NOCOPI TECHNOLOGIES, INC.
537 Apple Street
W. Conshohocken, PA 19428
- --------------------------------------------------------------------------------
NOTICE OF ANNUAL MEETING
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The Annual Meeting of Shareholders (the "Meeting") of Nocopi Technologies,
Inc., a Maryland corporation (the "Company") will be held at the Radnor Hotel,
591 E. Lancaster Ave., St. Davids, Pennsylvania 19087 at 10:00 a.m. Eastern
Daylight Savings Time on June 8, 1998 for the following purposes:
1. To elect five directors for a one year term to expire at the next annual
meeting of shareholders of the Company;
2. To amend the Company's Articles of Incorporation to increase its
authorized shares of Common Stock from 50,000,000 shares to 75,000,000
shares.
3. To approve the selection of BDO Seidman, LLP as independent auditors;
and
4. To take action upon any other matters which may properly come before the
meeting.
Shareholders of record at the close of business on April 14, 1998 are
entitled to notice of and to vote at the Meeting and any adjournment thereof.
It is important that your shares be represented at the Meeting. I urge you
to sign, date and promptly return the enclosed proxy card in the enclosed
postage paid envelope.
BY ORDER OF THE BOARD OF DIRECTORS
Joel A. Pinsky,
Secretary
April 30, 1998
<PAGE>
NOCOPI TECHNOLOGIES, INC.
537 Apple Street
W. Conshohocken, PA 19428
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 8, 1998
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Nocopi Technologies, Inc., a Maryland corporation (the
"Company") of proxies to be voted at the Company's Annual Meeting of
Shareholders (the "Meeting") to be held on June 8, 1998 at the Radnor Hotel, 591
E. Lancaster Ave., St. Davids, Pennsylvania 19087 at 10:00 a.m., Eastern
Daylight Savings Time, and at any adjournment thereof. It is anticipated that
this Proxy Statement and the accompanying proxy will be mailed to the Company's
shareholders on or about April 30, 1998.
If the enclosed proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Meeting. If a shareholder
indicates in his proxy a choice with respect to any matter to be acted upon, his
shares will be voted in accordance with that shareholder's choice. If no choice
is indicated, the shares will be voted "FOR" the election of nominees identified
herein to the Board of Directors, "FOR" the amendment to the Company's Articles
of Incorporation, "FOR" ratification of the appointment of the firm BDO Seidman
LLP, Certified Public Accountants, to audit the accounts and records of the
Company for the fiscal year ending December 31, 1998, and in the discretion of
the proxies, "FOR" or "AGAINST" and other proposals which may be submitted at
the Meeting. A shareholder giving a proxy may revoke it at any time by giving
written notice to the Secretary of the Company at any time before the proxy is
voted, by executing a proxy bearing a later date, or by attending the Meeting
and voting in person.
PERSONS MAKING THE SOLICITATION
This Proxy Statement solicits proxies on behalf of the Board of Directors
of the Company. The total expense of such solicitation, including the cost of
preparing, assembling and mailing the proxy materials to shareholders, will be
borne by the Company. It is anticipated that solicitations of proxies for the
Meeting will be made only by use of the mails; however, the Company may use the
services of its directors, officers, and employees to solicit proxies personally
or by telephone, without additional salary or compensation to them. Brokerage
houses, custodians, nominees, and fiduciaries will be required to forward the
proxy soliciting materials to the beneficial owners of the
<PAGE>
Company's shares held of record by such persons and the Company will reimburse
such persons for their reasonable out-of-pocket expenses incurred by them in
that connection.
SHARES OUTSTANDING AND VOTING RIGHTS
Only shareholders of record at the close of business on April 14, 1998, are
entitled to notice of any to vote at the Meeting or any adjournment thereof.
A list of shareholders entitled to notice of and to vote at the Meeting
will be made available during regular business hours at the offices of the
Company, 537 Apple Street, W. Conshohocken, PA 19428-2903 from May 1, 1998
through June 8, 1998, for inspection by any shareholder for any purpose germane
to the Meeting.
