<PAGE>
[FIRST SCIENTIFIC LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held November 15, 2000
The Annual Meeting of Shareholders (the "Annual Meeting") of First
Scientific Inc., a Delaware corporation (the "Company"), will be held at the
Little America Hotel and Towers, 500 South Main Street, Salt Lake City, Utah, on
Wednesday, November 15, 2000, at 2:30 p.m., local time, for the following
purposes:
1. To elect eight directors of the Company to serve until the 2001 Annual
Meeting of Shareholders or until their respective successors are elected
and qualified;
2. To ratify the appointment of Arthur Andersen LLP as the independent public
accountants for the Company for the year ending December 31, 2000; and
3. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement that is attached to and made a part
of this Notice.
The Board of Directors has fixed the close of business on September 29,
2000 as the record date for determining the shareholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend the Annual Meeting in person,
you are urged to mark, date, sign and return the enclosed proxy card as promptly
as possible in the postage-prepaid envelope provided to ensure your
representation and the presence of a quorum at the Annual Meeting. If you send
in your proxy card and then decide to attend the Annual Meeting to vote your
shares in person, you may still do so. Your proxy is revocable in accordance
with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ Randall L. Hales
Randall L. Hales
President and Chief Executive Officer
Ogden, Utah
October 4, 2000
<PAGE>
[FIRST SCIENTIFIC LOGO]
1877 West 2800 South, Suite 200
Ogden, UT 84401
PROXY STATEMENT
General
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of First Scientific Inc., a Delaware
corporation (the "Company" or "First Scientific"), of proxies in the enclosed
form for use in voting at the Annual Meeting of Shareholders (the "Annual
Meeting"), to be held at the Little America Hotel and Towers, located at 500
South Main Street, Salt Lake City, Utah, on Wednesday, November 15, 2000, at
2:30 p.m., local time, and any adjournment or postponement thereof.
This Proxy Statement, the enclosed proxy card, and the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1999, are being mailed on
or about October 5, 2000, to Shareholders entitled to vote at the meeting.
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 Company (Attention:
Secretary) a written notice of revocation or a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person.
Record Date; Voting Securities
The close of business on September 29, 2000, has been fixed as the record
date (the "Record Date") for determining the holders of shares of common stock,
par value $0.001 per share (the "Common Stock"), of the Company entitled to
notice of and to vote at the Annual Meeting. At the close of business on the
Record Date, the Company had 21,045,436 shares of Common Stock outstanding held
of record by 376 shareholders.
Voting and Solicitation
Each outstanding share of Common Stock on the Record Date is entitled to
one vote on all matters, subject to the conditions described below.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector"), with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present at the Annual Meeting. The presence of a quorum is required to
transact the business proposed to be transacted at the Annual Meeting. The
presence in person or by proxy of holders of a majority of the outstanding
shares of Common Stock entitled to vote will constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
(as defined below) will be counted for purposes of determining the presence or
absence of a quorum. Directors will be elected by a plurality of the votes cast
by the holders of the Company's Common Stock voting in person or by proxy at the
Annual Meeting. In order to be adopted, the proposal to ratify the Company's
appointment of the designated independent public accountants will require the
affirmative vote of a majority of the votes represented by the shares of Common
Stock present in person or represented by proxy at the Annual Meeting.
Abstentions will have the same practical effect as a negative vote on the
proposal to ratify the Company's appointment of the designated independent
public accountants, but will have no effect on the vote for election of
directors.
1
<PAGE>
The shares represented by the proxies received, properly marked, dated,
signed and not revoked will be voted at the Annual Meeting. Where such proxies
specify a choice with respect to any matter to be acted upon, the shares will be
voted in accordance with the specifications made. Any proxy in the enclosed form
which is returned but is not marked will be voted FOR the election of each of
the eight nominees named below and FOR ratification of the appointment of the
designated independent public accountants, and as the proxy holders deem
advisable on other matters that may come before the meeting. If a broker
indicates on the enclosed proxy or its substitute that it does not have
discretionary authority as to certain shares to vote on a particular matter
("broker non-votes"), those shares will not be considered as voting with respect
to that matter. The Company believes that the tabulation procedures to be
followed by the Inspector are consistent with the general requirements of
Delaware law concerning voting of shares and determination of a quorum.
