SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
Of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6
(e) (2) )
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Zevex International Corp.
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(Name of Registrant as Specified in its Charter)
BLOSCH AND HOLMES LLC
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
[ ] $125 per Exchange Act Rules 0-11 (c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(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:
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: (1)
4) Proposed maximum aggregate value of transaction:
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(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
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[ ] 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:
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PROXY STATEMENT
OF
BLOSCH AND HOLMES LLC
IN OPPOSITION TO CERTAIN NOMINEES
FOR ELECTION TO THE BOARD OF DIRECTORS
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ZEVEX INTERNATIONAL, INC.
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June 2, 1999 Annual Meeting of Stockholders
To Fellow Stockholders of Zevex International, Inc.
This Proxy Statement (the "Proxy Statement") is furnished to the
holders of Common Stock, par value $.001 per share, of Zevex International,
Inc., a Delaware corporation, by Blosch and Holmes LLC, a Utah limited liability
company ("Blosch & Holmes"), in connection with its solicitation of proxies for
use at the Annual Meeting of Stockholders of the Company scheduled to be held on
June 2, 1999, at the time and place designated by the Board of Directors of the
Company and any and all adjournments or postponements thereof (the "Annual
Meeting") to elect a new slate of directors of the Company in opposition to
certain nominees of the Company. This Proxy Statement, together with the [COLOR]
proxy card (the "[COLOR] Proxy Card"), is first being mailed or distributed to
stockholders on or about May _____, 1999.
THE PROXY SOLICITATIONS
The principal objective of the Proxy Solicitation is (i) to elect
directors who will place a greater emphasis on the enhancement of shareholder
value and (ii) to reject management's proposal to approve the 1999 Stock Option
Plan. At the end of 1998, the Company had lost over $26 million in the market
value from its November 21, 1997 public offering valuation of $40 million, a 65%
decrease. Current management is running the Company without giving the public
shareholders a strong, effective voice as in the management of the Company. IT
IS TIME TO PROVIDE THE SHAREHOLDERS WITH A STRONG, INDEPENDENT VOICE AND
REPRESENTATION ON THE BOARD AND TO SEND A MESSAGE TO MANAGEMENT THAT THE
SHAREHOLDERS DO NOT APPROVE OF THE CURRENT DIRECTION OF THE COMPANY. If elected,
the Nominees of Blosch & Holmes will constitute three of the seven members of
the Company's Board of Directors.
Proxy Solicitation
Blosch & Holmes is soliciting proxies (the "Proxy Solicitation") for
use at the Annual Meeting of the Company:
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1. To approve the election of Kirk Blosch, Jeff W. Holmes and Ronald
Marusiak (the "Blosch & Holmes Nominees") to the Board of the Company;
2. To reject the 1999 Stock Option Plan;
3. To approve the appointment by the Board of Ernst & Young LLP,
certified public accountants, as independent auditors of the Company for the
fiscal year ending December 31, 1999; and
4. To transact such other business as may properly come before the
meeting and any and all adjournments thereof.
At the Annual Meeting, management proposes to elect three directors, to
approve the 1999 Stock Option Plan and to approve the appointment by the Board
of Ernst & Young LLP as independent auditors for the fiscal year ending December
31, 1999. Blosch & Holmes opposes the election of two of management's nominees,
Phillip L. McStotts and Darla R. Gill (the "Designated Nominees"), opposes the
1999 Stock Option Plan; favors the Blosch & Holmes Nominees; and favors the
appointment of Ernst & Young LLP.
Blosch & Holmes will vote:
o FOR the Blosch & Holmes Nominees;
o AGAINST approval of the 1999 Stock Option Plan; and
o FOR the appointment of Ernst & Young, LLC.
Directors shall be elected by a plurality of the votes cast at the
Annual Meeting. The affirmative vote of the holders of a majority of the votes
represented in person or by proxy at the Annual Meeting is required to approve
the 1999 Stock Option Plan and appointment of Ernst & Young LLP.
