SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by 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 ss. 240.14a-11(c) or ss. 240.14a-12
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
(Name of Registrant as Specified In Its Charter)
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
(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).
[ ] $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:
[ ] 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:
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 14, 1997
The Annual Meeting of the Stockholders of Northern Technologies
International Corporation, a Delaware corporation (the "Company"), will be held
in Conference Room 31B at the law offices of Oppenheimer Wolff & Donnelly,
located at Suite 3100, 45 South Seventh Street, Minneapolis, Minnesota 55402
beginning at 11:00 a.m., local time, on Friday, February 14, 1997, for the
following purposes:
1. To elect seven (7) persons to serve as directors until the next
annual meeting of the stockholders or until their respective
successors shall be elected and qualified;
2. To approve the appointment of Deloitte & Touche as independent
auditors for the fiscal year ending August 31, 1997; and
3. To transact such other business as may properly come before the
meeting.
The record date for determination of stockholders entitled to notice of
and to vote at the meeting and any adjournments thereof is the close of business
on December 20, 1996.
Whether or not you expect to attend the meeting in person, please
complete, sign, date and promptly return the enclosed proxy in the envelope
provided, which requires no postage if mailed in the United States.
By Order of the Board of Directors
/s/ Loren M. Ehrmanntraut
---------------------------------------
Loren M. Ehrmanntraut
SECRETARY
January 8, 1997
Lino Lakes, Minnesota
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
6680 N. HIGHWAY 49
LINO LAKES, MINNESOTA 55014
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 14, 1997
INTRODUCTION
The Annual Meeting of Stockholders of Northern Technologies
International Corporation (the "Company") will be held on Friday, February 14,
1997, at 11:00 a.m., local time, in Conference Room 31B at the law offices of
Oppenheimer Wolff & Donnelly, located at Suite 3100, 45 South Seventh Street,
Minneapolis, Minnesota 55402, or at any adjournments thereof (the "Annual
Meeting"), for the purposes set forth in the Notice of Meeting.
A proxy card is enclosed for your use. You are solicited on behalf of
the Board of Directors to SIGN AND RETURN THE PROXY CARD IN THE ACCOMPANYING
ENVELOPE. No postage is required if mailed within the United States. The cost of
soliciting proxies, including the preparation, assembly and mailing of proxies
and soliciting material, as well as the cost of forwarding such material to the
beneficial owners of the Company's common stock, will be borne by the Company.
Directors, officers and regular employees of the Company may, without
compensation other than their regular compensation, solicit proxies by
telephone, telegraph or personal conversation. The Company may reimburse
brokerage firms and others for expenses in forwarding proxy materials to the
beneficial owners of the Company's common stock.
Any stockholder giving a proxy may revoke it at any time prior to its
use at the Annual Meeting either by giving written notice of such revocation to
the Secretary of the Company, by filing a duly executed proxy bearing a later
date with the Secretary of the Company, or by appearing at the Annual Meeting
and filing written notice of revocation with the Secretary of the Company prior
to use of the proxy. Proxies will be voted as specified by stockholders. Proxies
that are signed by stockholders but that lack any such specification will be
voted in favor of the proposals set forth in the Notice of Meeting and in favor
of the election as directors of the nominees for directors listed in this Proxy
Statement.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL OF THE
PROPOSALS SET FORTH IN THE NOTICE OF MEETING.
The Company expects that this proxy material will first be mailed to
stockholders on or about January 8, 1997.
VOTING OF SHARES
Only holders of the Company's common stock, $.02 par value (the "Common
Stock"), and Series A preferred stock, no par value (the "Preferred Stock"), of
record at the close of business on December 20, 1996 will be entitled to vote at
the Annual Meeting. On December 20, 1996, the Company had 4,206,108 outstanding
shares of Common Stock and no outstanding shares of Preferred Stock
(collectively, unless otherwise specified, the Common Stock and the Preferred
Stock of the Company shall be referred to hereinafter as the "Common Stock"),
each such share entitling the holder thereof to one vote on each matter to be
voted on at the Annual Meeting. The holders of a majority of the shares entitled
to vote and represented in person or by proxy at the Annual Meeting will
constitute a quorum for the transaction of business at the Annual Meeting. In
general, shares of Common Stock represented by a properly signed and returned
proxy card will be counted as shares present and entitled to vote at the meeting
for purposes of determining a quorum, without regard to whether the card
reflects abstentions (or is left blank) or reflects a "broker non-vote" on a
matter (i.e., a card returned by a broker because voting instructions have not
been received and the broker has no discretionary authority to vote). Holders of
shares of Common Stock are not entitled to cumulate voting rights.
