Superconductor Technologies Inc – ‘DEFS14A’ for 8/6/99

On:  Friday, 7/16/99   ·   For:  8/6/99   ·   Accession #:  891618-99-3182   ·   File #:  0-21074

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Definitive Proxy Solicitation Material — Special Meeting   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFS14A     Definitive Special Notice & Proxy                     10     48K 

Document Table of Contents

DEFS14A
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SCHEDULE 14A
(RULE 14A-101)
 INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
 SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.)

Filed by the registrant [X] Filed by a party other than the registrant |_| Check
the appropriate box:                                                            

                                                        [Enlarge/Download Table]
                                                                                              
[ ]  Preliminary proxy statement                                                              

[X]  Definitive proxy statement                                                               
                                             [_]  Confidential, For Use of the Commission Only
[_]  Definitive additional materials              (as permitted by 14a-6(e)(2))               

[_]  Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12                            

SUPERCONDUCTOR TECHNOLOGIES INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)                                

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)         

Payment of filing fee (Check the appropriate box):                              

[X] No fee required                                                       

  [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

  (1)  Title of each class of securities to which transaction applies:

(2)  Aggregate number of securities to which transaction applies: 

   (3)  Per unit price or other underlying value of transaction computed
         pursuant to Exchange Act Rule 0-11 (set forth the amount on which
      the filing fee is calculated and state how it was determined):

(4)  Proposed maximum aggregate value of transaction:             

(5)  Total fee paid:                                              

[_] 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:                                                  

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 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 6, 1999

TO THE STOCKHOLDERS OF SUPERCONDUCTOR TECHNOLOGIES INC.:                        

NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders of    
Superconductor Technologies Inc., a Delaware corporation (the "Company"), will  
be held on AUGUST 6, 1999, at 11:00 a.m., local time, at the offices of         
Superconductor Technologies Inc. at 460 Ward Drive, Santa Barbara, California,  
for the following purposes:                                                     

1.   To approve the issuance of Series D Preferred Stock and related  
     warrants and the issuance of Common Stock upon the conversion and
exercise of such securities.                                

2.   To transact such other business as may properly come before the  
meeting or any adjournment(s) thereof.                      

The foregoing items of business are more fully described in the Proxy 
Statement accompanying this Notice.                                             

   Only stockholders of record at the close of business on JUNE 16, 1999 are
entitled to notice of and to vote at the Special Meeting.                       

 All stockholders are cordially invited to attend the Special Meeting in
person. However, to ensure your representation at the meeting, you are urged to 
mark, sign, date and return the enclosed proxy card as promptly as possible in  
the postage-prepaid envelope enclosed for that purpose. Any stockholder         
attending the Special Meeting may vote in person even if such stockholder has   
previously returned a proxy.                                                    

James G. Evans, Jr.                                                             
Vice President and                                                              
Chief Financial Officer                                                         

Santa Barbara, California                                                       
July 16, 1999                                                                   

IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, YOU ARE       
REQUESTED TO COMPLETE, SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY IN THE 
ENVELOPE PROVIDED.                                                              

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460 WARD DRIVE
SANTA BARBARA, CALIFORNIA 93111-2310
(805) 683-7646

MEETING TO BE HELD AT:

SUPERCONDUCTOR TECHNOLOGIES INC.
460 WARD DRIVE
 SANTA BARBARA, CA 93111

--------------------

 PROXY STATEMENT FOR SPECIAL MEETING OF STOCKHOLDERS

--------------------

  The enclosed Proxy is solicited on behalf of Superconductor Technologies
Inc. (the "Company") for use at the Special Meeting of Stockholders (the        
"Special Meeting") to be held on Friday, August 6, 1999, at 11:00 a.m., local   
time, and at any adjournment(s) thereof, for the purposes set forth herein and  
in the accompanying Notice of Special Meeting of Stockholders. The Special      
Meeting will be held at 460 Ward Drive, Santa Barbara, California 93111.        

   These proxy solicitation materials were first mailed on or about July 16,
1999, to all stockholders entitled to vote at the Special Meeting.              

INFORMATION CONCERNING SOLICITATION AND VOTING

RECORD DATE                                                                     

Stockholders of record at the close of business on JUNE 16, 1999 (the 
"Record Date") are entitled to notice of the Special Meeting and to vote at the 
Special Meeting. At the Record Date, the following types and amounts of the     
Company's stock, each with a par value of $0.001 per share, were issued and     
outstanding: 7,737,216 shares of Common Stock, 64,584 shares of Series A-2      
Preferred Stock, 12,500 shares of Series A-3 Preferred Stock, 50,000 shares of  
Series B-1 Preferred Stock, and 41,667 shares of Series C Preferred Stock.      

