SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GENERAL KINETICS INCORPORATED
(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
( ) 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:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
GENERAL KINETICS INCORPORATED
14130-A Sullyfield Circle
Chantilly, Virginia 20151
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
January 16, 1998 at 9:30 a.m., Local Time
-----------------
Notice is hereby given that the next Annual Meeting of
Shareholders of General Kinetics Incorporated (the "Company") will be held at
the offices of Donovan Leisure Newton & Irvine LLP, 30 Rockefeller Plaza, 39th
Floor, New York, New York, 10112, on Friday, January 16, 1998 at 9:30 a.m.,
local time, for the following purposes:
1. To elect one director, in Class III, for a term expiring in
2000.
2. To consider and take action upon a proposal to ratify the
selection of BDO Seidman, independent certified public accountants, as auditors
for the Company for the fiscal year 1998.
3. To transact such other business as may properly come before
the meeting, or any adjournment or adjournments thereof.
Holders of common stock of the Company are entitled to vote on
each of the matters set forth above.
The stock transfer books of the Company will not be closed.
The Board of Directors has fixed the close of business on December 12, 1997 as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments thereof.
You are cordially invited to be present. Shareholders who do
not expect to attend in person are requested to sign and return the enclosed
form of Proxy in the envelope provided. At any time prior to their being voted,
proxies are revocable by written notice to the Secretary of the Company or by
voting at the meeting in person.
By Order of the Board of Directors
Sandy B. Sewitch, Secretary
December 12, 1997
<PAGE>
GENERAL KINETICS INCORPORATED
14130-C Sullyfield Circle
Chantilly, Virginia 22021
PROXY STATEMENT
-------------
Annual Meeting of Shareholders to be held January 16, 1998
-------------
This statement is furnished in connection with the
solicitation of proxies by the Board of Directors of General Kinetics
Incorporated (the "Company") from holders of the Company's outstanding shares of
common stock ("Common Stock") entitled to vote at the January 16, 1998 Annual
Meeting of Shareholders of the Company (and at any and all adjournments thereof)
for the purposes referred to below and set forth in the accompanying Notice of
Annual Meeting of Shareholders.
A proxy card ("Proxy") for use at the Meeting is enclosed. Any
shareholder who executes and delivers a Proxy retains the right to revoke it at
any time prior to the voting thereof by giving notice to the Secretary of the
Company in writing or by duly executing a Proxy bearing a later date. A Proxy
may also be revoked by attendance at the Meeting and election to vote thereat.
Unless so revoked, the shares represented by such Proxy will be voted, in the
manner specified therein, at the Meeting and any adjournment thereof.
The record date for shareholders entitled to notice of and to
vote at the Meeting was the close of business on December 12, 1997. As of the
record date, the Company had 6,658,925 shares of Common Stock, $.25 par value
per share outstanding. Each holder of Common Stock will be entitled to one vote,
in person or by Proxy, for each share of Common Stock of the Company standing in
such holder's name on the books of the Company as of the record date for the
Meeting on any matter submitted to the vote of the shareholders.
This Proxy Statement and Proxy are being sent to shareholders
of the Company on or about December 17, 1997. This solicitation is made by the
Board of Directors, and the Company will bear the costs of solicitation. It is
contemplated that the Proxies will be solicited through the mail, but directors,
officers and regular employees of the Company may solicit Proxies personally or
by telephone. Although there is no formal agreement to do so, the Company may
reimburse banks, brokerage houses, and other custodians, nominees, and
fiduciaries for their reasonable expenses in forwarding these proxy materials to
their principals. In addition, although it has no current plans to do so, the
Company may pay for and utilize the services of individuals or companies not
regularly employed by the Company in connection with the solicitation of Proxies
if the Board of Directors considers that this is advisable.
<PAGE>
PROPOSAL 1.
ELECTION OF DIRECTORS
Pursuant to the Company's Certificate of Incorporation, the
Board of Directors is divided into three separate classes of directors, Class I,
Class II and Class III, which are required, in all respects, to be as nearly
equal as practicable. At each annual meeting of shareholders, one class of
directors is elected to a term expiring at the third succeeding annual meeting
of shareholders. The January 16, 1998 Annual Meeting represents the beginning of
a new term for the Class III directors.
Larry M. Heimendinger presently serves as a Class I director
for the Company which term is scheduled to expire at the 1998 Annual Meeting of
Shareholders which will follow completion of the Company's fiscal year 1998. Mr.
