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SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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[X] Filed by the Registrant
[_] 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 (S)240.14a-11(c) or (S)240.14a-12
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TURBOSONIC TECHNOLOGIES, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
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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:
______________________________________________________________________
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:___________________________________________________________
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Copies of all communications to:
IRA I. ROXLAND, Esq.
Cooperman Levitt Winikoff Lester & Newman, P.C.
800 Third Avenue
New York, New York 10022
(212) 688-7000
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[LOGO OF TURBOSONIC]
TURBOSONIC TECHNOLOGIES, INC.
550 Parkside Drive, Suite A-14
Waterloo, Ontario
Canada N2L 5V4
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NOTICE OF ANNUAL MEETING
OF
SHAREHOLDERS
----------------
Dear Shareholders,
On Wednesday, February 9, 2000, TurboSonic Technologies, Inc. will hold its
Annual Meeting of Shareholders at the offices of Ernst & Young LLP, 515
Riverbend Drive, Kitchener, Ontario, Canada. The meeting will begin at 10:00
a.m.
Only shareholders that own shares of common stock at the close of business
on January 17, 2000 can vote at this meeting. At the meeting we will
. Elect a Board of Directors,
. Approve the appointment of our independent auditors for fiscal year 2000,
and
. Attend to any other business promptly brought before the meeting.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE TWO
PROPOSALS OUTLINED IN THIS PROXY STATEMENT.
/s/ Patrick J. Forde
Patrick J. Forde
Secretary
TABLE OF CONTENTS
Page
----
Questions and Answers.................................................... 3
Proposals You May Vote On................................................ 5
Nominees for the Board of Directors...................................... 6
Statement of Corporate Governance........................................ 7
Executive Compensation................................................... 8
Summary Compensation Table............................................. 8
Option Grants in Fiscal 1999........................................... 8
Aggregate Option Exercises in Fiscal 1999 and Year-End Options Values.. 8
Certain Relationships.................................................... 8
Holders of 5% or More of our Stock; Directors and Officers' Ownership of
our Stock............................................................... 9
Section 16(a) Beneficial Ownership Reporting Compliance.................. 9
2
QUESTIONS AND ANSWERS
Q:WHO IS SOLICITING MY VOTE?
A: This proxy solicitation is being made and paid for by TurboSonic
Technologies, Inc.
Q:WHEN WAS THE PROXY STATEMENT MAILED TO SHAREHOLDERS?
A: This proxy statement was first mailed to shareholders on or about January
18, 2000.
Q:WHAT MAY I VOTE ON?
A: (1) the election of nominees to serve on our Board of Directors; AND
(2) the approval of the appointment of our independent auditors for fiscal
year 2000.
Q:HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
A: The Board recommends a vote FOR each of the nominees. The Board recommends a
vote FOR the appointment of Ernst & Young LLP as independent auditors for
fiscal year 2000.
Q:WHO IS ENTITLED TO VOTE?
A: Shareholders as of the close of business on January 17, 2000 (the Record
Date) are entitled to vote at the Annual Meeting.
Q:HOW DO I VOTE?
A: Sign and date each proxy card you receive and return it in the prepaid
envelope. If you return your signed proxy card but do not mark the boxes
showing how you wish to vote, your shares will be voted FOR the two
proposals. You have the right to revoke your proxy at any time before the
meeting by
(1) notifying our Secretary, Patrick J. Forde, at our address shown above,
(2) voting in person, OR
(3) returning a later-dated proxy card.
Q:WHO WILL COUNT THE VOTE?
A: Representatives of our transfer agent, American Stock Transfer & Trust
Company, will count the votes.
Q:IS MY VOTE CONFIDENTIAL?
A: Proxy cards, ballots and voting tabulations that identify individual
shareholders are mailed or returned directly to American Stock Transfer &
Trust Company, and handled in a manner that protects your voting privacy.
Your vote will not be disclosed except (1) as needed to permit American
Stock Transfer & Trust Company to tabulate and certify the vote, and (2) as
required by law. Additionally, all comments written on the proxy card or
elsewhere will be forwarded to management. Your identity will be kept
confidential unless you ask that your name be disclosed.
Q:HOW MANY SHARES CAN VOTE?
A: As of January 17, 2000, 10,000,000 shares of common stock were issued and
outstanding. Every holder of common stock is entitled to one (1) vote for
each share held.
3
Q:WHAT IS A QUORUM?