REVOCABILITY OF PROXIES                                                         

    Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the      
Company at or before the taking of the vote at the Special Meeting a written    
notice of revocation or a duly executed proxy bearing a later date or by        
attending the Special Meeting and voting in person.                             

VOTING AND SOLICITATION                                                         

Each holder of Common Stock is entitled to one vote for each share of 
Common Stock on all matters presented at the Special Meeting. Holders of Series 
A-2, Series A-3, Series B-1, and Series C Preferred Stock (collectively, the    
"Preferred Stock") shall be entitled to vote a total of 3,375,020 votes on all  
matters presented at the meeting. No shares of Series D Preferred Stock were    
issued as of the Record Date and accordingly such shares are not entitled to    
vote at the Special Meeting.                                                    

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     Shares of Common Stock and Preferred Stock represented by properly executed
proxies will, unless such proxies have been previously revoked, be voted in     
accordance with the instructions indicated thereon. In the absence of specific  
instructions to the contrary, properly executed proxies will be voted FOR       
approval of the issuance of Series D Preferred Stock and related warrants and   
the issuance of Common Stock upon the conversion or exercise of such securities.
No business other than that set forth in the accompanying Notice of Special     
Meeting of Stockholders is expected to come before the Special Meeting. Should  
any other matter requiring a vote of stockholders properly arise, the persons   
named in the enclosed form of proxy will vote such proxy in accordance with the 
recommendation of the Board of Directors.                                       

Proxies may be solicited by certain of the directors, officers and    
employees of the Company, without additional compensation, personally or by     
telephone, telegram, letter or facsimile. In addition, the Company may reimburse
brokerage firms and other persons representing beneficial owners of shares for  
their expenses in forwarding solicitation materials to such beneficial owners.  

QUORUM; ABSTENTIONS; BROKER NON-VOTES                                           

    The required quorum for the transaction of business at the Special Meeting
is a majority of the votes eligible to be cast by holders of shares of Common   
Stock and Preferred Stock issued and outstanding on the Record Date. Shares that
are voted "FOR" or "AGAINST" a matter are treated as being present at the       
meeting for purposes of establishing a quorum and are also treated as shares    
entitled to vote at the Special Meeting (the "Votes Cast") with respect to such 
matter.                                                                         

     While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions   
should be counted for purposes of determining both (i) the presence or absence  
of a quorum for the transaction of business and (ii) the total number of Votes  
Cast with respect to a proposal (other than the election of directors). In the  
absence of controlling precedent to the contrary, the Company intends to treat  
abstentions in this manner. Accordingly, abstentions will have the same effect  
as a vote against the proposal.                                                 

   In a 1988 Delaware case, Berlin v. Emerald Partners, the Delaware Supreme
Court held that, while broker non-votes should be counted for the purpose of    
determining the presence or absence of a quorum for the transaction of business,
broker non-votes should not be counted for purposes of determining the number of
Votes Cast with respect to the particular proposal on which the broker has      
expressly not voted. Accordingly, the Company intends to treat broker non-votes 
in this manner. Thus, a broker non-vote will not affect the outcome of the      
voting on a proposal.                                                           

DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS                                   

    Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting of Stockholders must  
be received by the Company no later than December 22, 1999 in order to be       
considered for inclusion in the proxy statement and form of proxy relating to   
that meeting.                                                                   

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PROPOSAL

APPROVAL OF THE ISSUANCE OF SERIES D PREFERRED STOCK AND RELATED
 WARRANTS AND ISSUANCE OF COMMON STOCK UPON THE CONVERSION OF SERIES D
PREFERRED STOCK AND THE EXERCISE OF RELATED WARRANTS

     The Company is seeking stockholder approval for the purposes of Nasdaq Rule
4460(i) of the issuance of up to 130,000 shares of Series D Preferred Stock (the
"Shares") at a price of $50.00 per Share and warrants for the purchase of       
260,000 shares of Common Stock at a price of $3.00 per share (the "Warrants"),  
and approval of the issuance of 2,860,000 shares of Common Stock upon the       
conversion of the Shares and exercise of the Warrants, subject to upward        
adjustment for anti-dilution events.                                            

