SEC File No. 0-14189
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 ss.240.14a-11(c) or ss.240.14a-12
INTERWEST HOME MEDICAL, INC.
(Name of Registrant as Specified In Its Charter)
INTERWEST HOME MEDICAL, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total Fee Paid: N/A
[ ] 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 free 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
<PAGE>
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4)Date Filed: March 4, 1998.
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INTERWEST HOME MEDICAL, INC.
235 East 6100 South
Salt Lake City, Utah 84107
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 8, 1998
TO THE SHAREHOLDERS OF INTERWEST HOME MEDICAL, INC.
The Annual Meeting of the Shareholders of Interwest Home Medical, Inc. (the
"Company") will be held at the University Park Hotel, 480 Wakara Way, Salt Lake
City, Utah, on April 8, 1998, at 3:00 p.m. local time, for the following
purposes:
1. To elect four (4) directors to serve until the 1999 Annual Meeting of
Shareholders or until their successors shall have been duly elected and
qualified.
2. To transact such other business as may come before the Meeting or any
adjournment of adjournments thereof.
The Board of Directors has fixed the close of business on March 5, 1998 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Meeting and any adjournments thereof. Consequently, only holders
of common stock of record on the transfer books of the Company at the close of
business on March 5, 1998 will be entitled to notice of and to vote at the
meeting.
By Order of the Board of Directors
of Interwest Home Medical, Inc.
/s/ James E. Robinson
Chief Executive Officer
Salt Lake City, Utah
Date: March 5, 1998
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to sign and
return the enclosed proxy as promptly as possible in the postage-prepaid
envelope enclosed for that purpose. Any shareholder attending the meeting may
vote in person even if he or she returned a proxy.
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INTERWEST HOME MEDICAL, INC.
235 East 6100 South
Salt Lake City, UT 84107
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To Be Held April 8, 1998
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Interwest Home Medical, Inc., a Utah
corporation (the "Company") to be voted at the Annual Meeting of Shareholders to
be held April 8, 1998 and at any adjournment(s) thereof. The Meeting of
Shareholders ("Meeting") will be held at the University Park Hotel, 480 Wakara
Way, Salt Lake City, Utah at 3:00 p.m., local time. This Proxy Statement, the
enclosed Notice of Annual Meeting of Shareholders and the Proxy were first sent
or given to the Company's shareholders on or about March 6, 1998.
MATTERS TO BE CONSIDERED AT THE MEETING
The sole matter to come before the Meeting is the election of four (4)
directors to the Board of Directors to serve until the next Annual Meeting of
Shareholders and thereafter until their successors are elected and qualified.
The matter to be considered at the Meeting has great significance to the
shareholders of the Company and they are urged to carefully consider the
information presented in this Proxy Statement.
RECORD DATE AND VOTING SECURITIES
The securities of the Company entitled to vote at the Meeting consist of
shares of the Company's no par value common stock. Only shareholders of record
at the close of business on March 5, 1998, the record date for the Meeting, will
be entitled to notice of and to vote at the Meeting. On the record date, the
Company had outstanding 4,088,795 shares of common stock which were owned by
approximately 857 shareholders of record. The presence in person or by proxy of
a majority of the outstanding shares of stock entitled to vote is necessary to
constitute a quorum at the Meeting.
For the purpose of electing Directors, each shareholder is entitled to one
vote for each Director to be elected for each share of Common Stock owned.
Assuming a quorum is present, the four (4) nominees receiving the highest number
of votes cast at the Meeting will be elected as directors.
There will be no cumulative voting in the election of directors.
Abstentions will be treated as present and entitled to vote at the Meeting.
Therefore, abstentions will be counted in determining whether a quorum is
present and will have the effect of a vote against a matter. A broker non-vote
on a matter (i.e., shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and as to which the broker or nominee does not have discretionary power to vote
on a particular matter) is
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considered not entitled to vote on that matter and, therefore, will not be
counted in determining whether a quorum is present or whether a matter requiring
approval of a majority of the shares present and entitled to vote has been
approved.
All proxies received pursuant to this solicitation will be voted at the
Meeting and at any adjournments thereof as indicated in the Proxy. If no
instructions are given, the persons named in the proxy solicited by the Board of
Directors of the Company intend to vote in favor of all nominees for directors
described herein and for all of the proposals to be voted upon at the Meeting.