Heimendinger was reelected to the Board of Directors at the 1995 Annual Meeting
of Shareholders. Marc E. Cotnoir presently serves as a Class II director for the
Company which term is scheduled to expire at the 1999 Annual Meeting of
Shareholders. Mr. Cotnoir was elected to the Board of Directors at the 1996
Annual Meeting of Shareholders. Richard J. McConnell presently serves as a Class
III director for the Company and is nominated to be reelected in this capacity
at the January 16, 1998 Annual Meeting of Shareholders. Mr. McConnell was
elected to the Board of Directors as a Class II director at the 1996 Annual
Meeting of Shareholders and subsequently resigned that position and was
appointed the Class III director by the Board of Directors in order to fill the
then-vacant position.
At the January 16, 1998 Annual Meeting, holders of Common
Stock shall be entitled to elect one (1) director. Unless otherwise directed,
Proxies received will be voted in favor of the reelection of Richard J.
McConnell to serve as director as provided in the Bylaws. If reelected, Mr.
McConnell will serve as a Class III director for a term of three years or until
his successor shall be elected and qualified.
The Bylaws currently provide that the number of directors of
the Company shall be not fewer than three nor more than eleven and that the
Board of Directors may determine the size of the Board from time to time within
these limits. The Bylaws further provide that the Board of Directors may, by
majority vote, increase the size of the Board within this range between annual
meetings of shareholders; however, the Board may only fill two such vacancies
prior to the subsequent annual meeting of shareholders. The Board of Directors
is now composed of three members. It is presently contemplated that the Board of
Directors will review its current composition during the coming year and that
one or more new directors may be appointed.
Proxies in the enclosed form received from holders of Common
Stock will be voted for the election of Mr. McConnell as Class III director of
the Company unless shareholders indicate otherwise. If the nominee is unable to
serve for any reason (which event is not anticipated), the shares represented by
the enclosed Proxy may be voted for such other person or persons as may be
determined by the holders of such Proxy unless shareholders indicate otherwise.
2
<PAGE>
The Board of Directors recommends a vote FOR the election of
Mr. McConnell. Proxies solicited by the Board of Directors will be so voted
unless shareholders specify a contrary vote. This resolution may be adopted by a
plurality of the votes entitled to be cast with respect thereto. The following
information includes the names of the nominee of the Board of Directors for the
office of Class III director, Mr. Heimendinger, who will continue service as a
Class I director, and Mr. Cotnoir, who will continue service as a Class II
director, together with certain additional information concerning each
individual. If the nominee should be unable or unwilling to serve (which event
is not anticipated), the persons authorized by the Proxy to vote shall, pursuant
to the authority granted to them by the Board of Directors, have the discretion
to select and vote for a substituted nominee (unless shareholders indicate
otherwise, as noted above). The Board of Directors has no reason to believe that
the nominee will be unable or unwilling to serve.
DIRECTORS (AND NOMINEES)
<TABLE>
<CAPTION>
Name and Positions Business Experience Director
With the Company Age During The Last Five Years since
- ------------------ --- -------------------------- --------
<S><C>
Larry M. Heimendinger 52 Mr. Heimendinger has acted as the Chairman of the Board of March, 1994
Chairman of the Board Directors of the Company since he was elected to that
position in March of 1994. In accordance with the Amended
and Restated Bylaws of the Company, Mr. Heimendinger has
been performing the duties of the President and chief
executive officer through his position as Chairman of the
Board and will continue to do so until such time as a
replacement for President and chief executive officer is
elected and qualified. From 1989 through 1992, Mr.
Heimendinger was President and chief operating officer of
Nantucket Corp., a privately held software company which
was purchased in 1992 by Computer Associates
International, a company also involved in software
development. After that acquisition and until
sustaining a serious accident in September, 1992, Mr.
Heimendinger was associated with Computer Associates
International, most recently as its Director of Product
Strategy. For several years through 1988, Mr. Heimendinger
was the President and CEO of Origin, Inc., a company that
produced and marketed personal computer software for the
banking industry. Mr. Heimendinger is the author of
Advanced d Base IV and Advanced Clipper, books
published by Brady Books, and is a computer industry
conference and seminar speaker worldwide. Mr. Heimendinger is
a member of Class I of the
</TABLE>
3
<PAGE>
<TABLE>
<S><C>
Board of Directors.
