SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/_/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NOCOPI TECHNOLOGIES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
NOCOPI TECHNOLOGIES, INC.
537 APPLE STREET
W. CONSHOHOCKEN, PA 19428
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of Nocopi Technologies, Inc., a Maryland corporation (the
"Company"), which will be held at the Holiday Inn of Fort Washington, 432
Pennsylvania Avenue, Fort Washington, PA 19034 at 10:00 a.m., Local Time, on
November 30, 1999. Your Board of Directors and management look forward to
personally greeting those shareholders able to attend.
The items to be considered and voted on at the meeting are described in
the notice of the Meeting and the proxy statement accompanying this letter.
You may receive materials from a group of dissident shareholders
calling itself the Nocopi Committee to Maximize Our Return on Equity (the
"Pinsky Group") soliciting your vote for a slate of directors which includes
Joel Pinsky, a former officer and director of the Company.
THE BOARD OF DIRECTORS BELIEVES THAT THE ELECTION OF THE INDIVIDUALS
NOMINATED BY THE PINSKY GROUP IS NOT IN THE BEST INTERESTS OF THE
COMPANY AND ITS SHAREHOLDERS AND URGES YOU NOT TO VOTE FOR THEIR
ELECTION.
The current management team has been in place only eight months and
during that time has reduced expenses, recruited excellent, experienced
candidates for directors, and has implemented a search for strategic
alternatives which will attempt to realize value for shareholders after sixteen
years of losses. The Board includes representatives of investors who have
provided $9.7 million in financing for the Company and are committed to
increasing value for all shareholders.
Regardless of the number of shares you own or whether you plan to
attend, it is important that your shares be represented and voted at the Meeting
by completing the WHITE proxy card.
<PAGE>
THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED
WHITE PROXY CARD PROMPTLY.
THE BOARD UNANIMOUSLY OPPOSES THE PINSKY GROUP SOLICITATION.
THE BOARD URGES YOU NOT TO SIGN OR RETURN
ANY BLUE CARD SENT TO YOU BY THE PINSKY GROUP.
We wish to thank our shareholders for their participation and continued
support.
Sincerely,
---------------------
Jack H. Halperin
Chairman of the Board
<PAGE>
NOCOPI TECHNOLOGIES, INC.
537 APPLE STREET
W. CONSHOHOCKEN, PA 19428
------------------------------------------------------------
NOTICE OF ANNUAL MEETING
TO BE HELD ON NOVEMBER 30, 1999
-------------------------------------------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Meeting") of Nocopi Technologies, Inc., a Maryland corporation (the "Company"),
will be held at the Holiday Inn of Fort Washington, 432 Pennsylvania Avenue,
Fort Washington, PA 19034 at 10:00 a.m., Local Time, on November 30, 1999 for
the following purposes:
1. To elect six directors for a one year term to expire at the next
annual meeting of shareholders of the Company and until their
successors have been duly elected and qualified. The Board of
Directors recommends a vote FOR the election of the nominees proposed
for election by the Company, as described in the Company's proxy
statement.
2. To act upon a shareholder proposal that would require shareholder
approval of any proposal which changes the conversion rights of
shareholders of Euro-Nocopi, S.A. ("Euro-Nocopi") or changes any
rights of the Company with respect to such conversion, as more fully
described in Proposal No. 2 hereof. The Board of Directors recommends
a vote AGAINST this proposal.
3. To act upon a shareholder proposal to amend the Company's Articles of
Incorporation with respect to transactions between the Company and its
officers, directors, affiliates and principal shareholders, as more
fully described in Proposal No. 3 hereof. The Board of Directors
recommends a vote AGAINST this proposal.
4. To approve the selection of BDO Seidman, LLP as independent auditors.
The Board of Directors recommends a vote FOR this proposal.
5. To take action upon any other matters which may properly come before
the meeting.
The above matters are more fully described in the accompanying proxy
statement.
<PAGE>
Only shareholders of record at the close of business on October 25,
1999 are entitled to notice of and to vote at the Meeting and any adjournment(s)
or postponement(s) thereof.
All shareholders are cordially invited to attend the Meeting. To assure
your representation at the Meeting, you are urged to sign, date and promptly
return the enclosed WHITE proxy card as promptly as possible in the enclosed
postage-prepaid envelope. Any shareholder attending the Meeting may vote in
person even if he or she has returned a proxy.
THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED
WHITE PROXY CARD PROMPTLY.
THE BOARD UNANIMOUSLY OPPOSES THE PINSKY GROUP SOLICITATION.
THE BOARD URGES YOU NOT TO SIGN OR RETURN
ANY BLUE CARD SENT TO YOU BY THE PINSKY GROUP.
