Exchange Act of 1934
Proxy Statement Pursuant to Section 14(a) of the Securities
(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 240.14-11(c) or
240.14a-12
National Patent Development Corporation
(Name of Registrant as Specified In Its Charter)
Lawrence M. Gordon
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), or,
14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction
applies: COMMON STOCK
(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 0.11:1
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is
calculated
and state how it was determined.
[ ] 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:
-1-
NATIONAL PATENT DEVELOPMENT CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 18, 1996
To The Stockholders:
The Annual Meeting of Stockholders of National Patent
Development
Corporation (the "Company") will be held at the Columbia
Hilton, 5485 Twin Knolls Road, Columbia, Maryland on the
18th day of June, 1996, at 1:30 P.M., Eastern Standard
Daylight Savings Time, for the following purposes:
1. To elect seven Directors to serve until the next
Annual Meeting and until their respective successors are
elected qualify.
2. To consider and act upon a proposal to amend the
Company's Restated Certificate of Incorporation to decrease
the total number of authorized shares of Common Stock, Class
B Capital Stock and Preferred Stock which the Company shall have
authority to issue from (1) 40,000,000 shares ofCommon Stock to
15,000,000 shares of Common Stock, (2)2,800,000 shares of Class B
Capital Stock to 1,000,000 shares of Class B Capital Stock and
(3) 10,000,000 shares of Preferred Stock to 1,000,000 shares of
Preferred Stock.
3. To transact such other business as may properly
come before the meeting or any adjournment thereof.
Only stockholders of record as of the close of business
on April 19, 1996 are entitled to receive notice of and to
vote at the meeting. A list of such stockholders shall be
open to the examination of any stockholder during ordinary
business hours, for a period of ten days prior to the
meeting, at the principal executive offices of the Company,
9 West 57th Street, Suite 4170, New York, New York.
By Order of the Board of
Directors
Lydia M.
DeSantis
Secretary
New York, New York
April , 1996
If you do not expect to be present at the meeting,
please fill in, date and sign the enclosed Proxy and return
it promptly in the enclosed return envelope.
-2-
NATIONAL PATENT DEVELOPMENT CORPORATION
9 West 57th Street
Suite 4170
New York, New York 10019
April , 1996
New York, New York
PROXY STATEMENT
The accompanying Proxy is solicited by and on behalf of
the Board of Directors of National Patent Development
Corporation, a Delaware corporation the ("Company"), for use
only at the Annual Meeting of Stockholders to be held at the
Columbia Hilton, 5485 Twin Knolls Road, Columbia, Maryland
on the 18th day of June, 1996 at 1:30 P.M., Eastern Standard
Daylight Savings Time, and at any adjournments thereof. The
approximate date on which this Proxy statement and the
accompanying Proxy were first given or sent to security
holders was April , 1996.
Each Proxy executed and returned by a stockholder may
be revoked at any time thereafter, by written notice to that
effect to the Company, attention of the Secretary, prior to
the Annual Meeting, or to the Chairman of, or the Inspectors
of Election, in person, at the Annual Meeting, or by the
execution and return of a later-dated Proxy, except as to
any matter voted upon prior to such revocation.
The Proxies in the accompanying form will be voted in
accordance with the specifications made and where no
specifications are given, such Proxies will be voted FOR the
seven nominees for election as directors named herein and
FOR the approval of the amendment (the "Amendment") to the
Company's Restated Certificate of Incorporation to decrease
the total number of authorized shares of (1) common stock,
par value $.01 per share (the "Common Stock") (2) class B
capital stock, par value $.01 per share (the "Class B
Stock"), and (3) preferred stock, par value $.01 per share
(the "Preferred Stock") which the Company shall have
authority to issue (the "Amendment"). In the discretion of
the proxy holders, the Proxies will also be voted FOR or
AGAINST such other matters as may properly come before the
meeting. The management of the Company is not aware that any
other matters are to be presented for action at the meeting.
Although it is intended that the Proxies will be voted for
the nominees named herein, the holders of the Proxies
reserve discretion to cast votes for individuals other than
such nominees in the event of the unavailability of any such
nominee. The Company has no reason to believe that any of
the nominees will become unavailable for election. The
Proxies may not be voted for a greater number of persons
than the number of nominees named. The election of directors
will be determined by a plurality of the votes of the shares
of Common Stock and Class B Capital Stock present in person
or represented by proxy at the Annual Meeting and entitled
to vote on the election of directors. A majority of the
votes represented by the outstanding shares of Common Stock
and a majority of the votes represented by the outstanding
shares of Class B Stock, each voting separately as a class,
is required to approve the Amendment. Accordingly, in the
case of shares that are present or represented at the Annual
Meeting for quorum purposes, not voting such shares for a
particular nominee for director, including by withholding
-3-
authority on the Proxy, will not operate to prevent the
election of such nominee if he or she otherwise receives
affirmative votes; however, with respect to the approval
of the Amendment, an abstention will operate to prevent
approval of the Amendment to the same extent as a vote
against approval, and a broker "non-vote" (which results
when a broker holding shares for a beneficial owner has
not received timely voting instructions on certain matters
from such beneficial owner) will effect the outcome of the
vote the same as a negative vote with respect to the approval
of the Amendment.
