<PAGE>
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 Section 240.14a-11(c) or
Section 240.14a-12
MW MEDICAL, INC.
- -------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) 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 fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
MW MEDICAL, INC.
6955 E. Caballo Drive,
Paradise Valley, Arizona
85253
November 19, 1999
Dear Shareholder:
You are cordially invited to attend the annual meeting of
shareholders of MW Medical, Inc., which will be held on December
10, 1999 at 11:00 a.m., Pacific Standard Time at 101 Convention
Center Drive, Suite 1200, Las Vegas, Nevada 89109.
Details of the business to be conducted at the annual meeting are
given in the attached Notice of Annual Meeting of Shareholders and
Proxy Statement.
Whether or not you attend the annual meeting it is important that
your shares be represented and voted at the meeting. Therefore, I
urge you to sign, date, and promptly return the enclosed proxy in
the enclosed postage-paid envelope. If you decide to attend the
annual meeting and vote in person, you will of course have that
opportunity.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the
Company.
Sincerely,
\s\ Jan Wallace
Jan Wallace
President
<PAGE>
MW MEDICAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
December 10, 1999
To the Shareholders:
Notice is Hereby Given that the Annual Meeting of the holders of
shares of Common Stock of MW Medical, Inc. (the "Common Stock")
will be held at 101 Convention Center Drive, Suite 1200, Las Vegas,
Nevada 89109 on December 10, 1999 at 11:00 a.m., Pacific Standard
Time, for the following purposes:
1. To elect directors.
2. To approve the Incentive Stock Option Plan created by the board
of directors on March 23, 1999.
3. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on November 1,
1999 are entitled to notice of, and to vote at, this meeting.
BY ORDER OF THE BOARD OF DIRECTORS
\s\ Grace Sim
Grace Sim, Secretary
November 19, 1999
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign,
date, and return the enclosed Proxy at your earliest convenience.
This will ensure the presence of a quorum at the meeting. PROMPTLY
SIGNING, DATING, AND RETURNING THE PROXY WILL SAVE THE COMPANY THE
EXPENSE AND EXTRA WORK OF ADDITIONAL SOLICITATION. An addressed
envelope for which no postage is required if mailed in the United
States is enclosed for that purpose. Sending in your Proxy will not
prevent you from voting your stock at the meeting if you desire to
do so, as your Proxy is revocable at your option.
3
<PAGE>
MW MEDICAL, INC.
6955 E. Caballo Drive,
Paradise Valley, Arizona
85253
November 23, 1999
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD DECEMBER 10, 1999
This Proxy Statement, which was first mailed to shareholders on or
about November 23, 1999, is furnished in connection with the
solicitation of proxies by the Board of Directors of MW Medical,
Inc. (the "Company"), to be voted at the annual meeting of the
shareholders of the Company (the "Annual Meeting"), which will be
held at 11:00 a.m. on December 10, 1999, at 101 Convention Center
Drive, Suite 1200, Las Vegas, Nevada 89109 for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders.
Shareholders who execute proxies retain the right to revoke them at
any time prior to the exercise of the powers conferred thereby, by
delivering a signed statement to the Secretary of the Company at or
prior to the annual meeting or by executing another proxy dated as
of a later date. The cost of solicitation of proxies is to be borne
by the Company.
Shareholders of record at the close of business on November 1, 1999
will be entitled to vote at the meeting on the basis of one vote
for each share held. On November 1, 1999, there were 17,925,670
shares of common stock outstanding, held of record by 478
shareholders.
The deadline for submittals of shareholder proposals for the next
regularly scheduled annual meeting will be not less than 120 days
prior to the release date of the proxy materials as received at the
Company's principal offices by that date. A shareholder proposal
submitted outside the processes of SEC Regulation Section 240.14a-8
will be considered untimely if received at the principal offices of
the Company on or after 45 days prior to the Company's release of
its proxy statement to shareholders.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY
STATEMENT IN CONNECTION WITH THE SOLICITATION OF PROXIES MADE
HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
ANY OTHER PERSON.
4
<PAGE>
MEETING
PLACE, DATE AND TIME
The Annual Meeting will be held at 101 Convention Center Drive,
Suite 1200, Las Vegas, Nevada 89109, on December 10, 1999 at 11:00
a.m. Pacific Standard Time.
RECORD DATE; SOLICITATION OF PROXIES
The Board of Directors of the Company (the "Board") has fixed the
close of business on November 1, 1999 as the Record Date for the
determination of shareholders entitled to notice of and to vote at
the Annual Meeting. At the Record Date, there were 17,925,670
shares of Common Stock issued and outstanding and entitled to vote
at the Annual Meeting held by approximately 478 holders of record.
Holders of Common Stock are entitled to one vote at the Annual
Meeting for each share of Common Stock held of record at the Record
Date.
In addition to the solicitation of proxies by use of the mails,
proxies may also be solicited by the Company and its directors,
officers and employees (who will receive no additional compensation
therefor) by telephone, telegram, facsimile transmission or other
electronic communication, and/or by personal interview. The
Company will reimburse banks, brokerage houses, custodians and
other fiduciaries who hold shares of Common Stock in their name or
custody, or in the name of nominees for others, for their
out-of-pocket expenses incurred in forwarding copies of the proxy
materials to those persons for whom they hold such shares. The
Company will bear the costs of the Annual Meeting and of soliciting
proxies therefor, including the cost of printing and mailing this
Proxy Statement and related materials. The Company has spent
approximately $5,000 in legal and other expenses in the preparation
of this proxy statement and other expenses connected with the
solicitation of security holders. It is anticipated that the
Company will spend an additional $5,000 in solicitation of security
holders before the meeting is held.
