Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
Sonex Research, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Stattement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed per Exchange Act Rules 14a-6(i)(1) and 0-11.
<PAGE>
SONEX RESEARCH, INC.
23 Hudson Street
Annapolis, Maryland 21401
1998 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF MEETING AND PROXY STATEMENT
To the Shareholders of Sonex Research, Inc.:
The 1998 Annual Meeting of Shareholders of Sonex Research, Inc. (the
"Corporation") will be held on Tuesday, June 16, 1998 at 10 a.m. at the Riva
Conference Facility, located in the lower level of the Nationsbank Building,
2530 Riva Road, Annapolis, Maryland, 21401. Holders of record of the Common
Stock and Preferred Stock of the Corporation at the close of business on the
record date of April 30, 1998 will be entitled to notice of, and to vote at, the
Annual Meeting and any adjournment thereof.
There are no matters before the holders of the Corporation's Preferred
Stock. The holders of the Corporation's Common Stock will act upon the following
matter and such other matters as may properly come before the Annual Meeting or
any adjournment thereof:
COMMON STOCK PROPOSAL: To elect one individual to serve as a Class III
Common Stock director of the Corporation until the Annual Meeting of
Shareholders in 2001 and until his successor is duly elected and
qualified.
Whether or not you plan to attend the Annual Meeting, we urge you to
complete, date and sign the enclosed Proxy or proxy voting instructions form and
return it in the accompanying envelope promptly to assure that your shares are
represented at the meeting. If no direction is indicated, returned Proxies will
be voted "FOR" the Common Stock Proposal.
Please note that the Proxy or proxy voting instructions form for shares on
deposit in an account with a financial institution such as a brokerage house or
bank (i.e., held in "street name") should not be returned to the Corporation
because street name shares are considered to be held of record by the financial
institution, which then votes the shares in accordance with instructions
received from its accountholders. The Corporation cannot accept voting
instruction forms for shares held in street name. If, however, you own shares
represented by certificates registered in your own name, you will have received
proxy material directly from the Corporation, and the accompanying Proxy return
envelope will be addressed to the Corporation. If you own some shares registered
in your name and other shares in street name, you may receive separate mailings
of proxy materials for each such account. Please be sure to use the proxy card
and return envelope supplied with each mailing.
Shareholders may attend the Annual Meeting and vote their shares in person;
however, if you hold shares in street name and wish to vote in person, you must
mark the appropriate box on the proxy voting instruction form and return the
form to the financial institution, which will then send you a Legal Proxy to
allow you to vote the shares by ballot at the Annual Meeting. If you own shares
registered in your name you may vote your shares in person at the Annual Meeting
by submitting your completed Proxy or by completing a ballot. If you own shares
registered in your name and have returned the Proxy to the Corporation but later
decide to attend the Annual Meeting in person, you may revoke your Proxy at the
Annual Meeting and cast your vote in person by ballot.
By Order of the Board of Directors
George E. Ponticas
Secretary
May 20, 1998
1
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
INTRODUCTION
This Notice of Meeting and Proxy Statement is furnished to shareholders of
Sonex Research, Inc. (the "Corporation") in connection with the solicitation of
Proxies on behalf of the Board of Directors of the Corporation for use at the
Annual Meeting of Shareholders of the Corporation to be held on June 16, 1998
for the purposes set forth on the cover page of this Notice of Meeting and Proxy
Statement. The cost of preparing, assembling and mailing of proxy materials will
be borne by the Corporation.
The Corporation will supply Proxies and proxy materials as requested to
brokerage houses and other custodians, nominees and fiduciaries for transmission
to the beneficial owners of the Corporation's Common Stock. The Corporation will
reimburse such brokerage houses and other custodians for their expenses. The
approximate mailing date of this Notice of Meeting and Proxy Statement is May
20, 1998.
QUORUM
The presence, in person or by Proxy, of the majority in number of the
outstanding shares of each of the Common Stock and the Preferred Stock as of the
record date constitutes a quorum for that class of stock. A quorum of each class
of stock is required in order for the Corporation to conduct business at the
Annual Meeting. If a quorum is attained at the Annual Meeting for each class of
stock, directors will be elected by a plurality of the shares present and
entitled to vote.
