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
November 20, 1998 at 9:00 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 Marriott Suites, Washington Dulles, 13101 Worldgate Drive, Herndon, Virginia
22070, on Friday, November 20, 1998 at 9:00 a.m., local time, for the following
purposes:
1. To elect two directors, in Class I, for terms expiring in
2001.
2. To consider and take action upon a proposal to ratify the
selection of BDO Seidman, LLP, independent certified public accountants, as
auditors for the Company for the fiscal year 1999.
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 October 14, 1998 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
October 19, 1998
<PAGE>
GENERAL KINETICS INCORPORATED
14130-A Sullyfield Circle
Chantilly, Virginia 20151
PROXY STATEMENT
-------------
Annual Meeting of Shareholders to be held November 20, 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 November 20, 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 October 14, 1998. As of the
record date, the Company had 6,718,925 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 October 19, 1998. 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 November 20, 1998 Annual Meeting represents the beginning
of a new term for the Class I directors.
Larry M. Heimendinger presently serves as a Class I director
for the Company and is nominated to be reelected in this capacity at the
November 20, 1998 Annual Meeting of Shareholders. Mr. Heimendinger was reelected
to the Board of Directors at the 1995 Annual Meeting of Shareholders. Thomas M.
Hacala presently serves as a Class I director for the Company and is nominated
to be elected in this capacity at the November 20, 1998 Annual Meeting of
Shareholders. Mr. Hacala was appointed as a Class I director by the Board of
Directors in February 1998. 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 reelected 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 which term is scheduled to expire at the
2000 Annual Meeting of Shareholders. Mr. McConnell was reelected to the Board of
Directors at the 1997 Annual Meeting of Shareholders.
At the November 20, 1998 Annual Meeting, holders of Common
Stock shall be entitled to elect two (2) directors. Unless otherwise directed,
Proxies received will be voted in favor of the reelection of Larry M.
Heimendinger and Thomas M. Hacala to serve as directors as provided in the
Bylaws. If reelected, Mr. Heimendinger and Mr. Hacala will serve as Class I
directors for terms of three years or until their successors 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 four members.
Proxies in the enclosed form received from holders of Common
Stock will be voted for the election of Mr. Heimendinger and Mr. Hacala as Class
I directors of the Company unless shareholders indicate otherwise. If a 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.
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The Board of Directors recommends a vote FOR the election of
Mr. Heimendinger and Mr. Hacala. 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 nominees of the
Board of Directors for the offices of Class I directors, Mr. Cotnoir, who will
continue service as a Class II director, Mr. McConnell, who will continue
service as a Class III director, together with certain additional information
concerning each individual. If a 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.
<TABLE>
<CAPTION>
DIRECTORS (AND NOMINEES)
Name and Positions Business Experience
With the Company Age During The Last Five Years Director since
- ---------------- --- -------------------------- --------------
<S><C>
Larry M. Heimendinger 53 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
(Nominee for Class I) 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. Mr. Heimendinger is also a founder of
Link2It, LLC (See Certain Relationships and Related
Transactions). Mr. Heimendinger previously served as
President and chief operating officer of Nantucket Corp., a
privately held software company, and after that company's
acquisition by Computer Associates International was
associated with Computer Associates, most recently as its
Director of Product Strategy. Before joining Nantucket,
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.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S><C>
Thomas M. Hacala 53 Mr. Hacala has been the President of Seating Technology , a February, 1998
(Nominee for Class I) marketing and consulting company specializing in the
Asian/European office furniture industry, since 1991. Mr.
Hacala is a member of Class I of the Board of Directors.
Marc E. Cotnoir 49 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. Mr. Cotnoir was Vice President for Marketing, Sales,
and Service for VideoSite Incorporated from September 1997
to July 1998. 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 38 Mr. McConnell has been the President of Square Systems, March, 1994
Corp., a research and development firm specializing in
advanced software systems, since 1986. Mr. McConnell is
also a founder of Link2It, LLC (See Certain Relationships
and Related Transactions). Mr. McConnell has been involved
in research and development in the computer software
industry since 1981. Mr. McConnell is a member of Class
III of the Board of Directors.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE SHAREHOLDERS VOTE FOR THE ELECTION
OF THE CLASS I NOMINEES.