Any questions or requests for assistance regarding the Company's
proxies and related materials may be directed in writing to Grace
Sim at 6955 E. Caballo Drive, Paradise Valley, AZ 85253.
PURPOSE OF THE ANNUAL MEETING
At the Annual Meeting, holders of Common Stock of the Company will
be asked to elect directors and approve the Company's Incentive
Stock Option Plan created by the board of directors on March 23,
1999. See the section entitled "Incentive Stock Option Plan" for
background and details.
VOTE REQUIRED
Twenty Five Percent (25%) of the issued and outstanding shares of
Common Stock entitled to vote as of the Record Date, represented in
person or by proxy, is required for a quorum at the Annual Meeting.
The affirmative vote of a majority of those shares in favor of the
Incentive Stock Option Plan will be necessary to approve the plan,
and the nominees receiving the four highest number of votes will be
elected to the board of directors. Abstentions may be specified
and will be counted as present for the purpose of determining the
existence of a quorum.
5
<PAGE>
Shares of Common Stock that are represented by properly executed
proxies, unless such proxies shall have previously been properly
revoked (as provided herein), will be voted in accordance with the
instructions indicated in such proxies. If no contrary
instructions are indicated, such shares will be voted FOR approval
of incentive stock option plan and FOR the nominees for the Board
named herein, and in the discretion of the persons named in the
proxy as proxy appointees, as to any other matter that may properly
come before the Annual Meeting (of which the Company is not
presently aware). Shares represented by proxies that have voted
against the propositions presented at the meeting can not be used
to postpone or adjourn the meeting in order to solicit more votes
for the proposition.
Under the rules of the NASD, although brokers who hold shares in a
street name have the authority to vote on certain items when they
have not received instructions from the beneficial owners, brokers
will not be entitled to vote on the approval of the Merger
Agreement absent specific instructions. Brokers who do not receive
instructions but who are present, in person or by proxy, at the
Annual Meeting will be counted as present for quorum purposes.
It is not expected that any matters other than those referred to in
this Proxy Statement will be brought before the Annual Meeting. If
other matters are properly presented, however, the persons named as
proxy appointees will vote in accordance with their best judgment
on such matters. The grant of a proxy also will confer
discretionary authority on the persons named as proxy appointees to
vote in accordance with their best judgment on matters incident to
the conduct of the Annual Meeting.
Any shareholder may revoke his, her or its proxy (other than an
irrevocable proxy coupled with an interest) at any time before it
is voted, by: (1) filing with the Corporate Secretary of the
Company an instrument revoking the proxy; (2) returning a duly
executed proxy bearing a later date; or (3) attending the Annual
Meeting and voting in person. Attendance at the Annual Meeting
will not by itself constitute revocation of a proxy. There are no
dissenters rights or remedies for shareholders who do not agree
with the outcome of the vote on the issues to be brought at this
Annual Meeting.
SHAREHOLDERS ARE URGED TO READ AND CAREFULLY CONSIDER THE
INFORMATION PRESENTED IN THIS PROXY STATEMENT, AND SHAREHOLDERS ARE
URGED TO COMPLETE, DATE, SIGN AND PROMPTLY RETURN THE ENCLOSED
PROXY IN THE ACCOMPANYING PREPAID ENVELOPE.
ELECTION OF DIRECTORS
Four directors are to be elected at the Annual Meeting, to hold
office for one year until the next annual meeting of shareholders,
and until their successors are elected and qualified. It is
intended that the accompanying proxy will be voted in favor of the
following persons to serve as directors unless the shareholder
indicates to the contrary on the proxy. Management expects that
each of the nominees will be available for election, but if any of
them is not a candidate at the time the election occurs, it is
intended that such proxy will be voted for the election of another
nominee to be designated by the Board of Directors to fill any such
vacancy.
6
<PAGE>
NOMINEES
Name Age
- ---- ---
Jan Wallace 43
Grace Sim 38
Elliot Smith 67
Jack Friedland 59
Jan Wallace was President, Chief Executive Officer and a director
of MW at its inception in December, 1997. Ms. Wallace resigned as
President and Chief Executive Officer effective October 1, 1998 and
was then re-appointed on July 9, 1999 after the resignation of
former President Paul Banko. Ms. Wallace has been employed by
Dynamic since April 1995, when she was elected to the Board of
Directors and accepted the position of Chief Operating Officer. She
is currently a director and the President of Dynamic. Ms. Wallace
was previously Vice President of Active Systems, Inc. a Canadian
company specializing in SGML Software, an ISO standard, in Ottawa,
Ontario for the period from 1993 to 1994. Before that, she was
President and Owner of Mailhouse Plus, Ltd., an office equipment
distribution company which was sold to Ascom Corporation. She has
also been in management with Pitney Bowes-Canada and Bell Canada
where she received its highest award in Sales and Marketing. Ms.
Wallace was educated at Queens University in Kingston, Ontario and
Carleton University, Ottawa, Ontario in Political Science with a
minor in Economics.