The election of a nominee for director requires the approval of a
plurality of the votes of the shares present and entitled to vote in person or
by proxy and the approval of the other proposal described in this Proxy
Statement requires the approval of a majority of the votes of the shares present
and entitled to vote in person or by proxy on that matter (and at least a
majority of the minimum number of votes necessary for a quorum to transact
business at the Annual Meeting). Shares represented by a proxy card voted as
abstaining on any of the proposals will be treated as shares present and
entitled to vote that were not cast in favor of a particular matter, and thus
will be counted as votes against the matter. Shares represented by a proxy card
including any broker non-vote on a matter will be treated as shares not entitled
to vote on that matter, and thus will not be counted in determining whether that
matter has been approved.
ELECTION OF DIRECTORS
NOMINATION
At the Company's last annual meeting, seven persons were elected to the
Board of Directors (the "Board"). Since that time, Gerhard Hahn was appointed to
the Board in April 1996. Maria Szonert-Binienda, who had joined the Board in
November 1995, resigned from the Board in November 1996.
Directors elected at the Annual Meeting will hold office until the next
regular meeting of stockholders or until their successors are elected and
qualified. All of the nominees are current members of the Board.
Assuming a quorum is represented at the Annual Meeting, either in
person or by proxy, the election of each director requires the affirmative vote
of a plurality of the shares of Common Stock represented in person or by proxy
at the Annual Meeting. The Board recommends a vote FOR the election of each of
the nominees listed in this Proxy Statement. The Board intends to vote the
proxies solicited on its behalf for the election of each of the nominees as
directors. If prior to the Annual Meeting the Board should learn that any of the
nominees will be unable to serve by reason of death, incapacity or other
unexpected occurrence, the proxies may be cast for another nominee to be
designated by the Board to fill such vacancy, unless the stockholder indicates
to the contrary on the proxy. Alternatively, the proxies may, at the Board's
discretion, be voted for such fewer nominees as results from such death,
incapacity or other unexpected occurrence. The Board has no reason to believe
that any of the nominees will be unable to serve.
INFORMATION ABOUT NOMINEES
The following table sets forth certain information as of January 8,
1997, which has been furnished to the Company by each of the persons who have
been nominated by the Board to serve as Directors for the ensuing year.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
<S> <C> <C> <C>
Sidney Dworkin 75 Chairman, Advanced Modular Systems, Inc. 1979
Vincent J. Graziano 63 Co-Chief Executive Officer and President of the 1979
Company
Gerhard Hahn 52 General Manager, Knuppel KG 1996
Dr. Donald A. Kubik 56 Vice President of the Company 1995
Richard G. Lareau 68 Partner, Oppenheimer Wolff & Donnelly 1980
Philip M. Lynch 60 Co-Chief Executive Officer and Chairman of the 1979
Board of the Company; Executive Vice President
of Inter Alia Holding Company
Dr. Milan R. Vukcevich 59 Director of Materials Research and Development, 1995
Bicron Saint-Gobain Industrial Ceramics
</TABLE>
OTHER INFORMATION ABOUT NOMINEES
Mr. Dworkin has been chairman of the Board of Advanced Modular Systems,
Inc., a company which sells and leases modular buildings, since 1988. In
addition, since September 1987, Mr. Dworkin has been an independent venture
capitalist. Mr. Dworkin also serves as a director of CCA Industries, Inc.,
Viragen Corporation and Interactive Technologies, Inc. and as Chairman of the
Board of each of Comtrex Systems Corp. and Marbledge Group, Inc.
Mr. Graziano has been employed by the Company since 1976 and has been
president of the Company and a director of the Company since 1979. Prior to
joining the Company, Mr. Graziano held the position of Manager of Manufacturing
Systems with the management consulting department of Peat, Marwick, Mitchell &
Co. in Europe and the United States for nine years.