VOTING SECURITIES
The Board of Directors has fixed the close of business
on April 19, 1996 as the record date for the determination
of stockholders entitled to receive notice of and to vote at
the Annual Meeting. The issued and outstanding stock of the
Company on April 18, 1996 consisted of
shares of Common Stock, each entitled to one vote, and
62,500 shares of Class B Stock, each entitled to ten votes.
A quorum of the stockholders is constituted by the presence,
in person or by proxy, of holders of record of Common Stock
and Class B Stock representing a majority of the number of
votes entitled to be cast. The only difference in the rights
of the holders of Common Stock and the rights of holders of
Class B Stock is that the former class has one vote per
share and the latter class has ten votes per share. The
Class B Stock is convertible at any time into shares of
Common Stock on a share for share basis at the option of the
holders thereof.
PRINCIPAL HOLDERS OF SECURITIES
As of March 1, 1996, no person was known to the Company
to own beneficially more than 5% of the Common Stock or
Class B Stock of the Company except as set forth below.
The following table shows as of such date the Class B
Stock beneficially owned directly by Mr. Jerome I. Feldman,
President and Chief Executive Officer and a director of the
Company, and Mr. Martin M. Pollak, Executive Vice President
and Treasurer and a director of the Company. (For
information with respect to the shares of Common Stock
beneficially owned by Messrs. Feldman and Pollak, see
"Security Ownership of Directors and Named Executive
Officers"):
Amount of
Title of Name and Address Beneficial
Percent
Class of Beneficial Owners Ownership
of Class
Class B Jerome I. Feldman 245,813 shares(1) 50(2)
c/o National Patent
Development Corp.
9 West 57th Street
Suite 4170
New York, NY 10019
Class B Martin M. Pollak 245,813 shares(1) 50(2)
c/o National Patent
Development Corp.
9 West 57th Street
Suite 4170
New York, NY 10019
-4-
(1) Includes 214,563 shares each for Messrs. Feldman and
Pollak which they currently have the right to purchase
pursuant to the exercise of stock options.
(2) Percentage could increase up to approximately 89% if
either individual exercised all of his stock options and the
other individual did not exercise any.
Based upon the Common Stock and Class B Stock of the
Company outstanding at March 1, 1996, Mr. Feldman and Mr.
Pollak controlled in the aggregate approximately 9.9% of the
voting power of all voting securities of the Company. This
percentage for Mr. Feldman and Mr. Pollak would increase to
approximately 44.9% if they exercised all the presently
outstanding options to purchase shares of the Common Stock
and Class B Stock of the Company held by them.
On March 26, 1986, Mr. Feldman and Mr. Pollak entered
into an agreement (i) granting each other the right of first
refusal over the sale or hypothecation of the Class B Stock
and options to purchase Class B Stock now owned or
subsequently acquired by each of them and (ii) in the event
of the death of either of them granting the survivor a right
of first refusal over the sale or hypothecation of the Class
B Stock or options to acquire shares of Class B Stock held
by the estate of the decedent. The aforesaid right of first
refusal is for the duration of the life of the survivor of
Mr. Feldman or Mr. Pollak.
Merrill Lynch & Co., Inc., Merrill Lynch Group, Inc.,
Princeton Services, Inc., Fund Asset Management, L.P., and
Merrill Lynch Phoenix Fund, Inc. filed a 13-G which
disclosed the ownership of 456,525 shares of the Common
Stock representing approximately 6.9% of the outstanding
Common Stock as of December 31, 1995.
SECURITY OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS
The following table sets forth, as of March 1, 1996,
beneficial ownership of shares of Common Stock of the
Company and subsidiaries by each director, each of the named
executive officers and all directors and executive officers
as a group.
-5-
Total Number of Shares
Beneficially
Name Owned
Jerome I. Feldman(1)(2)(3)(4)(6) 582,036
Martin M. Pollak(1)(2)(3)(4)(6) 581,972
Scott N. Greenberg(3) 50,025
Roald Hoffmann, Ph.D.(5) 9,700
Ogden R. Reid(5) 10,250
Paul A. Gould(1)(5)(6) 81,125
Herbert R. Silverman(6) 2,250
Lawrence M. Gordon(1) 36,653
Directors and Executive Officers as a Group
(9 persons) (1)(3) 1,354,011
Percent of
Common Stock
Owned
Jerome I. Feldman (1)(2)(3)(4)(6) 7.8
Martin M. Pollak (1)(2)(3)(4)(6) 7.8
Scott N. Greenberg(3) *
Ogden R. Reid(5) *
Roald Hoffmann, Ph.D.(5) *
Paul A. Gould(1)(5)(6) 1.2
Herbert R. Silverman(6) *
Lawrence M. Gordon (1) *
Directors and Executive Officers as a Group
(9 persons)(1)(3) 16.7
Of Total Number of
Shares Beneficially
Owned,
Shares Which May Be
Acquired Within 60 Days
Jerome I. Feldman(1)(2)(3)(4)(6) 486,293
Martin M. Pollak(1)(2)(3)(4)(6) 487,793
Scott N. Greenberg(3) 45,875
Roald Hoffmann, Ph.D.(5) 9,250
Ogden R. Reid(5) 10,000
Paul A. Gould(1)(5)(6) 3,500
Herbert A. Silverman(6) 1,000
Lawrence M. Gordon(1) 36,025
Directors and Executive Officers as a Group
(9 persons)(1)(3) 651,610
* The number of shares owned is less than one percent of the
outstanding shares of Common Stock.
