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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
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
WATSON GENERAL CORPORATION
(Name of Registrant as Specified in its Charter)
Joseph L. Christoffel
Chief Financial Officer
32-B Mauchly
Irvine, California 92718
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(1) or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
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2) Aggregate number of securities to which transaction applied:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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4) Proposed maximum aggregate value of transaction:
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* 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)(?) 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 and Registration Statement No.
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3) Filing Party.
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4) Date Filed.
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WATSON GENERAL CORPORATION
32-B Mauchly
Irvine, California 92718
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF WATSON GENERAL CORPORATION
Meeting Date: April 10, 1996
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To the Shareholder:
We will hold the Annual Shareholders' Meeting of Watson General
Corporation on Wednesday, April 10, 1996 at 2:00p.m., local time, at the Hyatt
Regency Hotel, 17900 Jamboree Boulevard, Irvine, California 92714. The
telephone number of the meeting place is (714) 975-1234. At the meeting we
will consider and vote on these matters:
1. The election of seven directors, to hold office until the next
Annual Meeting and their successors are elected.
2. Any other matters that are properly raised.
The attached Proxy Statement, which is part of this notice, provides
you with more information.
March 1, 1995 is the record date for determining which shareholders
can vote at the Meeting. Only shareholders of record at the close of business
on that date will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof. WHETHER OR NOT YOU CAN ATTEND, PLEASE FILL IN, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED SELF-ADDRESSED ENVELOPE PROVIDED.
We look forward to seeing you.
By Order of the Board of Directors
/s/ RONALD G. CRANE
-----------------------------------
Ronald G. Crane
President and CEO
Irvine, California
March 8, 1995
<PAGE> 3
WATSON GENERAL CORPORATION
32-B Mauchly
Irvine, California 92718
(714) 727-4020
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PROXY STATEMENT
---------------
Watson General Corporation (the "Company") is soliciting proxies in the form
enclosed with this statement in connection with the Annual Meeting of
Shareholders to be held April 10, 1996. All expenses of this solicitation will
be borne by the Company.
We are mailing this Proxy Statement and the form of proxy starting on or about
March 8, 1996.
If you give us a proxy you can revoke it at any time before it is used. To
revoke it you should file a written notice revoking it with the Secretary of
the Company or execute a proxy with a later date or attend the meeting and vote
in person.
You may vote at the Annual Meeting only shares that you owned of record on
March 1, 1996. There were 11,303,301 shares of stock outstanding on that date.
Each share is entitled to one vote on each matter to be presented at the
meeting.
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of seven directors. At the
Annual Meeting, seven directors will be elected, each to hold office until the
next Annual Meeting and until his successor is elected. The Board of Directors
has nominated the seven persons named below. The persons named in the enclosed
form of proxy will vote it for the election of the nominees listed below unless
you instruct them otherwise, or the nominee is unable or unwilling to serve.
The Board of Directors has no reason to believe that any nominee will be
unavailable.
The California General Corporation Law, as applicable to the Company, provides
that a shareholder may cumulate votes if a shareholder gives notice, prior to
the voting, of an intention to cumulate votes. If such a notice is given,
every shareholder may cumulate votes. Under cumulative voting, a shareholder
is entitled to a number of votes for election of directors equal to the number
of his or her shares times the number of directors to be elected; these votes
could be cast all for one nominee, or spread among more than one, as the
shareholder wishes. If cumulative voting is elected, the enclosed form of
proxy gives the proxyholders discretion to cumulate votes so that they can
elect the maximum possible number of nominees identified below.
Any shareholder executing the enclosed form of proxy may withhold authority to
vote for any one or more nominees by so indicating in the manner described in
the form of proxy. The total number of votes which such shareholder is
entitled to cast will not be affected by such action. However, the
proxyholders, by cumulating the votes of other shareholders, could offset the
effect of the withheld authority.
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NOMINEES FOR DIRECTOR
The following information as of March 1, 1996 is provided about the seven
nominees for election as directors of the Company.
