SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A 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
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Pollution Research and Control Corp.
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(Name of Registrant as Specified In Its Charter)
Not Applicable
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(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 table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each Series of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange ActRule
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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
POLLUTION RESEARCH AND CONTROL CORP.
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
October 15, 1998
-----------------
TO THE SHAREHOLDERS OF POLLUTION RESEARCH AND CONTROL CORP.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders (the
"Annual Meeting") of Pollution Research and Control Corp., a California
corporation (the "Company"), will be held at the Best Western Golden Key Motel,
123 West Colorado Street, Glendale, California, on Thursday, October 15, 1998,
at 9:00 a.m., Pacific Daylight Time, for the following purposes:
1. To consider and act upon a proposal to elect six (6) directors to the
Company's Board of Directors to hold office until the next Annual Meeting and
until their successors have been duly elected and qualified.
2. To consider and act upon a proposal to authorize an amendment (the
"Amendment") to the Company's Articles of Incorporation, as amended, to effect a
recapitalization (the "Recapitalization") through a one-for-four reverse stock
split (the "Reverse Stock Split") pursuant to which every four shares of common
stock, no par value per share (the "Common Stock"), of the Company outstanding
on May 15, 1998, were converted into one share of Common Stock. The adoption of
this proposal would approve the decrease in the number of outstanding shares of
Common Stock from 8,673,732 to 2,168,433 effected on May 15, 1998. To avoid the
existence of fractional shares of Common Stock, shareholders who would otherwise
be entitled to receive fractional shares of Common Stock shall receive cash in
lieu thereof.
3. To consider and act upon a proposal to ratify the appointment of AJ.
Robbins, P.C., as the independent accountant for the Company for the fiscal year
ending December 31, 1998.
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 27, 1998,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting or any adjournment thereof.
<PAGE>
You are cordially invited to attend the Annual Meeting. Shareholders who do
not expect to attend the Annual Meeting in person are requested to complete,
date and sign the enclosed form of Proxy and return it promptly. Any shareholder
giving a Proxy may revoke the same at any time prior to the voting of such Proxy
by giving written notice of revocation to the Secretary of the Company, by
submitting a later dated Proxy or by attending the Annual Meeting and voting in
person.
By Order of the Board of Directors,
Barbara L. Gosselin, Secretary
Glendale, California
August 28, 1998
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN ORDER TO ASSURE REPRESENTATION OF
YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES.
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POLLUTION RESEARCH AND CONTROL CORP.
506 Paula Avenue
Glendale, California 91201
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
Proxies by the Board of Directors of Pollution Research and Control Corp. (the
"Company"). The enclosed Proxy is being solicited on behalf of the Board of
Directors of the Company for use at the Annual Meeting of the Shareholders (the
"Annual Meeting") to be held at the Best Western Golden Key Motel, 123 West
Colorado Street, Glendale, California, on Thursday, October 15, 1998, at 9:00
a.m., Pacific Daylight Time, and at any adjournment thereof, for the purposes
set forth in the foregoing Notice of Annual Meeting of Shareholders. The Notice
of Annual Meeting of Shareholders, Proxy Statement and form of Proxy are being
mailed to shareholders on or about September 14, 1998. The Company's mailing
address and the location of its principal executive offices are 506 Paula
Avenue, Glendale, California 91201 (telephone: (818) 247-7601). This Proxy
Statement should be read in conjunction with the Annual Report of the Company,
including financial statements and management's discussion and analysis of
financial condition and results of operations for the fiscal year ended December
31, 1997.
The Proxy Committee appointed by the Board of Directors consists of
Mesdames Barbara L. Gosselin and Marcia A. Smith, Secretary and Director of
Administration, respectively, and directors of the Company. The Board of
Directors met eight times during the fiscal year ended December 31, 1997, and
each director of the Company attended at least 62.5% of the Board meetings. In
addition, the Board of Directors voted by unanimous consent eight times during
the fiscal year ended December 31, 1997.
RECORD DATE AND VOTING RIGHTS
Only shareholders of record at the close of business on August 27, 1998,
are entitled to vote at the Annual Meeting. At the close of business on August
27, 1998, there were 2,619,689 shares of common stock, no par value per share
(the "Common Stock"), of the Company outstanding and entitled to vote, after
giving effect to the Reverse Stock Split effective on May 15, 1998, and the
conversion on July 30, 1998, of 220,000 outstanding shares of Series A
convertible, voting preferred stock, $.01 par value per share (the "Series A
Preferred Stock"), into shares of Common Stock on the basis of one share of
Common Stock for each one share of Series A Preferred Stock outstanding on July
30, 1998. In addition to the Common Stock, the Company has 450,000 shares of
Series B convertible, voting preferred stock, $.01 par value per share (the
"Series B Preferred Stock"), outstanding. Each shareholder entitled to vote
shall have one vote for each share of Common Stock registered in such
shareholder's name on the books of the Company as of the record date. The
shareholders of the Company's Series B Preferred Stock have one vote per each
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share (a total of 450,000 votes) to be cast as a single class, together with the
votes cast by the shareholders of the Common Stock, on the proposal to elect the
directors identified in the section below captioned Election of Directors
(Proposal Number 1 on the Proxy Card) and on the other proposals described in
the Notice of Annual Meeting (Proposals Number 2 and 3 on the Proxy Card) to be
considered and voted upon at the Annual Meeting. A complete list of the
shareholders of the Company entitled to vote at the Annual Meeting will be
available and open to the examination of any shareholder of the Company for any
purpose germane to the Annual Meeting during ordinary business hours from and
after August 27, 1998, at the office of the Company, 506 Paula Avenue, Glendale,
California 91201.
Shareholders of the Company have the right to cumulate their votes with
respect to the election of directors. If cumulative voting is employed, 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 deems appropriate. 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 candidates 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 Exchange or the NASDAQ
National Market System, cumulative voting will be eliminated for shareholders.
Further, at that time, the Board of Directors will be divided into two classes
as nearly equal in number as possible and all directors will no longer be
elected at each Annual Meeting.