Mr. Hahn has been employed as General Manager by Knuppel KG, a German
packaging firm, since 1966. Mr. Hahn has also been employed by Excor
Korrosionsschutz-Technologien and Produkte GmbH (the Company's German joint
venture) since 1991. Mr. Hahn was appointed to the Board in April 1996.
Dr. Kubik has been employed by the Company since 1978 and has been a
Vice President of the Chemical Division of the Company since 1979. Effective as
of August 30, 1995, Dr. Kubik was appointed as a director of the Company. Prior
to joining the Company, Dr. Kubik held a research and development position with
Minnesota Mining and Manufacturing Company.
Mr. Lareau has been a partner of the law firm of Oppenheimer Wolff &
Donnelly for more than five years. Mr. Lareau also serves as a director of
Ceridian Corporation, Merrill Corporation, Nash Finch Company, all public
companies, and as a trustee of Mesabi Trust.
Mr. Lynch has been executive vice president of Inter Alia Holding
Company, a financial and management consulting firm ("Inter Alia"), for more
than five years. In September 1992, Olympia Fitness Center, Inc., of which Mr.
Lynch was an officer and director, filed for protection under Chapter 11 of the
federal bankruptcy laws, which bankruptcy was subsequently discharged. Mr. Lynch
is also a member of the Board of Directors of the Fosbel Group of Companies:
Fosbel International (U.K.), Fosbel, Inc. (U.S.), Fosbel Japan, Ltd. (Tokyo),
Fosbel do Brasil (San Paulo), and Fosbel Europe BV, (operating in 17 Western and
three Eastern European countries). The Fosbel Group is itself a joint venture
between multinational listed companies: Glaverbel S.A., (Bruxelles) a leading
Belgian glass manufacturing company and an affiliate of Asahi Glass Co., Ltd.,
and the English petrochemical and materials science company Burmah Castrol plc.
Dr. Vukcevich was appointed to the Board of Directors in November 1995.
Dr. Vukcevich is employed as Director of Materials Research and Development of
Bicron Saint-Gobain Industrial Ceramics. Dr. Vukcevich was employed by GE
Lighting from 1973 to 1995, holding various positions including Chief Scientist,
Manager of Metallurgical Engineering, and Coordinator of International Research
and Development in Materials Science.
INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
The business and affairs of the Company are managed by the Board, which
held four meetings during the fiscal year ended August 31, 1996.
In 1990, the Board established an audit committee. The audit committee
maintains an active role in communication with the Company's independent
auditors and with the management of the Company. The audit committee for fiscal
1996 consisted of Messrs. Lareau and Lynch. The audit committee met one time
during fiscal 1996. Messrs. Lareau and Lynch will serve as the audit committee
for fiscal 1997.
In November 1993, the Board established a compensation committee. The
responsibilities of the compensation committee include setting the compensation
for those officers who are also directors and other executive officers of the
Company and setting the terms of and grants of awards under the Company's 1994
Stock Incentive Plan (the "Plan"). The compensation committee, consisting of
Messrs. Dworkin and Vukcevich and Ms. Szonert-Binienda, met one time during
fiscal 1996. Messrs. Dworkin and Vukcevich will serve as the compensation
committee for fiscal 1997.
During the fiscal year ending August 31, 1996, all of the nominees who
were directors of the Company during fiscal 1996 attended 75% or more of the
aggregate meetings of the Board and all such committees on which they served
during the period they served on the Board.
COMPENSATION OF DIRECTORS
DIRECTORS FEES. Each person who was a non-employee director received an
annual retainer of $5,000 in each of fiscal 1994, 1995 and 1996 for services
rendered as a director of the Company. Effective November 15, 1996, the Company
increased the annual retainer fee to $7,500 for fiscal 1997. Each non-employee
director of the Company also receives $750 for each Board meeting and $500 for
each Board committee meeting attended. The Chairman of the Board does not
receive any Board or committee meeting fee. The Company pays the premium on a
group insurance policy for the Chairman of the Board.