REVOCABILITY OF PROXIES
A form of proxy is enclosed herewith for use. Any proxy given pursuant to
this solicitation may be revoked by the person giving it at any time before its
use by delivering to the Secretary of the Company a written notice of revocation
or a duly executed proxy bearing a later date or by attending the Meeting and
voting in person.
PRINCIPAL SHAREHOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
The following table sets forth information regarding shares of the Company's
common stock owned beneficially as of March 5, 1998, by (i) each director and
nominee for director of the Company, (ii) all officers and directors as a group,
and (iii) each person known by the Company to beneficially own 5% or more of the
outstanding shares of the Company's common stock:
Name Amount
and Address and Nature Percent
of Beneficial of Beneficial of Class(1)
Owner Ownership Ownership
James E. Robinson (2) 1,271,916 29.82%
235 East 6100 South
Salt Lake City, UT 84107
James U. Jensen(3) 142,424 3.34%
420 Chipeta Way
Salt Lake City, UT 84108
Dr. Jeffrey F. Poore(4) 40,500 .95%
4021 South 700 East, Suite 300
Salt Lake City, UT 84107
Jerald L. Nelson(5) 50,064 1.17%
3800 North Central Ave.
Suite B-1
Phoenix, AZ 85012
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Que H. Christensen(6) 149,136 3.50%
235 East 6100 South
Salt Lake City, UT 84107
Serena Falgoust 30,229 .01%
235 East 6100 South
Salt Lake City, UT 84107
I-Med Shareholders (7) 395,968 9.28%
Share Purchase Trust
235 East 6100 South
Salt Lake City, UT 84107
Val D. Christiansen (8) 381,812 8.95%
3065 S. 2850 East
Salt Lake City, UT 84109
Charles Davis 232,500 5.45%
3439 E. Tudor Road # 39
Anchorage, AK 99508
Elizabeth Davis 232,500 5.45%
3439 E. Tudor Road # 39
Anchorage, AK 99508
All Officers and Directors 1,684,269 38.78%
as a Group (6 Persons)
Unless otherwise indicated in the footnotes below, the Company has been
advised that each person above has sole voting power over the shares indicated
above. All of the individuals listed above are officers and directors of the
Company.
(1) As of March 5, 1998, there were 4,088,795 shares of the Company's common
stock issued and outstanding. There are also outstanding options to purchase
176,500 shares of the Company's common stock which are owned by officers and
directors. Therefore, for purposes of the above set forth chart, 4,265,295
shares are deemed to be issued and outstanding in accordance with Rule 13d-3
adopted by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended. This amount does not include options owned
by officers and directors which are not currently exercisable.
(2) Includes (i) 22,500 shares owned of record by the five children of Mr.
Robinson (4,500 shares each); (ii) 898,798 shares owned by J&J Medical
Investments, Ltd., (iii) 288,118 shares owned of record by Mr. Robinson and
(iv) 62,500 shares which may be acquired by Mr. Robinson pursuant to a
currently exercisable stock option.
(3) Includes (i) 58,432 shares which are beneficially owned through the
I-Med Shareholder Share Purchase Trust; (ii) 55,992 shares owned of record
by Mr. Jensen; (iii) 23,000 shares which may be acquired by Mr. Jensen
pursuant to a currently exercisable stock option; and (iv) 5,000 shares
which may be acquired by Mr. Jensen pursuant to a currently exercisable
warrant.
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(4) Includes (i) 23,000 shares which may be acquired pursuant to currently
exercisable stock options; (ii) 9,250 shares owned of record by Dr. Poore;
and (iii) 8,250 shares which may be acquired by Dr. Poore pursuant to a
currently exercisable warrant.
(5) Includes (i) 23,000 shares which may be acquired pursuant to currently
exercisable stock options; (ii) 500 shares owned of record by Mr. Nelson;
(iii) 26,064 shares which are owned of record by Mr. Nelson's spouse; and
(iv) 500 shares which may be acquired pursuant to a currently exercisable
warrant.
(6) Includes (i) 15,000 shares owned of record by Mr. Christensen; (ii)
92,886 shares which are beneficially owned through the I-Med Shareholders
Share Purchase Trust; (iii) 10,000 shares owned of record by the four
children of Mr. Christensen (2,500 shares each) and (iv) 31,250 shares which
may be acquired pursuant to a currently exercisable stock option.