(1) Included in the table are 31,250 shares for each of
Messrs. Feldman and Pollak which they currently have the
right to acquire through the conversion of shares of Class B
Stock into shares of Common Stock which they currently own,
(see "Principal Holders of Securities"). Also included in
the table is 1,618 shares for a foundation of which Mr.
Pollak is a trustee. Also included in the table are 1,107
-6-
shares for Mr. Feldman, 604 shares for Mr. Pollak and 503 shares for Mr.
Gordon and 2,214 shares for all directors and executive officers as a group,
issuable upon the conversion of bonds issued with the Company's 12%
Subordinated Debentures Due 1997. Mr. Feldman disclaims beneficial ownership
of the 404 shares issuable upon conversion of bonds held by his wife pursuant
to the Debentures. Messrs. Feldman, Pollak and Gould disclaim beneficial
ownership of 1,173, 5,752 and 25 shares, respectively, held by members of
their families which are included in the table.
(2) Included in the table are options to purchase 214,563 shares of Class B
Options for each of Messrs. Feldman and Pollak which they currently have the
right to acquire through the exercise of stock options, which shares are
convertible into shares of Common Stock.
(3) Of the directors and executive officers of the Company,
the following beneficially own the number of shares of
common stock of General Physics Corporation ("GPC")
indicated: Jerome I. Feldman, 22,100 (of which 20,000 shares
are issuable upon exercise of currently exercisable stock
options); Martin M. Pollak, 25,900 (of which 20,000 shares
are issuable upon exercise of currently exercisable stock
options); Scott N. Greenberg 11,000 (of which 10,000 shares
are issuable upon exercise of currently exercisable stock
options);Ogden R. Reid-500 (all of which shares are issuable
upon exercise of currently exercisable stock options)and
Lawrence M. Gordon, 11,000 (all of which shares are issuable
upon exercise of currently exercisable stock options). In
addition, all directors and executive officers as a group
beneficially own 69,500 shares, of which 60,500 shares are
issuable upon exercise of currently exercisable stock
options. Mr. Feldman and Mr. Pollak through their ownership
of the Company's Common Stock, may be deemed to beneficially
own an aggregate of 5,342,789 shares of GPC beneficially
owned by the Company, Five Star and MXL, wholly-owned
subsidiaries of the Company. However, Mr. Feldman and Mr.
Pollak disclaim beneficial ownership of such 5,342,789
shares (5,364,889 and 5,368,689 shares in the aggregate for
Mr. Feldman and Mr. Pollak, respectively). The total number
of shares of GPC owned by all directors and executive
officers of the Company as a group (other than Messrs.
Feldman and Pollak) is .01% of the outstanding shares of
GPC's common stock. All such persons have sole voting and
investment power as to all shares except as indicated.
(4) Member of the Executive Committee.
(5) Member of the Audit Committee.
(6) Member of the Compensation Committee
As of March 1, 1996 the Company owned 3,642,789 shares
of GPC common stock, constituting approximately 35.1% of the
outstanding shares, Five Star owned approximately 1,062,500
shares constituting approximately 10.2% and MXL owned
approximately 637,500 shares constituting approximately 6.1%
of the outstanding shares of GPC common stock. Accordingly,
the Company's voting control of GPC is approximately 51.5%.
As of March 1, 1996 the Company owned 2,842,300 shares
of SGLG, Inc. ("SGLG") common stock, constituting
approximately 92% of the outstanding shares. In addition,
Mr. Pollak owns 1,000 shares of SGLG common stock.
-7-
ELECTION OF DIRECTORS
Seven directors will be elected at the meeting to hold
office until the next Annual Meeting of Stockholders and
until their respective successors are elected and qualify.
The By-Laws of the Company permit the Board of Directors to
fix the number of directors at no less than three nor more
than fifteen persons, and the Board of Directors has fixed
the number of directors at seven persons. The Proxies
solicited by this proxy statement may not be voted for a
greater number of persons than the number of nominees named.
It is intended that these Proxies will be voted for the
following nominees, but the holders of these Proxies reserve
discretion to cast votes for individuals other than
the nominees for director named below in the event of the
unavailability of any such nominee. The Company has no
reason to believe that any of the nominees will become
unavailable for election. Set forth below are the names of
the nominees, the principal occupation of each, the year in
which first elected a director of the Company and certain
other information concerning each of the nominees.
