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
[ ] Confidential, for use of the Commission only as permitted
by Rule 14a-6(e)(2)
[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] No fee required.
[ ] 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
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
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 July 9, 1997
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 July 9, 1997, at 2:00 p.m.
local time, for the following purposes:
1. To elect three (3) directors each to serve until the
1998 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
April 23, 1997 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 20, 1997
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 July 9, 1997
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 July 9,
1997 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 20, 1997.
The sole matter to come before the Meeting is the election
of three (3) directors to the Board of Directors to serve until
the 1998 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 April 23, 1997, 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 14,074,160 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 three (3) 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 two areas of
business, each operating as separate subsidiaries: Interline
Hydrocarbon Inc., a Wyoming corporation, which commercializes the
Company's patented used oil refining technology; and Interline
Energy Services, Inc., a Wyoming corporation, which manages the
Company's oil and gas operations located in Wyoming.
The Company has invested substantial resources
commercializing a used oil refining technology and has signed
license agreements with companies in England, South Korea, Dubai
and Australia. The Company's first used oil refinery was
constructed in Salt Lake City, Utah, in 1996.
The Company's main oil and gas operations consist of natural
gas gathering, natural gas processing and oil well production.
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
1996 $17,011,792 $17,112,679 $3,982,544
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
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 20,
1997 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) 3,120,006 21%
160 W. Canyon Crest Rd.
Alpine, UT 84004
Mark W. Holland(2)(4) 225,065 2%
160 W. Canyon Crest Rd.
Alpine, UT 84004
Stephen P. Yeoman(2)(5) 140,523 1%
160 W. Canyon Crest Rd.
Alpine, UT 84004
Maurice D. Sabbah(6) 2,127,916 14%
c/o 461 Fifth Avenue
New York, NY
All Officers and Directors 3,485,594 24%
as a Group (3 persons)
Total Shares Issued and 14,762,493 100%
Outstanding(1)
(1) As of May 20, 1997 there were 14,074,160 shares of
the Company's common stock issued and outstanding.
Under the rules of the Securities and Exchange
Commission and for purposes of the above set forth
chart, all shares issuable to the above referenced
persons upon the exercise of options and warrants and
conversion rights are deemed to be issued and
outstanding. A total of 688,333 shares are issuable
upon currently exercisable options and debentures owned
by the persons set forth in the table above. Therefore,
for purposes of the above set forth chart, there are
deemed to be 14,762,493 shares 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 2,628,056 beneficially owned, 104,450
shares owned by his minor children and 387,500 shares
issuable upon the exercise of currently exercisable
options.
(4) Mr. Holland is Chief Financial Officer of the
Company. The number of shares indicated as owned by Mr.
Holland includes 78,399 directly owned by Mr. Holland,
and 100,000 shares given by the Company to Mr. Holland
upon being appointed a director. These 100,000 shares
have a vesting date of January 1, 1998. He also has
46,666 shares which may be issued upon the exercise of
a currently exercisable stock option.
(5) Mr. Yeoman is President of Interline Hydrocarbon, a
subsidiary of the Company. He directly owns 1,356
shares of the Company's stock, plus 100,000 shares
given by the Company to Mr. Yeoman upon being appointed
a director. These 100,000 shares have a vesting date of
January 1, 1998. He also has 31,667 shares that may be
issued upon the exercise of a currently exercisable
stock option. He received an option of an additional
7,500 shares at a price of $4.50 per share upon being
appointed a director in May 1997, according to the
Company's Officer and Director Stock Option Plan.
(6) Includes 2,052,666 shares which are owned directly
by Mr. Sabbah and 67,750 shares which may be issued
upon the conversion of outstanding debt instrument.
According to a stock option plan approved by
shareholders, he received an option of 7,500 shares at
an exercise price of $4.50 per share when he was made a
director of the Company and he received an additional
option of 7,500 shares at an exercise price of $4.50
per share on March 1, 1997. These 15,000 shares of
options expire on June 25, 1997. 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 about $5,000,000 of debt instruments
issued by the Company which are convertible into shares
of common stock because of defaults on those debt
instruments.
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
Nominees
A board of three (3) 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.
Name Age Position
Michael R. Williams 45 Chairman/CEO/President/Director
Mark W. Holland 40 CFO/Director
Stephen P. Yeoman 42 President of Interline
Hydrocarbon/Director
Background information concerning the Company's directors is
as follows:
Michael R. Williams. 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. Mr. Williams
received his Bachelor of Arts degree in Business Management from
Brigham Young University in 1975.
Mark W. Holland. Mr. Holland is the Company's Chief
Financial Officer and has been employed by the Company since
1989. He was appointed a director of the Company in May 1997. He
was also a director from March 1995 to May 1996. From 1983 to
1989, Mr. Holland was employed by Savage Industries, Inc. as an
accountant and as a Controller for the Ideal Corporation and
Cornelius Development corporation subsidiaries. Mr. Holland
received his Certified Public Accountant certification in 1989.