SOLICITATION AND REVOCABILITY OF PROXIES
Any form of Proxy may be revoked at any time before it is voted. A
shareholder may revoke his Proxy by (a) notifying the Secretary of the Company
either in writing prior to the Annual Meeting or in person at the Annual
Meeting; (b) submitting a Proxy bearing a later date; or (c) voting in person at
the Annual Meeting. All Proxies returned prior to the Annual Meeting will be
voted in accordance with instructions contained therein. Shares of the Company's
Common and Preferred Stock represented by an effective Proxy in the accompanying
form will, unless contrary instructions are specified in the Proxy, be voted in
favor of (i) the proposal to elect the six (6) persons nominated by the Board of
Directors to be directors; (ii) the proposal to effect a recapitalization (the
"Recapitalization") through a one-for-four reverse stock split (the "Reverse
Stock Split"); and (iv) the proposal to ratify the appointment of AJ. Robbins,
P.C., as independent accountants for the Company for the fiscal year ending
December 31, 1998.
The Company will bear the cost of the solicitation of Proxies by the Board
of Directors. The Board of Directors may use the services of its executive
officers and certain directors to solicit Proxies from shareholders in person
and by mail, telegram and telephone. Arrangements may also be made with brokers,
fiduciaries, custodians and nominees to send Proxies, Proxy Statements and other
material to the beneficial owners of the Company's Common Stock held of record
by such persons, and the Company may reimburse them for reasonable out-of-pocket
expenses incurred by them in so doing.
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The Bylaws of the Company require that, unless cumulative voting is
invoked, a majority of the shares entitled to vote, present in person or by
Proxy, shall constitute a quorum for the conduct of business at the Annual
Meeting. A plurality of the votes cast at the Annual Meeting is required to
elect each of the nominees for election as a director of the Company. If
cumulative voting is invoked, however, the six candidates receiving the highest
number of votes shall be elected.
The enclosed form of Proxy provides a method for shareholders to withhold
authority to vote for any proposal. By withholding authority, shares will not be
voted either for or against a particular matter but will be counted for quorum
purposes. Abstentions and broker "non-votes" are counted for purposes of
determining the presence or absence of a quorum for the transaction of business
and are not counted in tabulations of the votes cast on proposals presented to
the shareholders for purposes of determining whether a proposal has been
approved. Because the proposal relating to the Amendment (as defined below)
requires the affirmative vote of a majority of the outstanding shares, broker
"non-votes" and abstentions will have the effect of a vote against such
proposal.
The Company knows of no reason why any of the nominees named herein would
be unable to serve. In the event, however, that any nominee named should, prior
to the election, become unable to serve as a director, the Proxy will be voted
in accordance with the best judgment of the person named therein. The Board of
Directors does not know of any matters which will be brought before the Annual
Meeting other than those matters specifically set forth in the Notice of Annual
Meeting. However, if any other matter properly comes before the Annual Meeting,
it is intended that the person named in the enclosed form of Proxy, or his
substitute(s) acting thereunder, will vote on such matter in accordance with his
best judgment.
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the names, ages, positions with the Company and its
wholly-owned subsidiaries, Dasibi Environmental Corp. ("Dasibi") and Nutek, Ltd.
("Nutek"), and business experience of the directors and executive officers of
the Company.
Name Age Position(s) with the Company
---- --- ----------------------------
Albert E. Gosselin, 65 President, Chief Executive Officer and
Jr. (1)(2) Chairman of the Board of Directors
Donald R. Ford 70 Chief Financial Officer
Barbara L. Gosselin (1) 62 Secretary and Director
Marcia A. Smith (3) 59 Director
Gary L. Dudley 60 Director
Craig E. Gosselin 38 Director
Barry Soltani 40 Director
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- ------------------
(1) The individuals named above hold the identical positions indicated with
Dasibi.
(2) Mr. Gosselin serves as the sole director and executive officer of Nutek.
(3) Ms. Smith serves as a director and the Manager of Administration of Dasibi.
All directors hold office until the next Annual Meeting of the Company's
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the Board of Directors.
Family Relationships
Mr. Albert E. Gosselin, Jr., and Ms. Barbara L. Gosselin, husband and wife,
are the parents of Mr. Craig E. Gosselin, who is an adult. Except as aforesaid,
no family relationship(s) exist between or among the directors and executive
officers of the Company.
Business Experience
Set forth below is certain information regarding the directors and
executive officers of the Company.
Albert E. Gosselin, Jr., has served as the President, Chief Executive
Officer and Chairman of the Board of Directors of the Company (formerly "Dasibi
Environmental Corp." and "A. E. Gosselin Engineering, Inc.") and Dasibi
(formerly "Baral Engineering, Inc."), corporations which he co-founded with Ms.
Barbara L. Gosselin, since the organization of those corporations in December
1971 and July 1976, respectively. He also served as the President, Chief
Executive Officer and Chairman of the Board of Directors of the Company's former
parent corporation, a corporation also named "Pollution Research and Control
Corp." ("PRCC") which he co-founded with Ms. Gosselin under the name of "A.E.
Gosselin Engineering Co.," from its inception date in 1966 through the date of
its spin-off in October 1986. Mr. Gosselin also served as the President, Chief
Executive Officer and Chairman of the Board of Directors of Applied Conservation
Technology, Inc. ("ACT"), a former wholly-owned subsidiary of PRCC engaged in
the business of providing environmental impact reports to electric utilities,
from 1980 through the date of the purchase of ACT by its management from PRCC in
November 1986. ACT is presently a diversified environmental consulting firm
owned and managed by, among others, Mr. Gary L. Dudley, a Company director. Mr.
Gosselin has served as the sole executive officer and director of Nutek, a
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wholly-owned subsidiary of the Company which is presently in reorganization
under Chapter 11 of the U.S. Bankruptcy Reform Act. Mr. Gosselin received a
Bachelor of Science in mechanical engineering from Loyola University, Los
Angeles, California, in 1954. He has been a registered mechanical engineer in
the State of California since 1959.