Jerome I. Feldman is founder of, and since 1959, has
been President and Chief Executive Officer and a Director of
the Company. He has been Chairman of the Executive Committee
and a Director of Interferon Sciences, Inc. ("Interferon"),
which is a biopharmaceutical company engaged in the
manufacture and sale of ALFERON N Injection since 1981; a
Director since 1981 and Chairman of the Board from 1985 to
January 1995 of GTS Duratek Inc., ("Duratek") a company
which provides waste treatment solutions for radioactive,
hazardous, mixed and other waste; a Director since 1987,
Chairman of the Executive Committee since 1988 and Chief
Executive Officer since September 1994 of GPC, a company
which provides engineering, environmental training and
technical support services to commercial nuclear and fossil
power utilities and to the United States Departments of
Defense and Energy; President since October 1994 and Chief
Executive Officer, Chairman of the Executive Committee and a
Director of SGLG since 1991, a holding company; and a
director and consultant to American Drug Company ("ADC"), a
generic drug distribution company since January 1994. He has
been a Director of Hamilton Financial Services, Inc., a
financial service holding company since 1983. Mr. Feldman is
also a Trustee of the New England Colleges Fund and of Bard
College. Age 67
Martin M. Pollak is founder of, and since 1959, has
been Executive Vice President, Treasurer and a Director of
the Company. He has been Chairman of the Board of Interferon
since 1981; a Director of Duratek since 1983 and Chairman of
the Executive Committee from 1985 to January 1995; a
Director of GPC since 1987 and Chairman of the Board since
1988; Chairman of the Board of SGLG since 1991; and
President, Chief Executive Officer and a director of ADC
since January 1994. Mr. Pollak is Chairman of the Czech and
Slovak United States Economic Counsel and a trustee of the
Board of Trustees of the Worcester Foundation for
Experimental Biology and a Director of Brandon Systems
Corporation, a personnel recruiting company, since 1986. Age
68
Scott N. Greenberg has been a Director of the Company
since 1987, Vice President and Chief Financial Officer since
1989 and Vice President, Finance from 1985. He has been a
Director of GPC since 1987; a Director of SGLG since 1991;
Chief Financial Officer of ADC since January 1994, a
Director of Interferon since January 1996, and from 1991 to
1995, a Director of Duratek. Age 39
-8-
Ogden R. Reid has been a Director of the Company since
1979. He has been a Director of Interferon since 1982; a
Director of GPC since 1988 and Vice Chairman and Director of
SGLG since 1992; from 1991 to January 1995 he was Vice
Chairman of the Board of Duratek. Mr. Reid had been Editor
and Publisher of the New York Herald Tribune and of its
International Edition; United States Ambassador to Israel; a
six-term member of the United States Congress and a New York
State Environmental Commissioner. Age 70
Roald Hoffmann, Ph.D. has been a Director of the
Company since 1988 and a Director of Interferon since 1991.
He has been a John Newman Professor of Physical Science at
Cornell University since 1974. Dr. Hoffmann is a member of
the National Academy of Sciences and the American Academy of
Arts and Sciences. In 1981, he shared the Nobel Prize in
Chemistry with Dr. Kenichi Fukui. Age 58
Paul A. Gould has been a Director of the Company since
1993. He has been Managing Director since 1979 of Allen &
Company Incorporated, an investment banking firm. He has
been a Director since 1992 of Liberty Media Corp., a cable
programming company and a Director since April 1994 of
Resource Recycling Technologies, Inc., which is engaged in
solid waste material management alternatives. Age 50
Herbert R. Silverman has been a Director of the Company
since November 1994. Since 1975 he has been a Senior
Advisor to Bank Julius Baer (New York), Zurich, Switzerland,
Chairman of the Executive Committee of Baer American Banking
Corporation since 1976 and is a member of the Board of
Directors of Partners Funds, Inc. and Focus Fund, both of
which are mutual stock funds managed by Neuberger & Berman
since 1965. He is also a life trustee of New York
University and New York University Medical Center. Age 78
Board of Directors
The Board of Directors has the responsibility for
establishing broad corporate policies and for the overall
performance of the Company, although it is not involved in
day-to-day operating details. Members of the Board are kept
informed of the Company's business by various reports and
documents sent to them as well as by operating and financial
reports made at Board and Committee meetings. The Board held
five meetings in 1995, at which all of the directors
attended at least 75% of the meetings of the Board and
Committees on which they served.
Directors Compensation
Directors who are not employees of the Company receive
a fee of $1,500 for each meeting of the Board of Directors
attended, but do not receive any additional compensation for
service on committees of the Board of Directors. Officers of
the Company do not receive additional compensation for
serving as directors.
Executive Committee
The Executive Committee, consisting of Jerome I.
Feldman and Martin M. Pollak, meets on call and has
authority to act on most matters during the intervals
between Board meetings. The committee formally acted
seventeen times in 1995 through unanimous written consent.
-9-
Audit Committee
The Audit Committee reviews the internal controls of
the Company and the objectivity of its financial reporting.
It meets with appropriate Company financial personnel and
the Company's independent certified public accountants in
connection with these reviews. This committee recommends to
the Board the appointment of the independent certified
public accountants, subject to the ratification by the
stockholders at the Annual Meeting, to serve as auditors for
the following year in examining the books and records of the
Company. This Committee met once in 1995. The Audit
Committee currently consists of Ogden R. Reid, Roald
Hoffmann and Paul A. Gould.
Compensation Committee
The Compensation Committee, consisting of Jerome I.
Feldman, Martin M. Pollak, Herbert R. Silverman and Paul A.
Gould, meets on call and has the authority to act with
respect to the compensation of officers and the grant of
options to officers and employees of the Company. The
Compensation Committee, formerly the Stock Option Committee,
formally acted seven times in 1995 through unanimous written
consent.
EXECUTIVE COMPENSATION
The following table and notes present the compensation
paid by the Company and subsidiaries to its Chief Executive Officer and
the Company's most highly compensated executive officers for 1995.
