<PAGE> 1
SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for use of the Commission Only (as Permitted by Rule
14-a-6(2)(2))
Pollution Research and Control Corp.
------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee Required.
[ ] Fee computed on the 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-ll:
-----------------------------------------------------------------------
(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> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1997
To the Shareholders of Pollution Research and Control Corp.:
PLEASE TAKE NOTICE that the ANNUAL MEETING OF SHAREHOLDERS OF POLLUTION
RESEARCH AND CONTROL CORP. (the "Company") will be held on June 18, 1997 at 3:00
P.M., California time, at the Holiday Inn, 150 E. Angeleno Avenue, Burbank,
California, for the following purposes:
1. To elect six directors to serve until the Company's 1998
Annual Meeting of Shareholders, or until their successors are duly elected and
qualified; and
2. To transact such other business as may be properly brought
before the Annual Meeting.
In accordance with the Company's By-Laws, the Board of Directors has
fixed the close of business on April 30, 1997 as the record date for the purpose
of determining shareholders entitled to receive notice of and to vote at the
Annual Meeting or any adjournment or adjournments thereof.
The stock transfer books will not be closed.
By Order of the Board of Directors
/s/ Barbara L. Gosselin
------------------------------------------
Barbara L. Gosselin, Secretary
May 10, 1997
Glendale, California
<PAGE> 3
YOUR VOTE IS IMPORTANT
YOU ARE URGED TO SIGN, DATE, AND PROMPTLY RETURN YOUR PROXY SO THAT YOUR SHARES
MAY BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A
QUORUM MAY BE ASSURED. THE PROMPT RETURN OF YOUR SIGNED PROXY, REGARDLESS OF THE
NUMBER OF SHARES YOU HOLD, WILL AID THE COMPANY IN REDUCING THE EXPENSE OF
ADDITIONAL PROXY SOLICITATION. FOR YOUR CONVENIENCE, THE ENCLOSED PROXY CAN BE
MAILED WITHOUT THE NEED FOR AN ENVELOPE. THE GIVING OF SUCH PROXY DOES NOT
AFFECT YOUR RIGHT TO VOTE IN PERSON IN THE EVENT YOU ATTEND THE MEETING. YOUR
PROXY WILL BE REVOCABLE, EITHER IN WRITING OR BY VOTING IN PERSON AT THE ANNUAL
MEETING, AT ANY TIME PRIOR TO ITS EXERCISE.
<PAGE> 4
POLLUTION RESEARCH AND CONTROL CORP.
506 Paula Ave.
Glendale, California 91201
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
June 18, 1997 and Adjournments
Approximate Date Proxy Materials First Sent to Shareholders:
May 10, 1997
SOLICITATION AND REVOCATION OF PROXY
The enclosed proxy is for use only at the Annual Meeting of
Shareholders (the "Annual Meeting") of POLLUTION RESEARCH AND CONTROL CORP. (the
"Company") to be held June 18, 1997 and any and all adjournments thereof, and is
solicited on behalf of the Board of Directors of the Company.
If the enclosed form of proxy is executed and returned it may
nevertheless be revoked at any time insofar as it has not been exercised by
transmitting notice of such revocation to the Company by hand or by registered
mail prior to the Annual Meeting. The proxy is in ballot form and each
shareholder may indicate approval or disapproval as to the proposals identified
in the proxy and as set forth and discussed in this Proxy Statement. Where a
choice is specified with respect to any proposal, the shares represented by the
proxy will be voted in accordance with the specification made. Where a choice is
not so specified, the shares represented by the proxy will be voted in FAVOR of
the proposal. The Proxy Committee appointed by the Board of Directors consists
of Barbara L. Gosselin, the Secretary and a director of the Company, and Marcia
Smith, Director of Administration and a director of the Company.
