SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Act of 1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials pursuant to 240.14a-11(c) or 14a-12
INMEDICA DEVELOPMENT CORPORATION
Name of Registrant as Specified in its Charter
INMEDICA DEVELOPMENT CORPORATION
Name of Person Filing Proxy Statement
Payment of Filing Fee (check applicable box)
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(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 Rule 14a-
6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies common stock, $.001 par value
2) Aggregate number of securities to which transaction
applies
3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
Total Amount:
How Determined:
4) Proposed maximum aggregate value of transaction
[ ] 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 N/A
2) Form, schedule or registration statement no.
3) Filing party
4) Date filed
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INMEDICA DEVELOPMENT CORPORATION
60 South 600 East, Suite 150
Salt Lake City, Utah 84102
801-521-9300
PROXY STATEMENT
This Proxy Statement is being furnished to shareholders of InMedica
Development Corporation, a Utah corporation, ("InMedica" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of
InMedica for use at the Annual Meeting of its shareholders to be held on Friday
August 29, 1997 at 2:00 p.m., local time, in the Summer Room at the Hilton
Hotel, 150 West 500 South, Salt Lake City, Utah, and at any adjournment thereof
(the "Meeting"). At the Meeting, InMedica shareholders will be asked to elect
four directors to serve for one year or until a successor is elected and
qualified and to ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants.
This Proxy Statement, Notice and enclosed form of proxy are first being
mailed to shareholders of InMedica on or about August 8, 1997.
Only holders of record of InMedica Common Stock (also referred to herein as
"common shares" or "shares") as of the close of business on July 31, 1997, (the
"Record Date") will be entitled to notice of and to vote at the Meeting. As of
the Record Date, there were 7,997,612 shares of InMedica Common Stock issued and
outstanding. The affirmative vote of the holders of a majority of such shares
present in person or by proxy at the meeting is required to elect directors and
to ratify the appointment of the Company's auditors. Each holder of common
shares is entitled to one vote for each share held; no cumulative voting is
permitted.
Shares of InMedica Common Stock represented by proxies properly signed and
returned, unless previously revoked, will be voted at the Meeting by the persons
named in the accompanying proxy in accordance with the instructions thereon. If
a proxy is signed and returned without indicating any voting instructions, the
shares represented by the Proxy will be voted "for" approval and adoption of
each of the proposals noted on the proxy. Abstentions and broker non-votes are
each included in the determination of the number of shares present and voting.
Each is tabulated separately. Abstentions are counted in tabulations of the
votes cast on proposals presented to shareholders, whereas broker non-votes are
not counted for purposes of determining whether a proposal has been approved. A
shareholder returning an executed Proxy may revoke or change the Proxy by giving
written notice to the Secretary of the Company, Richard Bruggeman, at the above
address, or by attending the meeting in person and notifying the Secretary of
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the Company of such revocation or change prior to the exercise of the powers
conferred by the Proxy. The solicitation of Proxies will be made by mail and may
also be made by Officers and Directors of the Company in person or by telephone
or mail. The cost of soliciting Proxies will be borne by the Company.
The Company is authorized to issue up to 20,000,000 common shares, par
value $.001 per share with 7,997,612 shares issued and outstanding as of July
31, 1997 (the Record Date). The following table furnishes information concerning
the common stock ownership of nominees, directors, officers, and principal
shareholders as of July 31, 1997.
Nature of Number of
Name and Position Ownership Shares Owned Percent
Larry E. Clark Direct 1,143,000 14.3%
Chairman, CEO Options 450,000
---------
Total 1,593,000 18.9%
=========
Allan L. Kaminsky* Direct 798,875 9.9%
4602 S. Fortuna Way Options 0
---------
S.L.C., Utah 84124 Total 798,875 9.9%
=========
Paul J. Diehl* Direct & Indirect 719,2301 9.0%
2963 E. Fallentine Rd.
Sandy, Utah 84092
John R. Merendino Options 75,000 0.9%
Director
David L. Dingman Options 75,000 0.9%
Director
Richard Bruggeman Direct & Indirect 72,7202 0.9%
Director, Chief Options 208,167
Financial Officer Total 280,887 3.4%
=========
All Executive Officers Direct & Indirect 1,351,167 16.9%
and Directors as a Options 808,167
---------
group (4 persons) Total 2,159,334 24.5%
=========
* Principal Shareholder
- --------
1 Includes 639,599 shares held by the Paul J. Diehl, M.D. P.C. profit
sharing plan, one share held by Paul J. Diehl, P.C. and 79,630 shares held by
Dr. Diehl as custodian for his wife's daughter, Shanon.