CHARLES A. WATSON has served as a director of the Company since 1972 and as the
Company's Chairman of the Board since 1985. He was appointed the Company's
President, Chief Executive Officer and Chief Financial Officer in September
1987. He relinquished the post of Chief Financial Officer in 1991, the post of
President in January 1993, and the post of Chief Executive Officer in July
1994. Mr. Watson is 65.
RONALD G. CRANE has served as a Director of the Company since 1973. At the
Company's Board of Directors meeting in January 1993, Mr. Crane was appointed
President and Chief Operating Officer of the Company. In July 1994 Mr. Crane
was appointed Chief Executive Officer. Mr. Crane is also President and Chief
Executive Officer of Toxguard Systems, Inc. and EnvirAlert, Inc., and Toxguard
Fluid Technologies, Inc. three subsidiaries of the Company. Mr. Crane is 48.
JOSEPH L. CHRISTOFFEL has served on the Board of Directors since February 1993.
He is a certified public accountant and was appointed by the Board of Directors
as Secretary and Chief Financial Officer of the Company in January 1993. He
has been a CPA since 1977, has practiced public accounting and has held the
position of Chief Financial Officer for both private and public organizations.
During the last five years he has been the owner of SMS, a data processing firm
and a partner of TRIAAC, a development and services company, both in
Sacramento, California. Mr. Christoffel is 43.
JOHN M. MARENCIK has served on the Board of Directors since February 1996. He
founded EnviroQuest Technologies, Ltd., which was acquired by the Company in
January, 1996, in 1990, and has served as an officer and director of that
company since then. Prior to founding EnviroQuest, Mr. Marencik was employed
by Hall-Kimrell Environmental Services as Director of Analytical Sales. Mr.
Marencik is 43.
DENNIS E. MULLIGAN was elected to serve on the Board of Directors in 1992.
Since 1977, he has been a principal with Lambert Smith Hampton, a large
commercial real estate brokerage company. He has been a Watson General
shareholder since 1978. Mr. Mulligan is 50.
ROGER H. SHERWOOD has served on the Board of Directors since February 1996. He
has been President of EnviroQuest Technologies, Ltd., a wholly owned
subsidiary of the Company, since October, 1995. Prior to joining EnviroQuest
he was with Amoco Oil Company for approximately thirty years, most recently
serving as District Manager for the Kansas City District from 1988 through
1994. As such, Mr. Sherwood managed and directed a five-state marketing
distribution operation, which had net sales of $450 Million. From 1994 until
September, 1995 Mr. Sherwood was employed by MPSI a provider of site location
services to the petroleum industry. Mr. Sherwood is 54.
JAMES M. SMATHERS has served as a Director of the Company since 1972. Mr.
Smathers has been a certified public accountant for over 29 years, and had
operated his own accounting firm from 1968 until he retired in 1985. Mr.
Smathers is 69.
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ATTENDANCE AT BOARD MEETINGS
During the fiscal year ended September 30, 1995, the Company's Board of
Directors held twenty (12) meetings. Each current director attended at least
75% of the Board meetings that he was eligible to attend.
STOCK OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth certain information regarding the beneficial
ownership of Common Stock as of March 1, 1996 of (i) each director, (ii) the
chief executive officer of the Company named in the Executive Compensation
Table appearing below, and (iii) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
- ---- ------------------ ------------------
<S> <C> <C>
Charles A. Watson 1,216,000 10.76%
5166 Soledad Road
San Diego, CA 92109
Ronald G. Crane 1,129,500(1) 9.41%
9152 Shady Hollow Way
Fair Oaks, CA 95628
Joseph L. Christoffel 350,000(2) 3.00%
4711 Copperfield Cir.
Roseville, CA 95746
James M. Smathers 133,750(3) 1.18%
3261 Purer Road
Escondido, CA 92029
Dennis E. Mulligan 55,000(4) less than 1%
141 Seventh Street
Del Mar, CA 92108
John M. Marencik 860,900(5) 7.60%
Wallace Reserve 2 Route 4
Lees Summit, MO 64063
Roger H. Sherwood 139,000(6) 1.22%
13815 Woodward
Overland Park, KS 66223
All officers and directors
as a group (five persons) 3,884,150 30.77%
</TABLE>
(1) Includes options granted by the Company to purchase up to 400,000
shares of common stock. The options are fully vested and expire
September 30, 1998. The options are exercisable at $1.50 per share.