AUTHORITY GRANTED BY THE PROXY/REVOCATION OF PROXY
Unless otherwise directed by the shareholder, the shares represented by
executed Proxies returned to the Corporation will be voted "FOR" the election of
directors, and in the discretion of the Proxy holders as to other matters coming
before the Annual Meeting. A Proxy may be revoked before it is voted if written
notice from the shareholder to the Corporation's Secretary is received at any
time prior to its use, and such Proxy shall be deemed revoked if the shareholder
is present at the Annual Meeting and gives written notice to the Corporation's
Secretary of his revocation at such time.
VOTING SECURITIES AND PRINCIPAL SHAREHOLDERS
The Corporation has two classes of voting securities: its $.01 par value
common stock (the "Common Stock") and its $.01 par value convertible preferred
stock (the "Preferred Stock"). Each share of Preferred Stock is convertible at
any time at the option of the holder into Common Stock at the rate of $.35 per
share of Common Stock. The Preferred Stock has priority in liquidation over the
Common Stock, but it carries no stated dividend. Additionally, the holders of
Preferred Stock, voting as a separate class, have the right to elect that number
of directors of the Corporation which represents a majority of the total number
of directors. The only other matters with respect to which holders of Preferred
Stock are entitled to vote concern a consolidation, merger, share exchange or
transfer of assets.
There were 17,556,406 shares of Common Stock and 1,540,001 shares of
Preferred Stock issued and outstanding at the close of business on April 30,
1998, the date fixed by the Board of Directors as the record date for the
determination of shareholders entitled to notice of, and to vote at, the Annual
Meeting. Each share of Common Stock outstanding on the record date will be
entitled to one vote on the Common Stock Proposal and on all other matters to
come before the Annual Meeting. Abstentions and broker non-votes will not be
counted as affirmative votes at the Annual Meeting. There are no matters before
the holders of the Corporation's Preferred Stock.
The following table sets forth as of April 30, 1998 information relating to
beneficial ownership of Common Stock by directors of the Corporation, directors
and executive officers of the Corporation as a group, and any other persons
known by the Corporation to be the beneficial owner of more than five percent of
the currently issued and outstanding Common Stock. Shares beneficially owned
include those shares which the reporting person currently owns or has the right
to acquire within the next sixty days through the exercise of currently
exercisable options and warrants or through the conversion of Preferred Stock.
Such shares which the reporting person has the right to acquire are not deemed
to be outstanding for computing the percentage of beneficial ownership of any
other person. Unless otherwise noted, all shares are beneficially owned and sole
voting and investment power is held by the persons named.
2
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
Total Beneficial Ownership
--------------------------
Common Rights to Total shares
shares acquire beneficially Percent
Name and address (1) owned shares owned of class
-------------------- --------- --------- --------- --------
Nuno Brandolini 111,726 330,150 441,876 2.5
Lawrence H. Hyde 394,986 606,857 1,001,843 5.6
Charles C. McGettigan 1,570,211 5,842,794 7,413,005 (3) 31.6
Andrew A. Pouring 688,239 146,316 834,555 4.7
Myron A. Wick, III 1,570,211 5,842,794 7,413,005 (3) 31.6
All directors & officers
as a group (6 persons) 2,906,424 7,134,868 10,041,292 40.7
Herbert J. Mitschele, Jr.
Far Hills, NJ 946,755 105,715 1,052,470 6.0
Proactive , et.al. (2)
San Francisco, CA 2,919,157 9,736,003 12,655,160 46.1
- -----------------------------
(1) The business address for each director and named executive officer is 23
Hudson Street, Annapolis, Maryland, 21401.
(2) Includes shares beneficially owned directly and indirectly by Proactive
Partners, L.P. and several affiliated entities and individuals
("Proactive et.al."), as reported in a Form 13D filing with the Securities
and Exchange Commission.
