SEC File No. 0-18995
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 240.14a-11(c) or 240.14a-12
INTERLINE RESOURCES CORPORATION
(Name of Registrant as Specified In Its Charter)
INTERLINE RESOURCES CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which
transaction applies: 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
[ ] 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
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
<PAGE>
INTERLINE RESOURCES CORPORATION
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
To Be Held June 21, 1996
TO THE SHAREHOLDERS OF INTERLINE RESOURCES CORPORATION:
The Annual Meeting of the Shareholders of Interline
Resources Corporation (the "Company") will be held at 160 West
Canyon Crest Road, Alpine, Utah, on June 21, 1996, at 2:00 p.m.
local time, for the following purposes:
1. To elect five (5) directors each to serve until the
1997 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 or adjournments thereof.
The Board of Directors has fixed the close of business on
May 17, 1996 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting and
any adjournments thereof.
By Order of the Board of Directors
/s/ Michael R. Williams
Chief Executive Officer
Alpine, Utah
May 24, 1996
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 has returned a proxy.
<PAGE>
INTERLINE RESOURCES CORPORATION
160 West Canyon Crest Road
Alpine, UT 84004
____________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
____________
To Be Held June 21, 1996
This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of Interline
Resources Corporation, a Utah corporation, (the "Company") to be
voted at the Annual Meeting of Shareholders to be held June 21,
1996 and at any adjournment(s) thereof. The Annual Meeting of
Shareholders (the "Meeting") will be held at the Company's
offices at 160 West Canyon Crest Road, Alpine, Utah 84004 at 2:00
p.m. local time. This Proxy Statement, the Notice of Annual
Meeting of Shareholders and the Proxy were first sent or given to
the Company's shareholders on or about May 24, 1996.
The sole matter to come before the Meeting is the election
of five (5) directors to the Board of Directors to serve until
the 1997 Annual Meeting of Shareholders and thereafter until
their successors are elected and are qualified.
RECORD DATE AND VOTING SECURITIES
The securities of the Company entitled to vote at the
Meeting consist of shares of the Company's common stock, $.005
par value. Only shareholders of record at the close of business
on May 17, 1996, 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 13,951,052 shares of common
stock. See "Principal Shareholders and Security Ownership of
Management" for information concerning beneficial ownership of
the Company's stock.
Assuming a quorum is present, the five (5) nominees
receiving the greatest number of votes cast by the holders of the
common stock will be elected as directors. There will be no
cumulative voting in the election of directors.
Abstentions are 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, on matters requiring a minimum number of
votes for approval (but not the election of directors) 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 considered not entitled to vote on that
matter and, thus, 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 for the nominees for election as directors of the
Company listed below.
REVOCABILITY OF PROXIES
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.
GENERAL INFORMATION ABOUT THE COMPANY
The Company is a Utah corporation with its principal and
executive offices located at 160 West Canyon Crest Road, Alpine,
Utah 84004 (801) 756-3031. Interline Resources Corporation (the
"Company"), a Utah corporation, is engaged in three (3) areas of
business: contaminated oil refining, oil and gas operations and
industrial and commercial construction. During 1995, the Company
formed three (3) separate subsidiaries to operate the three (3)
different areas of business. Interline Hydrocarbon Inc., a
Wyoming corporation, is the subsidiary that owns the used oil
refining technology. Interline Energy Services Inc., a Wyoming
corporation, manages the oil and gas operations in Utah and
Wyoming. Gagon Mechanical, a Utah corporation, participates in
three (3) areas of construction: industrial, commercial and
manufacturing.
The Company has invested substantial resources
commercializing a used oil refining technology and has signed
licensing or joint venture agreements with Genesis Petroleum (a
subsidiary of Quaker State), Gadgil Western Corporation of India,
Whelan Environmental Services of England and Dukeun Industrial
Company of South Korea.
The Company's main oil and gas operations consist of natural
gas gathering, natural gas processing and oil well production.
The central areas of business are conducted at its Well Draw Gas
Plant located near Douglas, Wyoming; the Monument Butte Gathering
system located near Roosevelt, Utah; and the Roseland Wells, also
located within the Monument Butte area.