In reliance upon rule 14a-5(c) of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), reference is made to management's proxy
statement for a full description of management's proposals, as well as
information with respect to the record date, the number of shares of Common
Stock eligible to vote at the Annual Meeting, the quorum, the securities
ownership of the Company, information about the Company's officers and
directors, including compensation, information about the appointment of Ernst &
Young LLP as independent auditors and the date by which stockholders must submit
proposals for inclusion to the next annual meeting.
Record Dates and Votes Required
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The Company has announced that the Annual Meeting will be held on June
2, 1999. Blosch & Holmes is soliciting your proxy for the Annual Meeting. The
Company has set the record date for determining the stockholders entitled to
receive notice of and to vote at the Annual Meeting as of the close of business
on April 15, 1999 (the "Proxy Record Date"). You can grant Blosch & Holmes your
proxy for use at the Annual Meeting by marking, signing and dating the [COLOR]
Proxy Card and returning it to Blosch & Holmes.
At the Annual Meeting, nominees for director receiving the highest
number of votes cast at the Annual Meeting will be elected to the Board. The
rejection of the 1999 Stock Option Plan and appointment of Ernst & Young LLP
requires the affirmative vote of holders of a majority of the votes entitled to
be cast by holders of the outstanding Common Stock of the Company present in
person or represented by proxy at the Annual Meeting.
How To Vote
Enclosed with this Proxy Statement is a card: a [COLOR] Proxy Card. It
is important that you sign, date and return the card so that your vote will
count at the Annual Meeting.
BE SURE TO SIGN AND DATE THE [COLOR] PROXY CARD. IT IS IMPORTANT THAT
YOUR SHARES BE VOTED IN THE PROXY SOLICITATION.
BLOSCH & HOLMES URGES YOU TO SUPPORT IT IN ITS ATTEMPT TO ELECT THE
BLOSCH & HOLMES NOMINEES INSTEAD OF THE DESIGNATED NOMINEES. PLEASE SIGN, DATE
AND MAIL THE FULLY COMPLETED [COLOR] PROXY CARD TO BLOSCH AND HOLMES, LLC, 8800
NORTH GAINEY RANCH DR., SUITE 256 SCOTTSDALE, AZ 85258.
If you have any questions about executing your Proxy or require
assistance, please contact:
Blosch & Holmes, LLC
Attn: Jeff W. Holmes
8800 North Gainey Ranch Dr.
Suite 256
Scottsdale, AZ 85258
Telephone: (602) 443-0851 (collect)
or
Kirk Blosch
Telephone: (801) 467-4566 (collect)
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BLOSCH AND HOLMES LLC
Blosch & Holmes is a Nevada limited liability company formed in January
1997. It is deemed to beneficially own the 14.6% of the total votes entitled to
be cast by holders of Common Stock of the Company. The Phoenix office of Blosch
& Holmes LLC is 8800 North Gainey Ranch Dr., Suite 256 Scottsdale, AZ 85258.
Kirk Blosch and Jeff Holmes, both of whom are Blosch & Holmes Nominees,
are the sole members of Blosch & Holmes.
On the Proxy Record Date, Blosch & Holmes beneficially owned and had
the right to vote an aggregate of 500,000 shares. Pursuant to publicly available
information concerning the Company, on May 12, 1999, there were 3,418,876 shares
of Common Stock outstanding. Based on this information, on the Proxy Record
Date, Blosch & Holmes beneficially owned Common Stock representing approximately
14.6% of the voting power of the Company.
REASONS FOR THE SOLICITATIONS
The principal objective of the Proxy Solicitation is to seek a
sufficient number of votes to elect to the Board of Directors of the Company
persons whose focus will be to enhance shareholder value and, in the process,
help to reestablish a more active, liquid trading market for the Company's
Common Stock. Blosch & Holmes has reviewed the history and performance of the
current management of the Company and believes that current management has
totally failed to perform responsibly and effectively. Blosch & Holmes has
reached this conclusion based on a review of a variety of factors including:
1. the market price for the Company's stock;
2. its operating performance;
3. management's cash compensation packages;
4. grants of new options when management's performance does not
deserve them;
5. repricing of management's options when management's
performance does not merit it;
6. the appointment of another employee as a director rather than
an experienced, independent, non-employee; and
7. other factors.
