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 19, 1999
The Annual Meeting of the Stockholders of Northern Technologies
International Corporation, a Delaware corporation (the "Company"), will be held
at the Hyatt Regency Minneapolis, 1300 Nicollet Mall, Minneapolis, Minnesota
55403, beginning at 11:00 a.m., local time, on Friday, February 19, 1999, 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, 1999; 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, 1998.
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 11, 1999
Lino Lakes, Minnesota
<PAGE>
NORTHERN TECHNOLOGIES INTERNATIONAL CORPORATION
6680 N. HIGHWAY 49
LINO LAKES, MINNESOTA 55014
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 19, 1999
INTRODUCTION
The Annual Meeting of Stockholders of Northern Technologies International
Corporation (the "Company") will be held on Friday, February 19, 1999, at 11:00
a.m., local time, at the Hyatt Regency Minneapolis, 1300 Nicollet Mall,
Minneapolis, Minnesota 55403, 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 11, 1999.
<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, 1998 will be
entitled to vote at the Annual Meeting. On December 30, 1998, the Company had
3,874,359 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.
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.
2
<PAGE>
INFORMATION ABOUT NOMINEES
The following table sets forth certain information as of January 11, 1999,
which has been furnished to the Company by each person who has 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 77 Chairman of the Board and Chief Executive 1979
Officer of Advanced Modular Systems, Inc.
Vincent J. Graziano 65 Co-Chief Executive Officer and President of 1979
the Company
Gerhard Hahn 54 General Manager of Knuppel KG 1996
Dr. Donald A. Kubik 58 Vice President and Treasurer of the Company 1995
Richard G. Lareau 70 Partner of Oppenheimer Wolff & Donnelly 1980
LLP
Philip M. Lynch 62 Co-Chief Executive Officer and Chairman of 1979
the Board of the Company and Executive
Vice President of Inter Alia Holding
Company
Haruhiko Rikuta 33 Manager, Zerust Department of Taiyo 1997
Petroleum Gas Co. Ltd.
Dr. Milan R. Vukcevich 61 Director of Materials Research and 1995
Development 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 that 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., Grand Court Lifestyle, Inc., Paragon
Mortgage Co. and Novarest, 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 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.
3
<PAGE>
Mr. Hahn, a German citizen, 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.
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. 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 LLP 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, 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 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 three meetings during the fiscal year ended August 31, 1998. 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 1998 consisted of Messrs. Lareau, Lynch and
Dworkin. The Audit Committee met one time during fiscal 1998. Messrs. Lareau,
Lynch and Dworkin will serve as the Audit Committee for fiscal 1999.
4
<PAGE>
The responsibilities of the Compensation Committee of the Board include
setting the compensation for the 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 1998. Messrs. Dworkin, Hahn, Rikuta and Vukcevich
will serve as the Compensation Committee for fiscal 1999.
All of the directors of the Company except Mr. Rikuta (who missed one
Board meeting) attended 75% or more of the aggregate meetings of the Board and
all such committees on which they served during fiscal 1998.
COMPENSATION OF DIRECTORS
DIRECTORS FEES. Each person who was a non-employee director received an
annual retainer of $7,500 in fiscal 1998 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. On September 1,
1998, Messrs. Dworkin, Hahn, Lareau, Lynch, Rikuta and Vukcevich each received a
Director Option to purchase 2,000 shares of Common Stock at an exercise price of
$6.25 per share. All of such Director Options granted vest in equal one-third
installments over a three-year period.
5
<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, 1998, unless
otherwise 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) 23.5%
Sidney Dworkin........................ 54,501 (4) 1.4
Constance M. Fason.................... 0 *
Vincent J. Graziano................... 88,505 (5) 2.3
Gerhard Hahn.......................... 5,448 *
Dr. Donald A. Kubik................... 103,340 2.7
Richard G. Lareau..................... 26,677 (6) *
Philip M. Lynch....................... 3,334 (7) *
Haruhiko Rikuta....................... 16,525 (8) *
Dr. Milan R. Vukcevich................ 3,398 (9) *
Loren M. Ehrmanntraut................. 62,000 (10) 1.6
All directors and executive officers
as a group (12 persons)............... 1,299,611 (11) 32.9
- ------------------------
*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 3,874,359 shares of Common Stock outstanding as of December 30,
1998.
(3) Includes 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 an officer and director.
(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
6,001 shares of Common Stock which may be acquired within 60 days pursuant
to the exercise of options.
(5) Includes 35,000 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.
6
<PAGE>
(7) Does not include 911,668 shares held of record or beneficially owned by
Inter Alia Holding Company, of which Mr. Lynch is an officer and director.
Includes 3,334 shares of Common Stock which may be acquired within 60 days
pursuant to the exercise of options.
(8) Includes 525 shares of Common Stock which may be acquired within 60 days
pursuant to the exercise of options.
(9) Includes 667 shares of Common Stock which may be acquired within 60 days
pursuant to the exercise of options.
(10) Includes 30,000 shares of Common Stock which may be acquired within 60
days pursuant to the exercise of options.