2 - includes 400 shares held in individual retirement accounts and 4,620
shares held in a family trust of which Mr. Bruggeman is Trustee.
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DIRECTORS AND EXECUTIVE OFFICERS
At the meeting, four directors are to be elected to hold office for one
year or until their successors are elected and qualified. Unless authority is
withheld, it is the intention of the persons named in the enclosed form of proxy
to vote "for" the election as directors of the persons named in the table below
who are nominees for director.
Name Age Director Since
Larry E. Clark 75 1995
John R. Merendino 58 1995
David L. Dingman 60 1995
Richard Bruggeman 42 1995
Certain information follows regarding the executive officers and directors
of InMedica and their business backgrounds for at least the last five years.
LARRY E. CLARK - Chairman, Principal Executive Officer and Director of
InMedica. Mr. Clark was president of Clark-Knoll & Associates, Inc., a Denver,
Colorado management consulting firm specializing in mergers and acquisitions
from 1963 to 1969. He served as president of Petro-Silver, Inc., a small public
company based in Salt Lake City, Utah, which engaged in the oil and gas business
from 1970 to 1975. From 1975 to 1981 Mr. Clark was president of Larry Clark &
Associates, a private company which engaged in a corporate mergers and
acquisitions business. In 1981, Mr. Clark formed Hingeline-Overthrust Oil & Gas,
Inc., a Utah public company, which merged with Whiting Petroleum Corporation of
Denver, Colorado in December 1983. Mr. Clark served as a director of Whiting
Petroleum from 1983 until 1992 when Whiting Petroleum merged with IES Industries
and Mr. Clark returned to full time employment as president of Larry Clark &
Associates. Mr. Clark graduated from the U.S. Merchant Marine Academy with a BS
degree in Naval Science in 1943 and received a degree in Business Administration
from the University of Wyoming in 1948.
JOHN R. MERENDINO, M.D. - Director and Nominee for Director of InMedica.
Dr. Merendino obtained a D.A. in chemistry from Lafayette College, Pennsylvania
in 1960 and an M.D. degree from New Jersey College of Medicine and Dentistry in
1964. He completed his internship and residency at Monmouth Medical Center in
New Jersey. From 1976 to 1984 he was an Associate Clinical Professor at the
University of Utah School of Medicine. He also served as a member of the
residency committee of the University of Utah School of Medicine from 1978 to
1984. He was Chairman of the Division of Orthopedics at Holy Cross Hospital,
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Salt Lake City, Utah from 1977 to 1984 and Chairman (or Chairman elect) of the
Department of Surgery, Holy Cross Hospital. Since 1984, he has been engaged in
private practice in Orthopedics and Sports Medicine. He also acts as an
independent consultant to the Honolulu Athletic Club, Alta View Sports Medicine
Clinic and Diversified Tech Inc. He is a Director of the Snowbird Clinic,
physician to the U.S. Ski Team and a member of the Board of Advisors to Nautilus
Physical Fitness Centers. He previously served as the Team Physician to the Salt
Lake Golden Eagles and the Salt Lake Gulls, professional sports teams.
DAVID L. DINGMAN, M.D. - Director of the Company. Dr. Dingman is a
Professor of Surgery, Emeritus, at the University of Utah Medical Center. He was
Associate Professor and Professor of Surgery from 1989-1993. He was an Attending
Staff Surgeon at the Veterans Administration Medical Center, Salt Lake City,
Utah from 1984-1989. He also served as Chairman of the Department of Surgery at
Holy Cross Hospital in Salt Lake City, Utah from 1986-1989 and as Chairman of
the Department of Plastic Surgery at Holy Cross Hospital from 1982-1985. From
1972-1989 he was a Clinical Associate Professor of Surgery at the University of
Utah Medical Center. He graduated in pre-med from Dartmouth College in 1957 and
received his M.D. degree from the University of Michigan in 1961.