Shareholders of record entitled to vote will be determined as of the
close of business on April 30, 1997. At that date, there were outstanding and
entitled to vote 8,673,732 shares of Common Stock of the Company. No other class
of capital stock is outstanding. Each share of Common Stock entitles the holder
thereof to one vote, and shareholders of the Company have the right to cumulate
their votes with respect to the election of directors. If cumulative voting is
utilized, the total number of votes which the shareholder may cast for the
election of directors shall equal the number of directors to be elected
multiplied by the number of shares held, and the shareholder may cast all of
such votes for one candidate or may distribute the total votes among all or
several candidates, as the shareholder sees fit. A shareholder may not cumulate
votes for a candidate unless the candidate's name has been placed in nomination
prior to the voting and unless the shareholder gives notice at the Annual
Meeting prior to the voting of an intention to cumulate votes. If any one
shareholder has given such notice, all shareholders may cumulate their votes for
candidacy in nomination. The Board of Directors is not soliciting discretionary
authority to cumulate votes for candidates for election to the Board. Under the
Company's amended Articles of Incorporation, at such time, if ever, that the
Company's securities are listed on the New York or American Stock Exchanges, or
the NASDAQ National Market System, cumulative voting will be eliminated for
shareholders.
VOTE REQUIRED
Unless cumulative voting is invoked, a majority of the shares eligible
to vote at the Annual
1
<PAGE> 5
Meeting present in person or by proxy, or 4,336,867 shares, will constitute a
quorum for the transaction of business at the Annual Meeting. The vote of a
plurality of the votes cast at the Annual Meeting is required to elect each of
the nominees for election as directors of the Company. If cumulative voting is
invoked, the six candidates receiving the highest number of votes shall be
elected.
NOMINATION AND ELECTION OF DIRECTORS
The Board of Directors currently consists of six members. The Board has
nominated all six of the current directors for re-election. Proxies may not be
voted for a greater number of persons than the number of nominees named herein.
Directors are elected at each Annual Meeting, but if any such Annual
Meeting is not held or directors are not elected, the directors may be elected
at any special meeting of shareholders held for that purpose. The term of office
for each director expires at the Company's next Annual Meeting and upon election
and qualification of their successor. Under the Company's amended Articles of
Incorporation, at such time, if ever, that the Company's securities are listed
on the New York or American Stock Exchanges, or the NASDAQ National Market
System, the Board of Directors will be divided into three classes and all
directors will no longer be elected at each Annual Meeting.
Unless authority is withheld by your proxy, the shares represented by
the proxy will be voted in FAVOR of the nominees for directors set forth herein.
In the event that any nominee for the Board shall become unavailable, it is
intended that such shares will be voted in FAVOR of such substitute nominee as
may be determined by the Board of Directors.
The Board of Directors has no standing, nominating, compensation or
audit committees. The Board of Directors met eight times during the year ended
December 31, 1996 and each director of the Company attended at least 75% of the
Board meetings. In addition, the Board voted by unanimous consent eight times
during the year ended December 31, 1996.
The following table contains information as of May 10, 1997, with
respect to each nominee:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Albert E. Gosselin, Jr. 64 Mr. Gosselin is currently President, Chief Executive Officer
and Chairman of the Board of the Company. Mr. Gosselin is
the founder of the Company, serving as its President since
1968, when the Company succeeded Mr. Gosselin's
engineering firm, A.E. Gosselin Engineering. Mr. Gosselin
has been a California Registered Professional Mechanical
Engineer since 1959, and received a graduate BSME from
Loyola University in 1954. Mr. Gosselin has served as a
director of the Company since 1968.
Gary L. Dudley 59 Mr. Dudley is, and for the last six years has been, President of
Applied Conservation Technology, Inc. Mr. Dudley received
a Masters Degree in Mechanical Engineering from the
University of Southern California in 1966. Mr. Dudley
served as a director of the Company from 1981 to January 23,
1991 and rejoined the Board on June 8, 1991.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C>
Barbara L. Gosselin 61 Mrs. Gosselin is currently Secretary of the Company and has
served in such capacity since the inception of the Company.
Mrs. Gosselin is a founder of the Company and its predecessor
and was involved in all aspects of the organization of such
companies. Mrs. Gosselin has served as a director of the
Company since 1968 and served as Chief Financial Officer of
the Company from its inception to March 1990.