BACKGROUND                                                                      

Outside financing is critical to the Company in its current stage of  
development because the Company does not yet generate sufficient cash from      
operations to fund its operations and growth. The Company's Board of Directors  
authorized the creation of Series D Preferred Stock and the Company has         
negotiated terms for the sale of $6.5 million of Shares and Warrants to         
institutional investors in private financings. On June 23, 1999, the Company    
raised $3,864,800 through the issuance of 77,296 Shares and Warrants for the    
purchase of 154,592 shares of Common Stock in an initial private placement of   
Series D Preferred Stock (the "Initial Closing"). The Company plans to raise up 
to an additional $2,635,200, depending on market conditions, through the        
issuance of an additional 52,704 Shares and Warrants for the purchase of 105,408
shares of Common Stock in a second closing to be held as soon as practical after
obtaining stockholder approval of this Proposal (the "Second Closing").         

The Company's principal stockholder, Wilmington Securities, Inc.      
("Wilmington") an indirect, wholly-owned subsidiary of The Hillman Company, a   
private corporation engaged in diversified investments and operations which is  
controlled by a trust for the benefit of Henry L. Hillman, purchased            
approximately $1.5 million of Shares and Warrants at the Initial Closing and may
purchase up to approximately $2 million in additional securities at the Second  
Closing. As a result of such purchases, if Wilmington and its affiliates and    
related parties fully exercised the warrants they hold for the purchase of      
Common Stock they would be able to vote approximately 45% of the Company's total
voting securities.                                                              

   As described below, each Share is initially convertible into 20 shares of
Common Stock. Accordingly, when issued, the aggregate voting power of the Shares
will be greater than 20% of the amount of the Company's voting securities       
immediately prior to the Initial Closing. Similarly, if all of the authorized   
Shares are issued and converted, the Company will be required to issue at least 
2.6 million shares of Common Stock, an amount in excess of 20% of the Common    
Stock outstanding and Company voting power immediately prior to the Initial     
Closing. Based on the market price of the Company's Common Stock at the time of 
the Initial Closing, the effective purchase price for each share of Common Stock
into which the Shares are convertible was less than the market value of the     
Common Stock at that time. Depending on the market price of the Company's Common
Stock at the time of the Second Closing, the Company's sale of Shares and       
Warrants may also potentially be deemed to be below market sales.               

 The Company's Common Stock is listed for trading on the Nasdaq National
Market System ("Nasdaq") and as a result the Company must comply with Nasdaq    
corporate governance rules. Nasdaq Rule 4460(i)(1)(D) (the "20% Rule") requires 
stockholder approval of securities issuances where (1) the securities issued are
Common Stock or securities convertible into or exercisable for Common Stock, (2)
the price of the securities is less than the market value of the Common Stock,  
and (3) the proposed issuance would result in the issuance of 20% or more of the
Common Stock or voting power of the Company before the issuance. Additionally,  
Nasdaq Rule 4460(i)(1)(B) (the "Control Rule") requires stockholder approval of 
the adoption of a plan or the issuance of securities by the Company that would  
result in a change of control of the Company. There is no concrete test to      
determine the amount of securities that the Company may issue to a party without
triggering the Control Rule. Depending on the facts and circumstances, the      
issuance by the                                                                 

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Company of a small amount of securities may result in a change of control of the
Company where an investor already owns a sizable portion of the Company's       
outstanding voting securities.                                                  

   The Company is seeking stockholder approval of the issuance of the Shares
and Warrants and the issuance of Common Stock upon the conversion of the Shares 
and the exercise of the Warrants to ensure compliance with the 20% Rule and the 
Control Rule.                                                                   

TERMS OF THE SERIES D PREFERRED STOCK                                           

The Shares have the following features:                               

    o    DIVIDENDS. Each Share receives a dividend per year equal to 6% of the
    purchase price of such Share, payable quarterly in cash or as an
   addition to the Series D Liquidation Preference. Holders of the
       Company's Common Stock will not be paid dividends until the Company
        has paid all due and payable dividends on the outstanding Shares and
the Company's outstanding Preferred Stock.                  

o    LIQUIDATION PREFERENCE. Depending on the date, a liquidation,    
    dissolution or wind up of the Company will entitle the holder of
    Shares to an amount per Share equal to the greater of $65.00 per
          share, or $50.00 plus all accrued and unpaid dividends on such Shares.
      A merger, consolidation or sale of all or substantially all of the
         assets of the Company shall also be treated as a liquidation. Holders
          of Common Stock will not receive distributions until holders of Shares
receive these liquidation amounts.                          