Shareholder Voting
All voting rights with respect to the election of five (5) directors of the
Company (proposal No. 1 below) and with respect to all other proposals coming
before the Meeting are vested exclusively in the holders of the Company's $0.01
par value voting common stock (the "Common Stock"), with each share entitled to
one vote. Cumulative voting in the election of directors is not allowed. On
April 14, 1998, the Company had 33,587,532 shares of Common Stock outstanding.
One-third of the Company's outstanding Common Stock represented in person
or by proxy shall constitute a quorum at the Meeting. The nominees receiving a
plurality of votes cast at the Meeting, assuming a quorum is present, will be
elected as directors. The affirmative vote of a two-thirds of the outstanding
shares of the Company is necessary to authorize the amendment to the Company's
Articles of Incorporation. The affirmative vote of a majority of the votes cast,
provided a quorum is present, is necessary to ratify the appointment of BDO
Seidman LLP, Certified Public Accountants, to audit the accounts and records of
the Company for the fiscal year ending December 31, 1998. To the Company's
knowledge, no single person or entity, and no group of persons, controls
sufficient votes to determine the outcome of any of the proposals being voted
upon by the shareholders.
2
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of April 14, 1998, the stock ownership
of each director, director nominee and Named Executive (as set forth under the
heading "Executive Compensation") individually, and of all directors and
executive officers of the Company as a group.
Common Stock
Name and Address of Number of Shares Percentage
Beneficial Owner Beneficially Owned Of Class (1)
- ---------------- ------------------ ------------
Richard A. Check 50,000 *
Susan Cox(2) 0 *
Dr. Arshavir Gundjian(3) 155,750 *
Jack H. Halperin 0 *
Neal Sroka 0 *
Norman A. Gardner(4) 730,000 2.17
All Executive Officers and Directors 259,600(5) *
as a Group (7 individuals)
* Less than 1.0%.
- --------
(1) Where the Number of Shares Beneficially Owned (reported in the preceding
column) includes shares which may be purchased upon the exercise of outstanding
stock options which are or within 60 days will become exercisable ("presently
exercisable options") the percentage of class reported in this column has been
calculated assuming the exercise of such presently exercisable options.
(2) Does not include 780,267 Warrants to purchase a like number of shares of
common stock owned by American Equities Overseas, Inc.
(3) Includes presently exercisable stock options to purchase 73,250 shares.
(4) Mr. Gardner resigned as a director effective March 27, 1998.
(5) Includes presently exercisable options to purchase a total of 120,500
shares.
Except as stated herein, there are no arrangements known to the Company
which may result in a change in control of the Company and each shareholder has
sole voting and investment power with respect to the Company's common shares
included in the above table.
3
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A total of five directors will be elected at the Meeting by the holders of
the Company's Common Stock. The proxies will not be voted for a greater number
of persons than the number of nominees named herein. The persons named as
"Proxies" in the enclosed form of Proxy will vote the shares represented by all
valid returned proxies in accordance with the specifications of the shareholders
returning such proxies. If no choice has been specified by a shareholder, the
shares will be voted "FOR" the nominees. If at the time of the Meeting any of
the nominees named below should be unable to unwilling to serve, which event is
not expected to occur, the discretionary authority provided in the proxy will be
exercised to vote for such substitute nominee or nominees, if any, as shall be
designated by the Board of Directors.
Nominees
Management of the Company recommends the election of the five director
nominees set forth below, to hold office until the next annual meeting of
shareholders and until their successors are elected and qualified or until their
earlier death, resignation, or removal. Management has nominated the following
persons for election as directors: Richard A. Check; Dr. Arshaviar Gundjian;
Susan Cox; Neal Sroka and Jack H. Halperin.
DIRECTORS, NOMINEES FOR DIRECTORS AND OFFICERS
Directors of the Company hold office until the next annual meeting of the
shareholders and until their successors have been elected and qualified. The
officers of the Company are appointed by and serve at the pleasure of the Board
of Directors.
The directors, nominees for directors and officers of the Company, their
ages, present positions with the Company, and a summary of their business
experience are set forth below.
Richard A. Check, 45, President and Chief Executive Officer. From 1975 to
October 1992 Mr. Check was President and Chief Executive Officer of Weiss Miquon
Paper Distribution Company. From October 1992 to October 1996, he was Division
President, Group Vice President and Business Manager at Alco Standard
Corporation and Unisource Worldwide, Inc. From October 1, 1996, until joining
the Company on October 1, 1997, he was a principal in Liberty Bell Brokerage
Company.