Marcia Smith 58 Ms. Smith currently serves as the Company's Director of
Administration. She has served in various capacities with the
Company since 1979. Ms. Smith has served as a director of
the Company since May 1990.
Craig E. Gosselin 37 Mr. Gosselin has served as a director of the Company since
October 1987. Mr. Gosselin is an attorney who has been
licensed to practice law in the State of California since 1984.
He has served as the Vice President and General Counsel of
Vans, Inc., a publicly-held manufacturer, distributor and
retailer of footwear, snowboard boots, apparel and related
accessories located in Santa Fe Springs, California since July
1992. He received a Bachelor of Business Administration
from Loyola Marymount University in 1981 and a Juris
Doctor from Southwestern University School of Law in 1984.
Barry Soltani 39 Dr. Soltani was appointed to the Board on April 22, 1997 to
fill a vacancy. He obtained a PhD in economics from the
University of California, Riverside in 1989, his Master's from
the University of California, Riverside in 1983, and graduated
from San Diego State University in 1981 with a B.B.A. in
economics. Dr. Soltani is directly involved in funding for
industrial development projects in China and since 1996 has
been a consultant in corporate finance for joint ventures in
China.
</TABLE>
INFORMATION WITH RESPECT TO EXECUTIVE OFFICERS AND KEY EMPLOYEES
The executive officers of the Company are as follows: Albert E.
Gosselin, Jr., Chairman of the Board, President and Chief Executive Officer;
Cynthia L. Gosselin, Chief Financial Officer; and Barbara L. Gosselin,
Secretary. Information with respect to Albert E. Gosselin, Jr. and Barbara L.
Gosselin is set forth above. Cynthia L. Gosselin, has been Chief Financial
Officer of the Company since March 1990, and has served in various capacities at
the Company, including Production Manager, since 1983.
PRINCIPAL SHAREHOLDERS
The following table sets forth as of April 30, 1997 information
concerning beneficial ownership of the Common Stock of the Company by (i) each
person (including any "group" as that term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934) known by the Company to own beneficially more
than 5% of such Common Stock, (ii) all directors of the Company, and (iii) all
directors and executive officers of the Company as a group.
3
<PAGE> 7
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
NAME AND ADDRESS OF OF COMMON STOCK OUTSTANDING
BENEFICIAL OWNER (1) BENEFICIALLY OWNED COMMON STOCK (2)
--------------------- ------------------ ----------------
<S> <C> <C>
Lee N. Sion (3) 619,000 6.0 %
Albert E. and Barbara L. 501,335 5.0 %
Gosselin, Jr. (4)
Marcia Smith (5) 101,280 1.0 %
Cynthia Gosselin (6) 96,305 1.0 %
Gary L. Dudley (7) 85,000 1.0 %
Craig E. Gosselin (8) 45,000 *
Barry Soltani (9) 0 *
All directors and officers 828,920 8 %
of the Company as a
group (10 persons)
</TABLE>
* Less than 1%
(1) The address of Mr. Lee Sion is P. O. Box 910, Glendale, California
91209. The address of the rest of the individuals named above is 506
Paula Avenue, Glendale, California 91201.
(2) Assumes the exercise of outstanding options and warrants to purchase a
total of 1,840,836 shares of the Company's Common Stock.
(3) Includes 50,000 shares of Common Stock issuable upon the exercise of
options owned of record by Lee N. Sion which is exercisable within 60
days, but does not include 37,500 options which will vest January,
1998.
(4) Includes 170,000 shares of Common Stock issuable upon the exercise of
an option owned of record by Albert E. Gosselin, Jr. exercisable within
60 days, but does not include 123,000 shares which will vest January,
1998. Does not include a total of 169,133 shares of Common Stock owned
of record collectively by Craig E., Cynthia L., Keith A. and Jennifer
S. Gosselin, the adult children of Albert E. and Barbara Gosselin, Jr.,
as to which Mr. and Mrs. Gosselin disclaim any beneficial ownership.