A: A "quorum" is a majority of the outstanding shares of common stock. They may
be present at the meeting or represented by proxy. There must be a quorum
for the meeting to be held. A proposal must receive more that 50% of the
shares voting to be adopted. If you submit a properly executed proxy card,
even if you abstain from voting, then you will be considered part of the
quorum. An abstention has the same effect as a vote AGAINST a proposal. A
WITHHELD vote will be counted for quorum purposes. However, a WITHHELD vote
is not deemed present for purposes of determining whether shareholder
approval has been obtained.
Q:WHO CAN ATTEND THE ANNUAL MEETING?
A: All shareholders on January 17, 2000 can attend. If your shares are held
through a broker and you'd like to attend, please bring a copy of your
brokerage account statement or an omnibus proxy (which you can get from your
broker), and we will permit you to attend the meeting.
Q:HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
A: We do not know of any business to be considered at the Annual Meeting other
than the proposals described in this proxy statement. If any other business
is presented at the Annual Meeting, your signed proxy card gives authority
to Edward F. Spink, our chairman, and Patrick J. Forde, our Secretary, to
vote on such matters at their discretion.
Q:WHO ARE THE LARGEST PRINCIPAL SHAREHOLDERS?
A: As of January 17, 2000, Dr. Donald R. Spink, Sr., and his related entities,
owned 3,456,931 shares of common stock (32.9%) of Sonic Canada, Inc., a
wholly owned subsidiary of TurboSonic, which by their terms, are convertible
into a like number of shares of our common stock. Canadian Ventures Founders
owned 1,334,999 shares of Sonic Canada common stock (12.7%).
Q:WHEN ARE THE SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING DUE?
A: All shareholder proposals to be considered for inclusion in next year's
proxy statement must be submitted in writing to Patrick J. Forde, our
Secretary, at the address shown above, prior to October 1, 2000.
Q:CAN A SHAREHOLDER NOMINATE SOMEONE TO BE A DIRECTOR OF THE COMPANY?
A: As a shareholder, you may recommend any person as a nominee for director by
writing to our Chairman, Edward F. Spink, at our address shown above.
Recommendations must be received prior to September 30, 2000 for the 2000
Annual Meeting. They must be accompanied by the name, residence and business
address of the nominating shareholder. They must include a representation
that the shareholder is a record holder of our common stock or holds the
stock through a broker. They must state the number of shares held. The
recommendations must include a representation that the shareholder intends
to appear in person or by proxy at the meeting of the shareholders to
nominate the individual(s) if the nominations are to be made at a
shareholder meeting. They must include information regarding each nominee
that would be required to be included in a proxy statement. They must also
include a description of any arrangement or understanding between and among
the shareholder and each and every nominee. Finally, the recommendations
must include the written consent of each nominee to serve as a director, if
elected.
4
PROPOSALS YOU MAY VOTE ON
ELECTION OF DIRECTORS
There are currently four members of the Board of Directors. All four current
members of the Board of Directors are nominees for election this year: Dr.
Donald R. Spink, Sr., Edward F. Spink, Patrick J. Forde, Richard H. Hurd. All
directors are elected annually, and serve until the next Annual Meeting of
Shareholders or until their respective successors are elected and qualified. If
any director is unable to stand for re-election, the Board may reduce the
Board's size or designate a substitute. If a substitute is designated, proxies
voting on the original director candidate will be cast for the substituted
candidate.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THESE DIRECTORS.
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
The Audit Committee has recommended, and the Board has appointed, Ernst &
Young LLP as our independent auditors for the 2000 fiscal year (July 1, 1999
through June 30, 2000) subject to your ratification.
Audit services provided by Ernst & Young during fiscal 1999 included an
audit of our financial statements. They reviewed our Annual Report filed with
the SEC and certain other filings that we made with the SEC and certain other
governmental agencies. They have unrestricted access to the Audit Committee to
discuss audit findings and other financial matters.
A representative of Ernst & Young LLP is expected to attend the Annual
Meeting. He or she will have the opportunity to speak at the meeting if he or
she wishes and will also respond to appropriate questions.
YOUR BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE APPOINTMENT
OF ERNST & YOUNG LLC AS INDEPENDENT AUDITORS FOR FISCAL 2000.
5
NOMINEES FOR THE BOARD OF DIRECTORS
Edward F. Spink
Director since 1997
Age 44
Edward F. Spink has served as our President from August 27, 1997, the date upon
which Turbotak and Sonic Environmental Systems were combined to form
TurboSonic, to June 15, 1995. On that date, the Board elected him as its
Chairman and as our chief executive officer. Prior thereto and from 1995, he
was President and a director of Turbotak. Mr. Spink served as Vice President-
Operations of Turbotak from 1989 to 1995.