The Company is also engaged in the construction industry
through its wholly owned Gagon Mechanical Contractors Subsidiary.
Gagon provides expertise and resources necessary for the
construction of refineries sold by the Company. The subsidiary
specializes in industrial and commercial construction of
mechanical systems, such as heating, air conditioning, process
piping and plumbing.
The total revenues, total assets and total stockholders'
equity for the past five (5) years are as follows:
Year Total Revenues Total Assets Stockholders'
Equity
1995 $20,405,802 $18,279,147 $7,983,626
1994 $11,091,172 $13,931,218 $7,115,740
1993 $9,740,815 $9,404,667 $4,597,094
1992 $8,489,768 $4,603,980 $2,424,653
1991 $5,475,017 $4,277,247 $1,436,670
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 May 17,
1996 by each director and nominee for director, each of the
executive officers, all officers and directors as a group and
each person known by the Company to beneficially own 5% or more
of the outstanding shares of the Company's common stock:
Name and Address Percentage
of Beneficial Owner Shares Owned(1) Owned
Michael R. Williams(2)(3) 3,306,363 22%
160 W. Canyon Crest Rd.
Alpine, UT 84004
Maurice D. Sabbah(2)(4) 2,370,416 16%
c/o 461 Fifth Avenue
New York, NY
Freddy H. Robinson(2)(5) 0 0%
P.O. Box 19608
Greensboro, NC 27419
Alan Gressel(2) 0 0%
2777 Broadway Ave.
Cleveland, OH 44115
R. LaMar Gagon(2)(6) 291,312 2%
8531 South 700 West
Sandy, UT 84070
Gearle D. Brooks(7) 981,294 7%
8531 South 700 West
Sandy, UT 84070
All Officers and Directors 5,724,001 25%
as a Group (4 persons)
Total Shares Issued and 14,843,469 39%
Outstanding(1)
(1) As of May 17, 1996 there were 13,951,052 shares of the
Company's common stock issued and outstanding. Under the
rules of the Securities and Exchange Commission, for
purposes of calculating the beneficial ownership of shares
of the Company's common stock by any person, all shares
issuable to that person upon the exercise of options,
warrants and conversion rights (if they are exercisable
within sixty days) are deemed to be issued and outstanding.
(2) These individuals are the officers and directors of the
Company.
(3) Mr. Williams is the Company's Chief Executive Officer.
The number of shares indicated as owned by Mr. Williams
includes 2,911,198 beneficially owned, 15,165 owned by his
minor children and 380,500 shares issuable upon the exercise
of currently exercisable options. Mr. Williams has an
agreement with Maurice D. Sabbah pursuant to which he has
agreed to vote all shares to which he has voting power in
favor of the election of Mr. Sabbah and Freddy H. Robinson
as directors of the Company. See "Certain Relationships and
Related Transactions."
(4) Includes 2,052,666 shares which are owned directly by
Mr. Sabbah and 67,750 shares which may be issued upon the
conversion of an outstanding debt instrument and 250,000
shares issuable upon exercise of a warrant issued by the
Company. The number of shares indicated excludes 29,000
shares owned by Mr. Sabbah's daughter and 25,000 shares
owned by Mr. Sabbah's wife, as to both of which Mr. Sabbah
disclaims beneficial ownership, and any shares issuable upon
conversion of an aggregate of $4,000,000 of debt instruments
issued by the Company which are not convertible within the
next sixty days. Also excluded are shares owned by Michael
R. Williams which are subject to an agreement with Mr.
Sabbah relating to voting. See "Certain Relationships and
Related Transactions." In addition, Mr. Williams' shares
securing a loan by Mr. Sabbah to Mr. Williams (and interest
thereon which may be payable in shares at Mr. Sabbah's
option) are excluded.
(5) Mr. Robinson's wife owns 1,000 shares. Mr. Robinson
disclaims any beneficial ownership of these shares.
(6) Includes 252,145 shares owned directly by Mr. Gagon and
39,167 shares issuable upon the exercise of currently
exercisable stock options. Mr. Gagon is president of a
subsidiary of the Company.