Marc E. Cotnoir 48 Mr. Cotnoir has been an independent consultant, providing March, 1994
business and strategic planning support and systems
engineering consulting, for a wide range of clients since
1988. Prior to 1988, Mr. Cotnoir had extensive experience,
both within private industry and in the U.S. Air Force,
with computer and communications technology. Mr. Cotnoir
is a member of Class II of the Board of Directors.
Richard J. McConnell 37 Mr. McConnell has been the President of Square Systems, March, 1994
(Nominee for Class III) Corp., a research and development firm specializing in
advanced software systems, since 1986. Mr. McConnell has
been involved in research and development in the computer
software industry since 1981.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE SHAREHOLDERS VOTE FOR THE ELECTION
OF THE CLASS III NOMINEE.
In addition to various informal operational meetings which the
members of the Board of Directors attended, the Board took all actions by
unanimous written consent during the year ended May 31, 1997 ("fiscal year
1997"). The Board of Directors has established a standing Audit and Compensation
Committee. The Audit Committee reviews all financial matters related to the
Company's operations, recommends to the Board of Directors independent auditors
for selection by the Company, discusses with the Company's independent auditors
the scope and results of audits and approves and reviews any non-audit services
performed by such independent auditors. The Compensation Committee reviews and
establishes compensation for the officers of the Company and administers the
compensation and benefits plans of the Company for officers of the Company. The
Audit Committee which consists of Messrs. Larry Heimendinger, Marc Cotnoir and
Richard McConnell, the entire Board, took all Audit Committee action during
fiscal year 1997 in conjunction with action taken by the entire Board of
Directors. The Compensation Committee, which met once in fiscal year 1997,
consisted of Messrs. Larry Heimendinger and Marc Cotnoir.
4
<PAGE>
The following table sets forth the beneficial ownership of
Common Stock as of September 15, 1997 of each of the current directors and each
of the executive officers named in the Summary Compensation Table below.
<TABLE>
<CAPTION>
Shares of Common Stock Percentage of Outstanding
Name Beneficially Owned (1) Common Stock
---- ---------------------- -------------------------
<S><C>
Marc E. Cotnoir 67,500 *
Richard J. McConnell 67,500 *
Larry M. Heimendinger 84,375 *
All Directors and named Executive
Officers as a group (five persons) 292,260 4.39%
</TABLE>
(1) Beneficial ownership also includes shares of Common Stock which may be
acquired within 60 days of December 12, 1997, through the exercise of
warrants, options, or otherwise, as follows: Mr. Cotnoir, 67,500
shares; Mr. Heimendinger, 84,375 shares; Mr. McConnell, 67,500 shares;
and all Directors and Officers as a group, 292,260 shares. Does not
include currently unallocated shares held by the ESOP of which Mr.
Heimendinger is a trustee. Additionally, each of Messrs. Cotnoir and
McConnell were granted options to purchase 100,000 shares, and Mr.
Heimendinger was granted an option to purchase 125,000 shares, each of
which options will only vest if the stock price reaches certain
stipulated multiples of base price of $1.0026 (for ten consecutive
trading days).
* Indicates less than 1 percent.
COMPENSATION OF DIRECTORS
Each nonemployee director other than Mr. Heimendinger has
received a monthly retainer of $1,500 since November, 1994.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
During fiscal year 1997, Square Systems, Corp., whose
president, Richard J. McConnell, is a director of the Company, provided
consulting services to the Company in connection with its work with respect to
certain research and development activities. During fiscal 1997, Square Systems
charged $59,200 to the Company for work attributable to a joint venture between
the Company and Link2It LLC ("Link2It"), a company formed by Larry L.
Heimendinger and Mr. McConnell.