AUTOMATIC OPTION GRANTS TO NON-EMPLOYEE DIRECTORS. On November 16,
1993, the Board adopted the 1994 Stock Incentive Plan (the "Plan"), which was
approved by the Company's stockholders at the April 25, 1994, Annual Meeting. In
accordance with the terms of the Plan, each non-employee director of the Company
who was a director on September 1, 1993 was automatically granted, on a one-time
basis, non-qualified options to purchase 2,000 shares of Common Stock, at an
exercise price equal to the fair market value of the Common Stock on November
16, 1993. In addition, each non-employee director elected or appointed to the
Board after the effective date of the Plan is granted, on a one-time basis,
non-qualified options to purchase the pro-rata portion of 2,000 shares of Common
Stock calculated by dividing the number of months remaining in the fiscal year
at the time of election or appointment divided by twelve. The Plan also provides
that following the effective date of the Plan, non-employee directors
automatically are granted non-qualified options to purchase 2,000 shares of
Common Stock on the first day of each fiscal year while serving as a
non-employee director of the Company.
On September 1, 1995, each of the non-employee directors on that date,
and Mr. Lynch, received an automatic grant of options under the Plan to purchase
2,000 shares of Common Stock at an exercise price of $6.75 per share. On
November 20, 1995, each of Mr. Vukcevich and Maria Szonert-Binienda received an
automatic grant of options under the Plan to purchase 1,600 shares of Common
Stock at an exercise price of $6.125 per share. On May 1, 1996, Mr. Hahn
received an automatic grant of an option under the Plan to purchase 670 shares
of Common Stock at an exercise price of $5.06 per share. On September 1, 1996,
each of the non-employee directors, and Mr. Lynch, received an automatic grant
of options under the Plan to purchase 2,000 shares of Common Stock at an
exercise price of $5.00 per share. All of such options granted vest in equal
one-third installments over a three-year period.
PRINCIPAL STOCKHOLDERS AND BENEFICIAL
OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Common Stock of the Company as of December 20, 1996, unless
other noted, (a) by each stockholder who is known by the Company to own
beneficially more than 5% of the outstanding Common Stock, (b) by each director,
(c) each Named Executive Officer (as defined below under the heading, "Executive
Compensation and Other Benefits"), and (d) by all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK BENEFICIALLY OWNED (1)
---------------------------------------------------------
NAME AMOUNT PERCENT OF CLASS
---- ------ ----------------
<S> <C> <C>
Inter Alia Holding Company............................... 911,668 (2) 21.7%
Herman H. Lee............................................ 261,545 (3) 6.2
Sidney Dworkin........................................... 50,501 (4) 1.2
Vincent J. Graziano...................................... 71,005 (5) 1.7
Gerhard Hahn............................................. 2,500 *
Dr. Donald A. Kubik...................................... 88,340 2.1
Richard G. Lareau........................................ 31,677 (6) *
Philip M. Lynch.......................................... 4,001 (7) *
Dr. Milan R. Vukcevich................................... 533 (8) *
Loren M. Ehrmanntraut.................................... 51,500 (9) 1.2
All directors and executive officers
as a group (10 persons).................................. 1,275,240(10) 29.9
</TABLE>
*Less than 1%.
(1) Shares not outstanding but deemed beneficially owned by virtue of the
right of a person or member of a group to acquire them within 60 days
are treated as outstanding only when determining the amount and percent
owned by such person or group. Unless otherwise noted, all of the
shares owned or held by individuals or entities possessing sole voting
and investment power with respect to such shares.
(2) Includes 911,668 shares held of record by Inter Alia, a financial and
management consulting firm of which Mr. Lynch, the Chairman of the
Board of Directors and the Co-Chief Executive Officer of the Company,
is a stockholder, officer and director.
(3) Includes 259,545 shares beneficially owned by Mr. Lee, based on a
Schedule 13G filed by Mr. Lee dated as of November 12, 1996. Includes
2,000 shares beneficially owned by Mr. Lee's wife as to which he
disclaims any beneficial interest.
(4) Does not include 21,015 shares held by Sidelmar, a partnership in which
Mr. Dworkin, a director of the Company, is a general partner. Includes
4,001 shares of Common Stock which may be acquired within 60 days
pursuant to the exercise of options.