Mr. and Mrs. Gosselin hold their shares of Common Stock as community
property and exercise joint voting and investment power with respect to
such shares.
(5) Includes 40,000 shares of Common Stock issuable upon the exercise of an
option owned of record by Marcia Smith which is exercisable within 60
days, but does not include 20,000
4
<PAGE> 8
shares subject to options which will vest January, 1998.
(6) Cynthia L. Gosselin is the adult daughter of Albert E. and Barbara L.
Gosselin, Jr., who disclaim any beneficial ownership of her shares and
includes 40,000 shares of Common Stock issuable upon the exercise of an
option owned of record and exercisable within 60 days, but does not
include 20,000 shares subject to options which will vest January, 1998.
(7) Represents 85,000 shares of Common Stock issuable upon the exercise of
options owned of record by Gary L. Dudley which is exercisable within
60 days, but does not include 20,000 shares subject to options which
will vest January, 1998.
(8) Craig E. Gosselin is the adult son of Albert E. and Barbara L.
Gosselin, Jr., who disclaim any beneficial ownership of his shares and
includes 40,000 shares of Common Stock issuable upon the exercise of an
option owned of record and exercisable within 60 days but does not
include 20,000 shares subject to options which will vest January, 1998.
(9) Does not include 40,000 shares subject to options which will vest
January, 1998.
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVES
Set forth below is a table which discloses all compensation, including
long term compensation under the Company's Employees' Incentive Stock Option
Plan, awarded to, earned by, or paid to, all executive officers of the Company
whose total compensation exceeded $100,000 in fiscal 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION LONG-TERM
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY COMPENSATION
--------------------------- ----------- ------------ ------------
<S> <C> <C> <C>
Albert E. Gosselin, Jr., 1996 $211,925 55,000 (1)
Chairman of the Board, President 1995 $196,638 0
and Chief Executive Officer 1994 $180,000 53,847 (2)
</TABLE>
(1) Represents shares subject to options granted by the Board of Directors at an
exercise price of $1.10 per share, the fair market value of the Company's Common
Stock on the date of the grant.
(2) Represents shares subject to an option granted under the Company's
Employees' Incentive Stock Option Plan. The option is fully vested and has been
exercised by Mr. Gosselin at a price of $.60 per share, the fair market value of
the Common Stock on the date of the grant.
The Company does not provide officers or employees with pension, stock
appreciation rights, long-term incentive or other plans.
COMPENSATION OF DIRECTORS
Directors do not receive compensation pursuant to any standard
arrangement for their services as directors.
5
<PAGE> 9
EMPLOYMENT AGREEMENTS
The Company has employment agreements with Albert E. Gosselin, Jr., the
President, Chief Executive Officer and Chairman of the Board of Directors of the
Company, and Cynthia L. Gosselin, the Company's Chief Financial Officer. Mr.
Gosselin's employment agreement (the "Agreement") was first approved by the
Board of Directors on July 30, 1987, and has since been extended through August
31, 1999. The Agreement, as extended, provides for the payment to Mr. Gosselin
of a base salary of $200,000, $210,000 and $220,000 during the one-year periods
ended August 31, 1996, 1997 and 1998, respectively. The Agreement further
obligates the Company to permit Mr. Gosselin to participate in the Company's
Employees' Incentive Stock Option Plan and Group Medical Plan and any other
health, life insurance, group medical, disability income insurance and/or stock
option plan adopted by the Company. Under the Agreement, Mr. Gosselin's salary
continues in the event of his disability and for two years after his death. He
is also entitled to a lump sum severance payment equivalent to 2.99 times his
current salary in the event of his termination as President or Chief Executive
Officer within eighteen months after a "change of control" of the Company,
including, among other events, certain types of mergers and other business
combinations, material changes in the composition of the Board of Directors or
the beneficial ownership of the Common Stock, the sale of substantially all of
the Company's assets or securities and the material downsizing or dissolution of
the Company. If such an event occurs during fiscal 1997 Mr. Gosselin would be
entitled to receive $627,900 as a severance payment.