4
<PAGE>
Dr. Arshavir Gundjian, 62, Senior Vice President, Technology & Technical
Sales Worldwide (since 1985) and a director (since 1991) of the Company. Dr.
Gundjian has held a teaching and research position in the specialized areas of
electronic semi-conductors and laser optics at McGill University in Montreal,
Quebec since 1965, and has published more than 25 papers in these areas. He was
Chairman of Graduate Studies of the McGill University Department of Electrical
Engineering until 1989. Dr. Gundjian is also Chairman of the International
Electro-Technical Commission Canadian Subcommittee on laser equipment. He is a
member of the Optical Society of America and the New York Academy of Sciences.
Susan Cox, 44, a director, has been a consultant to American Equities
Overseas (U.K.) Ltd. since March, 1981 and a director of it since May, 1994.
Neal Sroka, 45, a director, was President of Sroka Associates, Inc. an
investigative consulting firm, from 1991 to 1997. From 1997 to the present, he
has been Chairman and Chief Executive Officer of Management Services
International.
Jack H. Halperin, 51, a director, has been engaged in the practice of
Corporate and Securities Law for 26 years. He holds an A.B. degree (summa cum
laude) from Columbia College and a J.D. degree from New York University School
of Law where he was Note-and-Comment Editor of the Law Review. Mr. Halperin is
also a director of AccuMed International, Inc., I-Flow Corporation, Memry
Corporation and Pacific Pharmaceuticals, Inc.
Rudolph A. Lutterschmidt, 51, Vice President and Chief Financial Officer
(since 1994) of the Company. Mr. Lutterschmidt became Vice President and
Controller of the Company in April 1992 after having served as the Company's
Controller on a consulting basis from July 1991 to March 1992. He is a member of
the Financial Executives Institute and the Institute of Management Accountants
and is a Certified Management Accountant.
Joel A. Pinsky, 62, Secretary and General Counsel of the Company, served as
a director from 1992 until March 27, 1998. Mr. Pinsky has engaged in the
practice of law as a partner with the law firm of Gross, Pinsky (barristers and
solicitors) for more than thirty years.
The Board of Directors has the following standing committees:
1. An Audit Committee composed of Ms. Cox, Mr. Halperin and Mr. Sroka,
which selects, subject to Board approval (and, if the Board so
determines, subject to shareholder approval), the independent
accountants to audit the Company's books and records, and considers
and acts upon accounting matters as they arise. The Audit Committee
(consisting of Ms. Cox, Mr. Drake and Mr. Pinsky) met once during the
year ended December 31, 1997.
2. A Compensation and Stock Option Committee, composed of Ms. Cox, Mr.
Halperin and Mr. Sroka. The Compensation and Stock Option Committee
administers the Company's stock option plans and recommends
compensation policies to the Board of Directors. The Compensation and
Stock Option
5
<PAGE>
Committee (which consisted of Messrs. Drake and Pinsky) met once
during the year ended December 31, 1997.
The Board of Directors met nine times during the year ended December 31,
1997. During 1997, no director attended fewer than 75% of the aggregate of all
meetings of the Board of Directors and all meetings of each committee on which
such director serves.
PROPOSAL NO. 2
AMENDMENT OF ARTICLES OF INCORPORATION
The Board of Directors is proposing for adoption by shareholders an
amendment to the Company's Articles of Incorporation to increase its authorized
shares of common stock from 50,000,000 shares to 75,000,000 shares. The
amendment requires the affirmative vote of the holders of two-thirds of the
outstanding shares of Common Stock of the Company. The Board of Directors
recommends a vote for the amendment. The Company presently has outstanding
33,587,332 shares. It also has reserved for options 700,000 shares and
10,533,606 warrants. The Company believes that the 3,628,290 shares that are
available for issue are inadequate to provide incentives to employees and
directors and for other purposes. The Company reserves the right, however, to
issue any of such additional shares for one or more corporate purposes,
including incentives for employees or directors, future financings or
acquisitions. The Company has no specific plans for any such transaction. The
effect of the amendment is to enable the Board of Directors, subject to the
limitations of Maryland law and other applicable laws and regulations (including
those requiring shareholder approval for certain actions) to issue authorized
and unissued shares without further amendment to the Articles of Incorporation
and without further approval of the holders of Common Stock.