By Order of the Board of Directors,
--------------------------
Jack H. Halperin
Chairman of the Board
Dated: _______ ___, 1999
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE AND PROMPTLY
RETURN THE WHITE PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
NOCOPI TECHNOLOGIES, INC.
537 APPLE STREET
W. CONSHOHOCKEN, PA 19428
-------------------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30, 1999
-------------------------------------
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 November 30, 1999 at the Holiday Inn
of Fort Washington, 432 Pennsylvania Avenue, Fort Washington, PA 19034, at 10:00
a.m., Local Time, and at any adjournment(s) or postponement(s) thereof. It is
anticipated that this Proxy Statement and the accompanying proxy will be mailed
to the Company's shareholders on or about November___, 1999.
The Company's Annual Report on Form 10-KSB for the year ended December
31, 1998, is enclosed herewith for your information. The Annual Report is not to
be deemed soliciting material.
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 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.
An opposing solicitation has been made by a dissident shareholder group
calling itself the Nocopi Committee to Maximize Our Return on Equity (the
"Pinsky Group"). Pursuant to a preliminary proxy statement filed on October 26,
1999, the Pinsky Group has nominated five individuals for election to the Board
of Directors in opposition to the Company's six nominees. As such, if all of the
Pinsky Group's nominees are elected to the Board, then one of the Company's
nominees will also be elected. One of the individuals nominated by the Pinsky
Group is Joel Pinsky who is a former officer and director of the Company. The
Pinsky Group intends to seek reimbursement from the Company for its expenses in
connection with their proxy solicitation.
THE BOARD OF DIRECTORS BELIEVES THAT THE ELECTION OF THE INDIVIDUALS
NOMINATED BY THE PINSKY GROUP IS NOT IN THE BEST INTERESTS OF THE
COMPANY AND ITS SHAREHOLDERS AND URGES YOU NOT TO VOTE FOR THEIR
ELECTION.
<PAGE>
REVOCABILITY OF PROXIES
The execution of a proxy will not affect a shareholder's right to
attend the Meeting and vote in person. Any proxy given pursuant to this
solicitation may be revoked by the person giving it any time before the vote at
the Meeting by filing with the Secretary of the Company either (i) a written
notice of revocation; (ii) a proxy bearing a later date than the most recently
submitted proxy; or (iii) by attendance at the Meeting and voting in person.
Attendance at the Meeting will not, by itself, revoke a proxy. Any written
notice or proxy revoking a proxy should be sent to Nocopi Technologies, Inc.,
537 Apple Street, W. Conshohocken, Pennsylvania 19428-2903, Attention:
Secretary.
THE BOARD REQUESTS THAT YOU DO NOT VOTE ON OR RETURN THE BLUE PROXY
CARD PROVIDED TO YOU BY THE PINSKY GROUP.
RETURNING THE BLUE PROXY CARD PROVIDED TO YOU BY THE PINSKY GROUP
COULD REVOKE THE WHITE PROXY CARD THAT YOU SIGN, DATE
AND SEND TO THE COMPANY.
VOTING SECURITIES AND RECORD DATE
The voting securities of the Company consist of shares of its common
stock, $.01 par value per share ("Common Stock"). Shareholders of record at the
close of business on October 25, 1999 (the "Record Date") are entitled to notice
of and to vote at the Meeting or any postponement(s) or adjournment(s) thereof.
At the Record Date, 33,797,332 shares of Common Stock were issued and
outstanding.
VOTING RIGHTS
Each share of Common Stock is entitled to one vote. Cumulative voting
in the election of directors is not allowed. 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 majority of the votes cast, provided a
quorum is present, is necessary to (i) adopt the two shareholder proposals, and
(ii) ratify the appointment of BDO Seidman, LLP to audit the accounts and
records of the Company for the fiscal year ending December 31, 1999. 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.
Shareholders may designate a person or persons other than those named
in the enclosed proxy to vote their shares at the Meeting or any adjournment
thereof.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
As of the Record Date, there were 33,797,332 shares of Common Stock
outstanding. Shareholders holding one-third of the shares entitled to vote on
the Record Date, or 11,265,778 shares, must be present in person or represented
by proxy at the Meeting in order to constitute a quorum for the transaction of
business. Abstentions and broker non-votes will be counted for the
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<PAGE>
purpose of determining a quorum. Since the vote necessary to approve the
shareholder proposals and to ratify the appointment of the Company's auditors is
the affirmative vote of a majority of the votes cast, abstentions and broker
non-votes have the effect of negative votes with respect to these proposals.