(5) Includes 20,500 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(6) Includes 4,001 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(7) Does not include 911,668 shares held of record or beneficially owned by
Inter Alia Holding Company, of which Mr. Lynch is a stockholder,
officer and director. Includes 4,001 shares of Common Stock which may
be acquired within 60 days pursuant to the exercise of options.
(8) Includes 533 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(9) Includes 17,500 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(10) Includes (i) 911,668 shares held of record by Inter Alia Holding
Company, a financial and management consulting firm of which Mr. Lynch,
the Chairman of the Board of Directors and the Co-Chief Executive
Officer of the Company, is a stockholder, officer and director, (ii)
21,015 shares held of record by Sidelmar, a partnership in which Mr.
Dworkin, a director of the Company, is a general partner, and (iii)
options to purchase 55,536 shares which are held by officers and
directors of the Company which are exercisable within 60 days.
EXECUTIVE COMPENSATION AND OTHER BENEFITS
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION PAID TO EXECUTIVE OFFICERS
The following table provides summary information concerning cash and
non-cash compensation paid or accrued by the Company to or on behalf of the
Company's Co-Chief Executive Officers and the most highly compensated executive
officers of the Company whose cash and non-cash salary and bonus exceeded
$100,000 in the fiscal year ended August 31, 1996 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)(1)
--------------------------- ---- ---------- --------- ----------- -------------------
<S> <C> <C> <C> <C> <C>
Vincent J. Graziano 1996 $190,443 $45,000 0 $4,750
PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER 1995 182,516 40,000 0 5,574
1994 157,414 25,000 38,000 5,080
Philip M. Lynch 1996 0 0 2,000 0(2)
CHAIRMAN OF THE BOARD AND CO-CHIEF 1995 0 0 2,000 0(2)
EXECUTIVE OFFICER 1994 0 0 2,000 0(2)
Donald A. Kubik 1996 152,749 45,000 0 5,496
VICE PRESIDENT 1995 136,487 35,000 0 5,287
1994 121,386 15,000 32,500 4,238
Loren M. Ehrmanntraut 1996 107,410 40,000 0 5,159
TREASURER AND SECRETARY 1995 92,811 30,000 0 3,584
1994 82,714 20,000 32,500 2,884
- -----------------------------
</TABLE>
(1) Compensation hereunder consists of contributions to the 401(k) plans of
the Named Executive Officers.
(2) Does not include any commissions payable to Inter Alia, an entity
affiliated with Mr. Lynch, under a certain Manufacturer's
Representative Agreement. See "Certain Relationships and Related
Transactions."
OPTION GRANTS AND EXERCISES
The following tables provide information for the year ended August 31,
1996 as to individual grants of options to purchase shares of the Common Stock,
exercises of options and the potential realizable value of the options held by
the Named Executive Officers at August 31, 1996.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL 1996
PERCENT OF TOTAL OPTIONS
GRANTED TO EMPLOYEES EXERCISE OR BASE
NAME OPTIONS GRANTED (1) IN FISCAL YEAR PRICE ($/SHARE) EXPIRATION DATE
---- ------------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Philip M. Lynch 2,000 100% $6.750 August 31, 2000
</TABLE>
- -----------------------------
(1) These options were granted under the Plan. The options vest in three
equal installments on the first, second and third anniversary of the
date of grant (9/1/95). To the extent not already exercisable, options
granted under the Plan become immediately exercisable in full upon
certain changes in control of the Company.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND
FISCAL 1996 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT AUGUST 31, 1996 OPTIONS AT AUGUST 31, 1996 (1)
-------------------------- ------------------------------
SHARES ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vincent J. Graziano 0 0 19,500 18,500 $38,750 $36,875
Philip M. Lynch 0 0 2,001 3,999 3,835 3,915
Donald A. Kubik 9,167 23,282 7,500 15,833 15,000 31,562
Loren M. Ehrmanntraut 0 0 16,667 15,833 33,126 31,562
</TABLE>
- -----------------------------
(1) Value is calculated as the excess of the market value of the Common
Stock at August 31, 1996 over the exercise price. On August 31, 1996,
the market value of the Common Stock was $5.00 per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 1, 1976, the Company entered into a Manufacturer's
Representative Agreement with The Saxxon Organization, Incorporated (the
"Agreement"). The Agreement has no expiration date and may be terminated by