The solicitation of proxies will be conducted by mail and the Company will
bear all attendant costs. These costs will include the expense of preparing and
mailing proxy solicitation materials for the Annual Meeting and reimbursements
paid to brokerage firms and others for their expenses incurred in forwarding
solicitation materials regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally,
telephonically or by facsimile through its officers, directors and employees,
none of whom will receive additional compensation for assisting with the
solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
At the Annual Meeting, the shareholders will elect eight directors to serve
until the 2001 Annual Meeting of Shareholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the proxies
may be voted for the balance of those nominees named and for any substitute
nominee designated by the present Board or the proxy holders to fill such
vacancy, or for the balance of the nominees named without nomination of a
substitute, or the Board may be reduced in accordance with the Bylaws of the
Company. As of the date of this Proxy Statement, the Board has no reason to
believe that any of the persons named below will be unable or unwilling to serve
as a nominee or as a director if elected.
Assuming a quorum is present, the eight nominees receiving the highest
number of affirmative votes of shares entitled to be voted for them will be
elected as directors of the Company for the ensuing year. Shareholders are not
entitled to cumulate votes in the election of directors. Unless marked
otherwise, proxies received will be voted FOR the election of each of the
nominees named below. The names of the nominees, their ages as of September 29,
2000, and certain other information about them are set forth below:
Name
Age
Randall L. Hales 33
Douglas R. Warren 66
Edward B. Walker, Ph.D. 46
Peter J. Sundwall, Jr., M.D. (1) 34
Gary L. Crittenden (2) 46
Dan C. Jorgensen (2) 61
E. Todd Heiner (1) 39
Frank A. Cereska (2) 59
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
There are no family relationships among any of the directors or executive
officers of the Company.
2
<PAGE>
Mr. Hales was appointed as the Company's Chairman in August 2000. Mr. Hales
has served as the Company's Chief Executive Officer and as a member of the Board
since November 1999. Prior to November 1999, Mr. Hales served as the Company's
Vice President of Sales and Marketing. Prior to joining the Company in May 1999,
Mr. Hales was managing director of the glazed wall tile division of Daltile
International in Dallas, Texas from March 1995. From 1990 until 1995, Mr. Hales
was employed by David Weekley Homes, where he held various operations and
management positions, including general manager of operations. Mr. Hales holds a
B.S. degree in engineering from Brigham Young University.
Mr. Warren has served as a member of the Board since September 1998. From
September 1998 until November 1999, Mr. Warren was the President of the Company.
Prior to that, he served as the President of Linco Industries, Inc. from 1990
until its merger with the Company in September 1998. Before joining Linco, Mr.
Warren was the founder and owner of Warren's Restaurants in Ogden, Utah and was
engaged in real estate development in Park City, Utah.
Dr. Walker joined the Board in September 1998. He holds a B.S. degree from
Weber State University and a doctorate degree in chemistry from Texas Tech
University. After completing a post-doctoral fellowship in the Stanford
University Department of Biochemical Pharmacology, Dr. Walker returned to Weber
State University in 1981, where he is currently a professor of chemistry and
director of the Utah Center of Excellence for Chemical Technology. Dr. Walker
has received the Utah Governor's Medal for Science and Technology, Weber State
University's Master Teacher Award, and is a Cortez Professor in the Honors
Program at Weber State University. He has authored many scientific publications
and two university-level chemistry textbooks. Since September 1998, Dr. Walker
has been a consultant directing research and development for the Company.
Dr. Sundwall joined the Board in September 1998. He holds a degree in
Psychology (cum laude) and a master's degree in Educational Psychology and
Doctor of Medicine degree (with honors) from the University of Utah. Dr.
Sundwal1 completed his family practice residency at St. Peters Hospital in
O1ympia, Washington, and entered private practice in June 1997. He is currently
an associate physician with the American Fork Clinic, American Fork, Utah.
Mr. Crittenden joined the Board in March 2000. He is currently the
Executive Vice President and Chief Financial Officer of American Express. Prior
to joining American Express in June 2000, Mr. Crittenden was senior vice
president and CFO of Monsanto Chemical Company, executive vice president and
chief financial officer of Sears Roebuck and Company from 1996 through 1998, and
senior vice president and chief financial officer of Melville Corporation, Rye,
New York from 1994 to 1996. Mr. Crittenden has also served as a consultant to
Bain & Company in Boston, where he also held senior management and marketing
positions. Mr. Crittenden serves on the board of directors for Ryerson-Tull and
Wilson's The Leather Expert. Mr. Crittenden earned a bachelor's degree from
Brigham Young University and an MBA degree from Harvard University.