Grace Sim has been the Secretary/Treasurer and a director of MW
since its inception in December 1997. She is also currently the
Secretary/Treasurer and a director of Dynamic Associates, Inc., a
public company. Ms. Sim joined Dynamic in January 1997. Before
joining Dynamic, Ms. Sim owned Sim Accounting, an accounting
consulting company in Ottawa, Ontario, Canada. Between 1993 and
1994, she worked as the controller with Fulline, an office
equipment company and with Mailhouse Plus Ltd. between 1990 and
1992. Ms. Sim received her Bachelor of Mathematics with honors
from the University of Waterloo in Waterloo, Ontario.
Elliot Smith is a Director of the Company appointed on September
16, 1999. Mr. Smith has held a variety of senior management-level
positions in some of the world's most prestigious financial
institutions during the past 40 years. Mr. Smith began a 29 year
career with Prudential Bache in 1954 when he was hired as a
Registered Representative in its Syracuse, New York office. By
1973, Mr. Smith was elected to the Board of Directors of Bache &
Company Inc. In 1977, he was named Senior Officer of Commodity
Division and Metal Company and in 1980, was elected President of
Bach Haley Stuart Metal Company Inc. On leaving Prudential-Bache
in 1983, Mr. Smith served as Executive Vice President at R. Lewis
Securities, Inc., located in New York City and from 1983 to 1995,
was President of Whale Securities Company, L.P., in New York.
Since 1995, Mr. Smith has served as President of the Equity
Division of Rickel & Associates, Inc., an investment company. Mr.
Smith has also been elected to the Boards of The Pennington School
and Jullians Corporation. He is a former Member and Director of
the Chicago Board of Options Exchange; Governor of the American
Stock Exchange (AMEX); Governor and Chairman of the AMEX
Commodities Exchange; Director and Member of the Executive
Committee of the Securities Industry Automation Corp. and a past
President of the Association of Investment Brokers. Mr. Smith is
currently Executive Vice President, Investments at Oscar Gruss &
Son, Inc.
7
<PAGE>
Jack Friedland is a Director of the Company appointed on September
16, 1999. Dr. Friedland has operated a medical office in Phoenix,
Arizona for the past 25 years. Dr. Friedland specializes in
aesthetic plastic and reconstructive surgery for both children and
adults. Dr. Friedland completed his undergraduate education at the
University of Wisconsin (Madison), received his Bachelor of Science
degree from Northwestern University in 1962 and graduated from
Northwestern Medical School in 1965 where he was elected to the
Alpha Omega Alpha Honor Medical Society. Following his graduation
from medical school, Dr. Friedland's post-doctoral work included a
surgical internship (1965-1966) and surgical residency (1966-1970)
through New York University - Bellevue Medical Center. Dr.
Friedland was Surgery Resident and Chief Resident during his
surgical residency at N.Y.U. from 1966-1970, and Chief Resident and
Plastic Surgery Resident at the Institute of Reconstructive Plastic
Surgery, N.Y.U. Medical Center, from 1972-1974. Dr. Friedland
maintains three board certifications: National Board of Medical
Examiners (1966), American Board of Surgery (1971), and American
Board of Plastic Surgery (1975) and is a Fellow with the American
College of Surgeons. Dr. Friedland is also a former President and
current member of the Board of Trustees of the prestigious American
Society for Aesthetic Plastic Surgery. Dr. Friedland has authored
numerous published books and peer-reviewed articles in his practice
specialty.
INFORMATION REGARDING THE BOARD
The Company's Board of Directors (the "Board") has no Committees.
The Board met two times during this fiscal year and as issues were
raised signed several written consents to action without meeting.
All directors attended 75% or more of the aggregate number of Board
meetings. The current Board includes Jan Wallace, Grace Sim, Elliot
Smith and Jack Friedland. On July 9, 1999, Paul Banko resigned as
President, director and CEO of the Company, and on September 15,
1999 the Board voted to enlarge its membership to four. At the same
meeting, Elliot Smith and Jack Friedland were appointed to the
vacant Board seats.
The directors are not currently paid for acting as members of the
board, other than receiving stock options.
8
<PAGE>
The following table provides information on the annual compensation
received by the Executive Officers and Directors of the Company in
1998:
Annual Compensation Table
Annual Compensation Long-term Compensation
------------------- ----------------------
Other Re- All
Annual stricted other
Compen- Stock Options LTIP Compen-
Name Title Year Salary Bonus sation Awarded /SARs Payouts($) sation
- ---- ----- ---- -------- ----- ------- ------- ------- ---------- -------
Jan Chair-1998 $150,000(1) $ 0 0 0 0 0 0
Wallace man
Director
Paul Pres- 1998 $ 36,000(2) $ 0 0 0 0 0 0
E. ident
Banko
CEO
Grace Di- 1998 $ 80,000(3) $ 0 0 0 0 0 0
Sim rect-
Secret- or
ary/
Treasurer
Elliot Di- 1998 $ 0 $ 0 0 0 0 0 0
Smith rector
Jack Di- $ 0 $ 0 0 0 0 0 0
Fried- rector
land
- ------------------------------------------------------------------------------
(1) Includes $86,393 accrued at 12/31/98.
(2) For October 1, 1998 to December 31, 1998
(3) Includes $45,569 accrued at 12/31/98.
Please note that the type and amount of compensation paid in 1998
may differ materially from what is paid in 1999.