Patrick J. Forde
Director since 1997
Age 65
Patrick J. Forde has been our Secretary/Treasurer since the combination of
Turbotak and Sonic. He was elected as our President on June 15, 1999,
succeeding Edward F. Spink. Prior thereto and from 1986 he was a director of
Turbotak. Mr. Forde has served as Vice President--Corporate Planning for
Turbotak since 1996. He was chairman and chief executive officer of Borg
Textile Corporation from 1982 to 1995. He is president and owner of Glencree
Investments, Inc., chairman of the board of Waterloo Scientific, Inc. and
serves as a director of several other companies.
Richard H. Hurd
Director since 1993
Age 62
Richard H. Hurd served as Sonic's president from August 1993 to August 1997 and
as its Treasurer from April 1994 to August 1997. From July 1996 until its
combination with Turbotak, Sonic operated as a debtor-in-possession under
Chapter 11 of the Federal Bankruptcy Code. Mr. Hurd has been President and sole
owner of RHB Capital Company Inc., a financial consulting company since 1987.
He is also co-Managing Director of Genuine Article Publishing Group, LLC, a
publisher of children's books.
Dr. Donald R. Spink, Sr.
Director since 1997
Age 75
Dr. Donald R. Spink, Sr. served as Chairman of the Board from August 27, 1997
until his resignation on June 15, 1999. He continues to serve as a director
and, upon request, as a technical advisor. Prior thereto and from 1976 he was
chairman of Turbotak.
6
STATEMENT OF CORPORATE GOVERNANCE
Our business is managed under the direction of the Board of Directors. The
Board delegates the conduct of business to the Company's senior management
team.
Our Board usually meets three to four times a year in regularly scheduled
meetings. It may meet more often if necessary. The board held three meetings in
fiscal 1999. The Chairman usually determines the agenda for the meetings. Board
members receive the agenda and supporting information in advance of the
meetings. Board members may raise other matters at the meetings.
The Board considers all major decisions. The Board has established one
standing committee, an Audit Committee, so that financial issues can be
addressed in more depth than may be possible at a full Board meeting.
The Audit Committee assures the credibility of our financial reporting by
providing oversight of our financial reporting process and our internal
controls. The Audit Committee reports on its activities to the Board. This
committee, which is composed of Messrs. Forde and Hurd, held one meeting in
fiscal 1999.
7
EXECUTIVE COMPENSATION
Summary Compensation
Set forth below is the aggregate compensation paid to Edward F. Spink, our
chief executive officer, during the fiscal years ended June 30, 1999 and 1998.
No other executive officer received compensation higher than that paid to
Edward F. Spink during these fiscal years.
Annual Long Term
Compensation Compensation Awards
-------------- -------------------
Number
of
Name and Year Restricted Options
Principal Ended Fiscal Stock and
Position June 30 Salary Commissions(1) Awards Warrants
- --------- ------- ------- -------------- ---------- --------
Edward F. Spink ............. 1999 $66,243 $ 3,505 -- --
Chief Executive............ 1998 30,754 $52,231 -- --
Officer....................
- --------
(1) Commissions represent a fixed percentage of sales recorded in each fiscal
year.
Effective July 1, 1998, Edward F. Spink's compensation was revised to
included a base salary of $100,00 Canadian (US $63,000 at $1.47) plus a
discretionary bonus to be determined at the end of each fiscal year by the
Board of Directors.
Option Grants in Fiscal 1999
There were no option grants to Edward F. Spink during the year ended June
30, 1999. As provided in our stock option plan, one of our employee-directors
and two non-employee directors were granted options on the date that Turbotak
and Sonic were combined to acquire, respectively, 100,000, 50,000 and 50,000
shares of our common stock at an exercise price of $1.00 per share, being the
market price of our common stock on that date. The two 50,000 share options
expired on August 27, 1999. The 100,000 share option, which also was scheduled
to expire on that date, was extended by the Board until August 27, 2000.
Aggregate Option Exercises in Last
Fiscal Year and Fiscal Year End Option Values
Edward F. Spink neither owned nor exercised any stock options during fiscal
1999.
CERTAIN RELATIONSHIPS
Edward F. Spink is Dr. Donald R. Spink, Sr.'s son.
