 169.23 207.00 291.96
</TABLE>
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, 1998. In 1998 the Company extended the due date of the loan to
December 31, 1999. As of April 23, 1999, total principal and unpaid interest on
this loan was approximately $120,000.
During 1993 and 1995, Messrs. Cresci and Livingston exercised options to
purchase shares of the Company's Common Stock. As payment for the exercise
price of these stock options, the Company accepted promissory notes which are
payable upon demand by the Company from Messrs. Cresci and Livingston
aggregating $332,875 and $428,281, respectively. Interest on these notes, which
is payable monthly at the Applicable Federal Rate, amounted to $39,358 in the
aggregate in 1998 and has been fully collected from Messrs. Cresci and
Livingston.
11
<PAGE>
In September 1997, Mr. Weisberg exercised options to purchase 80,000 shares
of the Company's Common Stock. As payment for the exercise price of these stock
options, the Company accepted a promissory note which is payable upon demand by
the Company from Mr. Weisberg in the amount of $48,575. Interest on this note,
which is payable quarterly at the Applicable Federal Rate, amounted to $2,511 in
1998 and has been fully collected from Mr. Weisberg.
Edward B. Koehler is a partner with Hunton & Williams, New York, a law firm
which provided services to the Company in 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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.
The Company believes, based solely on its review of the copies of forms
received by it, or written representations from certain reporting persons that
no additional forms were required for those persons, that its officers,
directors and greater than ten-percent beneficial owners complied with all
filing requirements applicable to them for 1998.
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, 1999. 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 1998 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.
12
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement to
be furnished to all stockholders entitled to vote at the 2000 Annual Meeting of
Stockholders of the Company must be received at the Company's principal
executive offices not later than January 12, 2000. 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.
If the Company does not receive notice of any matter that is to come before the
stockholders at the 2000 Annual Meeting of Stockholders on or before March 26,
2000, which corresponds to forty-five days before the date on which the Company
first mailed this proxy statement, the proxy for the 2000 Annual Meeting of
Stockholders may, pursuant to Rule 14a-4(c) of the Proxy Rules under the
Securities Exchange Act of 1934, confer discretionary authority to vote on the
matters presented.
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.
ANNUAL REPORT ON FORM 10-K
YOU MAY OBTAIN A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1998 FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WITHOUT CHARGE BY WRITING TO: INVESTOR RELATIONS, ENVIRONMENTAL POWER
CORPORATION, 500 MARKET STREET, SUITE 1-E, PORTSMOUTH, NEW HAMPSHIRE 03801.
SUCH ANNUAL REPORT ON FORM 10-K, AS WELL AS ADDITIONAL PUBLIC FILINGS, PRESS
RELEASES AND INFORMATION ABOUT THE COMPANY, ARE ALSO AVAILABLE ON THE INTERNET
FROM THE COMPANY'S WEB SITE LOCATED AT WWW.ENVIRONMENTALPOWER.COM
13
<PAGE>
ENVIRONMENTAL POWER CORPORATION
500 MARKET STREET, SUITE 1-E
PORTSMOUTH, NEW HAMPSHIRE
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 28, 1999 at 11:00 a.m. at Courtyard Marriott, 1000 Market Street,
Portsmouth, New Hampshire, and at any adjournments thereof, upon matters set
forth in the Notice of Annual Meeting of Stockholders and Proxy Statement dated
May 11, 1999.
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
PROPOSAL IN ITEM 2 AND AUTHORITY WILL BE DEEMED GRANTED UNDER PROPOSAL 3.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
Please sign exactly as your name(s) appear(s) on the books of the Corporation.
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?
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
(CONTINUED ON THE REVERSE SIDE)
<PAGE>
<TABLE>
Please Detach and Mail in the Envelope Provided
- ------------------------------------------------------------------------------------------------------------------------------------
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
<S> <C> <C>
FOR ALL WITHHOLD
NOMINEES AUTHORITY
(except as marked to to vote for
the contrary below) all nominees
[_] [_] FOR AGAINST ABSTAIN
1. To elect a Board of Nominees: Joseph E. Cresci 2. To ratify the selection of the firm of [_] [_] [_]
Directors to serve Donald A Livingston Deloitte & Touche LLP as auditors for
the ensuing year Peter J. Blampied the Corporation for the fiscal year
until their respective successors Edward B. Koehler ending December 31, 1999.
have been duly elected and Robert I. Weisberg 3. To transact such other business as may
qualified. properly come before the meeting or
any adjournments thereof.
NOTE: To withhold authority to vote for any individual nominee(s), mark the "FOR
ALL" box and strike a line through the name(s) of the nominee(s) you wish to
withhold. Your shares will be voted for the remaining nominee(s).
Mark box at right if an address change has been noted at left [_]
Stockholder sign here____________________________________ Co-owner sign here_______________________________ Date__________________
</TABLE>
NOTE: Please be sure to sign and date this Proxy.