(11) 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 an 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 79,528 shares
which are held by officers and directors of the Company which are
exercisable within 60 days.
7
<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
$100,000 in the fiscal year ended August 31, 1998 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) OPTIONS (#) COMPENSATION ($)(2)
--------------------------- ---- ---------- ------------ ----------- -------------------
<S> <C> <C> <C> <C> <C>
Vincent J. Graziano 1998 $230,000 $55,000 0 $5,000
PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER 1997 217,107 55,000 0 4,750
1996 190,443 45,000 0 4,750
Philip M. Lynch (3) 1998 0 0 2,000 0 (4)
CHAIRMAN OF THE BOARD AND CO-CHIEF 1997 0 0 2,000 0 (4)
EXECUTIVE OFFICER 1996 0 0 2,000 0 (4)
Donald A. Kubik 1998 200,000 55,000 0 5,000
VICE PRESIDENT AND TREASURER 1997 176,082 55,000 0 4,750
1996 152,749 45,000 0 5,496
Loren M. Ehrmanntraut 1998 117,410 55,000 0 5,000
CHIEF FINANCIAL OFFICER AND SECRETARY 1997 117,410 55,000 0 5,013
1996 107,410 40,000 0 5,159
Constance M. Fason 1998 108,000 0 0 0
VICE PRESIDENT
</TABLE>
- -----------------------------
(1) Bonuses paid in 1998 were earned in 1997, bonuses paid in 1997 were earned
in 1996 and bonuses paid in 1996 were earned in 1995.
(2) Compensation hereunder consists of contributions to the 401(k) plans of
the Named Executive Officers.
(3) Mr. Lynch is not an employee of the Company. The options granted to Mr.
Lynch are Director Options granted under the Company's 1994 Stock
Incentive Plan. See "Election of Directors -- Compensation of Directors"
contained in this Proxy Statement.
(4) Does not include any commissions payable to Inter Alia Holding Company, an
entity affiliated with Mr. Lynch, under a certain Manufacturer's
Representative Agreement. See "Certain Relationships and Related
Transactions" contained in this Proxy Statement.
8
<PAGE>
OPTION GRANTS AND EXERCISES
The following tables provide information for the year ended August
31, 1998 as to individual grants of options to purchase shares of the Common
Stock, exercises of options and the potential realizable value of the options
held by the Named Executive Officers at August 31, 1998.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
PERCENT OF TOTAL OPTIONS
GRANTED TO EMPLOYEES EXERCISE OR BASE
NAME OPTIONS GRANTED (1) IN FISCAL YEAR (2) PRICE ($/SHARE) EXPIRATION DATE
---- ------------------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Philip M. Lynch 2,000 0% $12.00 8/31/2003
</TABLE>
(1) These options were granted under the Company's 1994 Stock Incentive Plan
(the "Plan"). The options vest in three equal installments on the first,
second and third anniversary of the date of grant. To the extent not
already exercisable, options granted under the Plan become immediately
exercisable in full upon certain "changes in control" (as defined in the
Plan) of the Company.
(2) Mr. Lynch is not an employee of the Company. No options were granted to
any employees of the Company during fiscal 1998.
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND
FISCAL 1998 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT AUGUST 31, 1998 AT AUGUST 31, 1998 (1)
-------------------------- ----------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Vincent J. Graziano 0 0 38,000 0 $130,250 $0
Philip M. Lynch 0 0 6,000 4,000 14,449 1,916
Donald A. Kubik 10,000 $28,541 5,000 0 17,118 0
Loren M. Ehrmanntraut 0 0 32,500 0 111,406 0
Constance M. Fason 0 0 0 0 0 0
</TABLE>
- ---------------------------
(1) Value is calculated as the excess of the fair market value of the Common
Stock on August 31, 1998 over the exercise price of the options. On August
31, 1998, the fair market value of the Common Stock was $6.4375 per share.
9
<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 Holding Company, a financial and management
consulting firm of which Philip M. Lynch, the Chairman of the Board of Directors
of the Company, is an officer and director. Under the Agreement, Inter Alia
Holding Company (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 Holding Company. 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, which
resulted in commissions of $51,754, $42,582 and $52,950 for the fiscal years
ending August 31, 1998, 1997 and 1996, 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 $105,543 was
$230,919 at August 31, 1998.
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
the joint venture in 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 the Asean region.
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, 1999. 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.
10
<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, 1998, 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 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 13, 1999.
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, 1998, TO EACH PERSON WHO WAS A
STOCKHOLDER OF THE COMPANY AS OF DECEMBER 30, 1998, 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
January 11, 1999
Lino Lakes, Minnesota
11
<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
Stockholders 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, 1998 at the Annual
Meeting of the Stockholders of the Company to be held at 11:00 a.m., local time,
on February 19, 1999, at the Hyatt Regency Minneapolis located at 1300 Nicollet
Mall, Minneapolis, Minnesota 55403, and any adjournments thereof.
1. ELECTION OF DIRECTORS:
|_| FOR all nominees listed below |_| AGAINST all nominees
(except as marked to the contrary below) listed 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)
<PAGE>
(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.