Donald R. Ford has served as the Company's Chief Financial Officer since
January 1998. Since 1958, he has been self-employed as an economist providing
consulting services to companies located, primarily, in California. For the
prior approximately five years, from 1953 through 1957, Mr. Ford was employed as
an accountant by Price Waterhouse, Los Angeles, California. He received a
Bachelor of Science Degree in finance from the University of California at
Berkley in 1952.
Barbara L. Gosselin has served as an executive officer and a director of
the Company, which she co-founded with Albert E. Gosselin, Jr., in December
1971, since its inception. Ms. Gosselin has served in the office of Secretary of
the Company since April 1990 and, from inception through April 1990, she served
as the Company's Chief Financial Officer. Ms. Gosselin, together with Mr.
Gosselin, co-founded Dasibi in July 1976 and she has served as the Secretary and
a director of Dasibi since its organization. Ms. Gosselin was the co-founder in
1966, with Mr. Gosselin, of PRCC, the Company's former parent corporation, for
which she served as an executive officer and a director until it was spun-off in
October 1986.
Marcia A. Smith has served as a director of the Company and Dasibi since
May 1990. She has been employed as the Manager of Administration and in various
other capacities with Dasibi since 1979.
Gary L. Dudley has served as a director of the Company during the periods
since June 1991 and from 1980 through January 1991, and he served as the
Company's Vice President from 1979 through November 1986. Mr. Dudley also served
as an executive officer and a director of PRCC, the Company's former parent
corporation, from 1984 through the date of the spin-off of PRCC in October 1986.
Mr. Dudley has been the President and a principal shareholder of ACT, now
located in Westminster, California, a diversified environmental consulting firm
formerly wholly-owned, together with the Company, by PRCC, since the purchase of
ACT by its management from PRCC in November 1986. He served as ACT's Vice
President from 1980 through 1986. From 1962 through 1978, Mr. Dudley was
employed in various engineering-related positions by Southern California Edison
Company, TRW Systems, McDonnell Douglas Corporation and North American Rockwell
Corporation. He received a Bachelor of Science in engineering from California
State University in 1962 and a Masters Degree in Mechanical Engineering from the
University of Southern California in 1966. Mr. Dudley is a registered mechanical
engineer in the State of California and a member of the Association of
Environmental Professionals.
Craig E. Gosselin has served as a director of the Company and Dasibi 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 and related accessories located in Orange, California,
since July 1992. From December 1989 through June 1992, Mr. Gosselin was a
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partner in the law firm of Cooper & Dempsey, Los Angeles, California, which
specialized in the areas of corporate and securities law and business
litigation. 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, PhD, has served as a director of the Company since April 22,
1997. Since 1989, he has served as the President and a director of PIC
Computers, Ltd., Macau, a Macau company owned 50% by him and Mr. Mehrdad Etemad,
each of whom is the record owner of approximately 7% of the Company's
outstanding shares of Common Stock, which is engaged in the marketing, resale
and wholesale distribution of computers and computer-related equipment. Since
1996, Dr. Soltani has been a financial consultant to joint ventures in China and
directly involved in funding industrial development projects in China. He
received a Bachelor of Business Administration degree in economics from San
Diego State University in 1981, a Masters degree and a PhD in economics from the
University of California, Riverside, in 1983 and 1989, respectively.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information as of August 27, 1998,
regarding the ownership of the Company's Common Stock by each shareholder known
by the Company to be the beneficial owner of more than five per cent of its
outstanding shares of Common Stock, each director and all executive officers and
directors as a group. Except as otherwise indicated, each of the shareholders
has sole voting and investment power with respect to the shares of Common Stock
beneficially owned. All amounts shown reflect a 1:4 reverse split in the Common
Stock effective on May 15, 1998.
Shares
Name and Address of Beneficially Per Cent
Beneficial Owner (1) Owned of Class (2)
-------------------- ------------ ------------
Albert E. and Barbara L. 284,059 (3) 9.0%
Gosselin, Jr.
Barry Soltani 235,000 (4) 7.1%
Mehrdad Etemad 225,000 (5) 6.8%
Lee N. Sion 164,125 (6) 5.3%
Gary L. Dudley 46,250 (7) 1.5%
Marcia A. Smith 30,295 (8) 1.0%
Craig E. Gosselin 16,250 (9) *
Donald R. Ford 0 *
All Executive Officers and
Directors as a Group (seven
persons) 611,854 17.8%
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*Less than one per cent.
(1) The address of each of the individuals named above, except Mr. Lee N. Sion,
is 506 Paula Avenue, Glendale, California 91201. Mr. Sion's address is P.O.
Box 910, Glendale, California 91209.
(2) Assumes the exercise of outstanding options and warrants to purchase a
total of 151,670 shares of the Company's Common Stock which are exercisable
within 60 days and, when added to the total number of shares of Common
Stock of the Company outstanding on August 27, 1998, constitutes 3,221,359
shares of Common Stock.
(3) Includes 73,250 shares of Common Stock issuable upon the exercise of an
option owned of record by Mr. Albert E. Gosselin, Jr., exercisable within
60 days. Does not include a total of 52,283 shares of Common Stock owned of
record, collectively, by Messrs. Craig E. and Keith A. Gosselin and
Mesdames Cynthia L. and Jennifer S. Gosselin, the adult children of Mr.
Albert E. and Ms. Barbara Gosselin, Jr., as to which Mr. and Ms. Gosselin
disclaim any beneficial ownership. Mr. and Ms. Gosselin hold their
securities as community property and exercise joint voting and investment
power with respect thereto.
(4) Includes 225,000 shares of Series B convertible, voting Preferred Stock and
10,000 shares of Common Stock issuable upon the exercise of an option owned
of record by Mr. Soltani which is exercisable within 60 days.
(5) Represents 225,000 shares of Series B convertible, voting Preferred Stock.
(6) Includes 21,875 shares of Common Stock issuable upon the exercise of an
option owned of record by Mr. Sion which is exercisable within 60 days.