(7) The I-Med Shareholders Share Purchase Trust was established in October
1991 to purchase shares of Interwest Medical Equipment Distributors, Inc.
common stock from a retiring officer/employee. The Trust's shares were
exchanged for the Company's shares in connection with a merger effected
February 22, 1995. The purchase price is payable in 120 monthly payments.
The purchase price for the shares is funded by Trust participants who
contribute monthly payments to purchase a pro-rata portion of such shares.
There are currently 10 persons purchasing shares pursuant to the Trust
arrangement. These persons have the right to vote the shares attributable to
their pro-rata portion of the total shares being purchased from the Trust.
It is anticipated that the Trust will distribute shares paid for to the
Trust beneficiaries from time-to-time as requested by purchasers. Interwest
Medical has guaranteed payment of the unpaid balance of the purchase price
for the shares purchased by the Trust.
(8) Includes (i) 204,099 shares owned of record by Mr. Christiansen jointly
with his spouse; (ii)155,213 shares which are beneficially owned through the
I-Med Shareholders Share Purchase Trust; and (iii) 22,500 shares owned of
record by the five children of Mr. Christensen (4,500 shares each).
PROPOSAL 1: ELECTION OF DIRECTORS
The Company's Board of Directors consists of such number of Directors
as may be determined by the Board of Directors from time to time. The full Board
of Directors currently consists of four Directors. All four of the directors
will be elected at the Annual Meeting. Such directors will serve until the next
annual meeting of shareholders and until their successors are duly elected and
qualified. Shareholders do not have cumulative voting rights in the election of
directors (each common shareholder is entitled to vote one vote for each share
held for each director). 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 identified as nominees for directors in the table
below. If the candidacy of any one or more of such nominees should, for any
reason, be withdrawn, the proxies will be voted "FOR" such other person or
persons, if any, as may be designated by the Board of Directors. The Board has
no reason to believe that any nominee herein named will be unable or unwilling
to serve.
Nominees for Directors and Current Directors
The current directors of the Company, all of whom are nominated for
reelection as directors, are as follows:
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James E. Robinson Mr. Robinson has been president and a director of the
Company since February 1995. Mr. Robinson has been President
(CEO) and Chairman of the Board of Interwest Medical
since October 1982. He also acted as Treasurer until 1990.
Mr. Robinson graduated from Brigham Young University
with a Master of Accountancy degree in 1975. He worked until
July 1977 with Haskins & Sells at which time he joined
Robinson's Medical Mart (a predecessor company to Interwest
Medical) as its Vice President and Treasurer. Mr. Robinson
was elected to the Board of Directors of the National
Association of Medical Equipment Suppliers (NAMES) in 1984
where he served as Treasurer from 1986 until 1990, Chair
from 1990 to 1991, Immediate Past-Chairman from 1991 to
1992, and continues as an "Ex-Officer" Board member. He was
also elected to the Board of Directors of Medical Equipment
Distributors, Inc. (The MED Group) in 1985 and served as its
Chair from 1988 until 1992. Mr. Robinson has been active in
many local, regional, and national organizations which
represent individuals with disabilities, currently serving
as the Chair of the Utah Assistive Technology Foundation
(UATF).
James U. Jensen Mr. Jensen has been a director of the Company since
February 1995. Mr. Jensen has been Vice President,
Corporate Development and Legal Affairs for NPS
Pharmaceutical since July 1991. He has been Secretary and a
director of Interwest Medical since 1987. From 1988 to July
1991, Mr. Jensen was a partner in the law firm of Woodbury,
Jensen, Kesler & Swinton, P.C. concentrating on technology
transfer and licensing and corporate finance. From 1983
until July 1985, he served as outside general counsel for a
software company. From July 1985 to October 1986, he served
as it's Chief Financial Officer. From 1980 to 1983, Mr.
Jensen served as General Counsel and Secretary of Dictaphone
Corporation, a subsidiary of Pitney Bowes, Inc. He serves as
a director of NPS Pharmaceutical, Inc., a public company and
Wasatch Advisors Funds, Inc., a publicly registered
investment company. Mr. Jensen received a B.S. in
English/Linguistics from the University of Utah and a J.D.
and an M.B.A. degree from Columbia University.