Since nominees receiving a plurality of the votes cast will be elected as
directors, abstentions and broker non-votes will not be taken into account in
determining the outcome of the election of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of October 25, 1999, information with
respect to all persons or groups of persons known by the Company to be the
beneficial owner of more than 5% of the Company's Common Stock. According to a
joint filing on Schedule 13D/A dated October 19, 1999, the below-named
individuals possess voting and dispositive power as a group.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNERS BENEFICIALLY OWNED OF CLASS
- - ------------------- ------------------ ----------
Daniel Benasutti
2002 Kerwood Drive
Broomall, PA 19008 610,000 1.8
Ross L. Campbell
675 Lewis Lane
Ambler, PA 19002 959,150 2.8
Joseph Falcone
402 Wyntrelea Drive
Bryn Mawr, PA 19010 240,000 *
Michael A Feinstein, M.D., P.C.
801 Spruce St., 3rd Floor
Philadelphia, PA 19107 1,000,500 3.0
--------- ----
2,809,650 8.3
- - ------------
* Less than 1.0%.
3
<PAGE>
The following table sets forth as of October 25, 1999, information with
respect to the beneficial ownership of the Company's Common Stock 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.
NAME AND ADDRESS OF NUMBER OF SHARES PERCENTAGE
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS(1)
- - ------------------- ------------------ -----------
Susan Cox(2) -0- *
Dr. Arshavir Gundjian(3) 135,750 *
Jack H. Halperin 160,000 *
Michael P. McGovern(4) 7,050 *
James Abrahart -0- *
M. Kelly Tillary -0- *
Richard A. Check (5) 250,000 *
Norman A. Gardner (6) 210,000 *
All Executive Officers and Directors
as a Group (7 individuals) 330,650(7) *
- - -----------
*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 53,250 shares.
(4) Includes presently exercisable stock options to purchase 6,000 shares.
(5) Mr. Check resigned as President, Chief Executive Officer and as a director
effective February 24, 1999. Includes presently exercisable options to
purchase a total of 200,000 shares.
4
<PAGE>
(6) Mr. Gardner resigned as President and Chief Executive Officer effective
October 24, 1997 and resigned as a director effective March 27, 1998.
Includes presently exercisable options to purchase a total of 150,000
shares.
(7) Includes presently exercisable options to purchase a total of 86,500
shares.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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, 1998 (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 failed to
timely file her initial reports on Form 3. All reports required to be filed by
Ms. Cox have subsequently been filed.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
A total of six 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 or 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 six 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: Susan Cox, Dr. Arshavir Gundjian, Jack H.
Halperin, Michael P. McGovern, James Abrahart and M. Kelly Tillary.
5
<PAGE>
The following sets forth certain information about each of the nominees
for director and their current positions with the Company. The Common Stock
ownership of each nominee for director is provided under "SECURITY OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT."
NAME AGE POSITIONS HELD DIRECTOR SINCE
- - ---- --- -------------- --------------
Susan Cox 46 Director 1997
Dr. Arshavir Gundjian 64 Director 1991
Jack H. Halperin 53 Chairman
of the Board of Directors 1998
Michael P. McGovern 40 Director, Chief
Operating Officer 1999
James Abrahart 40 Director 1999
M. Kelly Tillary 45 Director 1999
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.
o SUSAN COX, 46, a director, has been, since May 1994, a director of
American Equities Overseas (UK) Ltd., London, a wholly owned
subsidiary of American Equities Overseas, Inc., a private securities
brokerage and corporate finance firm, after having served as a
consultant to the UK company from March 1981. Previously, Ms. Cox was
employed by EF Hutton and Oppenheimer & Co.
o DR. ARSHAVIR GUNDJIAN, 64, Senior Vice President, Technology &
Technical Sales Worldwide since 1985 and a director of the Company
since 1991. He graduated with a Ph. D. from the University of
Pennsylvania in Philadelphia in 1965. Dr. Gundjian has held a teaching
and research position in the specialized areas of quantum electronics,
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. He has
6
<PAGE>
spearheaded the development of the Company's technologies from its
inception and has secured numerous patents in the United States and
internationally to the benefit of the Company.
o JACK H. HALPERIN, 53, Chairman of the Board since 1998, has been
engaged in the practice of corporate and securities law for 28 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, and Memry
Corporation.
o MICHAEL P. MCGOVERN, 40, Vice President of Sales from June 1996 to
June 1999 and Chief Operating Officer since June 1999. He was elected
as a director on October 27, 1999. His efforts have been instrumental
in securing a large number of the Company's existing product security
clients. As Chief Operating Officer, he has worked to significantly
reduce Company expenses and to create a teamwork environment among
Company employees. He is in the process of implementing a new
marketing approach, whereby the Company will offer several packages of
complimentary product security technologies, in order to create new
opportunities for the Company. Mr. McGovern has a B.S. in marketing
from Penn State University and an M.B.A. from the University of
Delaware. Prior to joining the Company, Mr. McGovern held sales and
operations management positions in the air freight industry. He is
Chairman of the International Anti-Counterfeit Coalition's Product
Security Committee, and serves on the Board of the YMCA Camp Tockwogh
in Delaware.
o JAMES ABRAHART, 40, was elected as a director on October 27, 1999. He
is the founder and major shareholder of Alto Group, an office
equipment supplier with operations in the United States and Europe,
which was founded in October 1996. Prior to that he sold an earlier
company that he had founded to Alco Standard Corporation in October
1995 and served on the U.K. operational Board of IKON Office Solutions
(formerly Alco Standard Corporation).
o M. KELLY TILLARY, 45, was elected as a director on October 27, 1999.