(7) The number of shares indicated as owned by Mr. Brooks
includes 818,794 owned directly by Mr. Brooks and 162,500
shares issuable upon the exercise of a currently exercisable
stock option.
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
A board of five (5) directors is to be elected at the
Meeting. Unless otherwise instructed, the proxy holders will
vote the proxies received by them for the Company's nominees
named below. In the event that any nominee of the Company is
unable or declines to serve as a director at the time of the
Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy.
It is not expected that any nominee will be unable or will
decline to serve as a director. The term of office of each
person elected as a director will continue until the next Annual
Meeting of Shareholders or until a successor has been elected and
qualified.
The following table sets forth for each nominee for election
as a director his name, all positions with the Corporation held
by him, his principal occupation, his age and the year in which
he first became a director of the Corporation.
Nominees Principal Occupation
Michael R. Williams: Age 45; Director Since 1990
Mr. Williams has been an officer
and director of the Company since October 1990.
He was also president, founder and majority owner
of Interline Natural Gas, a privately-held
company acquired by the Company. From 1981 to
1985, Mr. Williams was employed by Quest Energy
Corporation as the director of limited partnership
drilling funds and was also involved in developing
gas markets and negotiating gas sales and purchase
agreements. Mr. Williams received his Bachelor of
Arts degree in Business Management from Brigham
Young University in 1975.
R. LaMar Gagon: Age 51; Director Since 1994
Mr. Gagon is vice president and
founder of the Sandy, Utah based Gagon Mechanical
Contractors Incorporated. Gagon is a multi-million
dollar industrial/commercial construction company
and builds and provides mechanical services to the
construction, refinery, mining, government,
military and aerospace industries. His
responsibilities include financial management,
project bidding, negotiations, field operations
and design. He studied mechanical engineering at
Brigham Young University, after graduating from
Utah Technical College.
Maurice D. Sabbah: Age 67; Director Since 1996
Mr. Sabbah is Chairman of the Board
and Chief Executive Officer of Fortress RE, a
reinsurance underwriting manager.
Freddy H. Robinson: Age 43; Director Since 1996
Mr. Robinson is Managing
Partner of Bernard Robinson & Company, LLP, a
certified public accounting firm.
Alan Gressel; Age 66: Director Since 1996
Mr. Gressel is president of
Research Oil Company, a company involved in the
collection and disposal of oils and hazardous
wastes. Mr. Gressel has served as president of the
National Oil Recyclers Association (NORA). He
received his Bachelor of Science in Mathematics
(Magna Cum Laude) at John Carroll University and
conducted graduate work at Case Western Reserve
University.
Committees and Meetings
The Board of Directors held five meetings during the last
fiscal year. Mr. Williams and Mr. Gagon were directors of the
Company during all of the last fiscal year and the number of
Board Meetings attended by each of them is as follows: Michael R.
Williams- five meetings and R. LaMar Gagon- five meetings. The
Board of Directors also took various actions through unanimous
written consent in lieu of meetings of directors. Mr. Sabbah and
Mr. Robinson and Mr. Gressel were appointed directors on May 15,
1996.
The Board of Directors presently has no standing audit,
compensation or nominating committee.