Jeffrey F. Poore, Dr. Poore has been a director of the Company since
D.D.S. February 1995. He is currently Chairman and CEO of The
Health Chair Group and is a 22-year veteran of the
healthcare industry and an early champion of the concept of
managed care. From March 1994 until January 1996, Dr. Poore
was President of CompHealth, a physician recruiting and
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temporary placement company. Prior to joining CompHealth,
he coordinated mergers, acquisitions and development in the
office of the CEO at FHP International, Inc., a health
maintenance organization. During his tenure at FHP, he also
directed staff in the organization's operational finance,
financial services, marketing, sales, medical, PPO/IPA, and
contracting divisions. He also has experience as a
healthcare lobbyist and provider. He was in private dental
practice for many years. He earned his D.D.S. from Loyola
Medical Center in 1976, and a BA in Economics from Brigham
Young University in 1971.
Jerald L. Nelson, Dr. Nelson was a director of the Company from
Ph.D. April 1990 to February 1995, and was reappointed a director
in August, 1995. Dr. Nelson holds a Ph.D. in Economics from
North Carolina State University and a B.A. in business from
the University of Utah. Dr. Nelson has over twenty years of
experience as a business consultant and financial analyst.
Dr. Nelson's career began with TWA in New York City in 1972.
Later assignments included consulting with Date Resources,
Inc., and for eight years with U.S. Industries in market
research and financial analysis. He has served on numerous
Boards of Directors including Arrow Dynamics, Gentner
Communications and One-2-One Communications where he also
served as Chairman and CEO. From December 1993 until July of
1996, Mr. Nelson served as the President and Chief Operating
officer of Tenant Information Services, Inc. located in Salt
Lake City, Utah. Since July 1996, Mr. Nelson has been the
Chairman and CEO of Family Telecommunications, Inc. located
in Phoenix, Arizona.
Committees and Meetings
The Board of Directors held four (4) meetings during the last fiscal year.
Each of the Directors attended all four meetings. The Board of Directors has
established the following committees: (i) Audit Committee; (ii) Compensation
Committee; and (iii) Nominating Committee.
The Nominating Committee met one time during the year ended September 30,
1997 and is comprised of Mr. Robinson and Mr. Jensen.
The Audit Committee meets periodically with the Company's independent
accountants and management to make inquiries regarding the manner in which the
responsibilities of each are being discharged. The Audit Committee also
recommends to the Board of Directors the annual appointment of independent
accountants with whom the Audit Committee reviews (i) the scope of audit and
non-audit assignments and related fees; (ii) the Company's accounting principles
and (iii)
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the adequacy of the Company's internal controls. In 1997, the Audit Committee
was comprised of Messrs Nelson and Jensen and held one meeting during the 1997
fiscal year.
The Compensation Committee conducts an annual performance review of the
Company's senior management and establishes their salaries, bonuses and stock
ownership awards. The Compensation Committee consists of Messers Jensen and
Poore. The Compensation Committee held three (3) meetings during the 1997 fiscal
year.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" EACH OF THE
NOMINEES LISTED ABOVE.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate compensation paid by the
Company for services rendered during the last three years to the Company's Chief
Executive Officer and to the Company's most highly compensated executive
officers other than the CEO, whose annual salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Commissions Restrict
and Other Annual Stock Options/
Bonuses Compensation Awards SAR's
Name and Principal Position Year Salary ($) ($) ($) (#)
- ----------------------------- ------ ---------- ------------ ------------- --------- ----------
James E. Robinson 1997 $150,000 $15,750 (2) -0- 50,000(1)
President/CEO 1996 $150,000 $16,875 (2) -0- -0-
1995 $135,000 $12,273 (2) -0- 62,500(1)
Que H. Christensen 1997 $ 95,000 $ 9,975 (2) -0- 25,000(1)
Chief Financial Officer(3) 1996 $ 95,000 $10,688 (2) -0- -0-
1995 $ 90,000 $ 8,188 (2) -0- 31,250(1)
</TABLE>
(1) These Options were granted under the Company's 1995 Employee
Stock Option Plan. No SAR's have been granted by the Company.
(2) Does not include the value of perquisites provided to certain
executive officers which in the aggregate did not exceed the lesser
of $50,000 or 10% of such officer's salary and bonus.
(3) In December 1997, Mr. Christensen was promoted to Vice President
and Chief Operating Officer (COO).