Mr. Jorgensen joined the Board in March 2000. Since 1994, Mr. Jorgensen has
been president of Jorgensen Associates, a consulting firm specializing in
energy, financial services and investment projects in developing countries and
Russia. From 1986 to 1994, Mr. Jorgensen was a senior executive at AIG working
on debt recovery projects in third world nations and director of AIG business in
the former Soviet Union, where he founded the Russian American Investment Bank.
From 1965 to 1986, Mr. Jorgensen was a senior executive at Citicorp working in
corporate lending, foreign exchange, investment banking and risk management. He
founded Citicorp Insurance USA and Citicorp Insurance Bermuda. Mr. Jorgensen
serves on several boards including Conseco Bank (Utah), The Utah Symphony, Snow
College Foundation (Utah), and Foundation Jean Monnet pour l' Europe
(Switzerland). Mr. Jorgensen holds a bachelor's degree from Brigham Young
University and an MBA degree from Harvard University.
Mr. Heiner joined the Board in March 2000. He is Vice President, National
Sales and Operations, of Voicestream Wireless Corporation. As one of that
company's first 10 employees, Mr. Heiner has also held positions of director of
sales, managing director and executive director. A former employee of McCaw
Cellular, Mr. Heiner was instrumental in launching the first cellular services
in Utah and Idaho in 1986. He received a B.A. in Communications from Utah State
University in 1985.
3
<PAGE>
Mr. Cereska joined the Board in March 2000. He was vice president and
general manager of feminine care and adult incontinence care products for
Paragon Trade Brands, Inc., prior to his retirement from Paragon in June 2000.
He also previously worked as senior vice president of infant care products
manufacturing for Paragon. Before joining Paragon, Mr. Cereska held senior
management positions with Thiokol Corporation (Cordant Technologies) and managed
several manufacturing facilities for Kimberly-Clark Corporation. He received a
B.S. Degree from Western Michigan University in 1965 and a M.S. in Physical and
Biological Sciences from Syracuse University in 1969.
Meetings and Committees of the Board of Directors
During 1999, the Board met four times and took action by unanimous written
consent on eight occasions, and no director then in office attended fewer than
75% of the aggregate number of meetings of the Board or the committees of the
Board on which he serves. The Board has an Audit Committee and a Compensation
Committee. There is no standing nominating committee.
The Audit Committee was organized in 2000 and consists of independent
directors Crittenden (Chair), Cereska and Jorgensen. All members of this
committee are independent (non-employee) directors. The Audit Committee
recommends the engagement of independent public accountants to audit the
financial statements of the Company and monitors the effectiveness of the audit
effort, the Company's financial and accounting organization and its system of
internal accounting controls.
The Compensation Committee was organized in 2000 and consists of
independent directors Heiner (Chair) and Sundwall. The Compensation Committee's
functions are to establish and administer the Company's policies regarding
compensation and administers the Company's Stock Option Plan (the "Stock Plan").
Director Compensation
The Company pays a fee of $500 to its outside directors for each meeting
they attend in person. The Company reimburses its directors for their
out-of-pocket expenses incurred in the performance of their duties as directors
of the Company.
Recommendation of the Board
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES NAMED ABOVE.
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Effective August 1, 2000, the Company engaged Arthur Andersen LLP
("Arthur Andersen") as its independent public accountants for the year ending
December 31, 2000. In the event that ratification of this selection of
accountants is not approved by a majority of the shares of Common Stock of the
Company voting at the Annual Meeting in person or by proxy, management will
review its future selection of accountants.
A representative of Arthur Andersen is expected to be present at the
Annual Meeting. This representative will have an opportunity to make a statement
and will be available to respond to appropriate questions.
Recommendation of the Board
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ARTHUR
ANDERSEN AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE YEAR ENDING
DECEMBER 31, 2000.
4
<PAGE>
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information that has been provided
to the Company with respect to beneficial ownership of shares of the Company's
Common Stock as of September 29, 2000, for (i) each person who is known by the
Company to own beneficially more than 5% of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) each of the executive officers
of the Company named in the Summary Compensation Table of this Proxy Statement
(the "Named Executive Officers"), and (iv) all directors and executive officers
of the Company as a group. Unless otherwise indicated, the address of the
shareholder is the Company's principal executive offices, 1877 West 2800 South,
Suite 200, Ogden, Utah 84401.