(3) Includes 7,199,005 shares beneficially owned by Proactive et.al.,
which shares could be deemed to be beneficially owned by both Mr.
McGettigan and Mr. Wick by virtue of their executive and ownership
positions in Proactive et.al. Both individuals exercise shared voting
and investment power with respect to such shares.
Rights to Acquire Shares
------------------------
Total
Exercisable Preferred rights to
Exercisable (put)/ Exercisable stock acquire
Name options call (2) warrants converted shares
- -------------------- ---------- --------- --------- --------- ---------
Nuno Brandolini 330,150 330,150
Lawrence H. Hyde 464,000 142,857 606,857
Charles C. McGettigan (1) 214,000 (71,429) 3,414,510 2,285,713 5,842,794
Andrew A. Pouring 146,316 146,316
Myron A. Wick, III (1) 214,000 (71,429) 3,414,510 2,285,713 5,842,794
All directors & officers
as a group (6 persons) 1,477,216 71,429 3,514,510 2,285,713 7,134,868
Herbert J. Mitschele, Jr. 62,858 42,857 105,715
Proactive , et.al. (2)
San Francisco, CA (142,857) 5,521,719 4,357,141 9,736,003
- ---------------------------
(1) Includes 5,628,794 shares beneficially owned by Proactive, et.al.,
which shares could be deemed to be beneficially owned by both Mr.
McGettigan and Mr. Wick by virtue of their executive and ownership
positions in Proactive, et.al. Both individuals exercise shared voting
and investment power with respect to such shares.
(2) Represents the currently exercisable portion of a ten-year option
granted by Proactive, et.al. to Mr. Hyde to purchase 714,286 shares of
common stock presently owned by Proactive, et.al. at an exercise price
of $.35 per share. This option becomes exercisable at the rate of 20%
per year beginning with the December 15, 1997 date of grant. Because
this agreement relates to shares which are already outstanding, the
exercise of such rights will not result in an increase in the total
number of the Company's outstanding shares for purposes of computing
the percentage of beneficial ownership of each reporting person. Mr.
McGettigan and Mr. Wick each has indirect beneficial ownership in 50%
of the shares subject to this agreement.
3
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
BOARD OF DIRECTORS
The Corporation's Board of Directors is divided into two categories: (1)
"Common Stock" directors elected by the holders of Common Stock; and (2)
"Preferred Stock" directors elected by the holders of Preferred Stock. These two
categories of directors are further divided into three classes as nearly equal
in number as possible, with the term of one of the three classes of directors
expiring at each annual meeting of shareholders. The members of each class of
directors are to hold office for terms of three years until their successors
have been elected and qualified. The holders of the Preferred Stock, voting as a
separate class, have the right to elect that number of directors of the
Corporation which represents a majority of the total number of directors.
The Corporation's By-laws state that the Board of Directors shall consist
of not fewer than three directors, with the total number of directors to be set
by the Board by resolution. Following the resignation of three Preferred Stock
directors and one Common Stock director in 1997, the total number of directors
is now five, two of whom are Preferred Stock directors and three of whom are
Common Stock directors.
The Board of Directors has three standing committees: the Executive
Committee, the Compensation Committee, and the Audit Committee. The Executive
Committee meets on short notice when required during intervals between meetings
of the Board of Directors, and has authority to exercise all of the powers of
the Board of Directors, subject to specific directions of the Board of Directors
and subject to the limitations of the Maryland Corporation Law. The Executive
Committee held one formal meeting during 1997, but its members met informally by
telephone several times as needed.
The Compensation Committee makes recommendations to the Board of Directors
with respect to the payment of salaries to executive officers and administration
of the Corporation's stock option and other compensation plans. The Audit
Committee reviews the Corporation's financial statements and accounting policies
and practices with the Corporation's independent accountants. During 1997
neither the Audit Committee nor the Compensation Committee held any formal
meetings; however, the functions of these committees and the function of
recommending potential nominees for Board positions have been performed by the
Board as a whole.
