SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
NORTHERN TECHNOLOGIES INTERNATIONAL 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 transactions 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:
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 20, 1998
The Annual Meeting of the Stockholders of Northern Technologies
International Corporation, a Delaware corporation (the "Company"), will be held
at the Sheraton Minneapolis, located at 1330 Industrial Boulevard, Minneapolis,
Minnesota 55413, beginning at 11:00 a.m., local time, on Friday, February 20,
1998, for the following purposes:
1. To elect eight (8) 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 LLP as
independent auditors for the fiscal year ending August 31,
1998; 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 30, 1997.
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
Loren M. Ehrmanntraut
SECRETARY
January 12, 1998
Lino Lakes, Minnesota
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
6680 N. HIGHWAY 49
LINO LAKES, MINNESOTA 55014
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 20, 1998
INTRODUCTION
The Annual Meeting of Stockholders of Northern Technologies
International Corporation (the "Company") will be held on Friday, February 20,
1998, at 11:00 a.m., local time, at the Sheraton Minneapolis, located at 1330
Industrial Boulevard, Minneapolis, Minnesota 55413, 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 12, 1998.
<PAGE>
VOTING OF SHARES
Only holders of the Company's common stock, $.02 par value (the "Common
Stock"), of record at the close of business on December 30, 1997 will be
entitled to vote at the Annual Meeting. On December 30, 1997, the Company had
4,151,790 outstanding shares of 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
The Bylaws of the Company, as amended, provide that the Board of
Directors (the "Board") shall consist of eight members. The Board has nominated
the eight persons listed in this Proxy Statement to serve as directors of the
Company 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.
Haruhiko Rikuta was elected by the Board in November 1997 to fill a vacancy on
the Board created when the Board, pursuant to its authority under the Company's
Bylaws, increased the number of directors to eight.
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.
<PAGE>
INFORMATION ABOUT NOMINEES
The following table sets forth certain information as of January 12,
1998, 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 76 Chairman of the Board and Chief Executive 1979
Officer of Advanced Modular Systems, Inc.
Vincent J. Graziano 64 Co-Chief Executive Officer and President of the 1979
Company
Gerhard Hahn 53 General Manager of Knuppel KG 1996
Dr. Donald A. Kubik 57 Vice President and Treasurer of the Company 1995
Richard G. Lareau 69 Partner of Oppenheimer Wolff & Donnelly 1980
Philip M. Lynch 61 Co-Chief Executive Officer and Chairman of the 1979
Board of the Company and Executive Vice
President of Inter Alia Holding Company
Haruhiko Rikuta 32 Manager, Zerust Department of Taiyo Petroleum 1997
Gas Co. Ltd.
Dr. Milan R. Vukcevich 60 Director of Materials Research and Development 1995
of Bicron Saint-Gobain Industrial Ceramics
</TABLE>
OTHER INFORMATION ABOUT NOMINEES
Mr. Dworkin has been Chairman of the Board and Chief Executive Officer
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., Cragar Industries, Inc., Consolidated Healthcare, Inc.,
Entitle Design, Inc., QEP, Inc. and Interactive Technologies, Inc. and as
Chairman of the Board 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 served as Manager of Manufacturing Systems
with the management consulting department of Peat, Marwick, Mitchell & Co. in
Europe and the United States for nine years.
<PAGE>
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 and Treasurer
of the Company since November 1997. Dr. Kubik was appointed as a director of the
Company in August 1995. During his employ as senior chemist with the Company,
Dr. Kubik was responsible for developing the patent that led to the Company's
introduction of protective plastic film and paper products incorporating
volatile corrosion inhibitors. Prior to joining the Company, Dr. Kubik held a
research and development position with 3M 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. 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 Burmah Castrol plc, an English
petrochemical and materials science company.
Mr. Rikuta was appointed to the Board in November 1997. Mr. Rikuta, a
Japanese citizen, has been employed at Taiyo Petroleum Gas Co. Ltd. as Manager,
ZERUST Department since February 1993. From August 1991 to January 1993, Mr.
Rikuta served as a Sales Representative at the Company. Mr. Rikuta received a
B.A. degree in Economics from Seijo University in Tokyo, Japan in March 1989. In
May 1991, Mr. Rikuta received a B.A. degree in International Relations from the
University of Wisconsin in Milwaukee, Wisconsin.
Dr. Vukcevich was appointed to the Board 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, 1997. Committees
established and maintained by the Board include the Audit Committee and the
Compensation Committee.
The Audit Committee of the Board maintains an active role in
communication with the Company's independent auditors and with the management of
the Company. The Audit Committee for fiscal 1997 consisted of Messrs. Lareau,
Lynch and Dworkin. The Audit Committee met one time during fiscal 1997. Messrs.