(7) Includes 26,250 shares of Common stock issuable upon the exercise of
options owned of record by Mr. Dudley which are exercisable within 60 days.
(8) Includes 15,000 shares of Common Stock issuable upon the exercise of an
option owned of record by Ms. Smith which is exercisable within 60 days.
(9) Includes 15,000 shares of Common Stock issuable upon the exercise of an
option owned of record by Mr. Craig E. Gosselin which is exercisable within
60 days. Mr. Graig E. Gosselin is the adult son of Mr. Albert E. and Ms.
Barbara L. Gosselin, Jr., who disclaim any beneficial ownership of his
securities.
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As of August 27, 1998, the Company had a total of 450,000 shares of Series
B convertible, voting Preferred Stock in addition to an aggregate of 2,619,689
shares of Common Stock outstanding, which, collectively, total 3,069,689 shares
of Common Stock entitled to vote. The outstanding shares of the Company's Common
and Series B Preferred Stock will be voted together as a single class on the
proposal to elect the directors identified in the section below captioned
Election of Directors (Proposal Number 1 on the Proxy Card) and on the other
proposals described in the Notice of Annual Meeting (Proposals Number 2 and 3 on
the Proxy Card) to be considered and voted upon at the Annual Meeting. Each
share of Series B Preferred Stock has one vote per share. Accordingly, Messrs.
Soltani and Etemad, the record owners of an aggregate of 450,000 outstanding
shares of Series B Preferred Stock, have a total of 450,000 votes, collectively,
to be cast regarding the three proposals to be considered and acted upon at the
Annual Meeting. The aggregate of 450,000 votes to be cast by Messrs. Soltani and
Etemad represents approximately 13.9% of the total number of votes to be cast by
the holders of all of the shares of the Company's common and preferred stock
issued and outstanding, voting together as a single class.
CERTAIN TRANSACTIONS
On May 8, 1998, the Company issued an aggregate of 100,000 and 20,000
shares of Series A Preferred Stock to each of Messrs. Albert E. Gosselin, Jr.,
and Gary L. Dudley, executive officers and/or directors of the Company,
respectively, in consideration for the amounts of $50,000 and $10,000 in cash,
respectively. Each share of Series A Convertible Preferred Stock was converted
on July 30, 1998, into one share of Common Stock.
The Company issued a total of 225,000 shares of Series B Preferred Stock to
each of Dr. Barry Soltani and Mr. Mehrdad Etemad on June 24, 1998, in
consideration for the sale to the Company of a building comprised of
approximately 2,400 square feet known as the "Macau Technician Service Office
Center" located at Units E and F, Iau Luen Building, #15 Rua Ferreira, Do
Amaral, Macau, valued by the Company's Board of Directors at approximately
$800,000. The building has been leased to PIC Computers, Ltd., a Macau
corporation owned by Dr. Soltani and Mr. Etemad, pursuant to a "triple net"
lease agreement for a period of five years at a rental rate of approximately
$8,000 per month. Each share of Series B Preferred Stock is convertible into one
share of Common Stock on or subsequent to December 31, 1998.
EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth the total cash and non-cash compensation
paid by the Company for the fiscal years ended December 31, 1995, 1996 and 1997,
to the Company's President and Chief Executive Officer, who was the only
executive officer of the Company whose aggregate cash compensation exceeded
$100,000 for the 1997 fiscal year.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
Name and Securities Underlying
Principal Position Year Salary Options/SARs (#)
------------------ ---- ------ -----------------------
<S> <C> <C> <C>
Albert E. Gosselin, Jr. 1997 $151,000 -
President, Chief Execu- 1996 211,925 13,750*
tive Officer and Chair- 1995 196,638 -
man of the Board
</TABLE>
- ------------------
*Represents shares of Common Stock underlying options exercisable at an
exercise price of $4.40 per share, the fair market value of the Common Stock on
the date of grant.
The following table sets forth certain information concerning exercise(s)
of stock options (or tandem SARs) and freestanding SARs by the Company's
President and Chief Executive Officer during the fiscal year ended December 31,
1997.
<TABLE>
<CAPTION>
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-end ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized ($) Unexercisable Unexercisable
- ---------- ----------------- ------------------ ------------- -------------
<S> <C> <C> <C> <C>
Albert E. - $ - - /13,750 $ -/$ -
Gosselin, Jr.
</TABLE>
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.
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Employment Agreement
The Company has an employment agreement with Mr. Albert E. Gosselin, Jr.,
the President, Principal Executive Officer and Chairman of the Board of
Directors of the Company. 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, 1997, 1998 and 1999, respectively.
The Agreement further obligates the Company to permit Mr. Gosselin to
participate in the Company's 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 1998, Mr. Gosselin would be entitled to
receive $657,800 as a severance payment.
The Company has an employment agreement (the "Smith Agreement") with Ms.
Marcia A. Smith, Dasibi's Manager of Administration, which commenced on June 9,
1997, and continues through August 31, 1999. The Smith Agreement provides for
the payment to Ms. Smith of a base salary of $72,300 during each one-year period
ended July 20, 1997, 1998 and 1999, and annual salary increases in the
discretion of the Company's Board of Directors. Pursuant to the Smith Agreement,
Ms. Smith is required to be reimbursed by the Company for her expenses incurred
in connection with the performance of her responsibilities and she is permitted
to participate in the Company's Group Medical Plan and any other Company health,
life insurance, group medical, disability income insurance and/or stock option
plan. Under the Smith Agreement, Ms. Smith's salary continues in the event of
her disability and for six months after her death. She is also entitled to a
lump sum severance payment equivalent to 2.99 times her current salary in the
event of her termination within eighteen months after a "change of control" of
the Company, as defined in the Company's employment agreement with Mr. Gosselin
described hereinabove. She would be entitled to receive a severance payment in
the amount of $216,177 if such an event occurred during fiscal 1998.