It is also the policy of the Board to consider nominees recommended by
security holders. Such recommendations should be addressed to the Chairman of
the Board, at the address of the Corporation, and should include the name and
address of the security holder submitting the nomination and a detailed listing
of the business experience and particular qualifications of the nominee. The
Board will review the nomination at its next meeting following receipt of the
nomination and respond accordingly to the security holder who submitted the
nomination.
During 1997 the Board of Directors held eight meetings. All of the
incumbent directors attended more than 75% of the total number of regularly
scheduled meetings.
STOCK OPTION PLAN
The Corporation maintains a non-qualified stock option plan (the "Plan")
which has made available for issuance a total of five million shares of Common
Stock. All directors, full-time employees and consultants to the Corporation are
eligible for participation. Option awards are determined at the discretion of
the Board of Directors. The Plan provides that upon a change in control of the
Corporation, all outstanding options granted to employees and directors become
vested with respect to those options which have not already vested. As of April
30, 1998, there were outstanding options to purchase 3,597,716 shares of Common
Stock, of which options to purchase 3,277,966 shares are currently exercisable.
Outstanding options expire at various dates through December 2007, and have an
average exercise price of $.52 per share. As of April 30, 1998, options to
purchase 403,116 shares of Common Stock remain available for future grant.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the compensation paid by the Corporation to
its chief executive officer; no other executive officer earned annual
compensation during the most recently completed fiscal year in excess of
$100,000 (together referred to as the "Named Executives").
4
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
SUMMARY COMPENSATION TABLE
Annual compensation
--------------------------------
Salary Long-term
-------------------- compensation
Name and Position Year Cash paid Deferred Bonus # of options
----------------- ---- --------- -------- -------- ------------
Dr. Andrew A. Pouring 1997 $ 72,000 $ 48,000 35,000
CEO & Chief Scientist 1996 60,798 40,531 $ 10,000 25,000
1995 60,798 40,531
In order to help conserve the Corporation's limited cash resources, all of
the Corporation's employees, at the request of the Board of Directors, for
several years have been voluntarily deferring receipt of payment of significant
portions of their authorized annual salaries. In February 1992 as a condition of
the Corporation's receiving an indispensable capital infusion, this voluntary
deferral of salaries was documented formally through an agreement known as the
"Consent to Deferral" executed by all salaried employees. Under this agreement,
each of the signers consented to the past and future deferral of portions of
their annual salaries, and agreed to defer payment of amounts so accumulated
until the Corporation has received licensing revenue of at least $2 million or
at such earlier date as the Board of Directors determines that the Corporation's
cash flow is sufficient to allow such payment. The conditions of the Consent to
Deferral that would allow repayment of deferred salaries have yet to occur. As
of December 31, 1997, an aggregate of $648,292 in deferred salaries is owed to
current and former employees.
In an effort to avoid long-term financial commitments, the Corporation does
not have employment agreements with any of its personnel. The salaries of
executive officers are set by the Board of Directors on an annual basis. For the
past several years Dr. Pouring has been deferring 40% of his annual salary. As
of December 31, 1997, the amount of deferred salary owed to Dr. Pouring was
$250,981. His authorized salary was increased in 1997 for the first time since
1989.
With the exception of the granting of stock options, the Corporation does
not pay its Named Executives any bonuses or any type of long-term compensation
in the form of restricted stock awards, stock appreciation rights (SAR) or other
form of long-term incentive plan payments.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
-------------------------------------------------------------------
Number of % of total
securities options
underlying granted to
options employees in Exercise Market Expiration
Name granted fiscal year price price date
---- ------- ----------- ----- ----- -------------
Pouring 35,000 33% $.50 $.75 Dec. 14, 2007
Mr. Lawrence H. Hyde, a director of the Corporation and its former Chairman
of the Board of Directors, was named president of the Corporation in 1997. In
order to induce Mr. Hyde to take that position, Proactive, et.al., the
Corporation's principal shareholder, agreed to grant him a ten-year option to
purchase 714,286 shares of Common Stock owned by Proactive, et.al., at an
exercise price of $.35 per share. This option, which was not granted under the
Plan, becomes exercisable at the rate of 20% per year beginning with the
December 15, 1997 date of grant.