Lareau, Lynch and Dworkin will serve as the Audit Committee for fiscal 1998.
<PAGE>
The responsibilities of the Compensation Committee of the Board 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 Compensation Committee,
consisting of Messrs. Dworkin, Hahn and Vukcevich, met one time during fiscal
1997. Messrs. Dworkin, Hahn and Vukcevich will serve as the Compensation
Committee for fiscal 1998.
All of the directors of the Company attended 75% or more of the
aggregate meetings of the Board and all such committees on which they served
during fiscal 1997.
COMPENSATION OF DIRECTORS
DIRECTORS FEES. Each person who was a non-employee director received an
annual retainer of $7,500 in fiscal 1997 for services rendered as a director of
the Company. 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. Pursuant to the
Company's 1994 Stock Incentive Plan, each non-employee director of the Company
is automatically granted a non-qualified option to purchase 2,000 shares of
Common Stock (a "Director Option") on the first day of each fiscal year while
serving as a non-employee director of the Company. Non-employee directors who
are elected or appointed to the Board following the first day of the Company's
fiscal year receive a Director Option 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.
On September 1, 1996, Messrs. Dworkin, Hahn, Lareau, Lynch and
Vukcevich each received a Director Option to purchase 2,000 shares of Common
Stock at an exercise price of $5.00 per share. On September 1, 1997, Messrs.
Dworkin, Hahn, Lareau, Lynch and Vukcevich each received a Director Option to
purchase 2,000 shares of Common Stock at an exercise price of $12.00 per share.
All of such Director Options granted vest in equal one-third installments over a
three-year period.
<PAGE>
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 30, 1997, 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.
SHARES OF COMMON STOCK BENEFICIALLY OWNED (1)
---------------------------------------------
NAME AMOUNT PERCENT OF CLASS (2)
Inter Alia Holding Company.............. 911,668 (3) 21.7%
Herman H. Lee........................... 256,545 (4) 6.1
Sidney Dworkin.......................... 52,500 (5) 1.2
Vincent J. Graziano..................... 79,755 (6) 1.9
Gerhard Hahn............................ 3,641 *
Dr. Donald A. Kubik..................... 95,840 (7) 2.3
Richard G. Lareau....................... 29,676 (8) *
Philip M. Lynch......................... 6,000 (9) *
Haruhiko Rikuta......................... 15,750 (10) *
Dr. Milan R. Vukcevich.................. 2,064 (11) *
Loren M. Ehrmanntraut................... 54,000 (12) 1.3
All directors and executive officers
as a group (11 persons)................. 1,311,659 (13) 30.8
*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) Based on 4,151,790 shares of Common Stock outstanding as of
December 30, 1997.
(3) 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.
(4) Includes 254,545 shares beneficially owned by Mr. Lee, based on
information provided to the Company by Mr. Lee. Includes 2,000 shares
beneficially owned by Mr. Lee's wife as to which he disclaims any
beneficial interest.
(5) 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
6,000 shares of Common Stock which may be acquired within 60 days
pursuant to the exercise of options.
<PAGE>
(6) Includes 29,250 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(7) Includes 2,500 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(8) Includes 2,000 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(9) 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 6,000 shares of Common Stock which may
be acquired within 60 days pursuant to the exercise of options.
(10) Includes 750 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(11) Includes 1,407 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(12) Includes 25,000 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(13) 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 76,657 shares which are held by officers and
directors of the Company which are exercisable within 60 days.
<PAGE>
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
$100,000 in the fiscal year ended August 31, 1997 (the "Named Executive
Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)(1)
--------------------------- ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Vincent J. Graziano 1997 $217,107 $55,000 0 $4,750
PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER 1996 190,443 45,000 0 4,750
1995 182,516 40,000 0 5,574
Philip M. Lynch (2) 1997 0 0 2,000 0 (3)
CHAIRMAN OF THE BOARD AND CO-CHIEF 1996 0 0 2,000 0 (3)
EXECUTIVE OFFICER 1995 0 0 2,000 0 (3)
Donald A. Kubik 1997 176,082 55,000 0 4,750
VICE PRESIDENT AND TREASURER 1996 152,749 45,000 0 5,496
1995 136,487 35,000 0 5,287
Loren M. Ehrmanntraut 1997 117,410 55,000 0 5,013
CHIEF FINANCIAL OFFICER AND SECRETARY 1996 107,410 40,000 0 5,159
1995 92,811 30,000 0 3,584
</TABLE>
- -----------------------------
(1) Compensation hereunder consists of contributions to the 401(k) plans of
the Named Executive Officers.
