<PAGE> 1
SCHEDULE 14(a) INFORMATION
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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PACIFIC RESEARCH & ENGINEERING CORPORATION
(Name of Registrant as Specified In Its Charter)
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:(1)
------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------
5) Total Fee Paid:
------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] 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> 2
PACIFIC RESEARCH & ENGINEERING CORPORATION
2070 LAS PALMAS DRIVE
CARLSBAD, CALIFORNIA 92009
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 5, 1997
Dear Shareholder:
You are invited to attend the Annual Meeting of the Shareholders of Pacific
Research & Engineering Corporation (the "Company"), which will be held on June
5, 1997, at 9:00 a.m. local time at the Olympic Resort, 6111 El Camino Real,
Carlsbad, California for the following purposes:
1. To elect seven (7) directors to hold office for one-year terms and
until each of their successors are elected and qualified.
2. To consider a proposal to ratify the appointment of Harlan &
Boettger as the Company's independent public accountants for the fiscal
year ending December 31, 1997.
3. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on May 1, 1997 are entitled
to notice of, and to vote at, this meeting and any adjournments thereof.
By order of the Board of Directors,
LARRY EYLER,
Secretary
Carlsbad, California
May 9, 1997
<PAGE> 3
PACIFIC RESEARCH & ENGINEERING CORPORATION
2070 LAS PALMAS DRIVE
CARLSBAD, CALIFORNIA 92009
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
The accompanying proxy is solicited by the Board of Directors of Pacific
Research & Engineering Corporation, a California corporation (the "Company") for
use at the Annual Meeting of Shareholders to be held June 5, 1997 at 9:00 a.m.
local time, or any adjournment thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. This meeting will be held at the Olympic
Resort, 6111 El Camino Real, Carlsbad, California. The date of this Proxy
Statement is May 9, 1997, the approximate date on which this Proxy Statement and
the accompanying form of proxy were first sent or given to shareholders.
GENERAL INFORMATION
Annual Report. An annual report for the fiscal year ended December 31,
1996, is enclosed with this Proxy Statement.
Voting Securities. Only shareholders of record as of the close of business
on May 1, 1997, will be entitled to vote at the meeting and any adjournment
thereof. As of that date, there were 2,305,500 shares of Common Stock of the
Company, issued and outstanding. Shareholders may vote in person or in proxy.
Each holder of shares of Common Stock is entitled to one (1) vote for each share
of stock held on the proposals presented in this Proxy Statement, except that in
the election of directors each shareholder has cumulative voting rights and is
entitled to as many votes as equal the number of votes to which he is entitled
multiplied by the number of directors to be elected, which votes may be cast for
a single candidate or distributed among any or all of the candidates. However,
no shareholder shall be entitled to cumulate votes unless the candidate's name
has been placed in nomination prior to the voting and the shareholder, or any
other shareholder, has given notice at the meeting, prior to the voting, of his
intention to cumulate his votes. The Company's bylaws provide that a majority of
all of the shares of the stock entitled to vote, whether present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at the meeting.
Solicitation of Proxies. The cost of soliciting proxies will be borne by
the Company. The Company will solicit shareholders by mail through its regular
employees, and will request banks and brokers, and other custodians, nominees
and fiduciaries, to solicit their customers who have stock of the Company
registered in the names of such persons and will reimburse them for their
reasonable, out-of-pocket costs. In addition, the Company may use the services
of its officers, directors, and others to solicit proxies, personally or by
telephone, without additional compensation.
Voting of Proxies. All valid proxies received prior to the meeting will be
voted. All shares represented by a proxy will be voted, and where a shareholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made. If
no choice is indicated on the proxy, the shares will be voted in favor of the
proposal. A shareholder giving a proxy has the power to revoke his or her proxy,
at any time prior to the time it is voted, by delivery to the Secretary of the
Company of a written instrument revoking the proxy or a duly executed proxy with
a later date, or by attending the meeting and voting in person.
In the event that cumulative voting is invoked, a proxy authorizing a vote
for management's nominees for directors may be voted cumulatively for less than
all of such nominees. If no instructions are given on the executed proxy, the
proxy will be voted in favor of the proposals described, but votes may be
cumulated for less than all of the nominees for director.