He has been senior partner of Leonard, Tillary & Sciola, a law firm in
Philadelphia, Pennsylvania, for more than the last five years and is a
member of the Board of Directors of the International
Anti-Counterfeiting Coalition.
o RUDOLPH A. LUTTERSCHMIDT, 52, has been employed as Vice President and
Chief Financial Officer of the Company for more than five years. He is
a member of the Financial Executives Institute and the Institute of
Management Accountants and is a Certified Management Accountant.
7
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has the following committees:
1. An Audit Committee composed of Ms. Cox, Mr. Halperin and Mr.
Tillary, 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 met once during the year ended December 31, 1998.
2. A Compensation and Stock Option Committee composed of Ms. Cox,
Mr. Halperin and Mr. Tillary. 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 Committee met once during the year
ended December 31, 1998.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors met three times during the year ended December
31, 1998. During 1998, 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.
CERTAIN BUSINESS RELATIONSHIPS
Joel A. Pinsky, a candidate for the Board nominated by the Pinsky
Group, was Secretary, General Counsel and a director of the Company from its
inception until March 27, 1998. He 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, 1998.
Mr. Halperin, a director of the Company in 1998 and Chairman of the
Board, rendered legal services to the Company in 1998 and 1999.
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.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
1998, 1997 and 1996 earned by or paid to Richard A. Check, the Company's Chief
Executive Officer until March 1999, and the only other executive officers whose
total annual salary and bonus for 1998 exceeded $100,000 (the "Named
Executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------- --------------------------------
AWARDS
------
SECURITIES
OTHER UNDER- ALL
ANNUAL RESTRICTED LYING OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND SALARY BONUS SATION AWARDS SARs PAYOUT SATION
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- - ----------- ---- ------ ----- ------ ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard A. 1998 149,599 10,800 (2)
Check, Chief 1997 60,211 1,800 (2) 200,000
Executive
Officer (1)
Norman A. 1998 173,983 10,800 (2) 325,000
Gardner (3) 1997 168,448 8,930 (2) 200,000
1996 195,000 13,458 (2)
Dr. Arshavir 1998 128,931 10,000 (2)
Gundjian, 1997 142,341 14,333 (4)
Senior Vice 1996 165,000 21,500 (4) 20,000
President,
Technology &
Technical Sales
Worldwide
</TABLE>
- - ---------------------------
(1) Mr. Check resigned as Chief Executive Officer and a director effective
March, 1999.
(2) Reimbursement of automobile expense.
(3) Mr. Gardner resigned as President and Chief Executive Officer effective
October 24, 1997 and resigned as director effective March 27, 1998.
(4) Reimbursement of automobile expenses and expense allowances related to
extended foreign travel.
9
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table furnishes information concerning stock options
granted to the Named Executives during 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
------------------------------------------- ---------------------------
% OF TOTAL
OPTIONS/
SARs
SECURITIES GRANTED TO
UNDERLYING ALL EXERCISE
OPTIONS/ EMPLOYEES OF BASE
SARs IN FISCAL PRICE EXPIRATION
NAME GRANTED(#) YEAR ($/SH) DATE 5% ($) 10% ($)
- - ---- ---------- ---------- ------ ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Richard A. Check 200,000 50.0 0.45 3/2006 42,900 103,000
Norman A. Gardner 125,000 31.3 0.30 3/2006 17,900 42,900
</TABLE>
- - ------------
(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 March 26, 2006,
the date the options first listed above expire, of $0.44 and $0.64
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 $5 million and $11
million, respectively, over the same term. These prescribed rates are not
intended to forecast possible future appreciation, if any, of the Common
Stock.
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<PAGE>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
The following table sets forth the aggregate number of shares of Common
Stock subject to options held by the Named Executives at December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY
AT FISCAL YEAR OPTIONS AT FISCAL
END YEAR END
------------------- ------------------
SHARES
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED UNEXERCISABLE UNEXERCISABLE
- - ---- ----------- -------- ------------- -------------
<S> <C> <C> <C> <C>
Richard A. Check -- -- 100,000/100,000 -/-
Norman A. Gardner -- -- --/325,000 -/-
Arshavir Gundjian -- -- 53,250/-- -/-
</TABLE>
EMPLOYMENT CONTRACTS
In October 1997 the Company entered into an Employment Agreement with
Richard A. Check pursuant to which he served as President and Chief Executive
Officer of the Company. Mr. Check resigned those positions on February 24, 1999
and became a consultant to the Company being paid at the rate of $150,000 per
annum. The consultancy period was terminated in August 1999.