In consideration of, among other things, the amounts advanced
by the Company in connection with Link2It through January 21, 1997, in the total
amount of approximately $205,000, the Company received a common membership
interest in Link2It representing 10% of the total membership interests, and also
received a convertible preferred membership interest in Link2It with a face
amount of $112,500, convertible into 9% of the total membership interests
5
<PAGE>
(subject to adjustment under certain circumstances as described below). In
addition, the Company provided Link2It with $150,000 reflected in convertible
promissory notes due one year from the date of issuance and bearing interest at
9 1/4% per annum. An additional $100,000 (of which $25,000 has been released to
date) was provided to become available upon the satisfaction of certain
conditions in such amounts and at such times as may be mutually agreed in good
faith. In each case, Link2It's obligation with respect to advances from the
Company is evidenced in a convertible promissory note convertible into
additional common membership interests in Link2It at the rate of 1% of the
aggregate interests for each $12,500 principal amount of the note so converted
(subject to adjustment under certain circumstances described below). In the
event of further investment in Link2It by independent third-party investors the
conversion price at which both the note and the preferred membership interests
described above are convertible into common membership interests in Link2It
shall be subject to adjustment to such lesser percentage as the principal or
face amount so converted could have then purchased at a purchase price
proportionate to the lowest price actually paid for membership interests by such
an independent third-party investor less a discount of 15%. Prior to such an
adjustment, the Company's aggregate common membership interest in Link2It,
assuming advances in the total amount available, and conversion in full of both
the promissory notes evidencing such advances and its preferred membership
interest, would represent 39% of the total.
Link2It is engaged in the development of certain proprietary
products and services in the area of telecommunications and facsimile
transmission. Link2It has announced that it plans to introduce in the second
half of 1997 a line of products that will enable organizations to integrate
their standard fax machines into corporate network environments, Intranets, and
the Internet.
The terms of the Company's investment in Link2It were
negotiated on an arm's-length basis between Mr. Heimendinger and Marc E. Cotnoir
as an independent director and approved by Mr. Cotnoir and by the Board as a
whole. Such investment was also reviewed with and approved in principle by the
Company's principal shareholder.
In fiscal 1997, a company of which Mr. Robert K. Gardner, a
former director of the Company, was a principal received payments totaling
approximately $57,800 representing fees and expenses in connection with the
December 1996 disposition of the Company's Secure Communications Division.
The Company sold all of its stock in its Food Technology
Corporation subsidiary as of May 30, 1997 to Shirl Lakeway, Jr., the former Vice
President and general manager of FTC. In the transaction, the Company received
approximately $139,000 in cash and the right to receive royalties for a period
of ten years based on total annual revenues of FTC in excess of $300,000. The
consideration received by GKI for FTC was determined in arms-length negotiations
with the purchaser.
EXECUTIVE OFFICERS AND CERTAIN
SIGNIFICANT EMPLOYEES OF THE COMPANY
6
<PAGE>
The names, ages, and positions of the executive officers of
the Company are listed below.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S><C>
Larry M. Heimendinger 52 Chairman of the Board
(performing duties of President
and chief executive officer)
Richard E. Munczenski 55 Vice President and General Manager
Sandy B. Sewitch 40 Chief Financial Officer
</TABLE>
Larry M. Heimendinger has acted as the Chairman of the Board
of Directors since March of 1994 and, in accordance with the Amended and
Restated Bylaws of the Company, he has been performing the duties of the
President and chief executive officer through his position as Chairman of the
Board and will continue to do so until a replacement for President and chief
executive officer is elected and qualified.
Richard E. Munczenski, Vice President and General Manager,
joined the Company in August of 1969.
Sandy B. Sewitch, Chief Financial Officer, joined the Company
in April 1993.
The officers of the Company hold office at the discretion of
the Board of Directors of the Company.
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's directors and officers, and persons who
beneficially own more than 10% of its Common Stock, to file with the Securities
and Exchange Commission reports of ownership and changes in ownership of the
Company's equity securities. Officers, directors and greater than 10%
shareholders are also required to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on a review of such
reports furnished to the Company, during the fiscal year ended May 31, 1997, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% shareholders were complied with, except certain inadvertent
filing delinquencies which have been corrected as set forth below:
Under Rule 16a-3(f) every person who at any time during the
fiscal year was subject to Section 16 is required to file a Form 5 within 45
days after fiscal year end, unless all transactions otherwise required to be
reported on Form 5 have been reported before the due date of such form. During
fiscal year 1997, Messrs., Heimendinger, Cotnoir and McConnell did not timely
report the respective stock options granted to them under the Company's 1994
Nonemployee and Directors Stock Option Plan in the last fiscal year. It is the
Company's understanding that these Section 16(a) reporting delinquencies have
since been corrected.
7
<PAGE>
EXECUTIVE COMPENSATION
The information under this heading relates to the chief
executive officer and vice president for fiscal year 1997. The information is
presented in compliance with the rules and regulations of the Securities and
Exchange Commission applicable to those companies, such as General Kinetics
Incorporated, that meet the definition of a "small business issuer."