PROPOSAL NO.3
RATIFICATION OF AUDITORS
The firm of BDO Seidman LLP, Certified Public Accountants, has audited the
Financial Statements of the Company as at December 31, 1997 and for the year
then ended. The Board of Directors has appointed such firm to audit the accounts
and records of the Company for the fiscal year ended December 31, 1998. It is
proposed that the appointment of BDO Seidman LLP be submitted to the
shareholders for ratification. Neither such firm nor any of its members or any
of their associated has or has had any financial interest in the Company, direct
or indirect, or any relationship with the Company other than in connection with
their duties as auditors and accountants.
6
<PAGE>
Shareholder ratification of this appointment is not required. Management
has submitted this matter to the Shareholders because it believes the
shareholders' views on the matter should be considered and if the proposal is
not approved, management may reconsider the appointment for the fiscal year
ending December 31, 1998. The Board of Directors recommends that the
shareholders vote "FOR" this proposal.
It is anticipated that a representative of BDO Seidman LLP will be present
at the Meeting. Such representative will be give the opportunity to make a
statement should he so desire and will be available to answer appropriate
questions.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
1997, 1996 and 1995 earned by or paid to Richard A. Check the Company's Chief
Executive Officer, and the only other executive officers whose total annual
salary and bonus for 1997 exceeded $100,000 (the "Named Executives").
7
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
- -------------------------------------------------------------------------------------------------------------
All
Other Other
Annual Restric- Options LTIP Compen-
Name and Salary Bonus Compen- ted Stock SARs Payout sation
Position Year ($) ($) sation Awards (#) ($) ($)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard A. 1997 60,211 1,800 200,000
Check, Chief
Executive
Officer
- -------------------------------------------------------------------------------------------------------------
Norman 1997 168,448 8,930(1) 200,000
A. Gardner(2) 1996 195,000 26,666 13,458(1) 23,000
1995 152,625 14,019(1) 180,000
- -------------------------------------------------------------------------------------------------------------
Dr. Arshavir 1997 142,341 14,133(3)
Gundijian, 1996 165,000 21,500(3) 20,000
Senior Vice 1995 138,750 26,666 9,504(1) 33,250
President,
Technology &
Technical
Sales
Worldwide
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The following table furnishes information concerning stock options
granted during 1997.
- -----------
(1) Reimbursement of automobile expense.
(2) Mr. Gardner resigned as President & Chief Executive Officer effective
October 24, 1997 and resigned as a director effective March 27, 1998.
(3) Reimbursement of automobile expenses and expense allowances related to
extended foreign travel.
8
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Option Term
- -------------------------------------------------------------------------------------------------------------
% of Total
Options/
Securities SARs Granted
Underlying to All Exercise of
Options/ Employees in Base
SARs Fiscal Price Expiration
Name Granted(#) Year ($/SH.) date 5% ($) 10% ($)(1)
- ---- ---------- ---- ------- ---- ------ ----------
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Norman A. 200,000 38.1 0.45 10/2005 42,900 103,000
Gardner
- -------------------------------------------------------------------------------------------------------------
Richard A. 200,000 38.1 0.30 10/2005 28,600 68,600
Check
- -------------------------------------------------------------------------------------------------------------
</TABLE>
The following table sets forth the aggregate number of shares of Common
Stock subject to options held by the Named Executives at December 31, 1997.
(1) As required by the rules of the Securities and Exchange Commission, the
dollar amounts reflected in these columns represent the hypothetical gain that
would exist for the options based on assumed 5% and 10% annual compounded rates
of stock price appreciation over the full option term. These assumed rates would
result in a Common Stock price on October 23, 2005, the date the options first
listed above expire, of $0.66 and $0.96 respectively. If these price
appreciation assumptions are applied to all of the Company's outstanding Common
Stock on the grant date, such Common Stock would appreciate in the aggregate by
approximately $7 million and $17 million, respectively, over the same term.