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, provided 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 provided 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 could not exceed $125,000 for any year. 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 was terminated on
September 28, 1999.
The Company employed Dr. Arshavir Gundjian through December 31, 1998
under an agreement that provided for a base salary of $165,000 per annum. By
agreement in 1998, Dr.
11
<PAGE>
Gundjian was paid at the rate of $130,000 per annum due to the Company's cash
constraints. Under the terms of the agreement, the Company elected not to renew
Dr. Gundjian's employment beyond December 31, 1998, and thereby exercised its
option to retain Dr. Gundjian as a consultant to the Company for a period of
four years under which he will be compensated at the rate of $82,500 per annum
for two years and $62,500 per annum for the final two years of the agreement.
The agreement provides for a cash bonus of up to $82,500 in each of the first
two years of the consulting period if certain financial goals of the Company are
met. In addition, the Company has agreed to pay Dr. Gundjian's lodging and
automobile expenses in Pennsylvania, as will as the cost of travel between the
Company's headquarters in West Conshohocken, Pennsylvania and Dr. Gundjian's
home in Montreal, Quebec.
Dr. Gundjian has recently been diagnosed with a serious illness. His
recovery has progressed very positively; his prognosis is good, and he is
gradually taking an active role in the performance of services to the Company.
However, the Company cannot predict any further impact that such illness will
have on Dr. Gundjian's ability to render services to the Company.
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 compensation
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.
Mr. Halperin receives a fee of 20,000 shares of the Company's Common
Stock per month for his services as Chairman of the Board.
DIRECTOR COMPENSATION
Directors have not been paid any fees for their services as such during
the year ended December 31, 1998. All directors have been and will be reimbursed
for reasonable expenses incurred in connection with attendance at Board of
Directors meetings.
Joel A. Pinsky, Secretary, General Counsel and a director of the
Company from its inception 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, 1998. Fees for 1998 services were $61,000.
Mr. Pinsky resigned as Secretary and General Counsel on February 24, 1999.
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, 1998. Fees for 1998 services were less than
$60,000.
12
<PAGE>
Jack H. Halperin, Chairman of the Board of Directors, furnished legal
services to the Company during the fiscal year ended December 31, 1998. Fees for
1998 services were less than $60,000.
Susan A. Cox, a director, is employed by American Equities Overseas
(UK) Ltd., a wholly owned subsidiary of American Equities Overseas, Inc., an
investment banking firm. American Equities provided financial public relations
services to the Company during fiscal year ended December 31, 1998. Fees for
1998 services were less than $60,000.
PERFORMANCE GRAPH: COMPARISON OF TOTAL RETURNS AMONG COMPANY, A SIMILAR
MARKET CAPITALIZATION INDEX AND THE BROAD MARKET NASDAQ INDEX
The following graph compares the cumulative shareholder return on the
Common Stock of the Company, for the period from December 31, 1993 through
December 31, 1998, with the cumulative total return of the Broad Market NASDAQ
Index, and a Similar Market Capitalization Index. The Broad Market NASDAQ Index
includes all domestic common shares traded on the NASDAQ National Market and the
NASDAQ Small-Cap Market, while the Similar Capitalization Index includes only
issuers which are included in the Broad Market NASDAQ Index and had a market
capitalization at December 31, 1993 of between $40 million and $50 million.
[GRAPHIC]
In the printed version of the document, a line graph appears which
depicts the following plot points.
INDEXED RETURNS
<TABLE>
<CAPTION>
YEARS ENDING
- - --------------------------------------------------------------------------------------------
BASE PERIOD
COMPANY NAME/INDEX DEC 93 DEC 94 DEC 95 DEC 96 DEC 97 DEC 98
- - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NASDAQ 100 96.80 135.44 166.20 202.15 282.26
- - --------------------------------------------------------------------------------------------
NASDAQ PEER* 100 91.32 119.78 145.43 188.91 206.12
- - --------------------------------------------------------------------------------------------
NOCOPI 100 78.68 100.00 37.68 9.18 3.24
- - --------------------------------------------------------------------------------------------
</TABLE>
* NASDAQ PEER includes companies included in the Broad Market NASDAQ Index and
with market values at December 1993 between $40 million and $50 million.
Notes:
1. Total return assumes reinvestment of dividends.
2. Fiscal Year Ending December 31.
3. Return based on $100 dollars invested on December 31, 1993 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>
PINSKY GROUP SOLICITATION
Individuals using the name Nocopi Committee to Maximize Our Return on
Equity (the "Pinsky Group") have filed preliminary proxy materials seeking the
election of five individuals to the Board of Directors in opposition to the
Company's nominees for election to the Board of Directors.