Executive officers are appointed each year by the Board of
Directors at its annual meeting following the annual meeting of shareholders and
serve for one year or until their successors are chosen and qualify in their
stead. There are no family relationships among the executive officers, or any
arrangement or understanding between any officer and any person pursuant to
which the officer was elected.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-------------------------------------------- ----------------------------------
Name and Principal Other Annual All Other
Position Year Salary Bonus Compensation Number of Options Compensation
- ------------------- ---- ------ ----- ------------ ----------------- ------------
<S><C>
Larry M. Heimendinger(1) 1997 $ 0 $ 0 $ 0 12,500 $ 0
Chairman of the Board 1996 0 0 0 12,500 0
1995 0 0 0 187,500 0
Richard E. Munczenski(2) 1997 $85,000 $15,906 $ 4,200 0 $ 0
Vice President 1996 77,597 5,200 9,359 28,277 0
1995 73,772 0 23,588 10,000 0
</TABLE>
(1) Larry Heimendinger serves as the Company's Chairman of the Board, for
which he has received no salary compensation since being elected to
that position in March 1994. Since the resignation of the Company's
former President, in March 1994, the Company has not had a President.
In accordance with the Company's Bylaws, until a new President is
elected and qualified, the Company's Chairman performs the duties of
that office.
(2) The "Other Annual Compensation" for Richard Munczenski includes a car
allowance of $4,200 for each year listed. Additional amounts in "Other
Annual Compensation" in fiscal 1996 and 1995 reflect sales commissions
earned by Mr. Munczenski.
8
<PAGE>
INDIVIDUAL OPTION GRANTS TO EXECUTIVE OFFICERS
DURING FISCAL YEAR 1997
<TABLE>
<CAPTION>
Percent of Potential of Realizable Value
Total at assumed annual rate of
Number Options stock price appreciation
of Granted to for options term
Name of Executive Options Employees in Exercise Expiration -----------------------------
Officer Granted FY 1997 Price Date 5% 10%
- ----------------- ------- ------------ -------- ---------- -- ---
<S><C>
Larry M. Heimendinger 12,500(1) 38.0%(2) .0625 6/01/07 491 1,245
Richard E. Munczenski 0 --- --- --- --- ---
</TABLE>
(1) 75% of such options have vested and are currently exercisable. The
remaining 25% will vest on May 31, 1998.
(2) Mr. Heimendinger is not an employee of the Company. However, for
purposes of the calculation of the percentages, his options have been
included in the aggregate total employee options granted.
FY-1997 OPTIONS EXERCISE AND FY-1997 YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Value of Unexercised
Number of Options In-the-Money Options
Number of At End-FY 1997 At End-FY 1997
Name of Executive Shares Acquired ------------------ --------------
Officer On Exercise Exercisable Unexercisable Exercisable Unexercisable
------- ----------- ----------- ------------- ----------- -------------
<S><C>
Larry M. Heimendinger 0 84,375 128,125 0 0
Richard E. Munczenski 0 45,277 0 0 0
</TABLE>
9
<PAGE>
Principal Shareholders
As of Septemper 22, 1997, approximately 47.2 percent of the
Company's outstanding Common Stock was believed to be beneficially owned by RABO
Investment Management AG ("RABO"), formerly Gutzwiller & Partner AG. The
following table sets forth the beneficial ownership of Common Stock as of
September 22, 1997 of RABO, the only person or entity believed by the Company to
be the beneficial owner of more than 5 percent of such class of securities.
<TABLE>
<CAPTION>
Shares of Common Stock Percent of Outstanding
Name and Address of Beneficial Owner Beneficially Owned* Common Stock
- ------------------------------------ ---------------------- ----------------------
<S><C>
RABO Investment Management AG 3,142,700 47.2%
Brandschenkestrasse 41
8035 Zurich/Switzerland
</TABLE>
- -----------------------
* Based on information provided by RABO. As of September 22, 1997, RABO
has reported that it has the power to vote, and discretionary power to
dispose of, 3,142,700 shares of Common Stock issued and outstanding as
of the record date. It is the Company's understanding that RABO has
discretionary authority to dispose of or convert Convertible Debentures
of the Company which are convertible into 17,320,000 shares of Common
Stock, and would have the power to vote or dispose of the shares of
Common Stock issuable upon conversion thereof. After such a conversion,
RABO would hold 20,462,700 shares which would represent 85.3% of the
then outstanding Common Stock.