In connection with the grant of the option to Mr. Hyde by Proactive, in
1997 the Corporation charged $44,643 to compensation expense, representing the
excess of the aggregate market value at the date of grant of shares vested
pursuant to this option over the aggregate exercise price of such options.
Additional compensation of $133,929 is being amortized to compensation expense
in future years over the remaining vesting period of this option.
5
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Sonex Research, Inc. 1998 Proxy Statement
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
Number of securities Value of unexercised
underlying unexercised in-the-money
options/SARs at options/SARs at
December 31, 1997 December 31, 1997
# of shares
acquired on Value Exercisable/ Exercisable/
Name exercise realized unexercised unexercised
- -------- ----------- -------- ---------------------- -------------------
Pouring - - 146,316/185,066 $79,178/$97,850
With the exception of options to purchase 25,000 shares held by Dr. Pouring
that are exercisable at $.75 per share, all of the options held by the Named
Executives are exercisable at $.50 per share, which prices were below the
December 31, 1997 market price of the Common Stock of $1.0625 per share.
COMPENSATION OF DIRECTORS
Directors of the Corporation do not receive directors fees, but are
reimbursed for expenses related to their activities as directors and are
eligible to receive stock option grants. It has been the Corporation's policy to
grant outside (non-officer) directors stock options every three years that have
a term of ten years and vest over a number of years. The exercise prices of
these options granted in 1992 and 1995 have been set at the lower of the market
price of the Common Stock on the date of grant and the average market price of
the Common Stock for the ten trading days prior to the date of grant, although
no options have been granted with an exercise price below $.50 per share.
Individuals who become outside directors in the future would also receive
similar options.
As a result of the resignation of four directors in 1997, unvested options
granted in prior years under the Plan for the purchase of 150,000 shares of
common stock lapsed.
INDEPENDENT ACCOUNTANTS
On October 31, 1997, the Corporation informed Price Waterhouse LLP,
independent accountants for Sonex since 1985, that it had been dismissed as
independent accountants for the year ended December 31, 1997. The Corporation's
Board of Directors made the decision to change independent accountants. In
connection with its audits for each of the two years in the period ended
December 31, 1996, and through October 31, 1997, there were no disagreements
with Price Waterhouse LLP on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Price Waterhouse LLP,
would have caused them to make reference thereto in their report on the
financial statements for such years.
The reports of Price Waterhouse LLP on the financial statements of the
Corporation for fiscal years 1996 and 1995, presented on page 12 of the Form
10-KSB delivered with this Notice of Meeting and Proxy Statement, contain no
adverse opinion or disclaimer of opinion and are not qualified or modified as to
audit scope or accounting principle; however, such reports are modified by the
inclusion of an explanatory paragraph indicating that there is substantial doubt
about the Corporation's ability to continue as a going concern.
The Corporation's Board of Directors made the decision to engage C. L.
Stewart & Company as new independent accountants as of October 31, 1997. The
Corporation has had no disagreements with C. L. Stewart & Company on any matter
of accounting principles or practices or financial statement disclosure. It is
expected that a representative of C. L. Stewart & Company will be present at the
shareholders meeting and will have an opportunity to make a statement, should
they desire to do so, and will be available to answer appropriate questions.
ANNUAL REPORT ON FORM 10-KSB
A copy of the Corporation's 1997 Annual Report on Form 10-KSB containing
financial statements of the Corporation has been mailed with this Notice of
Meeting and Proxy Statement to all shareholders.
6
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
COMMON STOCK PROPOSAL
ELECTION OF COMMON STOCK DIRECTOR
The persons named in the enclosed Proxy have the intention of voting the
Proxies for the election of the nominee described below unless the shareholder
specifies otherwise. Although the Board of Directors does not contemplate that
the nominee will be unable to serve, if such a situation arises prior to the
meeting the persons named in the Proxy will vote in accordance with their best
judgment.