FOR THE REASONS GIVEN BELOW, THE BOARD OF DIRECTORS BELIEVES
THAT THE ELECTION OF THE PINSKY GROUP'S SLATE OF NOMINEES WOULD
BE HARMFUL TO THE COMPANY AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE ON THE
ENCLOSED WHITE PROXY CARD IN FAVOR OF THE SLATE OF DIRECTORS
PROPOSED BY THE BOARD. THE BOARD OF DIRECTORS ALSO URGES
SHAREHOLDERS NOT TO VOTE ON ANY PROXY CARD THAT MAY BE
FURNISHED BY THE PINSKY GROUP.
The Pinsky Group claims that it has proposed a slate of directors to
turn the Company around. However, the identity of its directors and its lack of
any concrete plan for the Company's future pose a substantial threat to the
efforts of the Company to enhance shareholder value.
WHO IS THE PINSKY GROUP?
For anyone who has followed the Company's history, it is apparent that
the Pinsky Group is closely tied to the former management of the Company which
unsuccessfully operated the Company for over ten years. Joel Pinsky, one of its
nominees, was a director, officer and close advisor of the Company's old
management team for the bulk of the Company's history.
The Pinsky Group believes its nominees have the experience necessary to
turn the Company around. However, a careful review of their backgrounds
demonstrates that while they may have experience in fields such as medicine, law
and investment banking, they have no disclosed experience in turn around
situations such as the Company or in the industry which the Company operates,
except for Joel Pinsky during whose tenure the Company experienced continual
losses.
WHAT ARE THE PINSKY GROUP'S PLANS?
Notwithstanding the Pinsky Group's long standing familiarity with the
Company and its past, it offers no specific plan for the Company's future. It
only proposes to engage in a variety of review and analysis.
WHAT ARE THE RISKS ASSOCIATED WITH THE PINSKY GROUP?
While the Pinsky Group attempts to blame the Company's current
management for the Company's losses, the great bulk of those losses occurred
before the current management became involved with the Company. Most of those
losses occurred during the tenure of one of its nominees, Joel Pinsky.
The current management team has been in place only eight months and
during that time has reduced expenses, added directors with excellent business
experience, and has implemented a search for strategic alternatives which will
attempt to realize value for shareholders after sixteen years of losses.
14
<PAGE>
The new Board immediately engaged in the effort of reducing overhead
expenses. We succeeded in reducing the latter by better than $450,000, which
constitutes about 30% of the Company's expenses. When Mr. Halperin became
Chairman of the Board on February 24, 1999, the closing price of the Company's
stock was $0.16. By October 25, 1999, the record date for this proxy vote, the
closing price of the Company's stock had increased to $0.20.
The Chief Operating Officer, Michael McGovern, was elected in June
1999. He is developing a new program to reposition the Company to offer a wide
array of products and services through strategic partnerships with companies
that offer products complementary to the Company's own products.
In investigating the unfortunate loss of the Company's major customer,
the Company's new management has identified weaknesses in the way previous
management supported customers, and action has already been taken to remedy this
situation.
Finally, the current management is also actively pursuing opportunities
for a merger, sale of assets or other similar transactions.
American Equities Overseas, Inc. believes in the value of the Company's
technology and has known and supported the Company for a long time. Over the
years it has raised a total of approximately $9,700,000, of which approximately
$2.9 million was raised in late 1997 at a time when the Company was in a very
fragile financial position.
THE THREAT POSED BY THE PINSKY GROUP IS A CONTINUATION OF THE DECLINE
THE COMPANY'S NEW MANAGEMENT IS ATTEMPTING TO REVERSE -- A RETURN TO THE PAST.
THE BOARD OF DIRECTORS BELIEVES THAT SHAREHOLDERS WOULD BE FAR
BETTER SERVED BY ELECTING THE COMPANY'S NOMINEE -- SUSAN COX,
DR. ARSHAVIR GUNDJIAN, JACK H. HALPERIN, MICHAEL P. MCGOVERN,
JAMES ABRAHART AND M. KELLY TILLARY -- TO THE BOARD, AND
YOU ARE URGED TO VOTE FOR THESE INDIVIDUALS IN THE ENCLOSED
WHITE PROXY CARD.
THE BOARD UNANIMOUSLY OPPOSES THE PINSKY GROUP
SOLICITATION. THE BOARD URGES YOU NOT TO SIGN OR RETURN ANY BLUE
CARD SENT TO YOU BY THE PINSKY GROUP.