<TABLE>
<CAPTION>
Amount and
Nature of Percent of
Beneficial Common Stock
Name and Address of Beneficial Owner Ownership(1) Outstanding
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Darrell J. Saunders 2,191,450 10.4%
998 Fifth Street
Ogden, Utah 84401
Charles L. Crittenden (2) 1,991,452 9.5%
2334 Filmore
Ogden, Utah 84401
Aspen Capital Resources, LLC (3) 1,806,156 7.9%
8989 S. Schofield Cir.
Sandy, Utah 84093
Edward B. Walker 5,434,170 25.8%
Director
Douglas R. Warren(4) 2,016,118 9.5%
Director
E. Todd Heiner (5) 964,000 4.5%
Director
Randall L. Hales(6) 350,000 1.6%
Chief Executive Officer, Chairman
Peter Sundwall(6) 50,000 *
Director
Bradley K. Andrews (6) 40,000 *
Chief Operating Officer
John L. Theler (6) 40,000 *
Chief Financial Officer
Gary Crittenden(6) 24,500 *
Director
Dan C. Jorgensen(6) 24,500 *
Director
Frank Cereska (6) 14,000 *
Director
All directors and executive officers as a group (10 persons) 8,957,288 40.5%
---------------------------
* Less than one percent.
</TABLE>
5
<PAGE>
(1) Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission (the "SEC"). In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of Common Stock subject to options,
warrants, or other convertible instruments held by that person that
are exercisable or convertible within 60 days of September 29, 2000,
are deemed outstanding. Such shares, however, are not deemed
outstanding for purposes of computing the ownership of any other
person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the shareholder named
in the table has sole voting and investment power with respect to the
shares set forth opposite such shareholder's name.
(2) Charles Crittenden, a former director of the Company, is the father
of Gary Crittenden, and disclaims beneficial ownership of any shares
of the Company's Common Stock held by Gary Crittenden.
(3) Consists of 1,806,156 shares of common stock underlying 4,000 shares
of convertible preferred stock and related preferred stock dividends
which are convertible within 60 days of September 29, 2000.
(4) Consists of 1,838,118 shares of common stock and 178,000 shares of
common stock issuable upon exercise of stock options which are
exercisable currently or within 60 days of September 29, 2000.
(5) Consisting of 633,333 shares of common stock, 14,000 shares of common
stock issuable upon exercise of stock options which are exercisable
currently or within 60 days of September 29, 2000, and 316,667 shares
of common stock issuable upon the exercise of warrants which are
exercisable currently or within 60 days of September 29, 2000
(6) Consisting of shares of common stock issuable upon exercise of stock
options which are exercisable currently or within 60 days of
September 29, 2000.
EXECUTIVE OFFICER COMPENSATION AND OTHER MATTERS
Summary Compensation Table
The following table sets forth certain information concerning the
compensation earned by (a) the individuals who served as the Company's Chief
Executive Officer during the year ended December 31, 1999, (b) the four other
most highly compensated individuals who served as executive officers of the
Company during the year ended December 31, 1999 whose compensation was $100,000
or more, and (c) each such individual for the Company's two preceding years.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
----------------------------------- --------------------------------------------
Securities Underlying All Other
Other Annual Options (#) Compensation
Name and Principal Position(1) Year Salary($) Compensation($) ($)
<S> <C> <C> <C> <C> <C>
Randall L. Hales, 1999 58,650 -- 500,000 --
Chairman and CEO 1998 -- -- -- --
1997 -- -- -- --
Douglas R. Warren 1999 81,237 10,000 100,000 --
President and CEO(2) 1998 29,298 -- 120,000 --
1997 -- -- -- --
</TABLE>
6
<PAGE>
(1) This table does not include John L. Theler, who was hired in July
2000 as the Company's Chief Financial Officer, or Bradley K. Andrews,
who became the Company's Chief Operating Officer in August 2000. For
the year ending December 31, 2000, Messrs. Theler and Andrews will
each be paid an annual salary of $110,000. Additionally, Messrs.
Theler and Andrews were also each granted an option to purchase
100,000 shares of the Company's common stock at an exercise price of
$3.00 per share. Options to purchase the first 40,000 shares vested
at the date of grant, options to purchase the next 30,000 shares will
vest on the first anniversary of the date of grant, and options to
purchase the final 30,000 shares will vest on the second anniversary
of the date of grant.
(2) Mr. Warren resigned as President and CEO on November 17, 1999. Mr.
Hales was appointed by the Board of Directors to replace Mr. Warren
at that time.
Option Grants in Last Year
The following table provides certain information with respect to
stock options granted to the Named Executive Officers during the year ended
December 31, 1999. In addition, as required by SEC rules, the table sets forth
the hypothetical gains that would exist for the shares subject to such options
based on assumed annual compounded rates of stock price appreciation during the
option term.