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It is clearly time for a change. The Designated Nominees do not deserve
to be re-elected to office. Phillip L. McStatts is a director and an officer of
the Company. As such, he is part of the current management team that has brought
the Company and its shareholders to the current sorry state. Darla R. Gill, a
non-employee director and a member of the Compensation Committee, voted for the
bonuses to management, the repricing of 210,000 management options from $16.44
per share to $5.00 per share and the granting of 90,000 new options to
management. This is the management team that led the Company to a mediocre year
in fiscal 1998, with operating income of just over $67,000, and presided over a
$26 million drop in the Company's market capitalization from November 1997 to
December 1998.
We are asking you to make a choice between a failed past and the
potential of a successful future. We believe that the proposal of Blosch &
Holmes is the only choice and the first step in the right direction for the
Company.
The Blosch & Holmes Nominees will be a strong, through still a
minority, voice for the shareholders on the Board. The Blosch & Holmes Nominees
will promptly evaluate the prospects for the current business and seek their
appointment to the Audit and Compensation Committees. They will also develop a
strategic plan that will focus on enhancing the Company's stock price and
improving liquidity.
A review of the history of the Company shows a bleak picture. Over the
past two years the Designated Nominees have had an opportunity to control the
destiny of the Company. Blosch & Holmes believes that the Designated Nominees
have had more than sufficient time within which to demonstrate that they could
successfully manage a public company and increase shareholder value and
liquidity. The Designated Nominees' record is clear. They are only interested in
maintaining the STATUS QUO and taking care of management's compensation, and
consequently, they have not created value for the shareholders.
Management recently filled the vacancy created on the Board created by
the resignation of a non-employee director with Leonard C. Smith, the President
of the J Tech subsidiary of the Company, and thus an employee of the Company.
With this appointment, the Board has now become controlled by insiders, or
employees of the Company, rather than by independent parties who have a wide
range of business acumen, experience and contacts.
Kirk Blosch, who is nominated by Blosch & Holmes and is a current
director, voted against appointing another employee as a director. Management
claims in its proxy statement that it plans to actively seek qualified
nonemployees for addition to the Board in the future. Based on this course of
conduct, management in this regard. When given the chance to fill a vacancy on
the Board, a vacancy created by the resignation of a no-employee director,
management selected, and the Board (except for Kirk Blosch) voted to appoint
another employee to fill this position. Kirk Blosch also opposes the repricing
of management's options. He has refused to accept the repricing of the options
granted to him as a director in October 22, 1998.
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Blosch & Holmes has reviewed a variety of factors and has concluded
that the Designated Nominees do not deserve or have the ability to continue to
control and manage the Company. The factors include the following:
1. Since its secondary public offering, the market price of
the Company's Common Stock has dropped from a high of $12.50 per share
in the third quarter of 1997 to $4.125 per share in December of 1998, a
67% decline in value and a 65% reduction in the Company's market
capitalization. This represents a reduction of over $26 million of
market value. This enormous erosion is a strong indication that the
market place does not have confidence in management's ability to grow
the Company.
2. Management has paid itself $150,000 in bonuses in fiscal
1998. This is how current management rewards itself for the dismal
financial performance of the Company in fiscal 1998!
3. The Compensation Committee of the Board of Directors, of
which Darla R. Gill is a member, approved the repricing of 210,000
management options from $16.44 per share to $5.00 per share. Blosch &
Holmes believes it is most inappropriate to reward management by
reducing the exercise price of management's options at a time when the
shareholders have suffered a $26 million drop in the market valuation
of the Company since its secondary offering in November 1997.
4. The current management runs the Company and communicates to
the public as if it was a private entity, frustrating shareholders and
analysts. Blosch & Holmes believes that this, along with the poor
operating performance, is a contributing factor to the eroding stock
price and liquidity.
5. The current management believes that it is doing a "good
job." It refuses to take responsibility for the $26 million loss of
shareholders' value since the secondary offering in November 1997.
6. Management has granted itself 90,000 additional options in
March 1999 exercisable at $5.00 per share to reward itself for its poor
performance in 1998.