Stock Ownership of Certain Beneficial Owners and Management. The following
table sets forth certain information, as of April 15, 1997, with respect to the
beneficial ownership of the Company's Common Stock by (i) all persons known by
the Company to be the beneficial owners of more than 5% of the outstanding
Common Stock of the Company, (ii) each director and director-nominee of the
Company, (iii) the executive
<PAGE> 4
officer of the Company named in the Summary Compensation Table, and (iv) all
current executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
SHARES OWNED(1)
--------------------------
NUMBER PERCENTAGE
NAME AND ADDRESS OF SHARES OF CLASS
------------------------------------------------------------ --------- ----------
<S> <C> <C>
Jack Williams(2)(3)......................................... 1,054,000 45.7%
Michael Dosch(2)............................................ 70,000 3.0
Larry Eyler(2).............................................. 70,000 3.0
Dave Pollard(2)............................................. 70,000 3.0
Michael T. Bosworth(2)(4)................................... 5,000 *
John D. Lane(5)............................................. 4,000 *
John M. Robbins(2)(6)....................................... 17,500 *
All Directors and Executive Officers as a Group (7
persons)(3)(4)(6)......................................... 1,290,500 55.7%
</TABLE>
- ---------------
* less than one percent
(1) The persons named in the table have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by such
persons, subject to applicable community property laws.
(2) Each of such persons may be reached through the Company at 2070 Las Palmas,
Drive, Carlsbad, California 92009.
(3) Includes 2,000 shares owned by Mr. Williams' children.
(4) Includes 5,000 shares subject to options exercisable within sixty (60) days
of April 15, 1997.
(5) Mr. Lane may be reached at Westport Resources, 315 Post Road West, Westport,
Connecticut 06880.
(6) Includes 5,000 shares subject to options exercisable within sixty (60) days
of April 15, 1997.
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of seven (7) authorized
directors, each of whom has been nominated by Management for election at the
Annual Meeting of Shareholders. If elected, each nominee will serve as a
director until the Company's Annual Meeting of Shareholders in 1998, and until
his successor is elected and qualified. If the nominee declines to serve or
becomes unavailable for any reason, or if a vacancy occurs before the election
(although Management knows of no reason to anticipate that this will occur), the
proxies may be voted for a substitute nominee as the Board of Directors may
designate.
If a quorum is present and voting, the nominees for director receiving the
highest number of votes will be elected. Abstentions and broker non-votes will
have no effect on the vote.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
- --------------------------------------- --- --------------------------------------- --------
<S> <C> <C> <C>
Jack Williams.......................... 55 Chairman of the Board, Chief Executive 1969
Officer and President
Michael Dosch.......................... 34 Vice President, Chief Operating Officer 1995
and Director
Larry Eyler............................ 43 Vice President, Finance, Chief 1995
Financial Officer, Corporate Secretary
and Director
David Pollard.......................... 44 Vice President, Engineering and 1996
Director
Michael T. Bosworth.................... 50 Director 1996
John D. Lane........................... 50 Director 1996
John M. Robbins........................ 49 Director 1996
</TABLE>
2
<PAGE> 5
Jack Williams has served as Chief Executive Officer, President and Chairman
of the Board of Directors since October 1969. Prior to founding the Company, Mr.
Williams was a professional recording engineer and an audio and video systems
designer at the University of California, San Diego.
Michael Dosch has been a Director of the Company since December 1995. Mr.
Dosch has served in a number of positions since he joined the Company in July
1984. Mr. Dosch was promoted to General Manager in June of 1992 to oversee the
Company's day-to-day operations and to direct marketing activities and he was
promoted to Vice President, Chief Operating Officer in 1995. Mr. Dosch's prior
experience includes positions with Xentek, Inc., a manufacturer of state of the
art switching power supplies, and Carvin Company, a manufacturer of professional
audio products for the music performance industry.
Larry Eyler joined the Company in July of 1992 as the Chief Financial
Officer, and was elected a Director in December 1995. Prior to joining the
Company, Mr. Eyler was Director of Finance, Real Estate, for The Price Company
from October 1987 to July 1989, and Chief Financial Officer for Club
Merchandising from July 1989 to September 1992. Mr. Eyler also had experience
with Peat, Marwick, Mitchell & Co., and Dixieline Lumber Company.
David Pollard has been a Director of the Company since May 1996. Mr.
Pollard has served as Vice President, Engineering of the Company since December
1995, and as manager of various operating functions since September 1985,
including product engineering, systems engineering/manufacturing as well as
sales. Mr. Pollard now oversees the technical staff responsible for research &
development, product design, systems engineering and documentation.
Michael T. Bosworth became a Director of the Company on February 14, 1996.