<TABLE>
<CAPTION>
Individual Grants(1)
----------------------------------------------------
Percent of Porential Realizable Value at
Number of Total Options Exercise Assumed Annual Rates of Stock
Name Securities Granted to Price or Price Appreciation for Option
Underlying Employees in Base Date Term(2)
Options Fiscal Per Share Expiration ---------------------------------
Granted(#) Year(%)(3) ($/sh) Date(1) 5%($) 10%($)
-------------- --------------- --------------- ------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Douglas R. Warren 100,000 11.2 0.75 8/30/06 $158,568 $233,050
250,000 28.0 0.75 5/12/06 $146,168 $252,572
Randall L. Hales 250,000 28.0 1.25 11/22/06 $271,419 $457,626
</TABLE>
(1) Options vest as follows: Options to purchase 40% of the shares vested
at the date of grant, options to purchase the next 30% of the shares
vest one year from the date of grant, and options to purchase the
remaining 30% vest two years from the date of grant. The options
expire five years from the date of vesting.
(2) The potential realizable value illustrates value that might be
realized upon exercise of the options immediately prior to the
expiration of their terms, assuming the specified compounded rates of
appreciation of the market price per share from the date of grant to
the end of the option term. Actual gains, if any, on stock option
exercise are dependent upon a number of factors, including the future
performance of the Common Stock and the timing of option exercises,
as well as the option holder's continued employment through the
vesting period. There can be no assurance that the amounts reflected
in this table will be achieved.
7
<PAGE>
(3) The Company granted stock options representing 894,000 shares of
Common Stock to employees in the year ended December 31, 1999.
Aggregated Option Exercises in Last Year and Year End Option Values
The following table sets forth certain information with respect to
stock options exercised by the Named Executive Officers during the year ended
December 31, 1999 and the year-end value of unexercised options held by the
Named Executive Officers.
<TABLE>
<CAPTION>
Number of Securities
Value Realized Underlying Unexercised Value of Unexercised
(Market Price Options at In-the-Money Options
Number of at Exercise Year-End(#) at Year-End($)(1)
Shares Acquired Less Exercise -----------------------------------------------------------------------
Name on Exercise(#) Price)($) Exercisable Unexercisable Exercisable Unexercisable
--------------------- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Randall L. Hales None N/A 200,000 300,000 150,000 225,000
Douglas R. Warren None N/A 148,000 72,000 148,000 72,000
</TABLE>
(1) Value is based on the fair market value of the Company's Common Stock on
December 31, 1999, less the exercise price.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
On August 1, 2000, the Company appointed Arthur Andersen to replace
Hansen Barnett & Maxwell ("Hansen Barnett") as independent public accountants of
the Company. Hansen Barnett's services as the Company's independent public
accountants terminated on the same date.
The report of Hansen Barnett on the Company's consolidated financial
statements for the years ended December 31, 1999 and 1998 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to
uncertainty, audit scope or accounting principle, except that such report on the
consolidated financial statements included an explanatory paragraph with respect
to the Company being in the development stage and its having suffered recurring
losses which raise substantial doubt about its ability to continue as a going
concern.
The decision to engage Arthur Andersen as the Company's independent
public accountants was approved by the Company's Board of Directors.
In connection with the audits for the years ended December 31, 1999
and 1998, and through the interim period ended August 1, 2000, there were no
disagreements or "reportable events" with Hansen Barnett as described in Item
304(a)(1)(iv) of Regulation S-B on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Hansen Barnett would have
caused it to make reference thereto in its report on the consolidated financial
statements for the years ended December 31, 1999 and 1998.
Hansen Barnett provided to the Company a letter addressed to the SEC
stating that it had reviewed the disclosure provided in the Current Report filed
by the Company on August 7, 2000 to report the change and that it had no
disagreement with the relevant portions of the disclosure contained in such
Current Report, which is repeated here, pursuant to the requirements of Item
8
<PAGE>
304(a)(3) of Regulation S-B. A copy of such letter, dated as of August 1, 2000,
was filed as Exhibit 16 to the Current Report on Form 8-K filed with the U.S.
Securities and Exchange Commission on August 7, 2000.
CERTAIN TRANSACTIONS
In September 1998, the Company entered into a private consulting
agreement with Jerral R. Pulley, now a former director, to consult on marketing
and market development. The agreement was for $10,000 per month, and had a
one-year initial term, renewable for additional one-year terms.