RICHARD BRUGGEMAN - Director and Secretary/Treasurer and Chief Financial
Officer of the Company. Since 1993, he has been employed as Controller of
Kitchen Specialties, Inc., a Salt Lake City firm distributing kitchen appliances
in the United States and Canada. From 1986 until 1993 he was employed by the
Company's subsidiary, MicroCor, Inc. as financial manager. During the period
1983-1985, he was a sole practitioner in accounting and from 1981-1983 he was
employed by the Salt Lake City public accounting firm of Robison Hill & Co. He
graduated from the University of Utah in 1981 with a B.S. degree in accounting.
Each director serves until the next annual meeting of shareholders or
until a successor is elected and qualified. Officers serve at the pleasure of
the board of directors. No arrangement or understanding exists between any
officer or director and any other person pursuant to which he was nominated or
elected as director or selected as an officer.
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 equity securities of the Company. Officers, directors and greater
than ten percent shareholders are required to furnish the Company with copies of
all Section 16(a) forms they file. To the Company's knowledge, based solely on
review of the copies of such reports furnished to the Company, during the fiscal
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year ended December 31, 1996 all Section 16(a) filing requirements applicable to
officers, directors and greater than ten percent shareholders were complied
with.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Company does not have nominating, audit or compensation committees of
the Board. The full board conducts the function of an audit committee. There
were two meetings of the Board of Directors held during the fiscal year ended
December 31, 1996. No member of the board of directors, then serving, attended
less than 75% of all meetings.
EXECUTIVE COMPENSATION
No executive officer of the Company has received compensation during the
three fiscal years ended December 31, 1996, except as disclosed in the table
below:
<TABLE>
<CAPTION>
Annual Compensation
Long Term
Compensation Awards
Name Year Salary Bonus Common Stock underlying Options Other
---- -------- ----- ------------------------------- -----
<S> <C> <C> <C> <C> <C>
Larry E. Clark (CEO) 1996 $ 39,000* - - -
Larry E. Clark (CEO) 1995 $ - - 450,000** -
Allan L. Kaminsky (CEO) 1994 $ - - - -
</TABLE>
*accrued in 1996 and paid in January 1997.
**600,000 options were originally granted, but subsequently were reduced to the
figure shown
Compensation of officers and employees is determined by the Board of
Directors. Mr. Larry E. Clark, chief executive officer, is chairman of the Board
of Directors. See Note 4 to the financial statements included as a part of the
Company's annual report to shareholders for information regarding the Company's
Stock Incentive Plan, Formula Stock Option Plan and Other Stock Options.
OPTIONS GRANTED IN THE LAST FISCAL YEAR
% of Total
Options
Granted to Exercise
Options Employees in Price Expiration
Name Granted FY 1996 ($/Share) Date
---- ------- ------------ --------- ----
None
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AGGREGATED OPTIONS EXERCISED IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Value of Unexercised
Number of In-The-Money
Unexercised Options Options at Fiscal
Shares at Fiscal Year End Year End3
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
Larry E.
Clark 0 0 450,000/0 $315,000/0
Richard
Bruggeman 0 0 208,167/0 $145,717/0
The Company presently has no plan for the payment of any annuity or
pension retirement benefits to any of its officers or directors, and no other
remuneration payments, contingent or otherwise, are proposed to be paid in the
future to any officer or director, directly or indirectly.
DIRECTORS' COMPENSATION
Directors may be compensated at the rate of $100 for attendance at each
board meeting, but did not receive compensation for meetings attended in 1996
and 1995. In October, 1995, the Board of Directors granted non-qualified stock
options to Directors Clark, Merendino and Bruggeman to purchase 100,000 shares
each of common stock of the Company for $.30 per share exercisable for a period
of 10 years. The options are immediately exercisable and became non-forfeitable
after each director completed one year of service and thereafter are not
cancelled if the Director leaves the service of the Company. In November, 1995,
the Board of Directors also granted a similar option to Director Dingman,
exercisable at $.385 per share. The options were reduced to 75,000 each
effective August 1, 1996.
MANAGEMENT INDEBTEDNESS AND TRANSACTIONS
No officer, director, nominee for director, or associate of any such
officer, director or nominee has been since the beginning of the last fiscal
year or is presently indebted to the Company. There have been no transactions
since the beginning of the Company's last fiscal year, nor are there any
- --------
3 - Fiscal year ended December 31, 1996. The average high and low bid price
of the Company's stock that day on the over the counter market was approximately
$.70. "In the money" options are exercisable at less than the fair market value
of the stock.