Executive Compensation
The following table sets forth the aggregate cash
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 $100,000:
<TABLE>
SUMMARY COMPENSATION TABLE
Long -Term Compensation
Annual Compensation Awards Payouts
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Annual Restrict Option/ LTIP Other
Name and ($) ($) Compen- Stock SAR's Payouts Compensa-
Principal Year Salary Bonus sation($) Awards($) (#) ($) tion($)
Position
Michael R. 1995 $198,000 $-0- $-0- $-0- 7,500(1) $-0- $-0-
Williams 1994 $168,000 $-0- $-0- $-0- 7,500(1) $-0- $-0-
President, CEO 1993 $168,000 $-0- $-0- $-0- 357,000(1) $-0- $-0-
Chairman
LaMar Gagon 1995 $100,000 $-0- $-0- $-0- 24,167(2) $-0- $-0-
Director/ 1994 $100,000 $-0- $-0- $-0- 7,500 $-0- $-0-
President, Gagon 1993 $-0- $-0- $-0- $-0- -0- $-0- $-0-
</TABLE>
(1) In August 1993, Mr. Williams was granted an option to
purchase 357,500 shares of common stock at a price of
$1.08125 per share which was the estimated market price at
the time of grant. The option was approved by the Company's
shareholders on May 10, 1994. The option was not
exercisable until the expiration of six months from the date
of shareholder approval. In February 1994, Mr. Williams was
granted an option to purchase 7,500 shares of the Company's
common stock at a price of $5.65 per share which was the
estimated market price at the time of grant. The option was
issued pursuant to the Company's 1994 Officer and Director
Stock Option Plan and was approved by the Company's
shareholders on May 10, 1994. The option was not
exercisable until the expiration of six months from the date
of shareholder approval. According to the Plan approved by
Shareholders, another option to purchase 7,500 shares of
common stock was granted March 1, 1995 at $4.50 per share.
(2) In February 1994, Mr. Gagon was granted an option to
purchase 7,500 shares of common stock at a price of $5.65
per share which was the estimated market price at the time
of grant. The option was issued pursuant to the Company's
1994 Officer and Director Stock Option Plan and was approved
by the Company's shareholders on May 10, 1994. The option
was not exercisable until the expiration of six months from
the date of shareholder approval. According to the Plan,
Mr. Gagon was granted another option to purchase 7,500
shares of common stock on March 1, 1995 at a price of $4.50
per share. Mr. Gagon was granted an option to purchase
16,667 shares of common stock at $4.50 per share pursuant to
a stock option grant approved by shareholders on June 15,
1995.
The Company provides health and life insurance to its
employees, including its officers and directors.
Stock Options Granted During 1995
The following table provides information on grants of stock
options during 1995 to the persons named in the Summary
Compensation Table above.
<TABLE>
OPTION GRANTS IN 1995
Individual
Grants
<CAPTION>
<S> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
% of Total
Options Exercise
Options Granted to or Base
Granted Employees Price Expiration
Name (#) in ($/Sh.) Date
Fiscal
Year
LaMar Gagon 24,167 16.38% $4.50 2/24/00
Michael R. 7,500 5.08% $4.50 2/24/00
Williams
</TABLE>
Option Values at December 31, 1995
No options were exercised during 1995 by the persons named
in the Summary Compensation Table. The following table provides
information on the unexercised options at December 31, 1995
owned by the persons named in the Summary Compensation Table
above.
<TABLE>
AGGREGATE OPTION EXERCISED IN 1995
AND YEAR END 1995 OPTION VALUES
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e)
Number of Unexercised Value of Unexercised
Shares Options at Year In-the-money Options
Acquired on Value End 1995 (#) at Year End 1995 ($)(1)
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Michael R. Williams -0- -0- 372,500(2) -0- $1,165,364 -0-
LaMar Gagon -0- -0- 31,667(3) -0- $-0- -0-
</TABLE>
(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 December 31, 1995 exceeded 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 American
Stock Exchange Emerging Company Marketplace on December 31,
1995 ($4.375).
(2) A total of 357,500 of these options were granted in
August 1993, 7,500 were granted in February 1994 and another
7,500 were granted in March 1995 pursuant to the 1994
Officer and Directors Stock Option Plan.
(3) 7,500 were granted in February 1994 and another 7,500
were granted March 1995 under the Company's 1994 Officer and
Director Stock Option Plan. The remaining 16,667 were
granted according to an option grant approved by
shareholders on June 15, 1995.
Employment Agreements
The Company has no written employment agreement with any
officers or directors. Michael R. Williams is paid a monthly
salary of $16,500 by the Company. R. LaMar Gagon, a director of
the Company and the president of Gagon Mechanical Contractors,
is paid a monthly salary of $8,333.
Compensation of Directors
The Company's directors receive no compensation for Board of
Directors Meetings attended.