SUMMARY COMPENSATION TABLE
Annual Compensation
Salary Bonus
Name and Principal Position Year ($) ($)
Jerome I. Feldman 1995 334,376(1) 161,250(2)
President and Chief 1994 322,304 40,000
Executive Officer 1993 316,526
120,000
Martin M. Pollak 1995 326,202(1)(3) 161,250(2)
Executive Vice President 1994 322,259(3) 40,000(2)
and Treasurer 1993 315,110 -0-
Scott N. Greenberg 1995 260,791 77,500(2)
Vice President and 1994 216,375 20,000(2)
Chief Financial Officer 1993 156,635 -0-
Lawrence M. Gordon 1995 233,205 149,375(2)
Vice President and 1994 233,205 50,000(2)
General Counsel 1993 183,205 50,000
(1) Includes $20,000 received from General Physics
Corporation for services rendered to General Physics
Corporation.
(2) For 1995, Messrs. Feldman, Pollak, Greenberg and Gordon
received their respective bonuses in shares of common stock
of GTS Duratek, Inc. ("Duratek") from holdings of the
Company's shares of Duratek common stock.
-10-
(3) For 1995 and 1994 $150,000, of Mr. Pollak's compensation
was paid by American Drug Company , as a consequence of his
services to both companies.
Long Term
Compensation
Awards All Other
Options Compensation
Name and Principal Position ($) ($)
Jerome I. Feldman -0- 22,570(1)
President and Chief -0- 3,696(l)
Executive Officer -0- 3,598(1)
Martin M. Pollak -0- 24,900(1)(2)
Executive Vice President -0- 3,696(1)
and Treasurer -0- 3,598(1)
Scott N. Greenberg -0- 3,500(3)
Vice President and -0- 3,695(3)
Chief Financial Officer -0- 3,598(3)
Lawrence M. Gordon -0- 3,500(3)
Vice President and -0- 3,696(3)
General Counsel -0- 2,937(3)
(1) Includes $3,500, $3,696 and $3,598 as a matching
contribution by the Company to the 401(k) Savings Plan.
Also included is $19,070 for Mr. Feldman and $21,400 for Mr.
Pollak, which is the split dollar value of the insurance
premium paid by the Company for the benefit of Messrs.
Feldman and Pollak. See "Employment Contracts and
Termination of Employment and Change in Control
Arrangements."
(2) Constitutes matching contributions made by ADC and the
Company equally on behalf of Mr. Pollak pursuant to the
Company's 401(k) Savings Plan.
(3) Matching contribution by the Company to the 401(k)
Savings Plan.
The following table and notes contain information
concerning the grant of non-qualified stock options in 1995
to the named executive officers.
OPTION GRANTS AT DECEMBER 31, 1995
Options % of Total Option Exercise or
Granted Granted to Employees Base Price
Name (#)(1) at December 31, 1995 ($/Sh)
Jerome I. Feldman
Common Stock 62,500(1) 14 8.50
106,250(2) 24 8.375
Class B Capital 62,500(3) 50 8.50
Martin M. Pollak
Common Stock 62,500(1) 14 8.50
106,250(2) 24 8.375
Class B Capital 62,500(3) 50 8.50
-11-
Scott N. Greenberg
Common Stock 25,000 6 8.375
Lawrence M. Gordon
Common Stock 25,000 6 8.375
(1) The options were granted pursuant to the terms of the
Company's 1973 Non-Qualified Stock Option Plan at an
exercise price equal to the fair market value on the date of
grant. The options are exercisable over a period of three
years from the date of grant. (See "Employment Contracts
and Termination of Employment and Change in Control
Arrangements").
(2) The options were granted pursuant to the terms of the
Company's 1973 Non-Qualified Stock Option Plan at an
exercise price of the fair market value on the date of
grant. The options are exercisable immediately for a period
of five years from the date of grant.
(3) The options were granted pursuant to the terms of the
Employment Agreements. (See "Employment Contracts and
Termination of Employment and Change in Control
Arrangements").
PotentialRealized
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Expiration Option Term (3)
Name Date 5%($) 10%($)
Jerome I. Feldman
Common Stock 5/19/00 146,875 324,375
11/17/00 245,438 542,938
Class B Capital 5/19/00 145,875 324,375
Martin M. Pollak
Common Stock 5/19/00 146,875 324,375
11/17/00 245,438 542,938
Class B Capital 5/19/00 145,875 324,375
Scott N. Greenberg
Common Stock 11/17/00 57,750 127,750
Lawrence M. Gordon
Common Stock 11/17/00 57,750 127,750
(3) Represents gain that would be realized assuming the
options were held for the entire five year period,
respectively and the stock price increased at compounded
rates of 5% and 10% from a base price of $8.50 and $8.375
per share. The potential realizable values per option or
per share under such rates of stock appreciation would be
$2.35 and $5.19 and $2.31 and $5.11, respectively. These
amounts represent assumed rates of appreciation only.
Actual gain, if any, on stock exercise and Common Stock
holdings will be dependent on overall market conditions and
on the future performance of the Company and its Common
Stock. There can be no assurance that the amounts reflected
in this table will be achieved.
-12-
The following table and notes set forth information for
the named executive officers regarding the exercise of stock
options during 1995 and unexercised options held at the end
of 1995.