Proxy Solicitation
In addition, Blosch and Holmes LLC is soliciting proxies (the "Proxy
Solicitation") for use at the Annual Meeting of the Company.
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1. To approve the election of Kirk Blosch, Jeff W. Holmes and
Ronald Marusiak to the Board of the Company;
2. To reject the 1999 Stock Option Plan;
3. To ratify the appointment of Ernst & Young LLP as
independent auditors of the Company for the fiscal year ending December
31, 1999; and
4. To transact such other business as may properly come before
the meeting and any and all adjournments thereof.
At the Annual Meeting, management proposes to elect three directors.
Zevex International, Inc.
Historical Performance Review
Summary Compensation Table
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS
- --------------------------- ---- ------ -----
Dean G. Constantine 1998 $107,755 $50,000
CEO and President 1997 $105,000 $11,125
1996 $ 77,917 $12,189
David J. McNally 1998 $107,755 $50,000
Executive Vice President 1997 $105,000 $11,125
1996 $ 77,917 $12,189
Phillip L. McStotts 1998 $107,755 $50,000
Secretary/Treasurer 1997 $105,000 $11.125
1996 $ 77,917 $12,189
Note that while the Company's net income was declining, management gave
themselves bonuses in the aggregate of $150,000, representing 30% of the
Company's net earnings, or $0.04 per share. The Company earned $567,991 for the
year from the interest on the unused the proceeds of its November 1997 public
offering. This was at a time when the Company had a meager $67,893 of operating
income for fiscal 1998. Without this significant interest income, the Company
would not have had enough funds to pay the exorbitant bonuses management paid
itself.
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Zevex International, Inc.
HISTORICAL PERFORMANCE REVIEW
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Earnings per Share
QUARTERS 1995 1996 1997 1998
-------- ---- ---- ---- ----
MAR $.07 $.06 $.12 $.03
JUN .04 .00 .02 .10
SEP .06 .04 .05 (0.13)
DEC .07 .14 .11 .09
--- --- --- ---
TOTALS $.24 $.240 $.300 $.09
Zevex International, Inc.
Stock Trading Range
From January 6, 1997 through April 7, 1999
Closing Sales Prices
Trading Period High Low
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1/6/97 3/797 $ 7.03 $ 3.25
3/10/97 5/9/97 8.00 6.00
5/12/97 7/11/97 18.125 9.50
7/14/97 9/12/97 18.00 15.375
9/15/97 11/14/97 17.00 13.50
11/17/97 1/16/98 15.125 8.875
1/19/98 3/20/98 12.375 8.125
3/23/98 5/22/98 11.187 9.50
5/25/98 7/31/98 9.625 6.875
8/3/98 10/2/98 7.250 4.50
10/5/98 12/4/98 7.500 4.06
12/7/99 2/5/99 7.250 4.125
2/8/99 4/7/99 6.250 4.75
PROTECT YOUR INVESTMENT, SIGN AND RETURN
THE ENCLOSED PROXY CARD TODAY
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THE PROGRAM OF BLOSCH AND HOLMES
If elected, Blosch & Holmes will hold three of the seats on the board.
The Blosch & Holmes Nominees will be a strong, independent voice on behalf of
the shareholders, even though they will still constitute a minority of the
Board. They will encourage the Company to evaluate the current business with a
view to increase shareholders' value. Blosch & Holmes will look for ways to
leverage existing Company assets for new acquisitions to positively impact
shareholder values. They will seek other financial professionals and advisors to
help chart a new direction. The Blosch & Holmes Nominees will bring more
pressure to bear for the Board to consider more opportunities to enhance
shareholder value. Blosch & Holmes will urge the Board to seek transactions and
opportunities that benefit all of the stockholders of the Company. It is tired
of seeing current management reap all of the benefits from the Company while the
stockholders get nothing but a declining stock price and the status quo.
SUMMARY OF THE PROPOSALS
Proxy Solicitation
Blosch & Holmes is seeking approval by the Company's stockholders of
the following actions:
Proposal 1: Election of Directors. To elect each of Kirk Blosch, Jeff
W. Holmes and Ronald Marusiak as a director of the Company, to serve for
three-year term, until the Annual Meeting in 2002, and until their respective
successors are duly elected and qualified.