Certain Relationships and Related Transactions
In connection with the Company's purchase of its corporate
offices in Alpine, Utah in 1992, Michael R. Williams executed a
personal and individual guarantee agreement for the $250,000 SBA
504 portion of the long-term financing, and Michael R. Williams,
Timothy G. Williams and Gearle D. Brooks executed guarantees as
individual guarantors of the commercial bank's $562,000 first
mortgage.
Effective December 31, 1993, the Company acquired Gagon
Mechanical Contractors, Inc., a Utah corporation owned by R.
LaMar Gagon, a director of the Company, and his brother. The
Company issued 200,000 shares of its common stock to the two
shareholders of Gagon Mechanical Contractors, Inc. in exchange
for all of the issued and outstanding shares thereof. Gagon
Mechanical Contractors, Inc. is operated as a wholly owned
subsidiary of the Company.
During 1993, the Company borrowed funds from officers'
Michael R. Williams, Timothy G. Williams and Gearle D. Brooks.
These loans accrued interest at the rate of 6% per annum and
were unsecured. The amounts of such loans made by each lender
and the amount due and owed by the Company as of December 31,
1995 was as follows:
Total Amount Unpaid as of
Lender of Loans 12/31/95
Michael R. Williams $89,519 $ -0-
Timothy G. Williams* $19,000 $9,000
Gearle D. Brooks* $79,985 $48,358
*Mr. Williams and Mr. Brooks are not currently officers or
directors of the Company.
As part of the merger with Interline Natural Gas, the
Company issued a total of $300,000 in long-term notes to the
shareholders of Interline Natural Gas. The amounts of such
notes issued to each shareholder lender and the amount due and
owed by the Company as of December 31, 1995 was as follows:
Total Amount Unpaid as of
Shareholder of Notes 12/31/95
Michael R. Williams $165,000 $ -0-
Timothy G. Williams $ 60,000 $ -0-
Gearle D. Brooks $ 75,000 $64,843
On October 28, 1994, Maurice D. Sabbah and the Company
entered into a Common Stock Purchase and Sale Agreement pursuant
to which Mr. Sabbah purchased 666,666 shares of common stock of
the Company for an aggregate purchase price of $3,000,000.
Pursuant to this agreement, Mr. Sabbah has certain rights to
require the Company to register his shares under the federal
securities laws and his consent is required for certain actions
by the Company, including the issuance of common stock or
options not meeting the conditions set forth in the agreement.
On June 30, 1994, Mr. Sabbah purchased a $250,000 10% Senior
Convertible Note from the Company for $250,000. The Note is
convertible at any time in whole, but not in part, at Mr.
Sabbah's option, into 67, 750 shares of the common stock of the
Company.
On February 29, 1996, Mr. Sabbah loaned the Company
$1,500,000. The loan is evidenced by a 6% Senior Secured Note
due August 29, 1996. If there is a default under the 6% Senior
Secured Note, then the principal can be converted, at Mr.
Sabbah's option, into shares of the Company's common stock at
the price of the lesser of $3.20 per share or 80% of the average
closing price for the Company's shares for the five consecutive
trading days preceding the date of conversion. The note is
secured by all of the issued and outstanding stock of certain
subsidiaries of the Company, including Interline Energy Services
and Gagon Mechanical Contractors.
Also on February 29, 1996, Mr. Sabbah agreed to extend the
maturity dated of the $250,000 10% Senior Convertible Note from
due June 30, 1996 was extended until August 29, 1996.
On May 15, 1996, the Company and Mr. Sabbah entered into a
Note and Warrant Purchase Agreement. Pursuant to this Agreement,
Mr. Sabbah agreed to lend up to $2,500,000 to the Company. These
loans will be evidenced by a 9 1/4% Senior Secured Note due
January 15, 1998. Mr. Sabbah will have the right, but not the
obligation, to convert all or a portion of the unpaid principal
amount of this Note at any time after (i) August 15, 1996 and
prior to December 31, 1996 or (ii) the occurrence of an event of
default under the Note into shares of common stock of the
Company at a price equal to the lesser of (a) $3.12 per Share or
(b) 80% of the average closing price of the Shares for the five
trading days preceding the election to convert all or a portion
of the loan. The loans are secured by the stock of certain
subsidiaries of the Company, including Interline Energy Services
and Gagon Mechanical Contractors.