These prescribed rates are not intended to forecast possible future
appreciation, if any, of the Common Stock.
9
<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Year End Fiscal Year End
- ------------------------------------------------------------------------------------------
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard A. Check _____ _____ ---/200,000 -/2,500
- ------------------------------------------------------------------------------------------
Norman A. Gardner _____ _____ ---/200,000 -/-
- ------------------------------------------------------------------------------------------
Arshivar Gundjian _____ _____ 73,250/ - -/-
- ------------------------------------------------------------------------------------------
</TABLE>
Employment Contracts
In October 1997 the Company entered into an Employment Agreement with
Richard A. Check pursuant to which he will serve as President and Chief
Executive Officer of the Company. The Agreement has a three year term and
provides for base compensation at the rate of $180,000 per annum. Mr. Check's
agreement also provides for a bonus equal to 10% of the excess, if any, of the
Company's net income before taxes for any year over $250,000. The bonus may not
exceed $180,000 for any year. Mr. Check is currently being paid at the rate of
$150,000 per annum because of the Company's cash constraints.
The Agreement may be terminated for cause if Mr. Check breaches his
obligations under the Agreement or has committed an act of dishonesty, moral
turpitude or theft or has breached his duty of loyalty to the Company or upon an
act of insubordination to the Board of Directors.
Norman A. Gardner entered into an Employment Agreement dated October 24,
1997, initially having a three-year term. The Agreement was amended effective
March 27, 1998. The Agreement, as amended, provides for Mr. Gardner to serve as
Senior Advisor to the Company with a salary at the rate of $180,000 per annum.
Mr. Gardner's agreement also provides for a bonus equal to 10% of the excess, if
any, of the Company's net income before taxes for any year over $250,000. The
bonus may not exceed $125,000 for any year. The term of the Agreement, as
amended, expires on October 31, 2002. Mr. Gardner also received 200,000 stock
options at an exercise price of $0.45 and 125,000 stock options at an exercise
price of $0.30 per share.
The Agreement is terminable for cause consisting of (i) breach by Mr.
Gardner of his obligations under the Agreement or (ii) that Mr. Gardner has
committed an act of dishonesty, moral turpitude or theft.
10
<PAGE>
The Company has an employment agreement with Dr. Arshavir Gundijian
pursuant to which the Company has employed Dr. Gundjian through December 31,
1998, with two one-year renewal terms at the option of the Company. Should the
Company choose not to exercise its option to reemploy Dr. Gundjian at the end of
the initial term or the initial renewal term, the Company has agreed to engage
Dr. Gundjian as a consultant on an annual basis at $82,500 per year for two
years, and $62,500 per year for a further two years. The agreement provides for
a base salary of $165,000 per annum during Dr. Gundjian's employment, a cash
bonus of up to $50,000 payable in respect of each year of his employment (or
$25,000 in respect of each year of his consultancy, should the Company not
exercise its option to reemploy Dr. Gundjian) if certain financial goals of the
Company are met, and additional bonuses if additional financial goals are
achieved. In addition, the Company has agreed to pay Dr. Gundjian's lodging and
automobile expenses, as well as the cost of weekly travel between the Company's
headquarters in W. Conshohocken, Pennsylvania and Dr. Gundjian's home in
Montreal, Quebec.
The agreement may be terminated by the Company for legal cause, or upon Dr.
Gundjian's death or disability. In the event that Dr. Gundjian's employment is
terminated without cause as a result of his disability or death, Dr. Gundjian
(or his estate) is entitled to receive the balance of the base salary payable to
him through the remaining term of the agreement.
The agreement confirms the Company's ownership of all intellectual property
developed during Dr. Gundjian's employment, and contains his undertaking not to
compete with the Company for a period of three years from the termination of his
employment.
Director Compensation
Directors have not been paid any fees for their services as such during the
year ended December 31, 1997. All directors have been and will be reimbursed for
reasonable expenses incurred in connection with attendance at Board of Directors
meetings.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
During 1997, the Company imposed salary reductions upon a broad group of
employees by reason of the severe cash shortages which the Company was
experiencing. These salary reductions affected the compensation offered to Mr.