15
<PAGE>
PROPOSAL NO. 2
SHAREHOLDER APPROVAL OF CHANGE IN EURO-NOCOPI
CONVERSION RIGHTS
Mr. Edward Hobby, 4686 Dream Catcher Ave., Las Vegas, Nevada 89129, who
states that he owns 50,000 shares of the Company's Common Stock, has proposed
that any repricing of the conversion rights of the shareholders of Euro-Nocopi
or any change to the Company's rights with respect to such conversion be
approved by the holders of two-thirds of the outstanding Common Stock of the
Company.
SUPPORTING STATEMENT
The Company currently has 33,627,332 shares of Common Stock outstanding
and is authorized to issue up to 75,000,000 shares of Common Stock.
The issuance of additional shares in a potential repricing will cause
severe additional dilution to the Company's current shareholders.
The shareholders of the Company's privately held affiliate, Euro-Nocopi
S.A. have the right to convert their shares of Euro-Nocopi to approximately 1
million shares of Nocopi Technologies, Inc. stock at a price of approximately
$2.40 per share. The Board of Directors of Nocopi is currently controlled by a
group directly related to the Company's investment banker who is also President
of Euro-Nocopi, S.A.. And one of the Company's directors is also a Director of
Euro-Nocopi as well as American Equities, the Company's investment banker.
This proposal would prevent any repricing of this conversion feature
without the approval of 2/3 majority vote of the Company's shareholders. It
would also prevent any change in any feature of this conversion without a 2/3
majority vote of the Company's shareholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote against the proposal. First it
is important to note that no proposal has been made to change the Euro-Nocopi
conversion rights referenced in the proposal. In the event that such a proposal
would be made, the Board of Directors would have an obligation to insure that
any such transaction would be in the best interest of the Company's shareholders
without regard to the interest of the shareholders of Euro-Nocopi. It is
impossible to speculate the circumstances under which such a proposal might be
made.
Maryland Corporation Law governs the actions of the Company and its
Board of Directors and shareholders. In any transaction involving self interest,
the Board of Directors would be obligated to take such action as is necessary to
insure that its action is free from conflict of interest.
16
<PAGE>
The Board has added three directors which augments its independence. If
the Board felt that it was unable to act independently through a committee of
independent directors, the Board might submit to shareholders the question of
approval of the proposal. Calling a shareholder meeting is a lengthy and
expensive proposition. Furthermore, the proposal contemplates that only
two-thirds of the outstanding shares of the Company would be required to approve
any proposal. Given the mechanics of shareholder meetings it is highly unlikely
that any such approval can be obtained. This unduly ties the Company's hands.
Furthermore, under the shareholder proposal, the holders of one-third of the
outstanding shares of the Company's common stock plus one share could prevent a
majority of the shareholders from acting.
FOR THESE REASONS, THE BOARD RECOMMENDS A
VOTE AGAINST THE PROPOSAL.
PROPOSAL NO. 3
PROPOSAL REGARDING PROCEDURES FOR APPROVAL
OF CERTAIN CORPORATE TRANSACTIONS
Mr. Richard Levitt, 4512 Beaver Run Circle, Imperial, Pennsylvania
15126, who states that he owns 10,000 shares of the Company's Common Stock, has
made the following proposal for adoption at the 1999 Annual Meeting of
Shareholders.
RESOLVED: That the Company's Articles of Incorporation be amended as
necessary to provide that all transactions between the Company and its officers,
directors, affiliates, and principal shareholders be on terms no less favorable
to the Company than terms of transactions with unrelated parties; provided that
any such transactions must be approved by a majority of the Company's
independent directors (voting alone and not as part of the entire Board of
Directors) and the board of directors has obtained a fairness opinion from an
independent financial advisor in writing that opines that the terms of the
transaction are fair and reasonable to the Company. For purposes of this
amendment, independent directors shall be those directors that are not elected
pursuant to any arrangement, contract or understanding with any third party, and
who do not have any interest (either direct or indirect) in the transaction.
Further, if the independent directors should decline to vote upon the proposed
transaction, then such transaction may be submitted to the shareholders for
their approval at a duly convened shareholders meeting, provided that a majority
of the board of directors approves the matter for submission to the shareholders
and that the board of directors has obtained a fairness opinion from an
independent financial advisor in writing that opines that the terms of the
transaction are fair and reasonable to the Company which is provided to the
shareholders in writing with the proxy materials for that meeting.