   o    VOTING RIGHTS. Holders of Shares are entitled to the number of votes
        equal to the number of shares of Common Stock into which such Shares
may be converted.                                           

    o    CONVERSIONS. Each Share is initially convertible at the option of the
        holder into 20 shares of Common Stock. In addition to adjustment for
        stock dividends, stock splits, recapitalizations and similar events,
         the "Conversion Price" per Share (initially $2.50 per share) shall be
         adjusted in the event of certain financing activities by the Company.
         Accordingly, while each Share is initially convertible into 20 shares
     of Common Stock, the actual number of shares of Common Stock into
which a Share is convertible may be greater than 20.        

       -    If the Company issues Common Stock or securities equivalent to
         Common Stock on or before June 3, 2000 at a price below the
             Conversion Price, the Conversion Price shall be reduced to that
              amount. For instance, if on June 2, 2000 the Company sold Common
          Stock for $2.00 per share, the Conversion Price would become
         $2.00 per share and each Share would be convertible into 25
shares of Common Stock.                           

       -    If the Company issues Common Stock or securities equivalent to
             Common Stock after June 3, 2000 at a price below the Conversion
               Price, the Conversion Price shall be reduced to an amount between
    the Conversion Price and the price of the newly issued
              securities. The exact amount of the adjustment in the Conversion
              Price depends on both the price of the securities issued and the
size of the offering.                             

  o    COVENANTS. So long as 25% of the authorized Shares are outstanding,
 the Company must obtain approval of the holders of 60% of the
 outstanding Shares prior to redeeming, repurchasing or paying
          dividends on its securities, making certain amendments to its Restated
   Certificate of Incorporation or Bylaws, and creating or issuing
certain types of new securities.                            

PRINCIPAL EFFECTS OF APPROVAL OR NONAPPROVAL                                    

     In the event that stockholder approval is obtained the Company may issue up
to 130,000 Shares, Warrants for the purchase of up to 260,000 shares of Common  
Stock and 2,860,000 shares of Common Stock upon conversion of the               

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Shares and exercise of the Warrants, subject to upward adjustment for           
anti-dilution events. In addition, Wilmington and its affiliates or related     
parties may purchase up to $3.5 million of the Shares and Warrants.             

     If stockholder approval is not obtained, the currently issued 77,296 Shares
and the Warrants for the purchase of 52,704 shares of Common Stock shall remain 
outstanding and no additional Shares and Warrants shall be issued. In addition, 
under Nasdaq rules the Company may not be able to issue additional securities at
a price below the current market price of the Company's Common Stock without    
obtaining stockholder approval in advance.                                      

   In the opinion of the Board, a failure of the stockholders to approve the
Proposal will have a severely detrimental effect on the Company and its future. 
A failure of the Company to obtain approval would have a negative effect on the 
Company's future financing activities, which are critical to the long-term      
success of the Company and maximizing value for the Company's stockholders.     

VOTE REQUIRED; RECOMMENDATION OF THE BOARD OF DIRECTORS                         

    The approval of the issuance of up to 130,000 shares of Series D Preferred
Stock requires the affirmative vote of a majority of Votes Cast.                

ALL OF THE MEMBERS OF THE BOARD OF DIRECTORS, OTHER THAN MESSRS. JOHNSTON AND   
MANZINGER, WHO ABSTAINED FROM VOTING DUE TO THEIR RELATIONSHIP WITH WILMINGTON  
AND ITS AFFILIATES AND RELATED PARTIES, RECOMMEND A VOTE "FOR" THE PROPOSAL     