ELECTION OF DIRECTORS
(Proposal Number 1 on Proxy Card)
The Company's Amended and Restated By-Laws provide that the business and
affairs of the Company shall be managed and all corporate powers shall be
exercised by or under the direction of a Board of Directors of not less than
three nor more than nine members, and that the Board's size shall be fixed from
time to time by the Board of Directors. The Company currently has six directors
and, at the Annual Meeting, it is proposed that six (6) directors be elected,
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each to serve until the next Annual Meeting and until his or her successor has
been duly elected and qualified, by the holders of the shares of the Company's
Common and Preferred Stock issued and outstanding, voting together as a single
class. To be elected, unless cumulative voting is invoked, each director must
receive a majority of the votes cast at the Annual Meeting. All directors serve
until the next Annual Meeting of the Company's shareholders and until their
successors are duly elected and qualified. Each outstanding share of common and
preferred stock entitles the holder thereof to one vote with respect to the
election of each of the six directors.
The enclosed form of Proxy provides a method for shareholders to withhold
authority to vote for any one or more of the nominees for director while
granting authority to vote for the remaining nominees. If you wish to grant
authority to vote for all nominees, check the box marked "FOR." If you wish to
withhold authority to vote for all nominees, check the box marked "WITHHOLD." If
you wish your shares to be voted for one or more nominees and not others, check
the box marked "FOR" and indicate the name(s) of the nominee(s) for whom you are
withholding the authority to vote by drawing a line through the name(s) of such
nominee(s). If you withhold authority to vote your shares, such vote will be
treated as an abstention and, accordingly, your shares will neither be voted for
or against a director, but will be counted for purposes of determining whether a
quorum of shares is present or represented by Proxy at the Annual Meeting.
It is intended that, if no contrary specification is made, the persons
named in the Proxy card will vote for the election of the following six
nominees: Mr. Albert E. Gosselin, Jr., Mr. Gary L. Dudley, Ms. Barbara L.
Gosselin, Ms. Marcia A. Smith, Mr. Craig E. Gosselin and Dr. Barry Soltani. All
of the nominees are presently serving as directors of the Company and Mr. Albert
E. Gosselin, Jr., and Ms. Barbara L. Gosselin are presently serving in the
positions of President/Chief Executive Officer/Chairman of the Board of
Directors and Secretary, respectively, of the Company. All of the nominees were
previously elected by the shareholders.
The enclosed Proxy, if properly signed and returned, will be voted for the
election of the six nominees named above, unless authority to vote is withheld.
The Board of Directors believes that all of the nominees will be available and
able to serve as directors, but if any of these persons should decline election
or should by reason of any unexpected occurrence be unable to serve, the persons
named in the Proxy card may exercise discretionary authority to vote for a
substitute or substitutes.
Vote Required and Recommendation
Unless cumulative voting is invoked, the affirmative vote of a majority of
the votes cast at the Annual Meeting is required to elect each nominee to serve
on the Board of Directors of the Company. If cumulative voting is invoked, the
six candidates receiving the highest number of votes shall be elected. The Board
of Directors of the Company unanimously recommends that the shareholders vote in
favor of the six (6) nominees, including Mr. Albert E. Gosselin, Jr., Mr. Gary
L. Dudley, Ms. Barbara L. Gosselin, Ms. Marcia A. Smith, Mr. Craig E. Gosselin
and Dr. Barry Soltani.
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REVERSE STOCK SPLIT
(Proposal Number 2 on Proxy Card)
The Board of Directors unanimously approved, subject to the approval of the
shareholders solicited hereby, a proposal to amend the Company's Articles of
Incorporation to reflect a reverse split of the Company's issued and outstanding
shares of Common Stock on May 15, 1998, on the basis of the conversion of each
four (4) shares of Common Stock then issued and outstanding into one (1) share
of Common Stock (the "Reverse Stock Split"). The approval of the Reverse Stock
Split by the Company's Board of Directors was further conditioned upon the
authorization of the Company to take the necessary action to reverse the
transaction in the event of the failure of the requisite number of shareholders
of the Company to vote in favor of the filing of the Amendment to reflect the
Recapitalization through the Reverse Stock Split. That is, in the event that the
Company's shareholders fail to approve the Recapitalization through the Reverse
Stock Split at the Annual Meeting, then, and in that event, the Board of
Directors has authorized the Company to nullify and reverse the transaction such
that the 2,168,433 shares of Common Stock which would have been outstanding if
the Reverse Stock Split had been approved, would revert for all purposes to the
8,673,732 shares of Common Stock of the Company which were issued and
outstanding immediately prior to the effectiveness of the Reverse Stock Split on
May 15, 1998.
The number of shares of capital stock authorized by the Articles of
Incorporation and the no par value of the Company's authorized capital stock
will not change as a result of the Reverse Stock Split. Effective on May 15,
1998 (the "Effective Date"), each four issued and outstanding shares (whether
outstanding or held as treasury stock) of the Company's Common Stock, no par
value per share (the "Old Common Stock"), were thereupon combined into and
reclassified as one share of Common Stock, no par value per share (the "New
Common Stock"). Accordingly, each stock certificate which, prior to the
Effective Date, represented shares of Old Common Stock, represented the number
of shares of New Common Stock into which the shares of Old Common Stock
represented by such certificate were combined upon the Effective Date. The
Company shall arrange for the disposition of fractional shares on behalf of
those record holders of Old Common Stock at the close of business on the
Effective Date who would otherwise be entitled to a fractional share of Common
Stock as a result of the Reverse Stock Split.
Background and Reasons For the Reverse Stock Split
On May 6, 1998, the Board of Directors voted in favor of the Reverse Stock
Split and directed that the Reverse Stock Split be placed on the agenda for
consideration by shareholders at the Annual Meeting. The Board of Directors
believes that the per share price of the Company's Common Stock prior to May 15,
1998, negatively impacted the marketability of the existing shares, the amount
and percentage of transaction costs paid by individual shareholders and the
potential ability of the Company to raise capital by issuing new shares. The
Company believes that the reasons summarized below largely account for such
effects.