either party upon 60 days written notice. Effective January 9, 1980, the
Agreement was assigned to Inter Alia, a financial and management consulting firm
of which Philip M. Lynch, the Chairman of the Board of Directors of the Company,
is a stockholder, officer and director. Under the Agreement, Inter Alia (or the
"Representative") is entitled to commissions from the Company on the net
proceeds of sales of the Company's product generated by Inter Alia. The
Representative acts as an independent manufacture's representative of the
Company. It has a non-exclusive worldwide right to offer for sale and solicit
orders for the Company's products in accordance with prices determined by the
Company. The Representative is responsible for all of its own operating expenses
with no entitlement for reimbursement from the Company. The Representative has
not effected any sales within the United States. The Representative's effort has
developed sales outside the United States, specifically in France, which
resulted in commissions of approximately $52,950, $52,057 and $29,700 for the
fiscal years ending August 31, 1996, 1995, and 1994, respectively. In light of
the Company's own domestic sales effort and its distributor network within the
United States, the Company does not anticipate the Representative developing any
sales within the United States. Additionally, the Company's expanding
international joint venture program may also limit opportunities abroad for the
Representative. Thus, the Company does not anticipate that the Representative
will develop any significant sales volume for the Company.
On February 1, 1982, each of Vincent J. Graziano, President of the
Company, and Inter Alia, a financial and management consulting firm of which
Philip M. Lynch, the Chairman of the Board of Directors of the Company, is a
stockholder, officer and director, purchased 15,000 shares of the Common Stock
from former employees who originally purchased the stock through the Company's
Employee Retention and Incentive Plan. Both Mr. Graziano and Inter Alia
purchased the stock and paid therefor by signing promissory notes dated February
1, 1982, each with a face value of $13,878 bearing interest at 5% per annum.
Both notes were originally due on December 31, 1992 and were due on demand
thereafter. As of August 31, 1995, Mr. Lynch paid all amounts due and owing
under his promissory note, including accrued interest. As of August 31, 1995,
the outstanding balance of the Graziano note, including prepaid and accrued
interest, was $6,538. Mr. Graziano paid all amounts due and owing under his
promissory note on October 15, 1995.
On August 31, 1984 and November 30, 1990, Inter Alia purchased 119,083
and 100,000 shares, respectively, of the Common Stock and paid therefor by
signing promissory notes. The August 31, 1984 promissory note (the "August
Note") had a face value of $125,375 and bore interest at 11% per year. The
August Note was originally due on December 31, 1992 and is currently due on
demand. As of August 31, 1996, the outstanding balance of the August Note,
including accrued interest, was $204,162. The November 30, 1990 promissory note
(the "November Note") had a face value of $98,000 and bore interest, to be paid
semi-annually, at the applicable federal rate. The November Note was due
November 30, 1995. The outstanding balance of the November Note, including
accrued interest, was paid in full in fiscal 1996.
On April 25, 1994, Inter Alia exercised a warrant to purchase 233,000
shares of the Common Stock at an exercise price of $2.50 per share, for an
aggregate exercise price of $582,500. In connection with such exercise, Inter
Alia paid $4,660 in cash and issued a promissory note to the Company in the
amount of $577,840, which note bore interest at 7.25% per annum and was due
December 31, 1995. Marketable equity securities owned by Inter Alia served as
collateral for the note. The outstanding balance of this note, including accrued
interest, was paid in full in fiscal 1996.
Inter Alia paid $48,943 and $13,878 of accrued interest and principal,
respectively, in fiscal 1995 pursuant to the cancellation of commissions and
other expense reimbursement due Inter Alia.
Gerhard Hahn, a director of the Company, is a shareholder and General
Manager of Knuppel KG. Knuppel KG is a 50% partner with the Company in a joint
venture in Germany. The German joint venture entity has granted a loan of
750,000 DM (approximately $482,000 as of December 27, 1996) to Knuppel KG. The
loan is secured by Knuppel KG's equity in the German joint venture and bears
interest at 7.5% per annum.