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Stock Options
The following table sets forth certain information concerning stock
options granted during fiscal 1997 to the named executive officers:
Options Grants in the Year Ended September 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Percentage
Number of of Total Exercise or
Securities Options Granted to Base Price
Underlying Employees in Per Share Expiration
Name Options Granted (#) Fiscal Year ($) Date
- -------------------- ------------------- ------------------ ------------ ----------
James E. Robinson 50,000(1) 60% $3.25 6/30/2002
Que H. Christensen 25,000(1) 30% $3.25 6/30/2002
</TABLE>
(1) Consists of stock options granted on July 1, 1997, under the
Company's 1995 Employee Stock Option Plan.
The following table sets forth information concerning the number and value
of options held at September 30, 1997 by each of the named executive officers.
No options held by such executive officers were exercised during 1997.
Option Values at September 30, 1997
Number of Unexercised Value of Unexercised
Options at In-the-Money Options
September 30, 1997(#) At September 30, 1997($)(1)
Name Exercisable Unexercisable Exercisable Unexercisable
James E. Robinson 62,500 50,000 $ 15,625 $50,000
Que H. Christensen 31,250 25,000 $ 7,183 $25,000
1. An "In-the-Money" stock option is an option for which the market
price of the Company's common stock underlying the option on
September 30, 1997 exceed the option price. The value shown
represents stock price appreciation since the date of grant. The
market price was based upon the closing price of the Company's
common stock on the NASD SmallCap Market on September 30, 1997. The
price per share was $4.25.
1995 Employee Stock Purchase Plan
On November 6, 1995, the Company's Board of Directors adopted the
Company's 1995 Stock Purchase Plan (the "Plan"). The Plan is designed to provide
employees of the Company with an opportunity to purchase shares of the Company's
common stock through accumulated payroll deductions. The purchase price may be
established at 85% of the fair market price. The number of shares which may be
purchased under the Plan is 500,000. At February 25, 1998, 10,486 shares of
common stock had been purchased under the plan.
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1995 Employee Stock Option Plan
On February 24, 1995, the Company's Board of Directors adopted the
Company's 1995 Stock Option Plan (the "Plan") which provides for the issuance of
a maximum 312,500 shares of common stock pursuant to the exercise of options
granted under the Plan. The Options granted under the Plan may be Incentive
Stock Options pursuant to Section 422 of the Internal Revenue Code of 1986
("ISO's") or Non-Qualified Stock Options ("NSO's"). The Plan is administered by
the Board of Directors' Compensation Committee. The Option price and terms is to
be set for each Option by the Committee administering the Plan. NSO options
granted under the Plan may have a term not exceeding ten years. ISO options
granted under the Plan may have a term not exceeding five years. The Committee
may grant options to employees (including officers and directors, or
consultants.
Options to purchase 225,750 shares of stock have been granted.
Compensation of Directors
The Company's non-employee directors are paid $500 for each Board of
Directors meeting attended or $400 for each Committee Meeting attended. On
February 24, 1995, the Company adopted, subject to shareholder approval, the
1995 Non-Employee Director's Stock Option Plan. The Plan provides that each
non-employee director who was a director as of February 24, 1995, or who became
a director thereafter, was and will be issued an option to purchase 5,000 shares
of the Company's common stock at $4.00 per share (calculated the 1-for-4 reverse
stock split effected on December 4, 1995). Additionally, each non-employee
director is automatically granted an option to purchase (1,500 shares calculated
after the 1-for-4 reverse split) at market prices on April 1st of each year
commencing April 1, 1996. As of April 1997, the annual grant was terminated and
each non-employee director was granted an option to purchase 40,000 shares at
$4.00 per share with one-third of the shares vesting at March 31, 1998 and each
additional one-third vesting in the two subsequent years.
Employment Agreements
The Company is currently a party to the following Employment Agreements:
James E. Robinson. On May 3, 1995, the Company entered into an Employment
Agreement with its President/CEO, James E. Robinson. The Agreement replaced and
superseded a previously executed agreement. The Agreement may be terminated by
the Company without notice and without cause. However, in such event, there is a
six (6) month continued obligation by the Company to compensate Mr. Robinson.
The Agreement may be terminated by Mr. Robinson upon thirty day written notice.
The Agreement provides for a base annual salary of $150,000 and incentive salary
based upon pre-tax profits, revenue growth and acquisition incentives. The
Agreement contains a 12 month non-competition restriction following termination
and provisions relating to death and disability during the term of employment.