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VOTING SECURITIES OF PRINCIPAL
 STOCKHOLDERS AND MANAGEMENT

  The following table sets forth the beneficial ownership of the Company's
Common Stock as of June 23, 1999, by (i) each person known by the Company to be 
the beneficial owner of more than 5% of the Company's Common Stock, (ii) by each
director, (iii) by each of the executive officers named in the table under      
"Executive Compensation--Summary Compensation Table," in the Proxy Statement    
distributed in connection with the Company's 1999 Annual Meeting, and (iv) all  
directors and executive officers as a group. Except as otherwise indicated in   
the footnotes to the table, the persons and entities named in the table have    
sole voting and investment power with respect to all shares beneficially owned, 
subject to community property laws, where applicable. Wilmington and its related
parties are the sole holders of 100% of the Company's Series A-2, Series A-3,   
Series B-1 and Series C Preferred Stock (64,584, 12,500, 50,000 and 41,667      
shares, respectively) and are entitled to cast a total of 3,375,020 votes with  
respect to such shares at the Special Meeting. Wilmington and its related       
parties, and TGI Fund III, LLC own 40% (30,918 shares) and 60% (46,378 shares)  
of the outstanding shares of Series D Preferred Stock, respectively, and are    
entitled to 618,360 and 927,560 votes, respectively, by virtue of such          
ownership. None of the Series D Preferred Stock was outstanding as of the Record
Date and such shares may not be voted at the Special Meeting.                   

                                                        [Enlarge/Download Table]

                                                                       Number of  Percentage
                                       Name                              Shares   Ownership 
---------------------------------------------------------------------  ---------  ----------
                                                                                            
Wilmington Securities, Inc. and Related Parties(1)................     5,534,632     44.65% 
    824 Market Street, Suite 900                                                            
    Wilmington, Delaware 19801                                                              
TGI Fund III, LLC(2) .............................................     1,020,316     11.65% 
    6501 Columbia Center                                                                    
    701 Fifth Avenue                                                                        
    Seattle, WA 98104                                                                       
Glenn E. Penisten(3)..............................................       185,591      2.37% 
M. Peter Thomas(4)................................................       177,100      2.24% 
Robert B. Hammond(5) .............................................       131,042      1.67% 
E. Ray Cotten(6)..................................................        97,356      1.24% 
James G. Evans, Jr.(6)............................................        80,626      1.03% 
J. Robert Schrieffer(7)...........................................        56,484        *   
Robert P. Caren(8)................................................        38,267        *   
Dennis Horowitz(9)................................................        30,284        *   
John D. Lockton(6)................................................         6,250        *   
Richard M. Johnston(10)...........................................         --           *   
Joseph C. Manzinger(10)...........................................        16,100        *   
James P. Simmons, Jr.(11).........................................           250        *   
All executive officers and directors as a group (14 persons)(12)..       944,261     11.09% 

--------------------                                                            
*    Less than one percent.                                                     

(1)  Based on information contained in a Schedule 13D, as amended, filed by     
     Wilmington and persons related to Wilmington. Includes a total of 4,113,622
    shares issuable upon the conversion of Preferred Stock, and 546,010 shares
     of Common Stock issuable upon exercise of warrants, that are convertible or
 exercisable within 60 days of June 23, 1999. Wilmington is an indirect,
wholly owned subsidiary of The Hillman Company, a private corporation 
   engaged in diversified investments and operations. The Hillman Company is
controlled by Henry L. Hillman, Elsie Hilliard Hillman and C.G.       
 Grefenstette, Trustees of the Henry L. Hillman Trust dated November 18,
1985 (the "HLH Trustees"). Each of the HLH Trustees shares voting and 
   disposition power over the assets of The Hillman Company. The above total
   includes 100,000 shares of Common Stock, 314,835 shares issuable upon the
     conversion of Preferred Stock, and warrants exercisable for an aggregate of
   45,752 shares of Common Stock owned by the HLH Trust. The above total for
   Wilmington and persons related to Wilmington also includes 419,780 shares
    of Common Stock issuable upon conversion of Series B-1 Preferred Stock and
warrants exercisable for an aggregate of 61,003 shares of Common Stock
owned beneficially of record by four trusts for members of the Hillman
    family. The HLH Trustees (other than Mr. Grefenstette, who is a trustee of
such trusts) disclaim beneficial ownership of such shares.            

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(2)  Includes a total of 927,560 shares issuable upon the conversion of Series D
   Preferred Stock, and 92,756 shares of Common Stock issuable upon exercise
     of warrants, that are convertible or exercisable within 60 days of June 23,
1999.                                                                 

(3)  Includes 96,997 shares held by a trust for the benefit of Glenn and Mary   
    Louise Penisten. Also includes 88,334 shares issuable upon the exercise of
stock options that are exercisable within 60 days of June 23, 1999.   

(4)  Includes 176,667 shares issuable upon the exercise of stock options that   
are exercisable within 60 days of June 23, 1999.                      

(5)  Includes 98,542 shares issuable upon the exercise of stock options that are
exercisable within 60 days of June 23, 1999.                          