17
<PAGE>
SUPPORTING STATEMENT
I urge you to vote for this resolution in order to ensure that related
party transactions between the Company and others in which one or more of its
officers, directors, affiliates, or principal shareholders has an interest are
carried out at arms length. I believe that the oversight of "independent
directors" or the shareholders as a whole is essential given that the Company
has nominated and elected two of its present directors pursuant to an
arrangement with the placement agent that assisted the Company with the closing
of a financing completed in December 1997, and the fact that a third director
has served as counsel to the placement agent. The Board of Directors consists of
five members, of which three have a prior relationship with the Placement
Directors Agent. The three directors that have a relationship with the Placement
Agent are Ms. Susan Cox and Messrs. Neal Sroka and Jack Halperin. These
directors may be deemed to be in control of the Company to the extent that they
agree on a particular matter or matters affecting the Company. Further, the
Placement Agent is affiliated with the Company's partially owned subsidiary
Euro-Nocopi. The ongoing relationship of these directors with the Placement
Agent that caused them to be nominated and elected to the Board of Directors
presents potential conflict-of-interest situations. Shareholders currently
cannot know whether transaction or amendments to transaction already entered
into with affiliated parties are carried out at arms length. Further, the fact
that one or more of the interested parties may abstain from voting does not in
and of itself mean that the transaction is fair and reasonable, since the Board
of Directors had no obligation to obtain independent fairness opinions. The
procedures I have recommended if properly implemented by the Company should give
shareholders assurance that any such transactions are on terms that are fair,
reasonable and at arms length.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends a vote against the proposal. Maryland Corporation
Law governs the actions of the Company and its Board of Directors and
shareholders. In any transaction involving self interest, the Board of Directors
would be obligated to take such action as is necessary to insure that its action
is free from conflict of interest.
The Board has added three directors which augments its independence. In
addition, Ms. Cox resigned as a director of Euro-Nocopi in June 1999. Obtaining
a fairness opinion from an independent financial advisor is likely to be
expensive. The effect of the proposal would be to make any proposed transaction
subject to it less likely to be consummated even after an independent board has
determined it to be in the best interests of the Company and its shareholders.
FOR THESE REASONS, THE BOARD RECOMMENDS A
VOTE AGAINST THE PROPOSAL.
18
<PAGE>
PROPOSAL NO. 4
RATIFICATION OF AUDITORS
The firm of BDO Seidman, LLP has audited the Financial Statements of
the Company as of December 31, 1998 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 ending December 31, 1999. 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.
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, 1999. 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.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSAL.
19
<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 2000
Any proposal by a Shareholder to be presented at the Company's next
Annual Meeting of Shareholders, currently expected to be held in June 2000, must
be received at the offices of the Company, 537 Apple Street, W. Conshohocken, PA
19428-2903 not later than December 31, 1999.
THE BOARD URGES YOU TO SIGN, DATE AND MAIL THE ENCLOSED
WHITE PROXY PROMPTLY.
THE BOARD UNANIMOUSLY OPPOSES THE PINSKY GROUP
SOLICITATION. THE BOARD URGES YOU NOT TO SIGN OR RETURN ANY BLUE
CARD SENT TO YOU BY THE PINSKY GROUP.
By Order of the Board of Directors
/s/
----------------------------------
Jack H. Halperin,
Chairman of the Board
November__, 1999
20
<PAGE>
NOCOPI TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Rudolph Lutterschmidt,
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 at
the Holiday Inn of Fort Washington, 432 Pennsylvania Avenue, Fort Washington, PA
19034 at 10:00 a.m. Local Time on November 30, 1999, 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.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE
BOX (SEE REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
THE PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS
CARD
SEE REVERSE SIDE
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE NOMINEES FOR DIRECTORS, AGAINST BOTH SHAREHOLDER PROPOSALS, AND FOR THE
RATIFICATION OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS FOR THE 1999 FISCAL
YEAR.
<TABLE>
- - -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Proposal 1
ELECTION OF DIRECTORS FOR WITHHELD
Nominees: Susan Cox, Dr. Arshavir Gundjian, Jack |_| |_|
Halperin, Michael McGovern, James Abrahart and
M. Kelly Tillary
For, except vote withheld for the following nominee(s):
---------------------------------------------
---------------------------------------------
---------------------------------------------
---------------------------------------------
2. Proposal 2
Shareholder proposal that would require shareholder FOR AGAINST ABSTAIN
approval of any proposal which changes the conversion |_| |_| |_|
rights of shareholders of Euro-Nocopi, S.A. or
changes any rights of the Company with respect to
such conversion.
3. Proposal 3
Shareholder proposal to amend the Company's Articles FOR AGAINST ABSTAIN
of Incorporation with respect to transactions |_| |_| |_|
between the Company and its officers, directors,
affiliates and principal shareholders
4. Proposal 4
Ratification of the appointment of BDO Seidman, FOR AGAINST ABSTAIN
LLP to serve as the auditors for the Company for |_| |_| |_|
the fiscal year ending December 31, 1999.
Check appropriate box
Indicate changes below:
Address Change |_| Name Change |_|
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
The undersigned hereby acknowledges receipt of the Annual Report and
Proxy Statement.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE REQUIRED IF
MAILED IN THE UNITED STATES.
NOTE: Please sign name(s) exactly as printed
hereon. Joint owners should each sign. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
SIGNATURE(S)
----------------------------------------
----------------------------------------
DATE ,1999
------------------