Most brokerage firms do not permit lower-priced securities to be purchased
on margin or used as collateral for margin accounts. Certain policies and
practices of the securities industry, such as time-consuming procedures that
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make the handling of lower-priced securities economically unattractive, may tend
to discourage individual brokers within those firms from dealing in lower-priced
securities. Moreover, the brokerage commission on the purchase or sale of a
lower-priced stock may represent a higher percentage of the price than the
brokerage commission on a higher-priced stock. For the foregoing, among other,
reasons, many brokerage firms and institutional investors are reluctant to
recommend lower-priced securities to their clients or to hold them in their own
portfolios. For these reasons, the Board of Directors of the Company believes
that the low per share price of the Company's Common Stock prior to the
Effective Date had the effect of limiting the effective marketability of the
Common Stock and other negative consequences for the Company and its
shareholders.
The Board of Directors believes that the decrease in the number of shares
of Common Stock issued and outstanding and the resulting increased price level
as a consequence of the Reverse Stock Split will encourage greater interest in
the Common Stock by the financial community and investing public. THERE CAN BE
NO ASSURANCE, HOWEVER, THAT THE FOREGOING EFFECTS WILL CONTINUE; THAT THE
INCREASE IN THE MARKET PRICE OF THE COMPANY'S COMMON STOCK IMMEDIATELY FOLLOWING
THE REVERSE STOCK SPLIT WILL BE SUSTAINED; OR THAT THE MARKET PRICE WILL BE
MAINTAINED AT A PRICE APPROXIMATING FOUR TIMES THE MARKET PRICE PRIOR TO THE
REVERSE STOCK SPLIT.
No dissenting shareholder rights exist under California law or under the
Company's Articles of Incorporation or Bylaws in connection with the Reverse
Stock Split, with the exception of a shareholder whose total number of shares of
Common Stock will be reduced to a fraction of one share as a result of the
Reverse Stock Split. The Company does not anticipate that the total holdings of
any shareholder will be reduced to a fraction of a share as a result of the
Reverse Stock Split.
Effects of the Reverse Stock Split
General Effects. As a result of the Reverse Stock Split, the number of
issued and outstanding shares of Common Stock of the Company was reduced from
8,673,732 shares to approximately 2,168,433 shares, based upon the total number
of issued and outstanding shares of the Company's Common Stock as of May 15,
1998. In order to avoid the expense and inconvenience of issuing and
transferring fractional shares of New Common Stock, the Company will pay cash to
shareholders who would otherwise be entitled to receive a fractional share of
New Common Stock ("Fractional Shareholders") in lieu of issuing them a
fractional share of New Common Stock. (See the subsection captioned "Exchange of
Shares and Payment in Lieu of Issuance of Fractional Shares" below.) Please note
that the Reverse Stock Split will not change a shareholder's proportionate
equity interest in the Company, except that which may result from the
elimination of a fractional share.
Effect on Market for Common Stock. On May 15, 1998, the closing sale price
of the Common Stock was $.375 per share. By decreasing the number of shares of
the Company's Common Stock issued and outstanding without altering the aggregate
economic interest in the Company represented by such shares, the Board of
Directors believes that the increase in the market price of the Common Stock
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will be maintained over time at a more appropriate price; however, there can be
no assurance that this will occur. The New Common Stock will continue to be
traded over-the-counter on the electronic Bulletin Board under the symbol
"PRCC." The Company plans to seek listing of the New Common Stock on the NASDAQ
SmallCap MarketSM at such time, if ever, as the market price of the New Common
Stock reaches the threshold required for such listing and other requirements are
satisfied.
Effect on Outstanding Options, Warrants and Convertible Securities. As of
August 27, 1998, the Company had options and warrants exercisable to purchase a
total of 151,670 shares of Common Stock, after giving effect to the Reverse
Stock Split effective May 15, 1998. Additionally, the Company has an aggregate
of 450,000 shares of Series B Preferred Stock outstanding, each of which shares
of Series B Preferred Stock is convertible into one share of Common Stock
authorized for issuance. The Company may issue additional shares of preferred
stock or other convertible securities or grant options or warrants exercisable
to purchase shares of Common Stock on or prior to the date of the Annual Meeting
on October 15, 1998. As of May 15, 1998, the Board of Directors made a
proportional downward adjustment in the number of shares of Common Stock subject
to such outstanding options, warrants and convertible securities and a
corresponding upward adjustment in the per share exercise or conversion price to
reflect the Reverse Stock Split.
Changes in Shareholders' Equity. Because the Company's Common Stock has no
par value, its stated capital consists of the aggregate value of cash or other
consideration received by the Company upon the issuance of all currently issued
and outstanding shares of Common Stock. Although the Common Stock remains
without par value following the Reverse Stock Split, the Company's stated
capital decreased because the number of shares of the Company's Common Stock
issued and outstanding was reduced as a result of the Reverse Stock Split.
Federal Income Tax Consequences
The following is a summary of the material anticipated Federal income tax
consequences of the Reverse Stock Split to shareholders of the Company. This
summary is based on the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), the Treasury Department Regulations (the "Regulations")
issued pursuant thereto and published rulings and court decisions in effect as
of the date hereof, all of which are subject to change. This summary does not
take into account possible changes in such laws or interpretations, including
amendments to the Code, applicable statutes, Regulations and proposed
Regulations or changes in judicial or administrative rulings, some of which may
have retroactive effect. No assurance can be given that any such changes will
not adversely affect the discussion in this summary.
This summary is provided for general information only and does not purport
to address all aspects of the possible Federal income tax consequences of the
Reverse Stock Split and IS NOT INTENDED AS TAX ADVICE TO ANY PERSON. In
particular, and without limiting the foregoing, this summary does not consider
the Federal income tax consequences to shareholders of the Company in light of
their individual investment circumstances or to holders subject to special
treatment under the Federal income tax laws (for example, life insurance
companies, regulated investment companies and foreign taxpayers). In addition,
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this summary does not address any consequence of the Reverse Stock Split under
any state, local or foreign tax laws. As a result, it is the responsibility of
each shareholder to obtain and rely on advice from his or her personal tax
advisor as to: (i) the effect on his or her personal tax situation of the
Reverse Stock Split, including the application and effect of state, local and
foreign income and other tax laws; (ii) the effect of possible changes in
judicial or administrative interpretations of existing legislation and
Regulations, as well as possible future legislation and Regulations; and (iii)
the reporting of information required in connection with the Reverse Stock Split
on his or her own tax returns. It will be the responsibility of each shareholder
to prepare and file all appropriate Federal, state and local tax returns.