In addition to various informal operational meetings which the
members of the Board of Directors attended, the Board took all formal actions by
unanimous written consent during the year ended May 31, 1998 ("fiscal year
1998"). 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, took all action during fiscal year 1998 in conjunction with
action taken by the entire Board of Directors. The Compensation Committee, which
met once in fiscal year 1998, consisted of Messrs. Larry Heimendinger and Marc
Cotnoir.
4
<PAGE>
The following table sets forth the beneficial ownership of
Common Stock as of September 28, 1998 of each of the current directors and each
of the executive officers named in the Summary Compensation Table below.
Shares of Common Stock Percentage of Outstanding
Name Beneficially Owned (1) Common Stock
---- ---------------------- -------------------------
Marc E. Cotnoir 77,500 1.2
Richard J. McConnell 77,500 1.2
Thomas M. Hacala 35,000 *
Larry M. Heimendinger 96,875 1.4
Sandy B. Sewitch 17,041 *
Richard E. Munczenski 59,801 *
All Directors and named
Executive Officers as a
group (six persons) 363,717 5.4%
(1) Beneficial ownership also includes shares of Common Stock which may be
acquired within 60 days of October 14, 1998, through the exercise of
warrants, options, or otherwise, as follows: Mr. Cotnoir, 77,500
shares; Mr. Heimendinger, 96,875 shares; Mr. McConnell, 77,500 shares;
Mr. Hacala, 32,500 shares; Mr. Sewitch, 12,500 shares; Mr. Munczenski,
45,277 shares; and all Directors and named Executive Officers as a
group, 363,717 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
received a monthly retainer of $1,500 during fiscal 1998.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
During fiscal 1997, Square Systems, Corp., whose president,
Richard J. McConnell, is a director of the Company, provided consulting services
to the Company in connection with work with respect to certain research and
development activities. Total charges to the Company for these consulting
services were approximately $59,200 during fiscal 1997, which was attributable
to work in connection with a
5
<PAGE>
contemplated joint venture with Link2It, LLC ("Link2It"), a company formed by
Larry M. Heimendinger, Chairman of the Board of the Company, and Mr. McConnell.
Additional funds advanced by the Company in connection with Link2It during
fiscal 1997 included payments of $14,300 to third parties and certain Company
expenses allocated to the new venture totaling approximately $38,500. No amounts
were charged to the Company by Square Systems during fiscal 1998.
In consideration of, among other things, the amounts advanced
by the Company through January 21, 1997, in the total amount of approximately
$205,500, the Company received a common membership interest in Link2It
representing 10% of the total and a convertible preferred membership interest in
Link2It with a face amount of $112,500 convertible into 9% of the total
membership interests (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 was released) was provided to become available upon the satisfaction of
certain agreed upon conditions. 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 January 1998, the Company extended the maturities of all of the
promissory notes to January 21, 1999 and, among other things, its obligation to
fund additional amounts was terminated, except to fund production start-up to
satisfy orders. 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 interest 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 originally
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 a line of
products that will enable organizations to integrate their standard fax machines
into corporate network environments, intranets, and the Internet. A prototype
product has begun beta testing with certain potential users in the U.S. and
abroad.
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.
6
<PAGE>
EXECUTIVE OFFICERS AND CERTAIN
SIGNIFICANT EMPLOYEES OF THE COMPANY
The names, ages, and positions of the executive officers of
the Company are listed below.
Name Age Position
- ---- --- --------
Larry M. Heimendinger 53 Chairman of the Board
(performing duties of President
and chief executive officer)
Richard E. Munczenski 56 Vice President and General Manager
Sandy B. Sewitch 41 Chief Financial Officer
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 of 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, 1998, 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, McConnell, and Hacala did not
timely report the respective stock options granted to them under the Company's
1994
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<PAGE>
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.