Options
- -------
In March 1999, MW granted 400,000 options to Paul E. Banko, 400,000
to Jan Wallace, and 200,000 to Grace Sim. The options allow the
holders to purchase common shares of MW for $1.00 per share. Fifty
percent (50%) of these options are exercisable immediately and 50%
require a one-year waiting period. A number of other employees
were granted options on similar terms. Subsequently, Paul Banko
resigned and an agreement was reached in which he retained 200,000
of his original 400,000 options. Upon appointment to the Board,
Elliot Smith and Jack Freidland were granted 100,000 options each
at a price of $2.62 per share on the same terms as the other
directors.
THE BOARD RECOMMENDS
A VOTE IN FAVOR OF THE NAMED NOMINEES.
9
<PAGE>
INCENTIVE STOCK OPTION PLAN
On March 23, 1999, the Board of Directors of the Company created
and approved an Incentive Stock Option Plan in the form and content
attached to this document. The stated purpose of this Plan is to
strengthen the Company by providing incentive stock options as a
means to attract, retain and motivate key corporate personnel,
through ownership of stock of the Company, and to attract
individuals of outstanding ability to render services to and enter
the employment of the Company or its subsidiaries.
The Board has approved the issuance of options to purchase
1,555,000 shares of MW's common stock at a price of $1.00 per
share, and 575,000 shares at $2.62 per share.
In summary, this Plan provides as follows:
Types of Stock Options
There are two types of Stock Options that may be granted: (1)
Options intended to qualify as Incentive Stock Options under
Section 422 of the Internal Revenue Code ("Qualified Stock
Options"), and (2) Options not specifically authorized or qualified
for favorable income tax treatment under the Internal Revenue Code
("Non-Qualified Stock Options").
Administration of the Plan
The Plan is administered by a Plan Administrator serving at the
pleasure of the Board of Directors. Currently the Plan
Administrator is Elliot Smith. Subject to the provisions of the
Plan, the Plan Administrator has authority to construe and
interpret the Plan, to promulgate, amend, and rescind rules and
regulations relating to its administration, to select, from time to
time, among the eligible employees and non-employee consultants of
the Company and its subsidiaries those employees and consultants to
whom Stock Options will be granted, to determine the duration and
manner of the grant of the Options, to determine the exercise
price, the number of shares and other terms covered by the Stock
Options, to determine the duration and purpose of leaves of absence
which may be granted to Stock Option holders without constituting
termination of their employment for purposes of the Plan, and to
make all of the determinations necessary or advisable for
administration of the Plan. The interpretation and construction by
the Board of any provision of the Plan, or of any agreement issued
and executed under the Plan, is final and binding upon all parties.
No member of the Board, nor the Plan Administrator, can be held
liable for any action or determination undertaken or made in good
faith with respect to the Plan or any agreement executed pursuant
to the Plan.
Grant of Options
The Company is authorized to grant Incentive Stock Options as
defined in section 422 of the Code to any employee or director of
the Company, or of any of its subsidiaries; provided, however, that
no person who owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company, or
any of its parent or subsidiary corporations, shall be eligible to
receive an Incentive Stock Option under the Plan unless at the time
such Incentive Stock Option is granted the Option price is at least
110% of the fair market value of the shares subject to the Option,
and such
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<PAGE>
Option by its terms is not exercisable after the expiration of
five years from the date such Option is granted.
An employee may receive more than one Option under the Plan.
Non-Employee Directors are eligible to receive Non-Qualified Stock
Options in the discretion of the Plan Administrator. In addition,
Non-Qualified Stock Options may be granted to Consultants who are
selected by the Plan Administrator.
Stock Subject to Plan
The stock available for grant of Options under the Plan are shares
of the Company's authorized but unissued, or reacquired, Common
Stock. The aggregate number of shares that may be issued pursuant
to exercise of Options granted under the Plan, as amended, can not
exceed 2,500,000 shares of Common Stock (subject to adjustment as
provided herein), including shares previously issued under the
Plan. The maximum number of shares for which an Option may be
granted to any Optionee during any calendar year can not exceed
500,000 shares.
Terms and Conditions of Options
Specific requirements for the terms and conditions of all Option
Agreements entered into are detailed in the Plan.
Termination or Amendment of the Plan
The Board may at any time terminate or amend the Plan; provided
that, without approval of the shareholders, the board cannot: (a)
increase the total number of shares covered by the Plan, (b) change
the class of persons eligible to receive options, (c) reduce the
exercise price of Options granted under the Plan, or (d) extend the
latest date upon which Options may be exercised. In addition,
without the consent of the Optionee, the board may not make any
amendments that would adversely affect any outstanding or
unexercised option agreements.
Indemnification
The Plan Administrator is indemnified by the Company under the Plan
against reasonable expense, including attorney's fees, actually and
necessarily incurred in connection with the defense of any action,
suit or proceeding for which he is a party by reason of any action
taken or failure to act under or in connection with the Plan or any
Option. He is also indemnified against any and all amounts paid by
him in settlement, or for any amounts paid by him in satisfaction
of a judgment in any such action, suit, or proceeding, except in
relation to matters in which he is judged liable for negligence or
misconduct in the performance of his duties.