The Company's employment agreement with Cynthia L. Gosselin commenced
on July 20, 1994, and continues through August 31, 1999. The agreement provides
for the payment to her of a base salary of $62,500 during each one-year period
ended July 20, 1996, 1997 and 1998, and annual increases in the discretion of
the Board of Directors. Pursuant to the employment agreement, Ms. Gosselin is
required to be reimbursed by the Company for her expenses incurred in connection
with the performance of her responsibilities. In the event of her death or
disability, the agreement provides for Ms. Gosselin's salary to continue for six
months thereafter. She is also entitled to participate in any Company health,
life insurance, group medical, disability income insurance and/or stock option
plan. Ms. Gosselin's employment agreement provides that she is entitled to a
lump sum severance payment equivalent to 2.99 times her current salary in the
event of her termination as Chief Financial Officer within eighteen months after
a "change in control" of the Company, as defined in the Company's Employment
Agreement with Mr. Albert E. Gosselin, Jr., described hereinabove. She would be
entitled to receive a severance payment of $216,775 if a change in control of
the Company occurs during fiscal 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent of a registered class of the Company's equity securities, to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Sections
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company and written representations that no other
reports were required during fiscal year ended December 31, 1996, all Section
16(a) filing requirements applicable to its officers, directors, and greater
than ten-percent beneficial owners were complied with.
6
<PAGE> 10
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1998 Annual Meeting must be delivered, in
writing, to the Secretary of the Company no later than December 22, 1997.
ANNUAL REPORT ON FORM 10-KSB
The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996, filed with the Securities and Exchange Commission, provides
certain additional information concerning the Company, and is available without
charge to shareholders upon written request directed to the Secretary of the
Company, Barbara L. Gosselin, 506 Paula Avenue, Glendale, California 91201. The
Company's 1996 Annual Report to Shareholders is being mailed to shareholders
with this Proxy Statement.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of
no other matter which properly may be presented at the Annual Meeting. However,
if other matters do properly come before the Annual Meeting, it is intended that
the person named in the accompanying proxy will vote thereon in his discretion
to his best judgement.
SOLICITATION OF PROXIES
The entire expense of preparing, assembling and mailing this Proxy
Statement, form of proxy and other material used in the solicitation of proxies
will be paid by the Company. In addition to the solicitation of proxies by mail,
arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxy materials to their principals, and the Company
will reimburse them for their expenses in so doing. To the extent necessary in
order to insure sufficient representation, officers and regular employees of the
Company may request the return of proxies personally be telephone or telegram.
The extent to which this will be necessary depends entirely on how promptly
proxies are received. Shareholders are therefore urged to send their proxies
without delay.
By Order of the Board of Directors
/s/ Barbara L. Gosselin
---------------------------------------
Barbara L. Gosselin, Secretary
May 10, 1997
Glendale, California
7
<PAGE> 11
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
POLLUTION RESEARCH AND CONTROL CORP.
The undersigned hereby appoints A. E. Gosselin, Jr. the proxy of the undersigned
at the 1997 Annual Meeting of Pollution Research and Control Corp. (the
"Company"), and any adjournments thereof, to vote his or her shares of Common
Stock as follows:
1. FOR [] WITHHOLD AUTHORITY FOR []
The election of the following directors:
<TABLE>
<S> <C> <C>
1. A. E. Gosselin, Jr. 3. Gary L. Dudley 5. Marcia Smith
2. Barbara L. Gosselin 4. Craig E. Gosselin 6. Barry Soltani
</TABLE>
(Instructions: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below)
- --------------------------------------------------------------------------------
2. FOR [] AGAINST [] ABSTAIN []
In their discretion, upon any other matters as may properly come before the
Annual Meeting.
- ---------------------------------------------- ------------------------
Signature Date
This proxy will be voted in accordance with the specific indication. In the
absence of such indicaiton, this proxy will be voted FOR each of the nominees
listed above.
8