SELECTION OF AUDITORS
The Board of Directors has appointed Deloitte & Touche, independent
certified public accountants, as auditors of the Company for the fiscal year
ending August 31, 1997. Such firm has acted as independent auditors of the
Company since the fiscal year ended August 31, 1990. If the stockholders do not
ratify the appointment of Deloitte & Touche, another firm of independent
auditors will be considered by the Board of Directors. Representatives of
Deloitte & Touche will be present at the meeting, will have an opportunity to
make a statement if they so desire and will be available to respond to
questions.
SECTION 16(a) OF THE EXCHANGE ACT
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers and all persons who
beneficially own more than 10% of the outstanding shares of the Company's Common
Stock to file with the Securities and Exchange Commission (the "SEC") initial
reports of ownership and reports of changes in ownership of the Company's Common
Stock. Executive officers, directors and greater than 10% beneficial owners are
also required to furnish the Company with copies of all Section 16(a) forms they
file. To the Company's knowledge, based upon a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended August 31, 1996, none of the
directors, officers and beneficial owners of greater than 10% of the Company's
Common Stock failed to file on a timely basis the forms required by Section 16
of the Exchange Act.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders intended to be presented in the proxy
materials relating to the next Annual Meeting must be received by the Company at
its principal executive offices on or about September 8, 1997.
OTHER BUSINESS
The Company knows of no business that will be presented for
consideration at the Annual Meeting other than that described in this Proxy
Statement. As to other business, if any, that may properly come before the
Annual Meeting, it is intended that proxies solicited by the Board will be voted
in accordance with the judgment of the person or persons voting the proxies.
MISCELLANEOUS
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON
FORM 10-KSB FOR THE FISCAL YEAR ENDED AUGUST 31, 1996, TO EACH PERSON WHO WAS A
STOCKHOLDER OF THE COMPANY AS OF DECEMBER 20, 1996, UPON RECEIPT FROM ANY SUCH
PERSON OF A WRITTEN REQUEST FOR SUCH AN ANNUAL REPORT. SUCH REQUEST SHOULD BE
SENT TO: NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION, 6680 N. HIGHWAY 49,
LINO LAKES, MINNESOTA 55014; ATTN: STOCKHOLDER INFORMATION.
By Order of the Board of Directors
/s/ Vincent J. Graziano
-----------------------------------------
Vincent J. Graziano
PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER
Dated: January 8, 1997
Lino Lakes, Minnesota
Appendix A
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
6680 N. Highway 49
Lino Lakes, Minnesota 55014
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, having duly received the Notice of Annual Meeting of
Shareholders and Proxy Statement, appoints Philip M. Lynch and Vincent J.
Graziano as proxies (each with power to act alone and with powers of
substitution) to represent the undersigned and to vote, as designated below, all
shares of common stock of Northern Technologies International Corporation (the
"Company") held of record by the undersigned on December 20, 1996, at the Annual
Meeting of the Stockholders of the Company to be held at 11:00 a.m., local time,
on February 14, 1997, in Conference Room 31B at the law offices of Oppenheimer
Wolff & Donnelly, located at Suite 3100, 45 South Seventh Street, Minneapolis,
Minnesota, and any adjournments thereof.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below [ ] AGAINST all nominees listed below
(except as marked to the contrary below)
NOMINEES FOR ELECTION
Sidney Dworkin, Vincent J. Graziano, Gerhard Hahn, Donald A. Kubik,
Richard G. Lareau, Philip M. Lynch, Milan R. Vukcevich
(INSTRUCTION: TO VOTE AGAINST ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THE NOMINEE'S NAME.)
2. REAPPOINTMENT OF DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued, and to be completed and signed on the reverse side)
(Continued from other side)
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTORS, FOR THE REAPPOINTMENT OF
DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS, AND IN THE DISCRETION
OF THE PROXY HOLDER ON OTHER MATTERS WHICH MAY PROPERLY COME BEFORE THE MEETING.
PLEASE SIGN exactly as name appears on of
this card. When shares are held by joint
tenants, both should sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as
such. If a corporation, please sign in full
corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Dated: ____________________________________
___________________________________________
Signature
___________________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