Proposal 2: 1999 Stock Option Plan. To vote against the approval of the
1999 Stock Option Plan.
Proposal 3: Independent Auditors: To approve the appointment by the
Board of Directors of Ernst & Young LLP, certified public accountants, as
independent auditors of the Company for the fiscal year ending December 31,
1999.
Proposed Election of Directors and Information about Nominees.
Blosch & Holmes proposes that the Blosch & Holmes Nominees - Kirk
Blosch, Jeff W. Holmes and Ronald Marusiak - be elected instead of the
Designated Nominees. The Blosch & Holmes Nominees have expressed their
willingness to serve on the Board if elected and have provided the information
set forth below for inclusion in this Proxy Statement.
Kirk Blosch, age 43, has been a general partner in the partnership of
Blosch & Holmes, a business consulting and private venture funding general
partnership since 1984. For the past fifteen years. Mr. Blosch has been an
advisor for various public and private companies. During
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1995 and 1996, Mr. Blosch provided bridge financing for private companies prior
to their initial offerings. Mr. Blosch graduated from the University of Utah
with a Bachelors Degree in Speech Communications in 1977.
Jeff W. Holmes, age 46, has been the manager of J.W. Holmes and
Associates, a private investment firm located in Scottsdale, Arizona since 1997.
Mr. Holmes is also manager of the Scottsdale Equity Growth Fund, a private
investment fund specializing in technology companies. For the past 15 years, Mr.
Holmes has acted as a business consultant to various public and private
companies. Mr. Holmes has been a general partner in the partnership of Blosch
and Holmes since 1984.
Ronald Marusiak, age 50, has been the Division President of
Micro-Tronics, Inc. since 1986. He is also the Plan Administrator for the
Company Profit Sharing Plan since 1983 (assets in excess of $6 million). Mr.
Marusiak currently director for Mobile Mini, Inc., a company listed on the
Nasdaq National Market System, and FiestaNet Communications, Inc.
Mr. Marusiak graduated from the United States Air Force Academy in 1971
serving on active duty in the Air Force as a fighter pilot and staff officer
until 1981. He joined Micro- Tronics, Inc. in 1981 as the vice-president. He
concurrently was a member of the Arizona Air National Guard until retiring in
1997 as the Director of Logistics, Headquarters Arizona National Guard in rank
of Lt. Col. He has served as a director and treasurer of the Arizona Chapter of
the National Tooling Association since 1994 and has been on the advisory boards
of several small computer companies since 1992. Mr. Marusiak beneficially owns
17,600 shares of the Company's Common Stock.
PROXY SOLICITATION
PROPOSAL 1: ELECTION OF DIRECTORS
Blosch & Holmes requests that you vote for the election of the Blosch &
Holmes Nominees: Kirk Blosch, Jeff W. Holmes and Ronald Marusiak as the three
directors who are part of the class to be elected at the Annual Meeting, and to
hold office until their term expires at the 2002 Annual Meeting of Stockholders
and thereafter until his/her successor is elected and qualified. Blosch & Holmes
proposes to nominate and elect three directors.
Vote Required.
Directors are elected by a plurality of the votes cast at the Annual
Meeting. Accordingly the Nominees receiving the highest number of votes from the
holders of shares of Common
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Stock represented at the Annual Meeting will be elected to serve on the Board.
Abstentions and Board non-votes will have no effect on the election of
Directors.
BLOSCH & HOLMES URGES YOU TO VOTE "FOR"
THE BLOSCH & HOLMES NOMINEES.
PROPOSAL 2: TO REJECT THE 1999 STOCK OPTION PLAN
Blosch & Holmes is asking for your support to reject the 1999 Stock
Option Plan because the members of management have been granted options under
Plan with exercise prices of $5.00 per share. Management does not deserve such
options based on its performance. Management's Proxy Statement contains more
information about the 1999 Stock Option Plan and why management proposes it.
Vote required.