Includes options granted by the Company to purchase up to 300,000
shares of Common Stock.
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Options vest as to 100,000 shares on each of May 27, 1994, 1995, and
1996. All options expire five years from vesting and are exercisable
at $2.625 per share after vesting.
(2) Includes options granted by the Company to purchase up to 350,000
shares of common stock. Options vest as to 50,000 on May 27, 1993 and
100,000 shares on each of May 27, 1994, 1995, and 1996. All options
expire five years from vesting and are exercisable at $2.625 per share
after vesting.
(3) Includes options granted by the Company to purchase up to 76,518
shares of common stock. The options are fully vested and expire June
28, 1998, and are exercisable at $2.44 per share.
(4) Includes options granted by the Company to purchase up to 50,000
shares of common stock. The options are fully vested and expire
February 16, 1999, and are exercisable at $2.625 per share.
(5) Includes options granted by the Company to purchase up to 25,000
shares of common stock. The options are fully vested and expire
January 31, 1999, and are exercisable at $0.50 per share.
(6) Includes options granted by the Company to purchase up to 120,000
shares of common stock. Options vest as to 40,000 shares on each of
September 28, 1996, 1997, and 1998. All options expire five years
from vesting and are exercisable at $2.50 per share after vesting.
DIRECTORS' COMPENSATION
Commencing January 4, 1994 the Company began compensating outside directors
$250.00 per Board meeting for physical attendance at Board of Directors
meetings. Prior to this date members of the Board of Directors received no
compensation for services rendered in their capacity as Directors.
In June, 1993 the Company granted to James Smathers an option to purchase up to
81,250 shares of Common Stock. The options are fully vested, expire June 28,
1998, and are exercisable at $2.44 per share (the bid price for the Company's
Common Stock on the date of grant). In July 1993, Mr. Smathers exercised
options to purchase 4,732 shares.
In February, 1995 the Company granted to Dennis Mulligan an option to purchase
up to 50,000 shares of Common Stock. The options are fully vested, expire
February 16, 1999, and are exercisable at $2.625 per share (the bid price for
the Company's Common Stock on the date of grant).
OBLIGATION TO ELECT CERTAIN DIRECTORS
In connection with the acquisition of EnviroQuest Technologies, Inc. in
January, 1996, the Company agreed to use its reasonable best efforts to elect
John M. Marencik, and Roger H. Sherwood to the Board of Directors of the
Company during Mr. Marencik's three year employment by EnviroQuest
Technologies, Ltd.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors does not have Executive, Audit, Compensation,
Nominating or other committees.
CERTAIN TRANSACTIONS
In November 1993, Charles A. Watson promised to loan $200,000 to the Company at
simple interest of five percent (5%) if collections from certain receivables of
the Company and certain proceeds from the exercise of
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securities of the Company did not reach $700,000 by December 15, 1993. The
Company received in excess of $700,000 from said collection and exercises and
the loan was therefore not made.
In December 1994, Charles A. Watson loaned the Company the sum of $49,900 at no
interest. The funds were used to complete the Company's acquisition of an
environmentally distressed property in San Diego California. The Company
repaid the entire amount in March 1995.
STOCK OWNERSHIP
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of all persons, other than directors and officers of the Company, who
are known to the Company to own more than 5% of the Company's outstanding
Common Stock as of March 1, 1996. Information concerning the beneficial
ownership of Common Stock as of March 1, 1996 of (i) each director, (ii) the
chief executive officer of the Company, and (iii) all directors and executive
officers of the Company as a group is set forth under the caption Stock
Ownership of Directors and Officers on Page 3 of this Proxy Statement.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
- ---- ------------------ ------------------
<S> <C> <C>
James C. Ray 914,287(1) 8.09%
1140 Airport Road
Minden, NV 89423
</TABLE>
(1) Includes 57,143 shares of common stock owned by June M. Ray, the
spouse of James C. Ray.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation provided to
the Company's Chief Executive Officer and Chairman. No other executive officer
or employee received, total annual salary and bonus exceeding $100,000.00.