Effective Date and Term of the Plan
This Plan became effective (the "Effective Date") on the March 23,
1999, the date of adoption by the board of directors. Options
granted under the Plan prior to shareholder approval are subject to
cancellation by the Plan Administrator if shareholder approval is
not obtained within 12 months of
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<PAGE>
the date of adoption. Unless sooner terminated by the Board in its
sole discretion, this Plan will expire on December 31, 2008.
The following table summarizes the benefits of this Plan as received
by the officers and directors of the Company to date.
Name and Position Dollar Value* Number of Units
- ----------------- ------------- ---------------
Jan Wallace Director/President $1,600,000 400,000
Grace Sim Director/Sec./Treas. $ 800,000 200,000
Elliot Smith $ 400,000 100,000
Jack Freidland $ 400,000 100,000
Executive Group $2,400,000 600,000
Director Group $3,200,000 800,000
Non-executive Director Group $ 800,000 200,000
Employee Group $5,320,000 1,330,000
- -----------------------------------------------------------------
* based on market price of $4.00 at closing on November 1, 1999.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE INCENTIVE STOCK
OPTION AGREEMENT.
12
<PAGE>
MARKET PRICES AND DIVIDEND INFORMATION
The Common Stock of the Company is traded on the NASDAQ OTC
Bulletin Board under the trading symbol "MWMD". As of October
29, 1999, the last date on which the Common Stock was traded prior
to the fixing of the record date for voting, the high and low sales
prices of the Common Stock on the OTC Bulletin Board was $4.09 per
share and $3.66 per share, respectively. On November 17, 1999, the
latest practicable trading day before the filing of this Proxy
Statement with the SEC, the high and low sales prices of the Common
Stock on the OTC Bulletin Board were $3.56 per share and $3.09 per
share, respectively.
The Company has not previously declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in
the foreseeable future.
The high and low sales price of the Common Stock on the OTC
Bulletin Board during the past two years by quarter are as follows:
HIGH LOW
------- ------
1999
First Quarter Not Trading*
Second Quarter $2.00 $1.00
Third Quarter $3.93 $1.75
Fourth Quarter (through 11-1-99) $4.09 $3.50
- -------------------------------------------------------------------
*Trading of MW's stock did not begin until Second Quarter 1999.
13
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SELECTED FINANCIAL INFORMATION CONCERNING THE COMPANY
The selected summary consolidated financial data presented below
for each of the last fiscal years ended December 31, 1998 have been
derived from the Company's historical financial statements. This
data should be read in conjunction with the consolidated financial
statements and notes thereto of the Company included in the Annual
Report on Form 10-K, filed April 15, 1999 for the fiscal year ended
December 31, 1998, which is incorporated by reference into this
Proxy Statement.
In Thousands (except per share amounts):
6/99 1998 1997 1996
Total Revenue 0 0 0 0
Operating Income (loss) (789) (1221) (1134) (605)
Income (loss) before
Income Tax Expense (775) 1106 (1127) (595)
Net Income (loss) (776) 433 (1252) (467)
Income (loss) per share $(.05) $.03 $(.09) $(.03)
Total assets 2189 1404 2539 2609
Current portion of notes
Payable and L/T debt 425 0 90 48
Notes payable and L/T debt.
Less Current portion 0 0 2330 1556
Total Shareholder
Equity (deficit) 1097 1198 (256) 996
Dividends declared and 0 0 0 0
Paid
SECURITY OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of the
Company's common stock held by all persons who, to the knowledge of
the Company, beneficially owned more than five percent (5%) of the
outstanding shares of the Company's common stock as of November 1,
1999, or, in certain instances as described in the footnotes below,
as of a date of the filing by such person of a Schedule 13G with
the Securities and Exchange Commission ("Commission"). According
to rules adopted by
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the Commission, a person is the "beneficial owner" of securities
if he or she has, or shares, the power to vote them, or to direct
their investment, or has the right to acquire beneficial
ownership of such securities within 60 days. Unless otherwise
indicated, all persons have sole voting and investment
power over all shares beneficially owned.
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
- -------------- ------------------- -------------------- --------
Common Stock High Octane Fund Ltd
HWR Services
Craigmuir Chamber
PO Box 71
Road Town,
Tortola BVI 990,608 5.53%
Common Stock Chase Manhattan Bank
4 New York Plaza
13th Floor
New York, NY 2,733,995 15.25%
Common Stock Bank Safe Deposit
& Trust Co.
C/O Mellon Bank
Mellon Bank NA
Three Mellon Bank Center
Room 153-3015
Pittsburgh, PA 1,332,600 7.43%
The Company knows of no other person who is the beneficial owner of
more than five percent of the Company's common stock.
SECURITY OWNERSHIP OF CERTAIN MANAGEMENT OF THE COMPANY
The following table sets forth information, as of November 1, 1999,
concerning the Company's common stock owned by: (i) each director;
(ii) the Chief Executive Officer and the other executive officers
of the Company who earned more than $100,000 during fiscal 1998 and
were serving as executive officers at the end of fiscal 1998; and
(iii) all directors and officers of the Company as a group.
According to rules adopted by the Commission, a person is the
"beneficial owner" of securities if he or she has, or shares, the
power to vote them, or to direct their investment, or has the right
to acquire beneficial ownership of such securities within 60 days.
Unless otherwise indicated, all persons have sole voting and
investment power over all shares beneficially owned.