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Que H. Christensen. On May 3, 1995, the Company entered into an Employment
Agreement with its Chief Financial Officer, Que H. Christensen. The Agreement
replaced and superseded a previously executed agreement. The Agreement may be
terminated by the Company without notice and without cause. However, in such
event, there is a three (3) month continued obligation by the Company to
compensate Mr. Christensen. The Agreement may be terminated by Mr. Christensen
upon thirty day written notice. The Agreement provides for a base annual salary
of $95,000 and incentive salary based upon pre-tax profits, revenue growth and
acquisition incentives. The Agreement contains a 12 month non-competition
restriction following termination and provisions relating to death and
disability during the term of employment.
RIGHTS OF DISSENTING SHAREHOLDERS
The matters to be considered and acted upon at the Annual Meeting of
Shareholders do not create any dissenting shareholders rights under the Utah
Revised Business Corporation Act.
CERTAIN TRANSACTIONS
Other Transactions
On September 29, 1995, the Company sold a parcel of real property
consisting of approximately 33 acres located in Utah County, State of Utah, to
American Springs Development Company, an affiliate of Daniel L. Richards. Mr.
Richards was a director of the Company from 1990 to 1996. The total sales price
for the property was $1,050,000. The sales price was paid as follows: (i)
$300,000 cash; (ii) $20,000 by Mr. Richards transferring some of his shares of
the Company's common stock to the Company for cancellation; (iii) $10,000 by Mr.
Richards transferring an option to purchase shares of the Company's common stock
to the Company for cancellation; and (iv) $720,000 by way of a promissory note
secured by the property. The note was payable in full on or before March 31,
1997. A title dispute has postponed the final payment on the note; however, the
Company continues to receive payments as lots sell. As of December 15, 1997, the
principal balance of the note was $249,095.
Board of Directors Stock Option Purchase Plan
On September 30, 1997, the Company's Board of Directors adopted a
financing Plan which provides a stock purchase right and warrant purchase right
to each of its three non-employee directors (the "Holders"). The maximum number
of shares issuable under the Plan is 66,000 shares per Holder, of which up to
33,000 shares per Holder may be purchased as "Purchase Shares" and up to 33,000
shares per Holder may be purchased as "Warrant Shares". This Plan is modeled on
a similar financing arrangement earlier negotiated between the Company and third
party investors. The Plan for the non-employee directors is intended to
encourage long term investment in the Company by the non-employee directors but
is not considered by the Company as "compensation"
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to the non-employee directors. The prices and terms provided are deemed fair
market value because the Plan uses substantially the same prices and terms as
were previously negotiated in good faith between the Company and third party
investors.
By October 30, 1997, each of the Holders had purchased the first option
right (the "First Purchase Right") by paying the required $1,000. This purchase
of the First Purchase Right entitles each Holder to purchase up to 8,250 shares
of the Company's common stock (the "First Purchase Shares") at a price of $4.28
per share if purchased on or before April 5, 1998, when the First Purchase Right
expires. To the extent the Holder purchases shares of the First Purchase Shares
on or before December 29, 1997, however, (rather that waiting until the end of
the First Purchase Period, April 5, 1998) the Holder is then entitled to
exercise a warrant (the "First Purchase Warrant") to purchase the same number of
shares (up to 8,250 shares, the "First Warrant Shares") during the ensuing three
year period at prices of $4.28 per share during the first year, $4.75 in the
second year, and $5.25 per First Warrant Share during the third year.
The Plan repeats this arrangement for three additional Purchase Periods,
for a total of four such purchase periods. The following Table show the basic
content of the non-employee director financing Plan:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Last Date for Last Date to Last Date
Exercise Price Shares Option Fee Obtain Warrants without Warrant Prices
Warrants
First Option 4.28 8,250 10/30/97 12/29/97 4/5/98 4.28, 4.75, 5.25
Second Option 4.78 8,250 1/28/98 Date Option Fee 6/9/98 4.78, 5.25, 5.75
paid + 90 days
Third Option 5.50 8,250 4/26/98 Date Option Fee 9/7/98 5.50, 6.00, 6.50
paid + 90 days
Fourth Option 6.00 8,250 7/25/98 Date Option Fee 12/6/98 6.00, 6.50, 7.00
paid + 90 days
</TABLE>
* Warrant prices change on the annual anniversary of the date the Option
Fee is paid.