Also in September 1998, the Company entered into an agreement with
Dr. Edward B. Walker to consult on product research and development for a period
of three years. Under the agreement, Dr. Edwards's was to be paid $7,000 per
month for the first year, $8,000 per month for the second year, and $9,000 per
month for the third year.
In November 1999, the Company entered into an agreement with the
Company's former Chief Executive Officer, Douglas R. Warren for $5,000 per month
for general business consulting. The agreement has a term of 24 months.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL SHAREHOLDERS' MEETING
The Company anticipates that its annual meeting in 2001 will be held
during the month of May 2001. Proposals of shareholders intended to be included
in the Company's proxy statement for the Company's 2001 Annual Meeting of
Shareholders must be received by First Scientific Inc., Attn: Secretary at 1877
West 2800 South, Suite 200, Ogden, Utah 84401, no later than December 8, 2000.
If the Company is not notified of a shareholder proposal by such date, then the
proxies held by management of the Company provide discretionary authority to
vote against such shareholder proposal, even though such proposal is not
discussed in the Proxy Statement.
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the SEC initial reports
of ownership and changes in ownership of the Company's Common Stock. Reporting
Persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) reports they file.
To the Company's knowledge, based solely on its review of the copies
of such reports received or written representations from certain Reporting
Persons that no other reports were required, the Company believes that during
its year ended December 31, 1999, all Reporting Persons complied with all
applicable filing requirements, with the exception that Randall L. Hales filed a
late Form 3 in September 2000.
OTHER MATTERS
The Board knows of no other business that will be presented at the
Annual Meeting. If any other business is properly brought before the Annual
Meeting, proxies in the enclosed form will be voted in respect thereof as the
proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Shareholders are urged to mark, date, sign and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
Randall L. Hales
Ogden, Utah
October 2, 2000
<PAGE>
APPENDICES
1. FORM OF PROXY
<PAGE>
PROXY CARD
FIRST SCIENTIFIC INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
FIRST SCIENTIFIC INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 15, 2000
The undersigned shareholder of First Scientific Inc. (the "Company"), a
Delaware corporation, hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated October 2, 2000, and
hereby appoints Randall L. Hales, Proxy and attorney-in-fact, with full power of
substitution, on behalf and in the name of the undersigned to represent the
undersigned at the 2000 Annual Meeting of Shareholders of the Company to be held
on Wednesday, November 15, 2000, at 2:30 p.m., local time, at the Little America
Hotel & Towers, located at 500 South Main Street, Salt Lake City, Utah and at
any postponement or adjournment thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to cast if personally present.
ANY SHAREHOLDER COMPLETING THIS PROXY THAT FAILS TO MARK ONE OF THE BOXES
FOR THE PROPOSAL WILL BE DEEMED TO HAVE GIVEN THE PROXY HOLDERS COMPLETE
DISCRETION IN VOTING HIS, HER, OR ITS SHARES FOR SUCH PROPOSAL AT THE MEETING,
OR, IN THE CASE OF ELECTION OF DIRECTORS, FOR EACH OF THE LISTED NOMINEES. IF A
BOX IS CHECKED, YOUR SHARES SHALL BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
Please mark your
/x/ vote as in this
example.
The Company's Board of Directors recommends a vote FOR each of the directors
listed below and a vote FOR each of the other proposals.
1. To elect eight directors of the Company to serve until the 2001 Annual
Meeting of Shareholders or until their respective successors are elected
and qualified:
/ / FOR / / WITHHOLD AS TO ALL / / FOR ALL EXCEPT
(Instructions: If you mark the "FOR ALL EXCEPT" category above, indicate
the nominees as to which you desire to withhold authority by striking a
line through the name of such nominee(s) in the list below:)
Randall L. Hales Gary L. Crittenden
Douglas R. Warren Dan C. Jorgensen
Edward B. Walker E. Todd Heiner
Peter J. Sundwall, Jr., M.D. Frank A. Cereska
2. To ratify the appointment of Arthur Andersen LLP as the independent public
accountants for the Company for the year ending December 31, 2000.
/ / FOR / / AGAINST / / ABSTAIN
3. In his discretion, the Proxy is authorized to vote upon such other business
as may properly come before the Annual Meeting.
Please sign and date this Proxy where shown below and return it promptly:
Signed: Date:
, 2000
SIGNATURE(S)
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PLEASE SIGN ABOVE EXACTLY AS THE SHARES ARE ISSUED. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, AS EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