No ruling from the Internal Revenue Service (the "Service") or opinion of
counsel will be obtained regarding the Federal income tax consequences to the
shareholders of the Company as a result of the Reverse Stock Split. ACCORDINGLY,
EACH SHAREHOLDER IS ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES OF THE PROPOSED TRANSACTION TO SUCH SHAREHOLDER,
INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND
OTHER TAX LAWS.
The following discussion describes certain Federal income tax consequences
of the proposed Reverse Stock Split to shareholders of the Company who are
citizens or residents of the United States. The following discussion assumes
that the Company, as agent for holders of rights to receive scrip, will hold and
combine all scrip into full shares of the Company's Common Stock, sell such
shares of Common Stock either in the open market or privately (at prices related
to prevailing market prices at the time of sale) and distribute the proceeds
therefrom to holders of rights to receive scrip (the "Scrip Sale"). In general,
the Federal income tax consequences of the proposed Reverse Stock Split will
vary among shareholders depending upon whether they receive (i) solely cash for
rights to receive scrip as a result of the Scrip Sale, (ii) solely new
certificates or (iii) new certificates plus cash for rights to receive scrip as
a result of the scrip sale, in exchange for old certificates. In addition, the
actual consequences for each shareholder will be governed by the specific facts
and circumstances pertaining to his or her acquisition and ownership of the
Common Stock. However, the Company believes that because the proposed Reverse
Stock Split is not a part of a plan to periodically increase a shareholder's
proportionate interest in the assets or earnings and profits of the Company, the
Reverse Stock Split probably will have the following Federal income tax effects:
(i) A shareholder who owns fewer than four (4) shares of Common Stock
before the Reverse Stock Split, and who therefore receives only cash for a right
to receive scrip as a result of the Reverse Stock Split, will be treated as
having sold his or her shares of Common Stock represented by old certificates
and will recognize gain to the extent that the cash received exceeds his or her
basis in such Common Stock. If the shares are a capital asset in the hands of
the shareholder, then the gain will be taxed either as a long-term or a
short-term capital gain depending on whether the shares were held for more than
one year. If the shareholder's basis in the shares is greater than the cash
received, and if the shares are a capital asset in the hands of the shareholder,
the shareholder will recognize a long-term or a short-term capital loss.
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(ii) A shareholder who holds four (4) or more shares of Common Stock and
whose shares are evenly divisible by four before the Reverse Stock Split (i.e.,
a shareholder who is entitled to receive solely new certificates), will not
recognize gain or loss on the exchange. In the aggregate, the shareholder's
basis in the shares of Common Stock represented by new certificates will equal
his or her basis in the shares of Common Stock represented by old certificates.
(iii) A shareholder who holds four (4) or more shares of Common Stock and
whose shares are not evenly divisible by four before the Reverse Stock Split
(i.e., a shareholder who is entitled to receive both new certificates and cash
for a right to receive scrip, in exchange for his old certificates), will not
recognize gain or loss on the exchange of old certificates for new certificates.
In the aggregate, the shareholder's basis in the shares of Common Stock
represented by new certificates will equal his basis in the highest number of
shares of Common Stock represented by old certificates that were evenly
divisible by four. A shareholder will be treated as having sold the shares not
evenly divisible by four, and will recognize gain to the extent the cash
received exceeds the shareholder's basis in the shares. If the shares are a
capital asset in the hands of the shareholder, then the gain will be taxed
either as a long-term or a short-term capital gain depending on whether the
shares were held for more than one year. If the shareholder's basis in the
shares is greater than the cash received, then no gain or loss will be
recognized, and the shareholder's basis in the shares of Common Stock
represented by new certificates will equal the shareholder's basis in the shares
of Common Stock represented by old certificates less the amount of cash
received.
The Reverse Stock Split will constitute a reorganization within the meaning
of Section 368(a)(1)(E) of the Internal Revenue Code of 1986 and the Company
will not recognize any gain or loss as a result of the Reverse Stock Split.
Exchange of Shares and Payment in Lieu of Issuance of Fractional Shares
Subsequent to the date of the Annual Meeting, provided that the Company'
shareholders authorize the Amendment to the Company' Articles of Incorporation,
as amended, to reflect the Recapitalization through the Reverse Stock Split, the
Company will mail to each shareholder a letter of transmittal. A shareholder
will be able to receive his or her shares of New Common Stock and, if
applicable, cash in lieu of a fractional share of New Common Stock only by
transmitting to Oxford Transfer, Inc., Portland, Oregon, the transfer agent and
registrar (the "Transfer Agent") for the Company's Common Stock, such
shareholder's stock certificate(s) evidencing shares of Old Common Stock issued
and outstanding prior to the Effective Date of the Reverse Stock Split, together
with the properly completed and executed letter of transmittal and such evidence
of ownership of such shares of Old Common Stock as the Company may require.
Shareholders will not receive certificates for shares of New Common Stock unless
and until the certificate(s) representing their shares of Old Common Stock
issued and outstanding prior to the Reverse Stock Split are surrendered.
Shareholders should not forward their certificate(s) to the Company's Transfer
Agent until they have received the letter of transmittal, and should surrender
their certificate(s) only with such letter of transmittal.
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No scrip or fractional share certificates for New Common Stock will be
issued in connection with the Reverse Stock Split. The Board of Directors has
authorized the Company's executive officers to pay to the Transfer Agent an
amount of cash equivalent to the prevailing per share price of New Common Stock
as of the Effective Date, multiplied by the total number of fractional shares of
Common Stock which would result from the Reverse Stock Split, plus a transaction
fee charged by the Transfer Agent for preparing a check to each Fractional
Shareholder. The Company estimates that the total payments arising from payments
to Fractional Shareholders in lieu of issuing fractional shares (including
transaction fees) will be less than Ten Thousand Dollars ($10,000.00). A payment
in lieu of a fractional share of New Common Stock will be made to a Fractional
Shareholder promptly after receipt of a properly completed letter of transmittal
and a stock certificate(s) representing all of his or her shares of Old Common
Stock outstanding prior to the Effective Date of the Reverse Stock Split.