As of February 25, 1998, Dr. Poore had purchased 8,250 shares, Dr. Nelson
had purchased 500 shares, and Mr. Jensen had purchased 5,000 shares under the
Plan. Each director received warrants equal to the number of shares purchased.
FILINGS UNDER SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16 of the Securities Exchange Act of 1934 requires the filing of
reports for sales of the Company's common stock made by officers, directors and
10% or greater shareholders. A Form 4 must be filed within ten days after the
end of the calendar month in which a sale or purchase occurred. Based upon the
review of the Form 4's filed with the Company, the following disclosure is
required in this Proxy Statement.
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Jeffrey F. Poore, D.D.S. During the fiscal year ended September 30,
1997, Dr. Poore was granted options to purchase shares of the Company's
common stock; one option grant was reported within the required period and
one option grant was reported but not within the required period.
Jerald L. Nelson Ph.D. During the fiscal year ended September 30,
1997, Dr. Nelson was granted options to purchase shares of the Company's
common stock; one option grant was reported within the required period and
one option grant was reported but not within the required period.
James U. Jensen. During the fiscal year ended September 30, 1997,
Mr. Jensen was granted options to purchase shares of the Company's common
stock; one option grant was reported within the required period and one
option grant was reported but not within the required period.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Tanner + Co. has served as the Company's independent auditor since 1994. No
change of auditors is contemplated. A representative of Tanner + Co. will be
present at the Annual Meeting, will have an opportunity to make a statement if
he or she desires to do so, and will be available to respond to any appropriate
questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 1999 Annual
Meeting must be received by the Company by November 5, 1998 to be considered for
inclusion in the proxy statement and form of proxy relating to the 1999 Meeting.
ANNUAL REPORT
The Company's 1997 annual report, containing audited financial statements
and schedules for the fiscal years ended September 30, 1997 and 1996,
accompanies this Proxy Statement. Upon written request, the company will send
you, without charge, a copy of its annual report on form 10-KSB (without
exhibits) for the fiscal year ended September 30, 1997, which the company has
filed with the securities and exchange commission. Copies of exhibits will also
be provided upon written request and payment of a fee of $.25 per page plus
postage. The written request should be directed to the Company's Secretary,
Serena Falgoust. At the address of the Company set forth on the first page of
this proxy statement.
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OTHER MATTERS
At the time of the preparation of this proxy statement, the Board of
Directors knows of no other matters which will be acted upon at the Annual
Meeting. If any other matters are presented for action at the Annual Meeting or
at any adjournment thereof, it is intended that the proxies will be voted with
respect thereto in accordance with the best judgment and in the discretion of
the proxy holders.
The entire cost of soliciting management proxies will be borne by the
Company. Proxies will be solicited by mail and may be solicited personally by
directors, officers or regular employees of the Company, who will not be
compensated for their services. The Company will reimburse banks, brokerage
firms, and other custodians, nominees and fiduciaries for reasonable expenses
incurred in sending proxy material to their proposals and obtaining their
proxies. A professional proxy solicitation will not be engaged.
By Order of the Board of Directors
March 5, 1998
attached: Annual Report
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED ENVELOPE.
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APPENDIX
PROXY
INTERWEST HOME MEDICAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
April 8, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James E. Robinson, CEO and director of
Interwest Home Medical, Inc., or any member of the Board of Directors, with
power of substitution, to represent and vote on behalf of the undersigned all
shares of stock of Interwest Home Medical, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on April 8,
1998, at 3:00 p.m. and at any adjournment or adjournments thereof, hereby
revoking all proxies heretofore given with respect to such stock, upon the
following proposals more fully described in the Proxy Statement for the meeting,
receipt of which is hereby acknowledged.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR (1) and (2).
1. Election of Directors
FOR all nominees listed below NO AUTHORITY to vote (except as marked to
the contrary before all nominees listed below |_|
James E. Robinson, James U. Jensen, Dr. Jeffrey F. Poore and Jerald L Nelson
For except vote withheld from the following nominee(s).
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2. IN THEIR DISCRETION, Proxy holders are authorized to vote upon such other
business as may properly come before the meeting.
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
OR ALL PROPOSALS SET FORTH ABOVE.
Dated:
Signature
Number of Shares owned Please print name clearly
Please sign exactly as the name appears on your stock
certificate. When shares are held by joint tenants,
both should sign. Please return this Proxy
in the enclosed envelope.
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