Mr. Bosworth has over 20 years experience in the information technology
industry. Mr. Bosworth is the founder and author of Solution Selling, and since
1983 has operated his own sales training and consulting company focusing on
buyer oriented sales methodology.
John D. Lane became a Director of the Company on March 15, 1996. In 1997
Mr. Lane joined the investment banking firm of Westport Resources as its
Managing Director, Vice President of Capital Markets. Prior to that, Mr. Lane
was Executive Vice President, Syndicate with Nutmeg Securities. Mr. Lane joined
Nutmeg Securities as a 30% partner in 1989 and served Nutmeg Securities in
several capacities including: officer, director, retail manager, and corporate
finance & syndicate. He has been an active member of the SIA since 1986 and
twice chairman of the Membership Committee. He has served for many years on the
SIA Local Firms Committee and served as a chairman of the committee in 1994. He
has also served as a director of the Regional Investment Brokers Association
since 1991.
John M. Robbins became a Director of the Company in May 1996. Mr. Robbins
is also a director of Garden Fresh Restaurant Corporation. From January 1988
through November 1994 Mr. Robbins served as chairman of the Board, President and
Chief Executive Officer of American Residential Mortgage Corporation.
During the year ended December 31, 1996, the Board held three (3) meetings.
Each director serving on the Board in fiscal year 1996 attended at least 75% of
the meetings of the Board and the Committees on which he serves during his
tenure on the Board or such committees.
The Company does not have a standing Nominating Committee, but does have an
Audit Committee and a Compensation Committee.
The Audit Committee's function is to review with the Company's independent
public accountants and management the annual financial statements and
independent public accountants' opinion, review the scope and results of the
examination of the Company's financial statements by the independent public
accountants, approve all professional services and related fees performed by the
independent public accountants, recommend the retention of the independent
public accountants to the Board, subject to ratification by the shareholders,
and periodically review the Company's accounting policies and internal
accounting and financial controls. The members of the Audit Committee are
Messrs. Lane and Robbins. During the year ended December 31, 1996, the Audit
Committee did not hold any meetings.
3
<PAGE> 6
The Compensation Committee's function is to review and approve salary and
bonus levels and stock option grants. The members of the Compensation Committee
are Messrs. Williams, Bosworth and Robbins. During the year ended December 31,
1996, the Compensation Committee held one (1) meeting.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company, who was the only executive officer
whose salary and bonus exceeded $100,000 in 1996, for services in all capacities
to the Company during the years ended December 31, 1996 and 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
---------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION
- ------------------------------------- ---- -------- ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Jack Williams........................ 1996 $138,154 -- 603,217 --
President and Chief 1995 $125,000 $6,500 -- $2,939(1)
Executive Officer
</TABLE>
- ---------------
(1) Includes 401(k) matching contributions made by the Company.
The following table provides the specified information concerning grants of
options to purchase the Company's Common Stock made during the year ended
December 31, 1996 to the person named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO
GRANTED EMPLOYEES IN EXERCISE EXPIRATION
NAME (1) FISCAL YEAR PRICE DATE
- ---------------------------------------------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Jack Williams................................. 603,217 80.4% $ 5.50 5/23/2006
</TABLE>
- ---------------
(1) These options will vest and become exercisable pursuant to the schedule set
forth below, if the Company achieves the following performance criteria: (i)
80,429 shares if the Company's earnings per share are at least $0.25 or the
Common Stock achieves a price of at least $6.00 per share in 1997; (ii)
80,429 shares if the Company's earnings per share are at least $0.30 or the
Common Stock achieves a price of at least $7.20 per share in 1998; (iii)
80,429 shares if the Company's earnings per share are at least $0.36 or the
Common Stock achieves a price of at least $8.64 per share in 1999; (iv)
180,965 shares if the Company's earnings per share are at least $0.43 per
share or the Common Stock achieves a price of at least $10.37 per share in
2000; and (v) 180,965 shares if the Company's earnings per share are at
least $0.52 or the Common Stock achieves a price of at least $12.44 per
share in 2001. In the event the Company does not achieve these performance
criteria in any given year, any shares reserved for issuance but not yet
vested will become exercisable in addition to such subsequent year's shares
if the Company achieves the performance criteria in such subsequent year. In
addition, if not previously vested, all shares will vest on December 31,
2003 in the event that the executive officer remains employed with the
Company through that date. Under the Company's 1996 Omnibus Stock Plan ("the
Plan"), the Board retains discretion to modify the terms, including the
price, of outstanding options. See "EXECUTIVE COMPENSATION AND OTHER
MATTERS -- Employment and Change of Control Arrangements."