AGGREGATED OPTION EXERCISES AT DECEMBER 31, 1995
AND YEAR-END OPTION VALUES
Shares Acquired
on Exercise
(#) (1) Value Realized
Name ($)
Jerome I. Feldman -0- -0-
Martin M. Pollak -0- -0-
Scott N. Greenberg -0- -0-
Lawrence M. Gordon -0- -0-
Number of Unexercised
Options at December 31,
1995 (#)
Name Exercisable/Unexercisable
Jerome I. Feldman 486,293(2) 83,374(2)
Martin M. Pollak 488,793(2) 83,374(2)
Scott N. Greenberg 45,875 -0-
Lawrence M. Gordon 36,025 -0-
Value of Unexercised
In-the-Money Options at
December 31, 1995 ($)
Name Exercisable/Unexercisable
Jerome I. Feldman $22,524 $5,211
Martin M. Pollak 22,524 5,211
Scott N. Greenberg 4,688 -0-
Lawrence M. Gordon 4,688 -0-
(1) None of the named executive officers exercised any
stock options during 1995.
(2) Includes 214,563 exercisable and 41,687 unexercisable
Class B Options, which options are convertible into shares
of Common Stock on a share for share basis.
(3) Calculated based on the closing price of the Common
Stock $8.5625 as reported by the American Stock Exchange on
December 29, 1995.
Board Compensation Committee Report on Executive
Compensation
As was earlier discussed in the section on Committees
of the Board, the Compensation Committee is responsible for
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administering the compensation program for the executive officers of the
Company. The Compensation Committee is currently comprised of Jerome I.
Feldman, Martin M. Pollak, Herbert R. Silverman and Paul A. Gould.
The Compensation Committee's executive compensation
policies are designed to offer competitive compensation
opportunities for all executives which are based on personal
performance, individual initiative and achievement, as well
as assisting the Company in attracting and retaining
qualified executives.
The Compensation Committee also endorses the position
that stock ownership by management and stock-based
compensation arrangements are beneficial in aligning
management's and shareholders' interests in the enhancement
of shareholder value and recommends the grant of stock
options to executive officers whose performance have a
significant effect on the success of the Company.
Compensation paid to the Company's executive officers
generally consists of the following elements: base salary,
annual bonus and grant of stock options. The compensation
for Mr. Pollak is determined on the same basis as that of
Mr. Feldman, the Chief Executive Officer. The compensation
for the other executive officers of the Company is
determined by a consideration of each officer's initiative
and contribution to overall corporate performance and the
officer's managerial abilities and performance in any
special projects that the officer may have undertaken.
Competitive base salaries that reflect the individual's
level of responsibility are important elements of the
Company's executive compensation philosophy. Subjective
considerations of individual performance are considered by
the Board in establishing annual bonuses and other incentive
compensation.
The Company has certain broad-based employee benefit
plans in which all employees, including the named executives
are permitted to participate on the same terms and
conditions relating to eligibility and subject to the same
limitations on amounts that may be contributed. In 1995, the
Company also made matching contributions to the 401(k)
Savings Plan for those participants.
Mr. Feldman's 1995 Compensation
Mr. Feldman's compensation is determined principally by
the terms of his employment agreement, as defined below. The
employment agreement was negotiated with an independent
committee of the Board of Directors of the Company comprised
of Paul A. Gould, Herbert R. Silverman and Roald Hoffmann.
As of May 19, 1995, the Company entered into an Employment
Agreement (the "Agreement") with Mr. Feldman which provided
that Mr. Feldman serve as President and Chief Executive
Officer of the Company for the period through May 18, 1998
(the "Employment Period"). The Agreement provides Mr.
Feldman with an annual base salary of $325,000 for the first
twelve months of the Employment Period, subject to such
increases as may be deemed appropriate by the Board of
Directors. In addition, Mr. Feldman was granted options to
purchase 62,500 shares of Common Stock and 62,500 shares of
Class B Capital Stock, pursuant to the terms of his
Agreement, as well as an additional 106,250 shares of Common
Stock. Mr. Feldman also received a cash bonus of $161,250
in shares of common stock of GTS Duratek, Inc.("Duratek") in
1995 from holdings of the Company's shares in Duratek for
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his significant contribution to the successful completion of The
Carlyle Group transaction ("Carlyle") with Duratek, pursuant
to which the Company sold 1,666,667 shares of its Duratek
common stock at a price of $3.00 per share to Carlyle in
connection with a $16 million financing by Duratek with
Carlyle. Mr. Feldman received compensation of $20,000 for
serving as Chief Executive Officer, Director and Chairman of
the Executive Committee of GPC. (See "Employment Contracts
and Termination of Employment and Change in Control
Arrangements").
Employment Contracts and Termination of Employment and
Change in Control Arrangements
Agreements with Messrs. Feldman and Pollak. As of May
19, 1995, the Company entered into a three year agreement
(the "Agreement") with its President and Chief Executive
Officer, Jerome I. Feldman, and with its Executive Vice
President and Treasurer, Martin M. Pollak (the "Employees").
Pursuant to the Agreement, Mr. Feldman will serve as
President and Chief Executive Officer of the Company and Mr.
Pollak will serve as Executive Vice President and Treasurer
of the Company for the period through May 18, 1998. The
Agreement provides for each Employee to receive annual
compensation (a minimum base salary) of $325,000 for the
first year of the Agreement, $350,000 for the second year of
the Agreement and $ 375,000 for the third year of the
Agreement (subject to increase by the Board of Directors).