He received his Bachelor of Science degree in Accounting and
Business Administration from Southern Utah State College in 1983.
Stephen P. Yeoman. Mr. Yeoman has been employed by the
Company since August 1992. He was appointed director of the
Company in May 1997, and he has previously served as a director
and secretary from March 1995 to May 1996. Mr. Yeoman is
president of Interline Hydrocarbon Inc., a subsidiary of the
Company. From April 1992 to August 1992, Mr. Yeoman was an
independent consultant. From March 1988 to March 1992, Mr. Yeoman
was employed by Southern American Insurance as executive vice
president and director and by Seven Peaks Resort as a director.
In April 1992, Seven Peaks Resort filed a petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Law. In
March 1992, Southern American Insurance Company filed voluntary
liquidation with State of Utah Insurance Department.
Committees and Meetings
The Board of Directors held four meetings during the 1996
fiscal year. Mr. Williams and Mr. Gagon were directors of the
Company during all of the meetings during last fiscal year and
the number of Board Meetings attended by each of them is as
follows: Michael R. Williams- four meetings; R. LaMar Gagon- four
meetings. Mr. Holland and Mr. Yeoman were directors for one
meeting during last fiscal year and each attended that meeting as
directors. Maurice D. Sabbah, Freddy H. Robinson and Alan Gressel
were directors during the past year. Each of these three
directors attended three meetings.
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 $100,000:
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name and Annual Restrict Option/ LTIP Other
Principal ($) ($) Compen- Stock SAR's Payouts Compensation
Position Year Salary Bonus sation ($) Awards (#) ($) ($)
Michael R. 1996 $168,000 $-0- $-0- $-0- 7,500(1) $-0- $-0-
Williams 1995 $198,000 $-0- $-0- $-0- 7,500(1) $-0- $-0-
President, 1994 $168,000 $-0- $-0- $-0- 7,500(1) $-0- $-0-
CEO
Chairman
Stephen P. 1996 $100,000 $-0- $-0- $-0- 7,500(2) $-0- $-0-
Yeoman 1995 $ 95,000 $-0- $-0- $-0- 24,167(2) $-0- $-0-
Director/ 1994 $ 80,000 $-0- $-0- $-0- 0(2) $-0- $-0-
President,
Interline
Hydrocarbon
</TABLE>
(1) 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, 7,500 shares of the Company's
stock were granted March 1, 1995 and March 1, 1996 at a
price of $4.50.
(2) In February 1995, Mr. Yeoman was granted an option
to purchase 7,500 shares of common stock at a price of
$4.50 per share. The option was issued pursuant to the
Company's 1994 Officer and Director Stock Option Plan
approved by the Company's shareholders on May 10, 1994.
According to the Plan approved by shareholders, 7,500
shares were also granted March 1, 1996 at a price of
$4.50. Mr. Yeoman was granted 16,667 shares of the
Company's stock at an exercise price of $4.50 per
share, according to a stock option grant approved by
shareholders on June 15, 1995. The option was not
exercisable until the expiration of six months from the
date of shareholder approval.
The Company provides health and life insurance to its
employees, including its officers and directors.
Stock Options Granted During 1996
The following table provides information on grants of stock
options during 1996 to the persons named in the Summary
Compensation Table above.
OPTION GRANTS IN 1996
Individual
Grants
(a) (b) (c) (d) (e)
% of Total
Options Exercise
Options Granted to or Base
Granted Employees Price s Expiration
Name (#) in Fiscal Year ($/Sh) Date
Stephen P. Yeoman 7,500 14.3% $4.50 3/1/01
Michael R. Williams 7,500 14.3% $4.50 3/1/01
Option Values at December 31, 1996
No options were exercised during 1996 by the person named in
the Summary Compensation Table. The following table provides
information on the unexercised options at December 31, 1996 owned
by the people named in the Summary Compensation Table above.
<TABLE>
AGGREGATE OPTION EXERCISED IN 1996
AND YEAR-END 1996 OPTION VALUES
(a) (b) (c) (d) (e)
Number of Value of
Unexercised Unexercised
Options at In-the-Money
Year End 1996 (#) Options at
Year End 1996
($)(1)
Shares
Acquired Value
Name on Realized Exercisable Unexercisable Exercisable Unexercisable
Exercise
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Michael R. -0- -0- 380,500(2) -0- $-0- -0-
Williams
Stephen P. -0- -0- 31,667(3) -0- $-0- -0-
Yeoman
</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, 1996 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, 1996 ($0.6875).
(2) A total of 357,500 of these options were granted in August
1993 at a price of $1.08125 per share, 7,500 were granted in
February 1994 and another 7,500 each were granted in March 1995
and March 1996 at a price of $4.50 per share pursuant to the
1994 Officer and Directors Stock Option Plan.
(3) Options of 7,500 shares each were granted in March 1995
and March 1996 at a price of $4.50 per share 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 at a price of $4.50 per share.