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proposed transactions, in which any officer, director, nominee or principal
security holder has a direct or indirect material interest, except as described
below:
Effective June 23, 1997, the Company entered into a revolving loan arrangement
with its Chief Executive Officer, Larry E. Clark, with a maximum loan amount of
$450,000, evidenced by a Line of Credit Loan Agreement (the "Agreement"). Loans
pursuant to the Agreement are to be upon terms not less favorable than the terms
of a loan obtained by Mr. Clark from Bank One concurrently with the loan made to
the Company; an initial advance was made to the Company by Mr. Clark pursuant to
the Agreement of $350,000. The proceeds of the $350,000 loan from Mr. Clark were
used to retire the outstanding debt of the Company owing to Wells Fargo Bank
(formerly First Interstate Bank) and to obtain a release of all Collateral
securing the debt, including the J & J Medical, Inc. royalty contract dated June
15, 1995 and collateral which had been supplied by Mr. Clark. The Company then
granted to Mr. Clark a security interest in the J & J Medical, Inc. royalty
agreement as security for repayment of the loan from Mr. Clark. The interest
rate pursuant to the Agreement with Mr. Clark is less than that previously paid
by the Company on the Wells Fargo loan.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 Annual Meeting
of Shareholders must be received by InMedica at its corporate offices on or
before April 10, 1998 in order to be included in the Proxy Statement and Form of
Proxy relating to that meeting.
RELATIONSHIP WITH INDEPENDENT
PUBLIC ACCOUNTANTS
The independent public accounting firm which conducted the audit of the
financial statements of InMedica is Arthur Andersen LLP. One or more
representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting of Shareholders and will have an opportunity to make a statement if they
desire to do so and will be expected to be available to respond to appropriate
questions. InMedica has selected the same firm to conduct the audit of its
financial records for the current year. There have been no disagreements with
accountants on accounting and financial disclosure.
THE COMPANY WILL PROVIDE TO EACH SHAREHOLDER, WITHOUT CHARGE, UPON WRITTEN
REQUEST, COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10- KSB FOR THE YEAR
ENDED DECEMBER 31, 1996, INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES
THERETO AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WRITTEN REQUEST
FOR SUCH INFORMATION SHOULD BE DIRECTED TO RICHARD BRUGGEMAN, P.O. BOX 27557,
SALT LAKE CITY, UTAH 84127.
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PROXY
INMEDICA DEVELOPMENT CORPORATION
P.O. Box 27557
Salt Lake City, Utah 84127
This Proxy is Solicited by the Board of Directors.
The undersigned hereby appoints Larry E. Clark and Richard Bruggeman as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of common stock of
InMedica Development Corporation ("InMedica") held of record by the undersigned
on July 31, 1997 at the Annual Meeting of Shareholders to be held on August 29,
1997 or any adjournment thereof.
1. ELECTION OF DIRECTORS
____ FOR all nominees listed below, (except as marked to the
contrary below)
____ WITHHOLD AUTHORITY to vote for all nominees listed below (INSTRUCTION: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE
NOMINEE'S NAME BELOW.)
Larry E. Clark John R. Merendino
David L. Dingman Richard Bruggeman
2. Proposal to ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the Company
[ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted for Proposals 1 and 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
DATED:
---------------------- --------------------------------------------------
Signature
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY
PROMPTLY USING THE --------------------------------------------------
ENCLOSED ENVELOPE Signature if held jointly
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD August 29, 1997
TO THE SHAREHOLDERS OF INMEDICA DEVELOPMENT CORPORATION:
The Annual Meeting of Shareholders of InMedica Development Corporation (the
"Company") will be held at 2:00 p.m. local time, Friday, August 29, 1997 in the
Summer Room at the Hilton Hotel, 150 West 500 South, Salt Lake City, Utah to
consider and vote upon the following proposals:
1. Proposal to elect four directors (Larry E. Clark, John R. Merendino, David L.
Dingman and Richard Bruggeman) to serve for one year or until a successor is
elected and qualified.
2. Proposal to ratify the appointment of Arthur Andersen LLP as the independent
public accountants of the corporation.
Information regarding the matters to be acted on at the Annual Meeting is
contained in the Proxy Statement accompanying this Notice. Shareholders of
record as of July 31, 1997 are entitled to notice of and to vote at the Annual
Shareholders' Meeting. Shareholders who do not expect to attend the meeting are
encouraged to mark, date, sign and return the enclosed Proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Salt Lake City, Utah Larry E. Clark, Chairman
August 8, 1997