The affirmative vote of the holders of the majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting is required to
approve the 1999 Stock Option Plan.
BLOSCH & HOLMES RECOMMENDS A VOTE "AGAINST"
THE 1999 STOCK OPTION PLAN
PROPOSAL 3: APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
Management has proposed and Blosch & Holmes favors the appointment of
Ernst & Young, LLP as the Company's independent auditors. More information about
this proposal is provided in management's Proxy Statement.
Required the affirmative vote of the majority votes represented in
person or by proxy and cast at the Annual Meeting is required to approve this
proposal.
BLOSCH & HOLMES RECOMMENDS A VOTE "FOR"
THE APPOINTMENT OF ERNST & YOUNG LLP
None of the Blosch & Holmes Nominees, or any of their associates, is a
party, or has material interest, adverse to the Company or any of its
subsidiaries in any material proceedings. None of the Blosch & Holmes Nominees,
or any of their associates, has been awarded, earned or been paid any form of
compensation for services rendered to the Company and its subsidiaries, except
as set forth below:
Kirk Blosch has received $625 per Board of Directors meeting attended,
$125 per hour for any special meetings attended and $250 for attendance at the
Annual Meeting of Stockholders
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and options to purchase 10,000 shares of Common Stock not currently exercisable
and will not become exercisable within 60 days.
On April 15, 1997, the Company entered into a consulting contract with
DMG Advisors, LLC, a Nevada limited liability company ("DMG"). Kirk Blosch and
Jeff W. Holmes, two of the Company's principal shareholders, are members and
managers of DMG. Under the consulting contract, the Company paid an initial fee
of $50,000 and paid $10,000 per month through April 15, 1999 in exchange for the
consulting services of DMG in the nature of strategic planning, public
relations, advice regarding financings and the indemnification and evaluation of
potential acquisitions of new products or companies. The Company is also
obligated to pay reasonable business expenses incurred by DMG.
Each of the Blosch & Holmes Nominees will receive director's fees upon
his election as a director of the Company in accordance with the Company's
current practice. Except as set forth above and elsewhere in this Proxy
Statement, none of the Blosch & Holmes Nominees has had a material direct or
indirect interest in any transactions since January 1, 1998, or has any such
interest in any currently proposed transaction or series of similar transactions
to which the Company or any subsidiary, is or is to be a party, in which the
amount involved exceeds $60,000.
VOTING SECURITIES OUTSTANDING
Based solely on publicly available information concerning the Company,
on April 15, 1999, there were 3,418,876 shares of Common Stock outstanding. Each
share of Common Stock entitles its recordholder to one vote.
As of May 12, 1999, members of Blosch & Holmes beneficially owned an
aggregate of 500,000 shares of Common Stock, representing approximately 14.6% of
the voting power of the outstanding Common Stock, based on the number of
outstanding shares set forth in the preceding paragraph. As of May 12, 1999,
members of the Blosch & Holmes and its affiliates beneficially owned shares of
Common Stock as set forth below in the table. It is important to note that, as
required by applicable securities laws, the number (and percentage) of shares of
Common Stock which may be acquired upon the exercise within sixty (60) days of
options are deemed to be owned by such stockholder. As a result the table
includes 300,000 options to acquire Common Stock. The shares subject to these
options may not be voted unless the options are exercised.
NAME AND ADDRESS OF COMMON STOCK (2)
BENEFICIAL OWNER (1)
NUMBER OF SHARES PERCENT OF CLASS
Blosch and Holmes LLC (1) 250,000 7.6%
2081 South Lake Line Drive
Salt Lake City, Utah 84109
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Kirk Blosch (2) 550,000 14.8%
Jeff W. Holmes (3) 550,000 14.8%
(1) Unless otherwise noted, all persons named in the table have sole voting
and investment power with respect to all shares of Common Stock
beneficially owned by them. Includes 250,000 shares of Common Stock
held by Bosch & Holmes of which Messrs. Blosch and Holmes are
principals (and which 250,000 shares are also reported as beneficially
owned by Mr. Holmes and Mr. Blosch). The address for Blosch & Holmes is
2081 S. Lakeline Drive, Salt Lake City, Utah 84109.
(2) Includes 125,000 shares of Common Stock held directly by Mr. Blosch,
175,000 shares of Common Stock issuable upon exercise of warrants that
are currently exercisable or will become exercisable within 60 days,
and 250,000 shares of Common Stock held by Blosch & Holmes, of which
Mr. Blosch is a principal (and which 250,000 shares are also reported a
beneficially owned by Mr. Holmes and Blosch & Holmes). Excludes 10,000
shares of Common Stock issuable upon exercise of options held by Mr.