4
<PAGE> 7
The following table provides the specified information concerning
unexercised options held as of December 31, 1996, by the person named in the
Summary Compensation Table:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES (1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS
AT 12/31/96
------------------------------
NAME UNEXERCISABLE (2)
----------------------------------------------------------- ------------------------------
<S> <C>
Jack Williams.............................................. 603,217
</TABLE>
- ---------------
(1) Based on a fair market value of $2.50, the closing price of the Company's
Common Stock on December 31, 1996, none of Mr. Williams' options were
in-the-money as of such date. Mr. Williams did not exercise any options in
1996.
(2) None of Mr. Williams' options are currently exercisable.
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Williams serves as Chairman, President and Chief Executive Officer
pursuant to the terms of an employment agreement entered into in 1996 which
continues in effect until April 1999. Under the terms of the agreement, Mr.
Williams receives an annual salary of not less than $156,000 and a bonus to be
determined by the Board of Directors. In addition, Mr. Williams receives an
automobile allowance of $250.00 per month.
Mr. Dosch serves as Vice President and Chief Operating Officer pursuant to
the terms of an employment agreement entered into in 1996 which continues in
effect until April 1999. Under the terms of the agreement, Mr. Dosch receives an
annual salary of not less than $104,000 and a bonus to be determined by the
Board of Directors. In addition, Mr. Dosch receives an automobile allowance of
$250.00 per month.
Mr. Eyler serves as Vice President, Finance, Chief Financial Officer and
Corporate Secretary pursuant to an employment agreement entered into in 1996
which continues in effect until April 1999. Under the terms of the agreement,
Mr. Eyler receives an annual salary of not less than $104,000 and a bonus to be
determined by the Board of Directors. In addition, Mr. Eyler receives an
automobile allowance of $250.00 per month.
Mr. Pollard serves as Vice President, Engineering pursuant to an employment
agreement entered into in 1996 which continues in effect until April 1999. Under
the terms of the agreement, Mr. Pollard receives an annual salary of not less
than $104,000 and a bonus to be determined by the Board of Directors. In
addition, Mr. Pollard receives an automobile allowance of $250.00 per month.
In the event an executive officer's employment with the Company is
terminated without cause, he will receive a lump sum payment of his salary at
the level stated above for the balance of the term of the Agreement.
Effective January 1997, the compensation committee increased annual
executive salaries as follows: Mr. Williams -- $170,000; Mr. Dosch -- $125,000;
Mr. Eyler -- $115,000; Mr. Pollard -- $115,000.
In the event the Company enters into an agreement to dispose of
substantially all of the assets or stock of the Company, options outstanding
under the Plan will vest in full and become exercisable as of the date of such
agreement. Any outstanding options which are not exercised or assumed will
terminate as of the date of such disposition.
COMPENSATION OF DIRECTORS
Mr. Bosworth and Mr. Robbins each receives $1,000 per month as a retainer,
$750 per directors' meeting and committee meeting attended and has been granted
an option to purchase 5,000 shares of Common Stock, exercisable at $5.50 per
share until May 23, 2006. Additionally, Mr. Bosworth and Mr. Robbins will each
receive ten year options to purchase 2,500 shares of Common Stock at the
then-market price on the date of
5
<PAGE> 8
the grant on the first three anniversaries of their respective elections as a
director. These grants are conditioned upon Mr. Bosworth and Mr. Robbins being a
director at the time of the grant. Mr. Bosworth and Mr. Robbins may also receive
additional reimbursement for expenses, as determined by the Board of Directors,
as directors' fees.
Mr. Lane receives $750 per directors' meeting and committee meeting
attended, and may receive such additional reimbursement for expenses, as
determined by the Board of Directors, as directors' fees. See also "-- Certain
Transactions."
CERTAIN TRANSACTIONS
During 1995, the Company incurred approximately $130,900 of rental expenses
in connection with its corporate offices, manufacturing operations and technical
cabinet fabrication facilities, located in Carlsbad, California, which was paid
to Mr. Williams, the former owner of the premises, through the Williams Family
Trust. This property was sold in May 1995 to an unrelated third party.
Mr. Williams personally guaranteed a credit facility with Grossmont Bank
comprised of two term loans and a line of credit in the amount of $150,000,
$250,000 and $500,000, respectively. Proceeds of the Company's public offering
in 1996 were used in part to pay off these loans.