NOMINEE FOR COMMON STOCK DIRECTOR
Dr. Andrew A. Pouring was nominated by the Board of Directors at its
meeting on March 17, 1998 for election as a Class III Common Stock director of
the Corporation. Dr. Pouring has been a full-time employee, director, and Chief
Scientist of the Corporation since 1980, serving as President from April 1980
through November 1991, and as Chief Executive Officer since May 1985. In
November 1991 he was elected a Vice Chairman of the Board of Directors. He is
the principal author of the Corporation's numerous patents and has personally
contributed most of the recently patented improvements and extensions to the
original discoveries. He served as a Professor of Aerospace Engineering at the
U.S. Naval Academy from 1964 to 1983, and was Chairman of the Academy's
Department of Aerospace Engineering from 1975 to 1978. Dr. Pouring is a member
of various professional and scientific societies, including the American Society
of Mechanical Engineers and the Society of Automotive Engineers, as has been
organizer and chairman of many symposia for these societies. Dr. Pouring
received his Bachelors and Masters degrees in mechanical engineering from
Rensselaer Polytechnic Institute. He received his Doctor of Engineering degree
from Yale University, where he also was a post doctoral research fellow and
lecturer.
COMMON STOCK DIRECTORS
Year first
elected to Year term
Name Age Class the Board expires
---------------------- --- ----- --------- -------
Mr. Nuno Brandolini 44 II 1982 2000
Mr. Lawrence H. Hyde 73 I 1986 1999
Dr. Andrew A. Pouring (nominee) 66 III 1980 1998
Mr. Nuno Brandolini has been a director of the Corporation since January
1982 and was elected a Vice Chairman of the Board in May 1988. Since November
1995 Mr. Brandolini has been the Chairman of the Board and Chief Executive
Officer of Scorpion Holdings, Inc., a merchant banking company. From December
1993 through October 1995 he was a managing director of Rosecliff, Inc., also a
merchant banking company. From June 1991 to November 1993 he was a Vice
President with Salomon Brothers, Inc. From 1988 to 1991 Mr. Brandolini was a
part owner of The Baltheus Group, Inc., a management consulting and financial
advisory firm. He has a law degree from the University of Paris and he received
an MBA from The Wharton School of the University of Pennsylvania.
Mr. Lawrence H. Hyde has been a director of the Corporation since September
1986, serving as Chairman of the Board from June 1987 to June 1993, and was
appointed President of the Corporation in October 1997. Mr. Hyde was a director
of Harris Graphics Corp. from 1983 to 1986, where during 1985 and 1986 he also
served as its Chairman of the Board and Chief Executive Officer. He was
President and Chief Executive Officer of AM General Company from 1979 to 1985.
He joined American Motors in 1974 and remained until 1983. At various times he
had corporate wide responsibility for engineering, international and marketing;
his last position was Executive Vice President responsible for International and
Engineering. He is a director of Whatman plc and a trustee of the American
University in Cairo, where he is also chairman of the University Educational
Investment Fund. Mr. Hyde is a graduate of Harvard College and Harvard Business
School.
PREFERRED STOCK DIRECTORS
Year first
elected to Year term
Name Age Class the Board expires
---------------------- --- ----- --------- -------
Mr. Charles C. McGettigan 53 I 1992 1999
Mr. Myron A. ("Mike") Wick, III 54 I 1991 1999
7
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Sonex Research, Inc. 1998 Proxy Statement
Mr. Charles C. McGettigan has been a director of the Corporation since
February 1992. He was a founding partner in 1991 and is a general partner of
Proactive Investment Managers, L.P., which is the general partner of Proactive
Partners, L.P. In 1988 Mr. McGettigan co-founded McGettigan, Wick & Co., Inc.,
an investment banking firm. From 1984 to 1988 he was a Principal, Corporate
Finance, of Hambrecht & Quist, Inc. Prior to that Mr. McGettigan was a Senior
Vice President of Dillon, Read & Co. Inc. He currently serves on the Boards of
Directors of Cuisine Solutions, Inc., Digital Dictation, Inc., I-Flow
Corporation, Modtech, Inc., PMR Corporation, Tanknology - NDE Corporation,
WrayTech Instruments, Inc., and Onsite Energy, Inc., of which he is the
Chairman. Mr. McGettigan is a graduate of Georgetown University, and received
his MBA in Finance from The Wharton School of the University of Pennsylvania.