Each shareholder will be responsible for paying a total service fee of
approximately Fifteen Dollars ($15.00) upon the surrender of his or her stock
certificate(s) in exchange for New Common Stock certificate(s). However, as
noted above, as of the Effective Date of the Reverse Stock Split, each four
issued and outstanding shares (whether outstanding or held as treasury stock) of
the Company's Common Stock, no par value per share (the "Old Common Stock"),
were automatically (i.e., without shareholder action) combined into and
reclassified as one share of Common Stock, no par value per share (the "New
Common Stock"). Thus, each stock certificate which, prior to the Effective Date
of the Reverse Stock Split, represented shares of Old Common Stock, represents
the number of shares of New Common Stock into which the shares of Old Common
Stock represented by such certificate were combined upon the Effective Date.
Vote Required and Recommendation
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy and voting at the Annual Meeting is required for approval
of this proposal. The Board of Directors of the Company unanimously recommends
that the shareholders vote in favor of authorization of the Reverse Stock Split.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANT
(Proposal Number 3 on Proxy Card)
The Company engaged the independent accounting firm of AJ. Robbins, P.C.
("AJ. Robbins"), Denver, Colorado, to audit the Company's financial statements
commencing with the Company's fiscal year ended December 31, 1996. The Board of
Directors of the Company appointed AJ. Robbins as the independent accountant for
the Company for the fiscal years ended December 31, 1996 and 1997, and has
appointed the firm to continue as the Company's independent accountant for the
current fiscal year ending December 31, 1998. It is not anticipated that a
representative of AJ. Robbins will be present at the Annual Meeting to respond
to questions or make a statement.
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Vote Required and Recommendation
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy and voting at the Annual Meeting is required for approval
of this proposal. The Board of Directors unanimously recommends that the
shareholders vote in favor of ratification of the appointment of AJ. Robbins to
serve as the Company's independent accountant for the current fiscal year ending
December 31, 1998.
REPORTS UNDER FEDERAL SECURITIES LAWS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's executive officers and directors and persons who own more
than ten per cent of a registered Series of the Company's securities file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Officers,
directors and greater than ten per cent shareholders are required by Commission
regulation to furnish the Company with copies of all forms filed pursuant to
Section 16(a) of the Exchange Act. Based on a review of the copies of such forms
received by it and written representations from certain reporting persons that
no Forms 4 or Forms 5 were required for those persons, the Company believes that
during the year ended December 31, 1997, its executive officers, directors and
ten per cent beneficial owners were in compliance with the applicable
requirements of Section 16(a) of the Exchange Act.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors of the
Company is unaware of any matters to be presented at the Annual Meeting other
than those specifically set forth in the Notice of Annual Meeting of
Shareholders. However, if other proper matters shall come before the Annual
Meeting or any adjournment thereof, the persons named in the enclosed Proxy
intend to vote the shares represented by them in accordance with their best
judgment in respect to any such matters.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder intended to be presented at the 1999 Annual
Meeting must be received at the offices of the Company, 506 Paula Avenue,
Glendale, California, 91201, not later than December 22, 1998, in order to be
included in the Company's Proxy Statement and Proxy relating to that Annual
Meeting.
By Order of the Board of Directors,
Barbara L. Gosselin
Secretary
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POLLUTION RESEARCH AND CONTROL CORP.
PROXY
Meeting of Shareholders Solicited on Behalf of the
October 15, 1998 Board of Directors
The undersigned shareholder of Pollution Research and Control Corp. (the
"Company"), revoking all prior proxies, hereby appoints Albert E. Gosselin, Jr.,
as the true and lawful proxy and attorney-in-fact of the undersigned, with full
power of substitution, to vote in the name of the undersigned all shares of the
common stock, no par value per share (the "Common Stock"), of the Company which
the undersigned is entitled to vote at the Annual Meeting of the Shareholders
(the "Annual Meeting") of the Company to be held on Thursday, October 15, 1998,
at 9:00 a.m., Pacific Daylight Time, at the Best Western Golden Key Motel, 123
West Colorado Street, Glendale, California, and at any and all adjournments of
said meeting. Said proxy and attorney-in-fact is directed to vote or refrain
from voting as indicated below upon the following matters, and otherwise in his
discretion:
1. FOR [ ] WITHHOLD AUTHORITY FOR [ ]
The election of the following six (6) directors to the Company's Board of
Directors to hold office until the next Annual Meeting or until their successors
shall have been elected and qualified:
(i) Albert E. Gosselin, Jr. (iii) Gary L. Dudley (v) Marcia Smith
(ii) Barbara L. Gosselin (iv) Craig E. Gosselin (vi) Barry Soltani
(Instructions: To withhold authority to vote for any individual nominee, write
the nominee's name on the space provided below)
2. FOR [ ] AGAINST [ ] ABSTAIN [ ]
Authorize an amendment to the Company's Articles of Incorporation, as amended,
to effect a recapitalization through a one-for-four reverse stock split pursuant
to which every four shares of common stock, no par value per share (the "Common
Stock"), of the Company outstanding on May 15, 1998, were converted into one
share of Common Stock.
3. FOR [ ] AGAINST [ ] ABSTAIN [ ]
Ratify the appointment of AJ. Robbins, P.C., as the independent accountant for
the Company for the fiscal year ending December 31, 1998.
4. FOR [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, upon any other matters as may properly come before the
Annual Meeting or any adjournment thereof.
- -------------------------------- -------------------------
Signature of Shareholder Date
This proxy will be voted in accordance with the specific indication. In the
absence of such indication, this proxy will be voted FOR each of the nominees
and proposals listed above.