At the time of the Company's public offering in 1996, Mr. Lane was an
executive officer and controlling person of Nutmeg Securities, the principal
underwriter of such offering. The total underwriting discounts and commissions
paid by the Company with respect to such offering were $550,000. In addition,
Nutmeg Securities received (i) a non-accountable expense allowance of $165,000
and (ii) warrants to purchase up to 50,000 units at $17.05 per unit exercisable
over four (4) years commencing May 28, 1997, with each unit consisting of two
shares of the Company's Common Stock and one redeemable Common Stock Purchase
Warrant of the Company, and (iii) a consulting fee of $72,000.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who beneficially own more than 10% of
the Company's Common Stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC"). Such
persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed by such persons.
Based solely on the Company's review of such forms furnished to the Company
and written representations from certain reporting persons, the Company believes
that all filing requirements applicable to the Company's executive officers,
directors and more than 10% shareholders were complied with except that (i) the
initial statements of beneficial ownership for the executive officers and more
than 10% shareholders of the Company were filed late and (ii) two reports
reporting four (4) transactions which resulted in beneficial ownership changes
by Mr. Williams were filed late.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected Harlan & Boettger,
independent accountants for the Company since 1993, as independent accountants
to audit the financial statements of the Company for the year ending December
31, 1997. A representative of Harlan & Boettger is expected to be present at the
Annual Meeting with the opportunity to make a statement if the representative
desires to do so, and is expected to be available to respond to appropriate
questions.
The affirmative vote of a majority of the votes cast at the Annual Meeting
of Shareholders, at which a quorum representing a majority of all outstanding
shares of Common Stock of the Company is present and voting, either in person or
by proxy, is required for approval of this proposal. Neither abstentions nor
broker non-votes shall have any effect on the outcome of this vote. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPOINTMENT OF HARLAN &
BOETTGER AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE YEAR ENDING DECEMBER
31, 1997.
6
<PAGE> 9
SHAREHOLDER PROPOSALS TO BE PRESENTED
AT NEXT ANNUAL MEETING
Proposals of shareholders intended to be presented at the next Annual
Meeting of the Shareholders of the Company must be received by the Company at
its offices at 2070 Las Palmas Drive, Carlsbad, CA 92009 not later than January
8, 1998, and satisfy the conditions established by the Securities and Exchange
Commission for shareholder proposals to be included in the Company's proxy
statement for that meeting.
TRANSACTION OF OTHER BUSINESS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the meeting is
as set forth above. If any other matter or matters are properly brought before
the meeting, or any adjournment thereof, it is the intention of the persons
named in the accompanying form of proxy to vote the proxy on such matters in
accordance with their best judgment.
By Order of the Board of Directors
LARRY EYLER,
Secretary
May 9, 1997
7
<PAGE> 10
PACIFIC RESEARCH & ENGINEERING CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 5, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Pacific Research & Engineering Corporation,
a California corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, and hereby appoints Jack Williams
and Larry Eyler, or either of them, proxies and attorneys-in-fact, with full
power to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the Annual Meeting of Shareholders of Pacific
Research & Engineering Corporation to be held on June 5, 1997, at 9:00 a.m.,
local time, and at any adjournment or adjournments thereof, and to vote all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on the matters set forth below.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED "FOR" THE ELECTION OF DIRECTORS AND "FOR" THE PROPOSALS SET FORTH ON
THE REVERSE SIDE.
Please fill in, date, sign and mail this proxy in the enclosed postage-paid
return envelope.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE. SEE REVERSE SIDE
<PAGE> 11
/X/ Please mark votes as in this example.
1. To elect directors to serve for the ensuing year and until their
successors are duly elected.
NOMINEES: Jack Williams, Michael Dosch, Larry Eyler, David Pollard,
Michael Bosworth, John Lane, John Robbins
FOR WITHHELD
/ / / /
/ /___________________________
For all nominees except as noted above
2. To ratify the appointment of Harlan & Boettger as the independent
accountants of the Company for fiscal year ending December 31, 1997.
FOR AGAINST ABSTAIN
/ / / / / /
3. To transact such other business as may properly come before the mooting or
any adjournment thereof.
/ / MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
Please sign exactly as name appears hereto. If stock is held jointly, each
holder should sign. If signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title.
Signature:_________________________ Date________________
Signature:_________________________ Date________________
12