<TABLE>
<CAPTION>
Name and Principal Fiscal All Other
Position Year Salary Compensation
- ------------------ ------ ------ ------------
<S> <C> <C> <C>
RONALD G. CRANE(1) 1995 75,000
Chief Executive Officer 1994 73,558
President 1993 66,964
CHARLES A. WATSON(2) 1995 84,000 34,992(3)
Chairman of the Board 1994 82,385 33,792(3)
1993 79,100 33,291(3)
</TABLE>
(1) Mr. Crane did not receive any bonus or other annual compensation
during the fiscal year ended September 30, 1994. Mr. Crane did not
receive or exercise any options to purchase Common Stock during the
fiscal year ended
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September 30, 1994. Mr. Crane did not receive any long-term
incentive plan award during the fiscal year ended September 30, 1994.
Mr. Crane received no other compensation during the fiscal year ended
September 30, 1994. Mr. Crane does not have an employment agreement
with the Company.
(2) Mr. Watson did not receive any bonus or other annual compensation.
Mr. Watson did not receive or exercise any options to purchase Common
Stock during the fiscal year ended September 30, 1994 and held no
unexercised options on September 30, 1994. In addition, Mr. Watson
did not receive any long-term incentive plan award during the fiscal
year ended September 30, 1994. Mr. Watson does not have an employment
agreement with the Company.
(3) The Company has also adopted a retirement plan for Mr. Charles A.
Watson. Benefits of $2,700 per month are payable to Mr. Watson or his
wife, if she survives him, for life with a ten year guaranteed
payment, subject also to annual cost of living increases.
In accordance with the Statement of Financial Accounting Standards No. 106
("SFAS 106"), "Employers' Accounting for Postretirement Benefits Other Than
Pensions," the Company elected for immediate recognition under SFAS 106 and the
projected benefit obligation of $462,000 or $.08 per share relating to prior
service costs under the agreement was recognized as a cumulative effect of
accounting change as of October 1, 1991.
OTHER MATTERS
Management does not know of any matters to be presented at the Annual Meeting
other than the election of directors. However, if any other matters shall
properly come before the meeting, it is the intention of the persons named in
the proxy to vote it in accordance with their judgment.
PROPOSALS OF SHAREHOLDERS FOR 1996 ANNUAL MEETING
All proposals of shareholders intended to be presented at the Company's 1996
Annual Meeting of Shareholders must be received by the Company at its
executive offices no later than December 31, 1996 in order to be considered for
inclusion in the proxy statement and form of proxy relating to that meeting.
REQUESTS FOR FORM 10-KSB
The Company will provide without change, at the written request of any
beneficial owner of shares entitled to vote at the Annual Meeting of
Shareholders, a copy (without exhibits) of the Company's Annual Report on Form
10-KSB for the fiscal year ended September 30, 1995, as filed with the
Securities and Exchange Commission. Requests should be made to the Secretary,
Watson General Corporation, 32-B Mauchly, Irvine, California 92718.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ RONALD G. CRANE
----------------------------------
Ronald G. Crane
President and CEO
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PROXY WATSON GENERAL CORPORATION PROXY
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 10, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald G. Crane and Joseph L.
Christoffel, or either of them, proxies and attorneys, each with full power of
substitution, to vote all the shares of Common Stock of Watson General
Corporation, a California corporation, which the undersigned is entitled to
vote at the Annual Meeting of Shareholders to be held on April 10, 1996, at
2:00p.m., local time, and at any postponement or adjournment thereof with
respect to Proposal set forth in the Proxy Statement and upon any other matter
that may properly come before the meeting or any adjournment.
This Proxy (properly executed) will be voted in the manner directed
herein by the undersigned stockholder. The Board of Directors recommends that
you vote for the election of the seven director nominees in this proxy.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL
NOMINEES.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary)
[ ] WITHOUT AUTHORITY to vote for all nominees listed below
(Continued and to be signed on reverse side)
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(Continued from other side)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK A
LINE THROUGH THE NOMINEE'S NAME BELOW:
Charles A. Watson Ronald G. Crane Joseph L. Christoffel James M. Smathers
Dennis E. Mulligan John M. Marencik Roger H. Sherwood
Date , 1996
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Signature
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Signature if held jointly
(Please mark, sign, date and return the proxy card promptly)