Under the terms of the Agreement, each of the Employees
received options to purchase 62,500 shares of Common Stock
and 62,500 shares of Class B Stock. The Agreement provide
for the termination of employment upon the Employee's death,
physical or mental disability or retirement. In addition,
the Company may terminate the Employee's employment "for
cause" (including a failure to perform required duties or
the engaging in of gross misconduct) and each Employee may
voluntarily terminate his employment for "Good Reason",
which occurs if the Employee determines in good faith that
due to a change in control of the Company he is not able to
effectively discharge his duties. "Change in control" is
defined to include (1) any "person" (other than the
Employees or certain persons who may acquire securities of
the Company from an Employee) acquiring the beneficial
ownership of more than 30% of the Company's outstanding
securities or (2) certain changes in the composition of the
Board of Directors of the Company.
Upon termination by the Company "for cause", all
obligations of the Company under the Employee's Agreement
terminates. Upon termination by the Company other than "for
cause", disability, or retirement, or by the Employee for
"Good Reason", such Employee is entitled to receive as
severance pay an amount equal to his full base salary (which
at the present time is a minimum of $325,000 for each of the
Employees) at the rate then in effect, multiplied by the
greater of (1) the number of years (including fractions
thereof) remaining in the term of the employment, or (2) the
number three. In addition, the Employee would receive an
amount in cash equal to the aggregate spread between the
exercise prices of all options held by the Employee under
the Company's 1973 Non-Qualified Stock Option Plan and the
higher of (x) the market value of the Common Stock, and (y)
the highest price paid in connection with any change in
control of the Company. Subject to certain conditions, the
Company would also maintain for two years (or until the
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Employee's commencement of full-time employment with a new
employer) certain insurance, health and disability plans in
effect, or arrange for substantially similar benefits. The
Agreements also contain non-competition and confidentiality
provisions.
Certain Transactions
GTS Duratek, Inc.
On January 24, 1995, the Company sold 1,666,667 shares
of its Duratek common stock at a price of $3.00 per share to
The Carlyle Group ("Carlyle") in connection with a $16
million financing by Duratek with Carlyle, a Washington, DC
based private merchant bank. In addition, the Company
granted Carlyle an option to purchase up to an additional
500,000 shares of Duratek common stock over the next year at
$3.75 per share (the "Carlyle Transaction").
Duratek received $16 million from Carlyle in exchange
for 160,000 shares of newly issued 8% cumulative convertible
preferred stock (the "Convertible Preferred
Stock")(convertible into 5,333,333 shares of Duratek common
stock at $3.00 per share). Duratek granted Carlyle an
option to purchase up to 1,250,000 shares of newly issued
Duratek common stock from Duratek over the next four years,
as described below. On December 26, 1995, Carlyle exercised
its option to purchase 500,000 shares of Duratek common
stock at $3.75 per share.
On March 20, 1996, Duratek filed a registration
statement with the Securities and Exchange Commission
relating to a proposed offering of 3,600,000 shares of
common stock of which 2,500,000 shares (3,040,000 shares if
the underwriter's over-allotment option is exercised) will
be sold by Duratek and 1,000,000 shares will be sold by the
Company (the "Duratek Public Offering"). Donaldson Lufkin &
Jenrette Securities Corporation, Deutsch Morgan Grenfell,
and Gruntal & Co. Incorporated serve as representatives of
the underwriters for the Duratek Public Offering.
As of February 22, 1996, the Company owns 2,947,972
shares of Duratek common stock (approximately 30.8% of the
outstanding shares of common stock). After completion of
the Duratek Public Offering, the Company would be the
beneficial owner of approximately 15.3% of the then
outstanding common stock and Carlyle will own approximately
16.9% of the then outstanding common stock and 94.2% of the
outstanding shares of Duratek's Convertible Preferred Stock,
or an aggregate of 40.6% of the outstanding voting
securities of Duratek after the Duratek Public Offering. In
addition, Carlyle has the option to purchase from Duratek an
additional 1,177,278 shares of Duratek Common Stock at any
time prior to January 24, 1999 for $3.75 per share.
Carlyle and the Company have entered into a
stockholders' agreement in which each agreed to vote the
shares of stock beneficially owned by them so that a
majority of Duratek's Board of Directors will be comprised
of Carlyle designees, and the remaining directors will be
Duratek's president and designees of the Company.
PERFORMANCE GRAPH
The following table compares the performance of the
Company for the periods indicated with the performance of
the AMEX Market Value
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Index and the Dow Jones Industry Group BTC - Biotechnology.
Total Return Indices reflect reinvested dividends and are
weighted on a market capitalization basis at the time of
each reported data point. Assumes $100 invested on December
31, 1990 in National Patent Common Stock, AMEX Market Value
Index and Dow Jones Industry Group BTC - Biotechnology.
Values are as of December 31 of specified year assuming that
dividends are reinvested.
Comparison of 5-Year Cumulative Total Return
Index 1990 1991 1992 1993 1994 1995
NPDC 41 71 42 64 25
AMEX Market 103 126 135 159 127
Dow Jones
Biotech 159.48 335.74 310.57 292.04 247
PROPOSED AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION
The Board of Directors has unanimously declared it
advisable and recommends that the stockholders adopt the
Amendment, which will decrease the total number of
authorized shares from 55,000,000 to 17,500,000 shares, of
which 15,000,000 are to be shares of Common Stock, 1,500,000
shares are to be shares of Class B Capital Stock, and
1,000,000 shares are to be shares of Preferred Stock.