15
<PAGE>
Name and Address Number of Shares Percent
Class of Beneficial Owner Beneficial Owned of class
- -------------- ------------------- ---------------- --------
Common Stock Jan Wallace 500,000(1) 2.79%
(Chairman/President)
6955 E. Caballo Dr.
Paradise Valley,
AZ 85253
Common Stock Grace Sim 50,000(2) 0.28%
(Secretary/Treasurer)
6955 E. Caballo Dr.
Paradise Valley,
AZ 85253
Common Stock Elliot Smith 34,000(3) 0.19%
(Director)
6955 E. Caballo Dr.
Paradise Valley,
AZ 85253
Common Stock Jack Friedland 0(4) 0%
(Director)
6955 E. Caballo Dr.
Paradise Valley,
AZ 85253
Common Stock All Officers and
Directors 600,000 3.35%
as a Group (4 persons)
- -------------------------------------------------------------------
* Based on 17,925,670 shares of common stock outstanding as of
November 1, 1999.
(1) Ms. Wallace also holds stock options to purchase 400,000 shares
at a price of $1.00.
(2) Ms. Sim also holds stock options to purchase 200,000 shares at
a price of $1.00.
(3) Mr. Smith also holds stock options to purchase 100,000 shares
at a price of $2.62.
(4) Dr. Friedland also holds stock options to purchase 100,000
shares at a price of $2.62.
ADDITIONAL INFORMATION
INDEPENDENT ACCOUNTANTS
Upon appointment by the Board, Smith & Company, independent public
accountants, audited and reported on the consolidated financial
statements of the Company and its subsidiaries for the fiscal year
ended December 31, 1998. Such financial statements can be found in
the Company's 10K filed on April 15, 1999 and are incorporated by
reference in this Proxy Statement. Representatives of Smith &
Company are not expected to be present at the Annual Meeting. As of
November 5, 1999, the Company dismissed Smith & Company and
appointed Grant Thornton, LLP as its independent auditors.
Representatives of Grant Thornton, LLP are not expected to be
present at the Annual Meeting.
16
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company with the Commission,
are incorporated herein by reference:
(i) the Company's Annual Report filed on Form 10-K filed
with the Commission on April 6, 1999, for the fiscal
year ended December 31, 1998;
(ii) the Company's Quarterly Reports filed on Form 10-QSB on
May 24, 1999 and August 23, 1999.
The following documents, attached hereto, are incorporated herein
by reference:
Exhibit Number Description
- -------------- -----------
1 Stock Option Plan
All reports and definitive proxy or information statements filed by
the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Proxy Statement and
prior to the date of the Annual Meeting shall be deemed to be
incorporated by reference into this Proxy Statement from the dates
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated in this Proxy Statement
shall be deemed to be modified or superseded for purposes of this
Proxy Statement to the extent that a statement contained herein or
in any other subsequently filed document that also is or is deemed
to be incorporated by reference modifies or supersedes such
statement.
A copy of the documents incorporated herein by reference (excluding
exhibits unless such exhibits are specifically incorporated by
reference into the information incorporated herein) that are not
presented with this document or delivered herewith, will be
provided without charge to each person, including any beneficial
owner, to whom a Proxy Statement is delivered, upon oral or written
request of any such person and by first-class mail or other equally
prompt means. Requests should be directed to the Corporate
Secretary at the address set forth below in "Other Matters."
ANNUAL MEETING
The 1999 Annual Meeting of Shareholders of the Company will be held
on December 10, 1999 at 11:00 a.m., at 101 Convention Center Drive,
Suite 1200, Las Vegas, Nevada 89109.
OTHER MATTERS
The Board, as of November 1, 1999 was not aware of any matters to
be presented for action at the Annual Meeting other than the
election of directors and the approval of the incentive stock
option plan, and do not intend to bring any other matters before
the Annual Meeting. If any other matters properly come before the
meeting, however, or any adjournment thereof, the person or persons
voting the proxies will vote in accordance with their best
judgment.
17
<PAGE>
A copy of the Company's 1999 Annual Report on Form 10-K,
incorporating the Company's audited financial statements for the
year ended December 31, 1998, as required to be filed with the
Commission will be provided upon written request without charge to
any shareholder whose proxy is being solicited by the Board. The
written request should be directed to the Secretary of the Company,
6955 E. Caballo Drive, Paradise Valley, Arizona 85253.
By Order of the Board of Directors
of MW Medical, Inc.
\s\ Jan Wallace
_______________________________
JAN WALLACE
President and Chief Executive Officer
18
<PAGE>
MW MEDICAL, INC.
PROXY
FOR ANNUAL MEETING OF THE SHAREHOLDERS OF MW MEDICAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints JAN WALLACE and GRACE SIM, and each
of them, with full power of substitution, as proxies to vote the
shares which the undersigned is entitled to vote at the Annual
Meeting of the Company to be held at 101 Convention Center Drive,
Suite 1200, Las Vegas, Nevada 89109, on December 10, 1999 at 11:00
a.m. Pacific Standard Time, and at any adjournments thereof.
Please mark your votes as indicated [X]
This proxy when properly signed will be voted in the manner
directed herein by the undersigned shareholder. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 and 2.
1. Election of directors: Jan Wallace, Grace Sim, Elliot Smith and
Jack Friedland.
FOR Election NOT FOR Election
of directors of directors
[_] [_]
Except vote withheld from following nominee(s) listed above.
___________________________ ________________________
2. Incentive Stock Option Plan.
FOR Plan NOT FOR Plan
[_] [_]
In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the meeting.