(2) Mr. Lynch is not an employee of the Company. The options granted to Mr.
Lynch are Director Options granted under the Company's 1994 Stock
Incentive Plan. See "Election of Directors -- Compensation of
Directors" contained in this Proxy Statement.
(3) Does not include any commissions payable to Inter Alia, an entity
affiliated with Mr. Lynch, under a certain Manufacturer's
Representative Agreement. See "Certain Relationships and Related
Transactions" contained in this Proxy Statement.
<PAGE>
OPTION GRANTS AND EXERCISES
The following tables provide information for the year ended August 31,
1997 as to individual grants of options to purchase shares of the Common Stock,
exercises of options and the potential realizable value of the options held by
the Named Executive Officers at August 31, 1997.
OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
PERCENT OF TOTAL OPTIONS
GRANTED TO EMPLOYEES EXERCISE OR BASE
NAME OPTIONS GRANTED (1) IN FISCAL YEAR (2) PRICE ($/SHARE) EXPIRATION DATE
---- ------------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C>
Philip M. Lynch 2,000 0% $5.00 8/31/01
</TABLE>
- -----------------------------
(1) These options were granted under the Company's 1994 Stock Incentive
Plan (the "Plan"). The options vest in three equal installments on the
first, second and third anniversary of the date of grant. To the extent
not already exercisable, options granted under the Plan become
immediately exercisable in full upon certain "changes in control" (as
defined in the Plan) of the Company.
(2) Mr. Lynch is not an employee of the Company. No options were granted to
any employees of the Company during fiscal 1997.
AGGREGATED OPTION EXERCISES IN FISCAL 1997 AND
FISCAL 1997 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT AUGUST 31, 1997 AT AUGUST 31, 1997 (1)
-------------------------- ----------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vincent J. Graziano 0 0 29,250 8,750 $262,860 $78,750
Philip M. Lynch 0 0 4,000 4,000 33,239 27,001
Donald A. Kubik 8,333 $28,541 7,500 7,500 67,500 67,500
Loren M. Ehrmanntraut 0 0 25,000 7,500 224,675 67,500
</TABLE>
- -----------------------------
(1) Value is calculated as the excess of the fair market value of the
Common Stock on August 31, 1997 over the exercise price of the options.
On August 31, 1997, the fair market value of the Common Stock was
$12.00 per share.
<PAGE>
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 manufacturer'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 $42,582, $52,950 and $52,057 for the
fiscal years ending August 31, 1997, 1996 and 1995, 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 August 31, 1984, Inter Alia purchased 119,083 shares of Common Stock
and paid therefor by signing a promissory note. The promissory note (the "Note")
has a face value of $125,375 and bears interest at 11% per year. The Note was
originally due on December 31, 1992 and is currently due on demand. The
outstanding balance of the Note, including accrued interest of $92,579, was
$217,954 at August 31, 1997.
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 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.
Haruhiko Rikuta, a director of the Company, is Manager, Zerust
Department of Taiyo Petroleum Gas Co. Ltd. ("Taiyo Petroleum"). Taiyo Petroleum
is a 50% partner with the Company in Taiyonic Limited, the Company's joint
venture in Japan. Additionally, Taiyo Petroleum is a partner with the Company in
joint ventures in Taiwan, Singapore and South Korea and a 50% partner with the
Company in NTI Asean LLC, a Nevada limited liability company, which has
established joint ventures with third parties in Thailand and Indonesia.
SELECTION OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, independent
certified public accountants, as auditors of the Company for the fiscal year
ending August 31, 1998. Such firm has acted as independent auditors of the
Company since the fiscal year ended August 31, 1990. If the stockholders of the
Company do not ratify the appointment of Deloitte & Touche LLP, another firm of
independent auditors will be considered by the Board of Directors.
Representatives of Deloitte & Touche LLP 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.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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
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, 1997, 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, except that Connie L.
Magnuson, the Company's former Treasurer, failed to file a timely report under
Section 16(a) reporting her appointment as an executive officer of the Company.
Such required report has subsequently been filed.
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Proposals of stockholders of the Company 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 15, 1998.
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, 1997, TO EACH PERSON WHO WAS A
STOCKHOLDER OF THE COMPANY AS OF DECEMBER 30, 1997, 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
Vincent J. Graziano
PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER
January 12, 1998
Lino Lakes, Minnesota
<PAGE>
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 30, 1997 at the Annual
Meeting of the Stockholders of the Company to be held at 11:00 a.m., local time,
on February 20, 1998 at the Sheraton Minneapolis located at 1330 Industrial
Boulevard, Minneapolis, Minnesota 55413, 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, Haruhiko Rikuta, 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, THE 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 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.