Reasons for the Decrease in the Authorized Shares
The Company's Board of Directors has unanimously
adopted the proposal to amend the first sentence of Article
Fourth of the Restated Certificate of Incorporation as
follows:
"4. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
Seventeen-Million Five-Hundred Thousand (17,500,000) shares;
of which Fifteen Million (15,000,000) shares are to be
Common Stock with a par value of One Cent ($.01) per share
(hereinafter called the "Common Stock"), of which One
Million Five Hundred Thousand (1,500,000) shares are to be
Class B Capital Stock with a par value of One Cent ($01) per
share (hereinafter called the "Class B Capital Stock"); and
of which One Million (1,000,000) shares are to be Preferred
Stock with a par value of One Cent ($.01) per share
(hereinafter called the "Preferred Stock") to be issued in
such series and with such terms as the Board of Directors
may determine."
The State of Delaware calculates its franchise tax
based upon the number of authorized shares. As a result of
the Company"s One-for-Four Reverse Stock Split in 1995, as
of March 1, 1996, the number of issued shares of common
stock were ____________, the number of authorized shares of
common stock were ____________ and the number of issued
shares of Class B Capital Stock were ______________ and the
number of authorized shares of Class B Capital Stock were
___________. There were no issued shares of Preferred Stock.
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The Board of Directors believes that the number of authorized
shares must be decreased in order to reduce the Delaware franchise tax
payable by the Company.
In order to decrease the number of authorized shares of
because of the Reverse Stock Split, the Restated Certificate
of Incorporation must be amended, which requires, under
Delaware law, the affirmative vote of holders of a majority
of the (i) votes represented by the outstanding shares of
Common Stock and (ii) votes represented by the outstanding
shares of Class B Stock, each voting separately as a class.
The Board of Directors recommends that you vote FOR the
proposal to amend the Restated Certificate of Incorporation
to decrease the number of authorized shares of common stock
which the Company shall have authority to issue.
STOCKHOLDER PROPOSALS
Stockholders may present proposals for inclusion in the
Company's 1997 proxy statement provided they are received by
the Company no later than January 13, 1997, and are
otherwise in compliance with applicable Securities and
Exchange Commission regulations.
GENERAL
So far as is now known, there is no business other than
that described above to be presented for action by the
stockholders at the meeting, but it is intended that the
proxies will be voted upon any other matters and proposals
that may legally come before the meeting and any
adjournments thereof in accordance with the discretion of
the persons named therein.
COST OF SOLICITATION
The cost of solicitation of proxies will be borne by
the Company. It is expected that the solicitations will be
made primarily by mail, but regular employees or
representatives of the Company may also solicit proxies by
telephone or telegraph and in person, and arrange for
brokerage houses and other custodians, nominees and
fiduciaries to send proxy material to their principals at
the expense of the Company.
Lydia M. DeSantis
Secretary
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NATIONAL PATENT DEVELOPMENT CORPORATION
COMMON STOCK Annual Meeting of Stockholders PROXY
To Be Held June 18, 1996
This proxy is solicited on behalf of the Board of Directors
Revoking any such prior appointment, the undersigned, a
stockholder of National Patent Development Corporation
hereby appoints Jerome I. Feldman and Martin M. Pollak, and
each of them, attorneys and agents of the undersigned, with
full power of substitution, to vote all shares of the Common
Stock of the undersigned in said Company at the Annual
Meeting of Stockholders of said Company to be held at the
Columbia Hilton, 5485 Twin Knolls Road, Columbia, Maryland
on June 18, 1996, at 1:30 P.M. Eastern Standard Daylight
Savings Time and at any adjournments thereof, as fully and
effectually as the undersigned could do if personally
present and voting, hereby approving, ratifying and
confirming all that said attorneys and agents or their
substitutes may lawfully do in place of the undersigned as
indicated below.
This proxy when properly executed will be voted as directed.
If no direction is indicated, this proxy will be voted for
proposals (1) (2) and (3).
1. Election of Directors: Jerome I. Feldman, Martin M.
Pollak, Scott N. Greenberg, Roald Hoffmann, Ogden R. Reid,
Paul A. Gould and Herbert R. Silverman.
For All
(Except
Nominees
Written
(INSTRUCTION: To withhold For Withhold Below)
authority to vote for any
individual nominee, write
that nominee's name in the
space provided below)
2. Proposal to amend the Company"s Restated Certificate of
Incorporation to decrease the total number of authorized
shares of stock which the Company shall have authority
to issue from 55,000,000 shares to 17,500,000 shares.
FOR AGAINST ABSTAIN
3. Upon any other matters which may properly come before
the meeting or any adjournments thereof.
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Please sign exactly as name appear below.
Dated , 1996
Signature
Signature if held jointly
Please mark, sign, date and
return the proxy card promptly using
the enclosed envelope. When shares
are held by joint tenants both should
sign. When signing as attorney, as
executor, administrator, trustee or
an, please give full title as such.
corporation, please sign in full
corporate name by President
or other authorized officer.
If a partnership please sign in
partnership name by authorized
person.
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