Check as the incoming chief executive officer as well as that of Mr. Gardner,
who preceded Mr. Check in that function. These arrangements continue, with Mr.
Check's compensation to be restored to its normal level following such time as
the Company achieves two consecutive quarters of positive cash flow.
11
<PAGE>
As it has done in the past, the Compensation Committee formulates
compensation policy by considering both the size and nature of the Company's
current activities and the Company's future prospects. In light of the Company's
modest revenues, its cash constraints, and the future potential of its
technologies and products, the policies of the Compensation Committee are:
To provide cash compensation for executive officers, principally in the
form of salary, which is considered adequate but not excessive in light of the
Company's limited resources. In addition, cash bonuses are expected to be paid
upon attainment of specific goals related to financial results.
The compensation of Mr. Check in his capacity as chief executive officer
has been determined by the Compensation Committee and reflected in an employment
agreement. In the view of the Compensation Committee, the chief executive
officer is primarily responsible for the development and implementation of
corporate strategy and the development of shareholder value. During 1997, the
Company, under Mr. Check's guidance began to implement a business strategy
emphasizing the development of revenues from licensing and sales in new markets.
The Committee believes that Mr. Check will bring to the role of chief executive
officer new perspectives which will be beneficial to the creation of shareholder
value, and that the portion of his compensation consisting of options under the
Company's stock option plans is consistent with Mr. Check's responsibility in
this respect.
The Compensation Committee of the Board of Directors:
William Drake
Joel A. Pinsky
Performance Graph
The following graph compares the cumulative shareholder return on the
Common Stock of the Company, for the period from August 21, 1992 (when the
Company first registered its Common Stock under the Securities Exchange Act of
1934, as amended) through December 31, 1997, with the cumulative total return of
the NASDAQ Broad Market Index, and a Similar Market Capitalization Index. The
NASDAQ Broad Market Index includes all domestic common shares traded on the
NASDAQ National Market and the NASDAQ Small-Cap Market, while the Similar
Capitalization Index only issuers which are included in the NASDAQ Broad Market
Index and had a market capitalization at August 21, 1992 of between $40 million
and $50 million.
12
<PAGE>
Comparison of Total Returns Among the Company, a Similar Market Capitalization
Index and the Broad Market NASDAQ Index
[GRAPHIC]
In the printed version of the document, a line graph appears which depicts
the following plot points:
NASDAQ PEER NOCOPI NASDAQ
----------- ------ ------
8/21/92
9/30/92
12/31/92
3/31/93
6/30/93
9/30/93
12/31/93
3/31/94
6/30/94
9/3094 [PLOT POINTS TO BE SUPPLIED]
12/31/94
3/31/95
6/30/95
9/30/95
12/31/95
3/31/96
6/30/96
9/30/96
12/30/96
Notes: 1. Total return assumes reinvestment of dividends.
2. Fiscal Year Ending December 31.
3. Return based on $100 dollars invested on August 21, 1992 in the
Company stock, a similar market capitalization index and the
broad market NASDAQ index.
4. Both the comparative indices were provided by Standard & Poor's
Compustat service.
13
<PAGE>
Compliance with Section 16(a) of the Exchange Act
Based solely upon a review of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during or with respect to the Company's fiscal year
ended December 31, 1997 (and the written representations of certain persons that
such persons were not required to file an annual report on Form 5 in respect of
such year), except as described below, no person who, at any time during such
fiscal year was a director or officer of the Company or beneficially owned ten
percent or more of the outstanding common stock of the Company, failed to timely
file reports required by Section 16(a) of the Exchange Act. Ms. Cox and Mr.
Sroka failed to timely file their initial reports on Form 3. All reports
required to be filed by Ms. Cox and Mr. Sroka have subsequently been filed.
CERTAIN TRANSACTIONS
Other Transactions
Joel A. Pinsky, Secretary, General Counsel and a director of the Company
until March 27, 1998, is a partner in the Montreal law firm of Gross, Pinsky
which rendered legal services to the Company during the fiscal year ended
December 31, 1997.
William F. Drake, a director of the Company until March 27, 1998, is of
counsel to the law firm of Montgomery, McCracken, Walker & Rhoads, Philadelphia,
Pennsylvania. Such law firm furnished legal services to the Company during the
fiscal year ended December 31, 1997.