IMPORTANT - PLEASE SIGN AND RETURN PROMPTLY. When shares are held
by joint tenants, both should sign. When signing as attorney,
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 an authorized person.
Signature(s) Dated: ________________, 1999
___________________________ ___________________________
19
<PAGE>
STOCK OPTION PLAN OF
MW MEDICAL, INC.
A Nevada Corporation
1. Purpose of the Plan
The purpose of this Plan is to strengthen MW Medical, Inc.
(hereinafter the "Company") by providing incentive stock
options as a means to attract, retain and motivate key
corporate personnel, through ownership of stock of the
Company, and to attract individuals of outstanding ability
to render services to and enter the employment of the
Company or its subsidiaries.
2. Types of Stock Options
There shall be two types of Stock Options (referred to
herein as "Options" without distinction between such
different types) that may be granted under this Plan: (1)
Options intended to qualify as Incentive Stock Options
under Section 422 of the Internal Revenue Code ("Qualified
Stock Options"), and (2) Options not specifically
authorized or qualified for favorable income tax treatment
under the Internal Revenue Code ("Non-Qualified Stock
Options").
3. Definitions
The following definitions are applicable to the Plan:
(a) Board. The Board of Directors of the Company.
(b) Code. The Internal Revenue Code of 1986, as amended
from time to time.
(c) Common Stock. The shares of Common Stock of the
Company.
(d) Company. MW Medical, Inc., a Nevada corporation.
(e) Consultant. An individual or entity that renders
professional services to the Company as an independent
contractor and is not an employee or under the direct
supervision and control of the Company.
(f) Disabled or Disability. For the purposes of Section 7,
a disability of the type defined in Section 22(e)(3) of
the Code. The determination of whether an individual is
Disabled or has a Disability is determined under
procedures established by the Plan Administrator for
purposes of the Plan.
(g) Fair Market Value. For purposes of the Plan, the "fair
market value" per share of Common Stock of the Company
at any date shall be: (a) if the Common Stock is listed
on an established stock exchange or exchanges or the
NASDAQ National Market, the closing price per share on
the last trading day immediately preceding such date on
the principal exchange on which it is traded or as
reported by NASDAQ; or (b) if the Common Stock is not
then listed on an exchange or the NASDAQ National
Market, but is quoted on the NASDAQ Small Cap Market,
the NASDAQ
<PAGE>
electronic bulletin board or the National
Quotation Bureau pink sheets, the average of the closing
bid and asked prices per share for the Common Stock as
quoted by NASDAQ or the National Quotation Bureau, as
the case may be, on the last trading day immediately
preceding such date; or (c) if the Common Stock is not
then listed on an exchange or the NASDAQ National
Market, or quoted by NASDAQ or the National Quotation
Bureau, an amount determined in good faith by the Plan
Administrator.
(h) Incentive Stock Option. Any Stock Option intended to
be and designated as an "incentive stock option" within
the meaning of Section 422 of the Code.
(i) Non-Qualified Stock Option. Any Stock Option that is
not an Incentive Stock Option.
(j) Optionee. The recipient of a Stock Option.
(k) Plan Administrator. The board or the Committee
designated by the Board pursuant to Section 4 to
administer and interpret the terms of the Plan.
(l) Stock Option. Any option to purchase shares of Common
Stock granted pursuant to Section 7.
4. Administration of the Plan
This Plan shall be administered by a "Compensation
Committee" or "Plan Administrator" composed of members
selected by, and serving at the pleasure of, the Board of
Directors. Subject to the provisions of the Plan, the Plan
Administrator shall have authority to construe and
interpret the Plan, to promulgate, amend, and rescind
rules and regulations relating to its administration, to
select, from time to time, among the eligible employees
and non-employee consultants (as determined pursuant to
Section 5) of the Company and its subsidiaries those
employees and consultants to whom Stock Options will be
granted, to determine the duration and manner of the grant
of the Options, to determine the exercise price, the
number of shares and other terms covered by the Stock
Options, to determine the duration and purpose of leaves
of absence which may be granted to Stock Option holders
without constituting termination of their employment for
purposes of the Plan, and to make all of the
determinations necessary or advisable for administration
of the Plan. The interpretation and construction by the
Plan Administrator of any provision of the Plan, or of any
agreement issued and executed under the Plan, shall be
final and binding upon all parties. No member of the
Committee or Board shall be liable for any action or
determination undertaken or made in good faith with
respect to the Plan or any agreement executed pursuant to
the Plan.
All of the members of the Committee shall be persons who,
in the opinion of counsel to the Company, are outside
directors and "non-employee directors" within the meaning
of Rule l6b-3(b)(3)(i) promulgated by the Securities and
Exchange Commission. From time to time, the Board may
increase or decrease the size of the Committee, and add
additional members to, or remove members from, the
Committee. The Committee shall act pursuant to a majority
vote, or the written consent of a majority of its members,
and minutes shall be kept of all of its meetings and
copies thereof shall be provided to the Board. Subject to
the provisions of the Plan and the directions of the
Board, the Committee may establish and follow such rules
and regulations for the conduct of its business as it may
deem advisable.
2
<PAGE>
At the option of the Board, the entire Board of Directors
of the Company may act as the Plan Administrator during
such periods of time as all members of the Board are
"outside directors" as defined in Prop. Treas. Regs.