On October 21, 1998 and January 4, 1999, Donald Spink and Patrick Forde,
respectively, lent your Company a total of $130,190 (Canadian $200,000). These
loans are repayable two years from the date of the loans, bear interest at 10%
per annum and are collateralized by a lien upon and security interest in
substantially all of our assets. As an inducement to advance these sums to us,
Messrs. Spink and Forde were granted detachable warrants to purchase an
aggregate of 200,000 shares of our common stock at an initial exercise price of
$0.50 per share through October 31, 2000, increasing to $0.75 per share
thereafter through October 31, 2002 and to $1.00 per share thereafter through
October 31, 2003, respectively. The warrants, whose initial exercise price was
greater than the market price of our common stock on the date such warrants
were granted, expire on the earlier of October 31, 2003 or 30 days after our
shares have closed at a price per share above $1.50 for 10 consecutive trading
days on the NASDAQ Electronic Bulletin Board.
8
HOLDERS OF 5% OR MORE OF OUR STOCK;
DIRECTORS' AND OFFICERS' OWNERSHIP OF OUR STOCK
The following table shows how much stock each of our directors and named
executive officers owned as of January 17, 2000 and also how much stock was
reportedly owned by entities owning 5% or more of our stock as of January 17,
2000. The table also includes vested option or warrant shares (as of January
17, 2000) that are exercisable within 60 days. Shares held in family trusts or
held in partnerships where the director or officer is a general partner or
exercises voting control are included in the table.
Amount and
Nature of
Name of Beneficial Owner Beneficial Approximate
or Identity of Group Ownership(1) Percentage
- ------------------------ ------------ -----------
Dr. Donald R. Spink, Sr. .................... 3,456,931(1)(2)(5) 32.9%
Edward F. Spink*............................. 456,338(1) 4.4%
Patrick J. Forde*............................ 819,159(1)(3)(5) 7.8%
Richard H. Hurd**............................ 213,938(1)(4) 2.0%
Canadian Venture Founders.................... 1,334,979(1) 12.7%
114 Lakeshore Road East
Oakville, Ontario L6J 6N2,
Canada
All executive officers and directors as a
group (4 persons)........................... 4,955,366(1)-(5) 47.2%
- --------
* 550 Parkside Drive, Suite A-14, Waterloo, Ontario N2L 5V4, Canada.
** 11 Melanie Lane, Unit 22A, East Hanover, New Jersey 07936.
(1) Represents shares of Sonic Canada which, by their terms, are convertible
at any time into a like number of our shares of common stock.
(2) Includes 3,008,186 Sonic Canada shares owned by a Canadian numbered
corporation, over which shares Dr. Spink exercises voting control.
(3) Includes 507,642 Sonic Canada shares owned by the Patrick and Joan Forde
Family Trust.
(4) Includes 1,195 shares owned by Mr. Hurd's spouse, as to which Mr. Hurd
disclaims any beneficial ownership; also includes 100,000 shares issuable
upon exercise of an option that was scheduled to expire on August 1999 at
an exercise price of $1.00 per share, which option was granted pursuant to
our Stock Option Plan. The Board has extended the expiration date of this
option to August 27, 2000.
(5) Includes detachable warrants for each of Messrs. Donald R. Spink, Sr. and
Patrick Forde to purchase 100,000 shares at an initial exercise price of
$0.50 per share through October 31, 2000, increasing to $0.75 per share
thereafter through October 31, 2002 and to $1.00 per share thereafter
through October 31, 2003, respectively.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
We believe that during fiscal 1999, all SEC filings of directors, officers
and ten percent shareholders complied with the requirements of Section 16 of
the Securities Exchange Act. This belief is based on our review of forms filed,
or written notice that no forms were required.
9
TURBOSONIC TECHNOLOGIES, INC.
550 Parkside Drive, Suite A-14
Waterloo, Ontario
Canada N2L 5V4
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Edward F. Spink and Patrick J. Forde as
Proxies, each with the power to appoint his substitute, and hereby authorizes
each of them, to represent and vote, as designated on the reverse side hereof,
all the shares of common stock of TurboSonic Technologies, Inc. (the "Company")
held of record by the undersigned on January 17, 2000, at the Annual Meeting of
Shareholders to be held on Wednesday, February 9, 2000 or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
(To Be Signed on Reverse Side)
1. Election of directors:
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
such nominee's name from the list at right)
FOR all nominees WITHHOLD AUTHORITY NOMINEES:
Edward F. Spink
listed at right to vote for all Patrick J. Forde
(except as marked nominees listed Richard H. Hurd
to the contrary at right Dr. Donald R. Spink, Sr.
at right)
[_] [_]
2. To ratify the selection of Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending June 30, 2000.
FOR [_] AGAINST [_]
3. To transact such other business as may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
___________________________________________
Signature
Date: _____________________________________
___________________________________________
Signature, if held jointly
NOTE: Please sign exactly as name appears hereon. When shares are held by joint
tenants, both 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 the President or other
authorized officer. If a partnership, please sign in partnership name by
an authorized person.