For additional information regarding related party transactions,
shareholders are directed to footnote 5, "Related Party Transactions," contained
in the Notes to the Financial Statements of the Company appearing in the Annual
Report on form 10-K for the year ended December 31, 1997 which is enclosed with
this Proxy Statement.
Except as otherwise described herein, no officer or director of the Company
has, or proposes to have, any direct or indirect material interest by securities
holdings, contract, or otherwise, in the Company, or in any assets of the
Company, or in any purchase, the value of which will be affected by the
operations of the Company.
14
<PAGE>
OTHER BUSINESS
As of the date of this Proxy Statement, management of the Company was not
aware of any matter to be presented at the Meeting other than as set forth
herein. If any other matters are properly brought before the Meeting, however,
the shares represented by valid proxies will be voted with respect to such
matters in accordance with the judgment of the persons voting them. A majority
of the shares present which are entitled to vote thereon would be necessary to
approve any such matters.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS
FOR ANNUAL MEETING TO BE HELD IN 1999
Any proposal by a Shareholder to be presented at the Company's next Annual
Meeting of Shareholders, currently expected to be held in June 1999, must be
received at the offices of the Company, 537 Apple Street, W. Conshohocken, PA
19428-2903 not later than December 31, 1998.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31, 1997, is
enclosed herewith for your information. Portions of the Annual Report are
incorporated by reference into this Proxy Statement and are considered part of
the soliciting materials.
BY ORDER OF THE BOARD OF DIRECTORS
Joel A. Pinsky,
Secretary
April 30, 1998
15
<PAGE>
Proxy
NOCOPI TECHNOLOGIES, INC.
Annual Meeting of Shareholders
to be held June 8, 1998
The undersigned hereby constitutes and appoints Rudolph Lutterschmidt and
Joyce Csanady, and either of them, with full power of substitution, as proxies,
to vote for the undersigned all shares of the common stock, par value $.01 of
Nocopi Technologies, Inc., a Maryland corporation (the "Company") that the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders to be held on June 8, 1998 at 10 a.m., Eastern Daylight
Savings Time, or at any adjournments thereof, upon the matters described in the
accompanying proxy statement and upon such other matters as may be properly come
before the meeting. Said proxies are directed to vote or refrain from voting on
the matters set forth in the accompanying proxy statement in the manner set
forth on the reverse side of this proxy.
/X/ Please mark your vote as in this example.
Nominees as directors:
Messrs. Check, Halperin, Sroka, Ms. Cox and Dr. Gundjian
FOR WITHHELD
1. Election of Directors. / / / /
For all listed Withhold Authority
nominees for all listed
(except for the nominees
following
persons, as to whom
authority to vote
FOR
is withheld)
2. Authorization of Amendment to the Company's Articles of Incorporation as
described in the accompanying Proxy Statement.
FOR AGAINST ABSTAIN
/ / / / / /
<PAGE>
3. Ratification of the appointment of BDO Seidman, LLP the Company's
Independent Accountants.
FOR AGAINST ABSTAIN
/ / / / / /
In the event that any of the above nominees for director are unable or unwilling
to serve at the time of the meeting, the proxies are authorized to vote in their
discretion for any substitute nominees(s) selected by the Board of Directors. In
their discretion, the proxies are authorized to vote upon such other matters as
may properly come before the meeting or any adjournments thereof.
This proxy is solicited on behalf of the Board of Directors.
This proxy, when properly executed, will be voted in the manner directed on the
face hereof. If no direction is made, this proxy will be voted FOR the above
named nominees for election as directors, FOR proposal 2 and FOR Proposal 3.
The undersigned represents that he has received the Company's Annual Report for
the year ended December 31, 1997 and the Company's Proxy Statement furnished in
connection with the Annual Meeting of Shareholders.
Please date, sign and return this proxy card promptly in the accompanying
envelope. No postage is required. If you furnish a proxy and subsequently attend
the annual meeting in person, you may vote in person.
Signature_________________ Date ______ Signature_________________ Date _________
Joint Signature(if necessary)
Note: Please sign exactly as the name appears hereon. When shares are held by
joint tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please furnish 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.