(6)  All shares are issuable upon the exercise of stock options that are        
exercisable within 60 days of June 23, 1999.                          

(7)  Includes 51,834 shares issuable upon the exercise of stock options that are
exercisable within 60 days of June 23, 1999.                          

(8)  Includes 30,917 shares issuable upon the exercise of stock options that are
exercisable within 60 days of June 23, 1999.                          

(9)  Includes 22,834 shares issuable upon the exercise of stock options that are
exercisable within 60 days of June 23, 1999.                          

(10) Mr. Johnston is a Vice President and Director of The Hillman Company and   
     Mr. Manzinger is a Vice President of The Hillman Company. Both Mr. Johnston
    and Mr. Manzinger disclaim beneficial ownership of all of the shares owned
by Wilmington Securities, Inc. and the trusts for the benefit of the  
Hillman family referred to in footnote 1.                             

(11) Mr. Simmons ceased service with the Company in September of 1998.          

(12) See footnotes (3)-(10). Includes 775,321 shares issuable upon exercise of  
     stock options held by executive officers and directors that are exercisable
within 60 days of June 23, 1999.                                      

The Company knows of no other matters to be submitted at the Special  
Meeting. If any other matters properly come before the meeting, it is the       
intention of the persons named in the enclosed proxy card to vote the shares    
they represent as the Board of Directors may recommend.                         

BY ORDER OF THE BOARD OF DIRECTORS

Santa Barbara, California                                                       
July 16, 1999                                                                   

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                                                                      APPENDIX A

 DETACH HERE

 PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS SUPERCONDUCTOR
TECHNOLOGIES INC. SPECIAL MEETING OF STOCKHOLDERS 
AUGUST 6, 1999

     The undersigned stockholder of SUPERCONDUCTOR TECHNOLOGIES INC., a Delaware
corporation, hereby acknowledges receipt of the Notice of Special Meeting of    
Stockholders and Proxy Statement, each dated July 16, 1999 and hereby appoints  
M. Peter Thomas and James G. Evans, Jr. or either of them, proxies and          
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Special Meeting of 
Stockholders of Superconductor Technologies Inc. to be held on August 6, 1999 at
11:00 a.m., local time, 460 Ward Drive, Santa Barbara, California, and at any   
adjournment or adjournments thereof, and to vote all shares of Common Stock and 
Preferred Stock which the undersigned would be entitled to vote if then and     
there personally present, on the matters set forth on the reverse side.         

                                                                [Download Table]
                                                                                  
[SEE REVERSE SIDE]  CONTINUED AND TO BE SIGNED ON REVERSE SIDE  [SEE REVERSE SIDE]

[BACK OF PROXY]                                                                 
 DETACH HERE

[X] Please mark votes as in                                                     
this example                                                            

THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED, 
WILL BE VOTED FOR APPROVAL OF THE ISSUANCE OF SERIES D PREFERRED STOCK AND      
RELATED WARRANTS AND THE ISSUANCE OF COMMON STOCK UPON THE CONVERSION AND       
EXERCISE OF SUCH SECURITIES AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER    
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.                                

                                                                [Download Table]

                                                 FOR  AGAINST  ABSTAIN
                                                                      
1. PROPOSAL TO APPROVE THE ISSUANCE OF SERIES D  [ ]    [ ]      [ ]  
   PREFERRED STOCK AND RELATED WARRANTS AND THE                       
   ISSUANCE OF COMMON STOCK UPON THE CONVERSION                       
   AND EXERCISE OF SUCH SECURITIES                                    

and in their discretion, upon such other matter or matters, which may properly  
come before the meeting or any adjournment or adjournments thereof.             

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT  [ ]                              

PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE MEETING  [ ]                        

(This Proxy should be marked, dated and signed by the stockholder(s) exactly as 
his or her name appears hereon, and returned promptly in the enclosed envelope. 
Persons signing in a fiduciary capacity should so indicate. If shares are held  
by joint tenants or as community property, both should sign.)                   

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Signature:                           Date:           Signature:                            Date:         
          -------------------------        --------             -------------------------        --------

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFS14A’ Filing		Date		First		Last			Other Filings
		6/3/00		6
		6/2/00		6
		12/22/99		4
For Period End:		8/6/99		2		10			PRES14A
Filed on:		7/16/99		2		10
		6/23/99		5		9
		6/16/99		2		3
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