Blosch that are not currently exercisable and will not become excisable
within 60 days. Mr. Blosch's address is 2091 S. Lakeline Drive, Salt
Lake City, Utah 84109.
(3) Includes 125,000 shares of Common Stock held directly by Mr. Holmes,
175,000 shares of Common Stock issuable upon exercise of warrants that
are currently exercisable or will become exercisable within 60 days,
and 250,000 shares of Common Stock held by Blosch & Holmes, of which
Mr. Holmes is a principal (and which 250,000 shares are also reported
as beneficially owned by Mr. Blosch and Blosch & Holmes). Mr. Holmes'
address is 8555 E. Voltaire Ave., Scottsdale, Arizona 85260.
Please see "Security Ownership of Certain Beneficial Owners and
Management" in Management's Proxy Statement for such information respecting
beneficial owners and directors and officers of the Company.
PROXY PROCEDURE
Record Date
The Board of the Company has set the record date (the "Proxy Record
Date") for the Annual Meeting at the close of business as April 15, 1999.
Pursuant to publicly available information concerning the Company, on April 15,
1999, there were 3,418,876 shares of Common Stock outstanding. Each share of
Common Stock outstanding on the Proxy Record Date is entitled to one vote.
Cumulative voting of the election of directors of the Company is not
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permitted. Even if you are not sure as to your eligibility to vote at the Annual
Meeting, we urge you to complete the enclosed [COLOR] Proxy Card so that your
shares will be voted if eligible.
The persons named in the accompanying [COLOR] Proxy Card will vote
properly execute and duly returned proxies in favor of the election of the
Blosch & Holmes Nominees and in favor of proposal 3 and against proposal 2
unless marked to the contrary.
Revocation
Any stockholder who has given a proxy with respect to the Company may
revoke it at any time before it is exercised by voting in person at the Annual
Meeting, by filing with the Secretary of the Company a written notice of
revocation prior to the voting of such proxy, or by submitting a later dated
proxy at any time before the vote is taken. Accordingly, you may revoke any
proxy you have previously given the Board of the Company by signing and dating
the enclosed [COLOR] Proxy Card and returning it as indicated herein. The proxy
contained in the enclosed [COLOR] Proxy Card may also be revoked in the manner
described above.
Voting Rights
At the Annual Meeting, nominees for director receiving the highest
number of votes cast by holders of shares of Common Stock represented and voting
at the Annual Meeting will be elected to the Board. The affirmative vote of a
majority of the votes cast at the Annual Meeting is required to reject the
approval of the 1999 Stock Option Plan and to approve the appointment of Ernst &
Young LLP. Blosch & Holmes understands that action with respect to the other
proposals described above requires the affirmative vote of holders of Common
Stock entitled to cast a majority of the total votes required to be cast by the
outstanding Common Stock at the Annual Meeting.
Solicitation of Proxies and Consents
Solicitation of Proxies will be made by Blosch & Holmes. Proxies will
be solicited by mail, express mail, telephone or telecopier, e-mail, and in
person. No such persons will receive any additional compensation for such
solicitation.
Brokers, custodians, nominees and fiduciaries will be requested to
forward solicitation material to beneficial owners of the Common Stock. Blosch &
Holmes and its affiliates will reimburse brokers, custodians, nominees and
fiduciaries for their reasonable expenses for sending solicitation material to
the beneficial owners of Common Stock.
Subject to the following paragraph, the cost of solicitation will be
borne by Blosch & Holmes and its affiliates in a manner to be determined. The
anticipated cost of the solicitation is estimated to be approximately $10,000.