Employment Agreements
Michael R. Williams is paid a monthly salary of $14,000 by the
Company. Stephen P. Yeoman, a director of the Company and the
president of Interline Hydrocarbon, is paid a monthly salary of
$8,333. Stephen P. Yeoman and Mark W. Holland were appointed
directors on May 16, 1997. In connection with being appointed
directors, both Mr. Yeoman and Mr. Holland were given 100,000 shares
each of the Company's common stock with a vesting date of January 1,
1998. In March 1997, Maurice Sabbah, Freddy Robinson and Alan
Gressel resigned as directors of the Company. Due to the Company's
adverse financial position and lack of Directors Liability
Insurance, the Company has not been able to attract replacement
independent directors. On May 16, 1997, Stephen P. Yeoman and Mark
W. Holland agreed to become directors of the Company and were
appointed as directors by Michael Williams, who was the sole
remaining director of the Company. As inducement for their agreement
to become directors of the Company, the Company agreed to issue Mr.
Yeoman and Mr. Holland each 100,000 shares of the Company's common
stock. Furthermore, the Company has agreed to enter into employment
agreements with them. Employment agreements have not yet been
finalized, but it is anticipated that such employment agreements
will be for a three- to four-year term, will include cash
compensation, which is equivalent to current cash compensation being
paid to Mr. Yeoman and to Mr. Holland, and will incentive stock
options or incentive stock grants.
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. 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 former 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.
was operated as a wholly owned subsidiary of the Company during 1996.
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 are unsecured. The
amounts of such loans made by each lender and the amount due and owed
by the Company as of December 31, 1996 was as follows:
Total Amount Unpaid as of
Lender of Loans 12/31/96
Michael R. Williams $89,519 $ -0-
Timothy G. Williams $19,000 $ 9,000
Gearle D. Brooks $79,985 $48,269
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 loans made by each lender
and the amount due and owed by the Company as of December 31, 1996
was as follows:
Total Amount Unpaid as of
Lender of Loans 12/31/96
Michael R. Williams $165,000 $ -0-
Timothy G. Williams $ 60,000 $ -0-
Gearle D. Brooks $ 75,000 $55,330
On May 1, 1997, the Company paid $2,200,000 toward accrued
interest and principal on the following four notes due to a related
party, Maurice D. Sabbah, who was a former director of the Company,
totaling $5,030,089. Three of the following Senior Secured notes to
a shareholder totaled $2,530,089. This amount and the associated
interest was due September 1, 1996. As a result of non payment by the
Company, the notes are currently in default. (An event of default
under another $2.5 million note (see IV) has occurred, which permits
acceleration of the Company's obligation to repay the principal and
interest.) The lender has indicated to the Company that he does not
currently intend to take remedial action against the Company.
I. During 1994, the Company issued a $250,000 senior convertible
note payable to a related party. The note bears interest at 10%
and was due on September 1, 1996. After December 31, 1994, the
note is convertible in full to 67,750 shares of the Company's
restricted common stock at the option of the note holder. As a
result of the default, the interest rate has changed to 12%.
II. On February 29, 1996 the Company obtained $1,500,000 in a 6%
senior secured note from the same related party. The obligation
was due September 1, 1996. In the event of a default on the note
the principal can be converted to shares of the Company's common
stock at the price of the lesser of $3.20 per share or 80
percent of the average closing price for the Company's shares
for the five consecutive trading days preceding the date of
conversion. The note was secured by all of the issued and
outstanding stock of two subsidiaries, Interline Energy Services
and Gagon Mechanical Contractors. As a result of the default,
the interest rate has changed to 12%.
III. On July 19, 1996, the Company obtained $780,089 in a 9.5% senior
secured note from the same related party. The obligation was due
September 1, 1996. The note is secured by the outstanding shares
of Interline Energy Services, Gagon Mechanical and Interline
Hydrocarbon. As a result of the default, the interest rate has
changed to 16%.
IV. On May 15, 1996, the Company obtained $2,500,000 in a 9.25%
senior secured note from the same related party as above. The
note is due January 15, 1998 and is secured by the outstanding
shares of Interline Energy Services and Gagon Mechanical. Upon
default, the loan may be converted into shares of the Company's
common stock at the lesser of $3.12 per share or 80 percent of
the average closing price for shares of the Company's common
stock for five consecutive trading days preceding the date of
conversion. As additional consideration for the shareholder
making the Loan to the Company, the Company has issued a Warrant
to purchase up to 250,000 shares of common stock at $3.90 per
share. As a result of the default, the interest rate has changed
to 16%.
In an effort to cure the default status on the four notes due to
a related party, the Company is seeking to restructure the note
obligations with the lender, or raise additional sums through equity
financing. There can be no assurance that this will be accomplished.
RECOMMENDATION OF BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR all of the above-
listed nominees for directors.
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 1998
Annual Meeting must be received by the Company by January 2, 1998 to
be considered for inclusion in the proxy statement and form of proxy
relating to the 1998 Meeting.
ANNUAL REPORT
The Company's Annual Report for the year ended December 31,
1996, 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 and Chairman of the Board
May 20, 1997