Pursuant to the Note and Warrant Purchase Agreement, the
Company issued to Mr. Sabbah a warrant to purchase an aggregate
of 250,000 shares of common stock of the Company at a purchase
price of $3.90 per Share, at any time or from time to time until
December 31, 1999. The per share is subject to customary anti-
dilution adjustments.
At the time the Note and Warrant Purchase Agreement was
executed, the Company also entered into an agreement with Mr.
Sabbah pursuant to which the Company agreed to (i) change the
size of its Board of Directors to five, (ii) to secure the
resignations of two of the then members of the Board and (iii)
to appoint Mr. Sabbah and Freddy H. Robinson to the Board
immediately and, within ninety days, to appoint to the Board
another person designated by the Filing Person who is reasonably
acceptable to the Company (collectively, the "Designees").
In addition, Mr. Sabbah entered into an agreement with
Michael R. Williams, President of the Company, pursuant to which
Mr. Williams agreed to vote all shares of common stock of the
Company he owns or has the power to vote in favor of the
election of the Designees at any annual or special meeting of
stockholders of the Company and not to vote or execute a written
consent in favor of the removal of the Designees or to agree to
a change in the size of the Company's Board of Directors. This
agreement terminates upon the earlier of the termination of the
Note and Warrant Purchase Agreement and August 1, 1999.
RECOMMENDATION OF BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR all of the
above-listed nominees for directors.
PROPOSAL 2: RATIFICATION AND APPROVAL OF 1995 EMPLOYEE-OFFICER
OPTION
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Tanner + Co. has served as the Company's independent auditor
since 1989. 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.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES AND EXCHANGE ACT
OF 1934
Section 16 of the Securities Exchange Act of 1934 requires
the filing of reports for sales and purchases of the Company's
common stock made by officers, directors and 10% or greater
shareholders. A Form 4 must be filed within 10 days after the
end of the calendar month in which a sale or purchase occurred.
Based upon review of Forms 4 filed with the Company, the Company
believes that all persons required to file reports under Section
16 were current on their filing.
RIGHTS OF DISSENTING SHAREHOLDERS
The matters to be considered and acted upon at the Meeting
do not create any dissenting shareholders rights under Utah
corporation law.
STOCKHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the
1997 Annual Meeting must be received by the Company by January
2, 1997 to be considered for inclusion in the proxy statement
and form of proxy relating to the 1997 Meeting.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31,
1995, is being mailed to shareholders with this Proxy Statement.
GENERAL
Management of the Company does not know of any matters other
than the foregoing that will be presented for consideration at
the meeting. However, if other matters properly come before the
meeting, it is the intention of the persons named in the
enclosed proxy to vote thereon in accordance with their
judgment.
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 solicitor
will not be engaged.
Whether or not you expect to be present at the meeting,
please sign the accompanying form of proxy and return it
promptly in the enclosed envelope.
By Order of the Board of Directors
/s/ Michael R. Williams
Michael R. Williams
President
May 24, 1996
<PAGE>
PROXY
INTERLINE RESOURCES CORPORATION
June 21, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael R. Williams, CEO and director
of Interline Resources Corporation, or any member of the Board of Directors,
with power of substitution, to represent and vote on behalf of the undersigned
all shares of common stock of Interline Resources Corporation which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on June 21, 1996, at 2:00 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).
1 ELECTION OF DIRECTORS FOR all nominees listed NO AUTHORITY
below (except as marked to vote for
to the contrary below) ___ all nominees
listed below
_____
Michael R. Williams, R. LaMar Gagon, Maurice D. Sabbah,
Alan Gressel and Freddy H. Robinson
INSTRUCTION: To withhold authority to vote for any individual nominee
write that nominee's name on the space provided below.
___________________________________________________________
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 FOR ALL PROPOSALS SET FORTH ABOVE.
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.
Dated: Signature:
Number of shares owned: Please print name clearly