Mr. Myron A. ("Mike") Wick, III, has been a director of the Corporation
since November 1991 and was elected Chairman of the Board of Directors in June
1993. He was a founding partner in 1991 and is a general partner of Proactive
Investment Managers, L.P., which is the general partner of Proactive Partners,
L.P. In 1988 Mr. Wick co-founded McGettigan, Wick & Co., Inc., an investment
banking firm. From 1985 to 1988 Mr. Wick was Chief Operating Officer of
California Biotechnology, Inc. in Mountain View, California. He currently serves
on the Boards of Directors of Children's Discovery Centers of America, Inc.,
Digital Dictation, Inc., Modtech, Inc., Tanknology - NDE Corporation, and
WrayTech Instruments, Inc., of which he is the Chairman. Mr. Wick received a
B.A. degree from Yale University and an MBA from the Harvard Business School.
OTHER EXECUTIVE OFFICERS
Mr. George E. Ponticas, age 38, has been Vice President of Finance, Chief
Financial Officer, Secretary and Treasurer of the Company since September 1991.
From May 1987 through August 1991, he served as the Company's Controller and
Assistant Secretary. From August 1981 through April 1987, Mr. Ponticas was a
member of the auditing staff of Price Waterhouse in Baltimore, Maryland,
attaining the position of audit manager in 1986. At Price Waterhouse, he worked
on the audits of a number of public and private companies, with an emphasis on
small businesses. Mr. Ponticas is a Certified Public Accountant, and is a member
of the American Institute of Certified Public Accountants and the Maryland
Association of Certified Public Accountants. He received his B.S. in Accounting
from Loyola College in Maryland.
SECTION 16(a) REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's officers and directors, and persons who own more than 10% of a
registered class of the Corporation's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission,
and to provide copies of all such reports to the Corporation. Based solely on
its review of the copies of such reports received by it, or written
representations from certain reporting persons that no reports were required for
those persons, the Corporation believes that all of its officers, directors, and
greater than 10% shareholders complied with all such filing requirements for its
last fiscal year.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the
meeting other than those specifically set forth in the notice thereof. If any
such matters should arise, it is intended that the persons named in and acting
under the enclosed form of Proxy or their substitutes will vote thereon in
accordance with their best judgment.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any proposal intended to be presented at the 1999 Annual Meeting of
Shareholders and included in the Corporation's proxy statement and form of proxy
for the 1999 Annual Meeting of Shareholders must be received at the
Corporation's principal executive offices in Annapolis, Maryland, on or before
January 1, 1999.
8
<PAGE>
Sonex Research, Inc. 1998 Proxy Statement
APPENDIX A - FORM OF PROXY
PROXY Sonex Research, Inc. - Common Stock
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints LAWRENCE H. HYDE and GEORGE E. PONTICAS,
or each of them, as Proxies, each with the power to appoint his substitute, to
represent and vote all shares of Common Stock of and on behalf of the
undersigned, as designated below and upon or in connection with the transaction
of all other business at the Annual Meeting of Holders of Common Stock of Sonex
Research, Inc. to be held June 16, 1998, and any adjournments thereof, with
all powers the undersigned would possess if personally present and voting at
such meeting.
The Board of Directors unanimously recommends a vote "FOR" the following:
COMMON STOCK PROPOSAL 1: Election of Directors
Andrew A. Pouring [ ] FOR [ ] WITHHOLD AUTHORITY
WHEN PROPERLY EXECUTED AND RETURNED THIS PROXY WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED "FOR" COMMON STOCK PROPOSAL 1 AS SET FORTH ON THIS CARD.
Dated _______________ , 1998
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Signature
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Signature (if held jointly)
PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S) HEREON. If shares are held in the
names of two or more persons, all must sign. When signing in a representative or
fiduciary capacity, give full title as such. If signer is a corporation, sign
corporate name by fully authorized officer.
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