10
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected BDO Seidman, independent
certified public accountants, as independent auditors for the Company for fiscal
year 1998. A resolution will be submitted to shareholders at the meeting for
ratification of such selection. Although ratification by shareholders is not a
prerequisite to the ability of the Board of Directors to select BDO Seidman as
the Company's independent auditors, the Company believes such ratification to be
desirable. If the shareholders do not ratify the selection of BDO Seidman, the
selection of independent auditors will be reconsidered by the Board of
Directors; however, the Board of Directors may select BDO Seidman
notwithstanding the absence of shareholder ratification of its selection.
The Board of Directors recommends a vote FOR the resolution to
approve BDO Seidman as the independent auditors for the Company for fiscal year
1998. Proxies solicited by the Board of Directors will be so voted unless
shareholders specify a contrary vote. The resolution may be adopted by a
majority of the votes cast with respect thereto.
It is expected that a representative of BDO Seidman will be
present at the meeting, will have an opportunity to make a statement if he or
she desires to do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE SHAREHOLDERS VOTE FOR THE RATIFICATION
OF BDO SEIDMAN AS THE INDEPENDENT AUDITORS
11
<PAGE>
SHAREHOLDERS' PROPOSAL
Proposals of shareholders which are intended to be presented
at the fall 1998 Annual Meeting, which will follow completion of the Company's
1998 fiscal year, must be received by the Company at its principal executive
offices no later than July 31, 1998 for inclusion in the Company's proxy
materials for that meeting.
OTHER MATTERS
The Proxy and Proxy Statement have been approved by the Board
of Directors and sent to shareholders by its authority. The matters referred to
in the Notice of Meeting and in the Proxy Statement are, to management's
knowledge, the only matters which will be presented for consideration at the
Meeting. If any other matters properly come before the Meeting, the persons
named in the enclosed Proxy intend to vote said Proxy on any such matters in
accordance with their best judgment.
This Proxy Statement incorporates certain Financial Statements
and other information from the Company's Annual Report delivered herewith which
contains the text of the Company's Annual Report on Form 10-K and any amendments
thereto for the fiscal year ending May 31, 1997.
A copy of the Company's Annual Report on Form 10-K, and any
amendments thereto for the fiscal year ending May 31, 1997, as filed with the
Securities and Exchange Commission, will be furnished without charge upon the
written request to the Company's Secretary at the address shown on the first
page.
SANDY B. SEWITCH,
Secretary
12
<PAGE>
(Text of Front Side of Proxy Card)
COMMON STOCK PROXY
GENERAL KINETICS INCORPORATED
14130-A SULLYFIELD CIRCLE, CHANTILLY, VA 20151
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Larry Heimendinger and Sandy
Sewitch, and each of them jointly and severally, attorneys and proxies of the
undersigned, with full power of substitution, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all the shares of
common stock of General Kinetics Incorporated which the undersigned may be
entitled to vote at the Annual Meeting of Shareholders to be held at the offices
of Donovan Leisure Newton & Irvine LLP, 30 Rockefeller Plaza, 39th Floor, New
York, NY 10112, on January 16, 1998 at 9:30 AM, and at all adjournments thereof
with all powers the undersigned would possess if personally present and voting
thereat.
IMPORTANT - THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE
SIDE.
<PAGE>
(Text of Reverse Side of Proxy Card)
Please mark your votes as indicated in this example X
Stockholders planning to attend the Annual Meeting are
requested to indicate the number of persons attending in the block _______.
Stockholders may attend the meeting whether or not the block is filled in.
The Board of Directors recommends a vote FOR:
1. The election of Richard J. McConnell as a Class III director:
FOR the WITHHOLD AUTHORITY
above named to vote for the above named
nominee nominee
---- ----
2. The proposal to ratify the appointment of BDO Seidman
FOR AGAINST ABSTAIN
---- ---- ----
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THE SHARES REPRESENTED HEREBY WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS IN THIS PROXY. IF INSTRUCTIONS ARE NOT INCLUDED HEREIN, THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Date ___________________, 199__
------------------------------
(Signature)
------------------------------
(Signature if jointly held)
(Please sign as name(s) appear(s) on this proxy card. If joint
account, each joint owner should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person).
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY CARD PROMPTLY
IN THE ENVELOPE ENCLOSED - NO POSTAGE IS REQUIRED