EXECUTIVE COMPENSATION
The information under this heading relates to the chief
executive officer, chief financial officer, and vice president for fiscal year
1998. 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) 1998 $ 0 $ 0 $ 0 12,500 $ 0
Chairman of the Board 1997 0 0 0 12,500 0
1996 0 0 0 12,500 0
Sandy B. Sewitch (2) 1998 $ 101,958 $ 0 $4,800 0 $ 0
Chief Financial Officer 1997 93,500 0 4,800 0 0
1996 88,541 0 4,800 0 0
Richard E. Munczenski(3) 1998 $90,843 $20,000 $ 4,200 0 $0
Vice President 1997 85,000 15,906 4,200 0 0
1996 77,597 5,200 9,359 28,277 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 Sandy Sewitch includes a car
allowance of $4,800 for each year listed.
(3) 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 reflect sales commissions earned by
Mr. Munczenski.
8
<PAGE>
INDIVIDUAL OPTION GRANTS TO EXECUTIVE OFFICERS
DURING FISCAL YEAR 1998
<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 -------------------------------
Officer Granted FY 1998 Price Expiration Date 5% 10%
- ----------------- ------- ------------ -------- --------------- -- ---
<S><C>
Larry M. Heimendinger 12,500(1) 71.4%(2) .1875 6/01/07 $1,474 $3,735
Sandy B. Sewitch 0 --- --- --- --- ---
Richard E. Munczenski 0 --- --- --- --- ---
</TABLE>
(1) 75% of such options have vested and are currently exercisable. The
remaining 25% will vest on May 31, 1999.
(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-1998 OPTIONS EXERCISE AND FY-1998 YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Value of Unexercised
Number of Options In-the-Money Options
At End-FY 1998 At End-FY 1998
Number of ----------------- --------------------
Name of Executive Shares Acquired
Officer On Exercise Exercisable Unexercisable Exercisable Unexercisable
------- ----------- ----------- ------------- ----------- -------------
<S><C>
Larry M. Heimendinger 0 84,375 128,125 0 0
Sandy B. Sewitch 0 12,500 0 0 0
Richard E. Munczenski 0 45,277 0 0 0
</TABLE>
Principal Shareholders
The Company understands that shares of its Common Stock and Convertible
Debentures, which in past years have been reported as beneficially owned by
Gutzwiller or its successor are held by Gutzwiller or its succesor as nominee
only for various underlying owners, none of which is a beneficial owner of five
percent of more of the Company's Common Stock. As of May 31, 1998, clients of
9
<PAGE>
Gutzwiller or its successor had invested approximately $3 million in equity of
the Company, and approximately $9.4 million in convertible debentures of the
Company, which are convertible into 18,190,000 shares of Common Stock.
As of September 28, 1998, no person or entity is believed by the
Company to be the beneficial owner of more than 5 percent of such class of
securities.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected BDO Seidman, LLP,
independent certified public accountants, as independent auditors for the
Company for fiscal year 1999. 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
1999. 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 COMPANY'S INDEPENDENT AUDITORS
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<PAGE>
SHAREHOLDERS' PROPOSAL
Proposals of shareholders which are intended to be presented
at the fall 1999 Annual Meeting, which will follow completion of the Company's
1999 fiscal year, must be received by the Company at its principal executive
offices no later than July 31, 1999 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, 1998.
A copy of the Company's Annual Report on Form 10-K, and any
amendments thereto for the fiscal year ending May 31, 1998, 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
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<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 M. Heimendinger
and Sandy B. 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 Marriott Suites, Washington Dulles, 13101 Worldgate Drive, Herndon,
Virginia 22070, on November 20, 1998 at 9:00 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.
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<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 Larry M. Heimendinger and Thomas M. Hacala as Class I
directors:
<TABLE>
<S><C>
Mr. Hacala: Mr. Heimendinger:
FOR the WITHHOLD AUTHORITY to FOR the WITHHOLD AUTHORITY to
above named vote for the above named above named vote for the above named
nominee nominee nominee nominee
____ ____ ____ ____
</TABLE>
2. The proposal to ratify the appointment of BDO Seidman, LLP
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