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<PAGE>
IMPORTANT
YOUR VOTE IS IMPORTANT. PLEASE MARK, SIGN AND DATE BOTH THE ENCLOSED
[COLOR] PROXY CARD AND MAIL IT IN THE ENCLOSED ENVELOPE PROMPTLY.
IF YOU HAVE ALREADY SIGNED THE PROXY CARD SENT TO YOU BY THE BOARD OF
DIRECTORS OF THE COMPANY, YOU CAN REVOKE SUCH PROXY BY SIGNING AND DATING THE
ENCLOSED [COLOR] PROXY CARD AND RETURNING THE CARD TO BLOSCH & HOLMES. ONLY YOUR
LATEST DATED PROXY WILL COUNT AT THE ANNUAL MEETING.
If your shares of Common Stock are held in the name of a brokerage
firm, bank nominee or other institution, only it can sign a Proxy with respect
to your shares. Accordingly, please contact the person responsible for your
account and give instructions for a Proxy to be signed representing your shares.
IF YOU HAVE ANY QUESTIONS REGARDING THIS JOINT PROXY AND CONSENT
STATEMENT OR THE EXECUTION OF YOUR PROXY, PLEASE CONTACT:
Blosch and Holmes LLC
8800 North Gainey Ranch Dr.
Suite 256
Scottsdale, AZ 85258
Telephone: (602) 443-0851 (call collect)
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<PAGE>
PRELIMINARY COPIES
ZEVEX INTERNATIONAL, INC.
SOLICITED ON BEHALF OF BLOSCH AND HOLMES LLC
IN OPPOSITION TO THE BOARD OF DIRECTORS
The undersigned hereby appoints Jeff W. Holmes and Gregg Holmes, or
either of them, (with full power to act without the other and with power to
appoint his substitute) as the undersigned's proxies to vote all shares of
Common Stock of the undersigned in ZEVEX INTERNATIONAL, INC., a Delaware
corporation (the "Company"), which the undersigned would be entitled to vote at
the Annual Meeting of Stockholders of the Company to be held at the Company's
corporate offices located at 4314 Zevex Park Lane (670 West), Salt Lake City,
Utah, on June 2, 1999, at 3:00 p.m., local time, and at any and all adjournments
or postponements thereof, in the manner indicated below and on the reverse side
hereof.
The undersigned hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders to be held on June 2, 1999 and the Proxy Statement of
the Company, each dated _________, 1999, the Company's Annual Report for the
fiscal year ended December 31, 1998, and the Proxy Statement of Blosch & Holmes
dated ______________, 1999.
The undersigned hereby revokes any proxy to vote shares of Common Stock
of the Company heretofore given by the undersigned.
Please complete, sign on the reverse side and return promptly in the
enclosed envelope.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE INSTRUCTIONS SET FORTH BELOW AND ON THE REVERSE SIDE HEREOF.
IN THE ABSENCE OF ANY INSTRUCTIONS, SUCH SHARES WILL BE VOTED "FOR" THE ELECTION
OF ALL NOMINEES LISTED IN PROPOSAL 1, "AGAINST" THE APPROVAL OF PROPOSAL 2 AND
"FOR" PROPOSAL 3.
1. ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to the contrary
below)
[ ] WITHHOLD AUTHORITY to vote below:
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
Nominees: Kirk Blosch, Jeff W. Holmes and Ronald Marusiak.
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<PAGE>
2. Proposal to Approve 1999 Stock Option Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment by the Board of Directors of Ernst &
Young LLP, certified public accountant as independent auditors for the
year ended December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion such other business as may properly come before the
meeting and any and all adjournments and postponements thereof.
Dated:
Signature
Signature, if held jointly
Tile (if applicable)
Please date and sign exactly as names appear on the proxy card, and
promptly return in the enclosed envelope. When signing as guardian,
executor, administrator, attorney, trustee, custodian, or in any other
similar capacity, please give full title. If a corporation, sign in
full corporate name by president or other authorized officer, giving
title, and affix corporate seal. If a partnership, sign in partnership
name by authorized person. In the case of joint ownership, each joint
owner must sign.
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