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
[ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[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] No fee required
[ ] Fee computed on table below per Exchange Act Rule 14a- 6(i)(1) and
0-11
1) Title of each class of securities to which transaction
applies__________________
2) Aggregate number of securities to which transaction
applies_______________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 Total Amount: How
Determined: 4) Proposed maximum aggregate value of transaction
5) Total Fee paid: 0
[ ] fee paid previously with preliminary materials
[ ] check box if any part of the fee is offset as provided by Exchange
Act Rule 0- 11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid
2) Form, schedule or registration statement no.
3) Filing party
4) Date filed
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD September 10, 1998
TO THE SHAREHOLDERS OF INMEDICA DEVELOPMENT CORPORATION:
The Annual Meeting of Shareholders of InMedica Development Corporation (the
"Company") will be held at 2:00 pm local time, Thursday, September 10, 1998 in
the Sawtooth Room at the Little America Hotel, 500 South Main Street, 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, 1998 are entitled to notice of and to vote at the Special
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
July 31, 1998
<PAGE>
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, 1998 at the Annual Meeting of Shareholders to be held on September
10, 1998 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>
INMEDICA DEVELOPMENT CORPORATION
825 North 300 West
Salt Lake City, Utah 84103
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
Thursday September 10, 1998 at 2:00 pm, local time, in the Sawtooth Room at the
Little America Hotel, 500 South Main, 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 5, 1998.
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,
1998, (the "Record Date") will be entitled to notice of and to vote at the
Meeting. As of the Record Date, there were 8,550,899 shares of InMedica Common
Stock issued and outstanding. The affirmative vote of the holders of a plurality
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; cumulative voting
is not 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. 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 the Company of such revocation or change prior to the
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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 8,550,899 shares issued and outstanding as of July
31, 1998 (the Record Date). The following table furnishes information concerning
the common stock ownership of nominees, directors, officers, and principal
shareholders as of July 31, 1998.
Nature of Number of
Name and Position Ownership Shares Owned Percent
----------------- --------- ------------ -------
Larry E. Clark Direct 1,593,000 18.6%
Allan L. Kaminsky Direct 798,875 9.3%
4602 S. Fortuna Way
S.L.C., Utah 84124
Principal Shareholder
Paul J. Diehl Direct & 719,230-1 8.4%
2963 E. Fallentine Rd. Indirect
Sandy, Utah 84092
Principal Shareholder
J. Lynn Smith Direct & 452,048-2 5.3%
5770 S. 250 East #115 Indirect
Murray, Utah 84107-8100
Principal Shareholder
John R. Merendino Options 75,000 0.9%
Director
David L. Dingman Options 75,000 0.9%
Director
- --------------------------------
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 186,048 shares held directly by Dr. Smith and 266,000 shares
held by the J. Lynn Smith Family Limited Partnership.
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<PAGE>
Richard Bruggeman Direct & 174,387-3 2.0%
Director, Chief Indirect
Financial Officer Options 106,500 1.2%
------- ----
Total 280,887 3.2%
=======
All Executive Officers Direct & 1,767,387 20.7%
and Directors as a & Indirect
group (4 persons) Options 265,500 3.0%
------- ----
Total 2,032,887 23.1%
=======
Shares shown in the forgoing table as directly owned are owned beneficially and
of record, and such record shareholder has sole voting, investment, and
dispositive power. Calculations of the percentage of ownership of shares
outstanding in the foregoing table assumes the exercise of options, to which the
percentage relates. Percentages calculated for totals assume the exercise of
options comprising such totals. As to totals of shares held by principal
shareholders, the Company has relied upon the latest filing on Form 13D
furnished to the Company by such shareholders.
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 also nominees for director.
Name Age Director Since
---- --- --------------
Larry E. Clark 76 1995
John R. Merendino 59 1995
David L. Dingman 61 1995
Richard Bruggeman 43 1995
Certain information follows regarding the executive officers and directors
of InMedica and their business backgrounds for at least the last five years.
- --------
3 - 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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<PAGE>
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,
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
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<PAGE>
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
year ended December 31, 1997 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, 1997. 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, 1997, 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) 1997 $ - - - $51,996*
Larry E. Clark (CEO) 1996 $39,000 - - -
Larry E. Clark (CEO) 1995 $ - - 450,000 -
</TABLE>
* - includes consulting fees paid ($30,331) and consulting fees accrued for
payment ($21,665) to a corporation owned by Larry E. Clark.
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<PAGE>
Compensation of officers and employees is determined by the Board of
Directors. Mr. Larry E. Clark, chief executive officer, is chairman of the Board
of Directors. See Note 3 to the financial statements included as a part of the
Company's annual report to shareholders for information regarding the Company's
Stock Incentive Plan, Formula Stock Option Plan and Other Stock Options.
The following tables show certain information regarding stock options
granted to and exercised by officers named in the executive compensation table:
OPTIONS GRANTED IN THE LAST FISCAL YEAR
% of Total
Options
Granted to Exercise
Options Employees in Price Expiration
Name Granted FY 1997 ($/Share) Date
---- ------- ------------ --------- ----
None
AGGREGATED OPTIONS EXERCISED IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of In-The-Money
Unexercised Options Options at Fiscal
Shares at Fiscal Year End Year End
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
---- ------------ ------------ ------------------- -------------
<S> <C> <C> <C> <C> <C>
Larry E.
Clark 450,000 0 0/0 $ 0/0/0
</TABLE>
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 1997
and 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
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<PAGE>
since the beginning of the Company's last fiscal year, nor are there any
proposed transactions, in which any officer, director, nominee or principal
security holder has a direct or indirect material interest, except as described
below:
During June 1997, Larry E. Clark retired the outstanding balance of the
Company's bank loan (on which he was a co-obligor) with proceeds of a new loan
in the amount of $355,000 and the Company signed a note to Mr. Clark for the
amount of the pay-off and a Line of Credit Loan Agreement (the "Agreement")
pursuant to which Mr. Clark agreed to loan the Company up to $450,000, including
the amount of the pay-off. Loans by Mr. Clark to the Company pursuant to the
Agreement are to be upon terms not less favorable than the terms of a loan
obtained concurrently by Mr. Clark from Bank One Utah, NA. In connection with
the refinancing of the Company's bank loan, all collateral securing the original
bank debt, including the J & J Medical, Inc. royalty contract dated June 15,
1995 and collateral which had been supplied by Mr. Clark, was released. The
Company then granted to Mr. Clark a security interest in the J & J Medical, Inc.
royalty agreement as security for repayment of loans from Mr. Clark pursuant to
the Agreement. The interest rate pursuant to the Agreement with Mr. Clark is
less than that previously paid by the Company on the bank loan. Following
periodic payments against the loan balance and a $135,000 payment on the loan
balance following the exercise of stock options by Mr. Clark (see "Executive
Compensation"), the outstanding balance on the loan owed to Mr. Clark by the
Company is $145,000 as of June 30, 1998.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1999 Annual Meeting
of Shareholders must be received by InMedica at its corporate offices on or
before April 5, 1999 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.
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<PAGE>
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, 1997, 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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