Section 1.162-27(e)(3), except that this requirement shall not
apply during any period of time prior to the date the
Company's Common Stock becomes registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as
amended.
5. Grant of Options
The Company is hereby authorized to grant Incentive Stock
Options as defined in section 422 of the Code to any
employee or director (including any officer or director
who is an employee) of the Company, or of any of its
subsidiaries; provided, however, that no person who owns
stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, or
any of its parent or subsidiary corporations, shall be
eligible to receive an Incentive Stock Option under the
Plan unless at the time such Incentive Stock Option is
granted the Option price is at least 110% of the fair
market value of the shares subject to the Option, and such
Option by its terms is not exercisable after the
expiration of five years frorn the date such Option is
granted.
An employee may receive more than one Option under the
Plan. Non-Employee Directors shall be eligible to receive
Non-Qualified Stock Options in the discretion of the Plan
Administrator. In addition, Non-Qualified Stock Options
may be granted to Consultants who are selected by the Plan
Administrator.
6. Stock Subject to Plan
The stock available for grant of Options under the Plan
shall be shares of the Company's authorized but unissued,
or reacquired, Common Stock. The aggregate number of
shares that may be issued pursuant to exercise of Options
granted under the Plan, as amended, shall not exceed
2,500,000 shares of Common Stock (subject to adjustment as
provided herein), including shares previously issued under
the Plan. The maximum number of shares for which an Option
may be granted to any Optionee during any calendar year
shall not exceed 500,000 shares. In the event that any
outstanding Option under the Plan for any reason expires
or is terminated, the shares of Common Stock allocable to
the unexercised portion of the Option shall again be
available for Options under the Plan as if no Option had
been granted with regard to such shares.
7. Terms and Conditions of Options
Options granted under the Plan shall be evidenced by
agreements (which need not be identical) in such form and
containing such provisions that are consistent with the
Plan as the Plan Administrator shall from time to time
approve. Such agreements may incorporate all or any of the
terms hereof by reference and shall comply with and be
subject to the following terms and conditions:
(a) Number of Shares. Each Option agreement shall specify
the number of shares subject to the Option.
3
<PAGE>
(b) Option Price. The purchase price for the shares
subject to any Option shall be determined by the Plan
Administrator at the time of the grant, but shall not be
less than 85% of Fair Market Value per share. Anything
to the contrary notwithstanding, the purchase price for
the shares subject to any Incentive Stock Option shall
not be less than 100% of the Fair Market Value of the
shares of Common Stock of the Company on the date the
Stock Option is granted. In the case of any Option
granted to an employee who owns stock possessing more
than 10% of the total combined voting power of all
classes of stock of the Company, or any of its parent or
subsidiary corporations, the Option price shall not be
less than 110% of the Fair Market Value per share of the
Common Stock of the Company on the date the Option is
granted. For purposes of determining the stock
ownership of an employee, the attribution rules of
Section 424(d) of the Code shall apply.
(c) Notice and Payment. Any exercisable portion of a Stock
Option may be exercised only by: (a) delivery of a
written notice to the Company prior to the time when
such Stock Option becomes unexercisable herein, stating
the number of shares bring purchased and complying with
all applicable rules established by the Plan
Administrator; (b) payment in full of the exercise price
of such Option by, as applicable, delivery of: (i) cash
or check for an amount equal to the aggregate Stock
Option exercise price for the number of shares being
purchased, (ii) in the discretion of the Plan
Administrator, upon such terms as the Plan Administrator
shall approve, a copy of instructions to a broker
directing such broker to sell the Common Stock for which
such Option is exercised, and to remit to the Company
the aggregate exercise price of such Stock Option (a
"cash1ess exercise"), or (iii) in the discretion of the
Plan Administrator, upon such terms as the Plan
Administrator shall approve, shares of the Company's
Common Stock owned by the Optionee, duly endorsed for
transfer to the Company, with a Fair Market Value on the
date of delivery equal to the aggregate purchase price
of the shares with respect to which such Stock Option or
portion is thereby exercised (a "stock-for-stock
exercise"); (c) payment of the amount of tax required to
be withheld (if any) by the Company, or any parent or
subsidiary corporation as a result of the exercise of a
Stock Option. At the discretion of the Plan
Administrator, upon such terms as the Plan Administrator
shall approve, the Optionee my pay all or a portion of
the tax withholding by: (i) cash or check payable to the
Company, (ii) a cashless exercise, (iii) a
stock-for-stock exercise, or (iv) a combination of one
or more of the foregoing payment rnethods; and (d)
delivery of a written notice to the Company requesting
that the Company direct the transfer agent to issue to
the Optionee (or his designee) a certificate for the
number of shares of Common Stock for which the Option
was exercised or, in the case of a cashless exercise,
for any shares that were not sold in the cashless
exercise. Notwithstanding the foregoing, the Company, in
its sole discretion, may extend and maintain, or mange
for the extension and maintenance of credit to any
Optionee to finance the Optionee's purchase of shares
pursuant to the exercise of any Stock Option, on such
terms as may be approved by the Plan Administrator,
subject to applicable regulations of the Federal Reserve
Board and any other laws or regulations in effect at the
time such credit is extended.
(d) Terms of Option. No Option shall be exercisable after
the expiration of the earliest of: (a) ten years after
the date the Option is granted, (b) three months after
the date the Optionee's employment with the Company and
its subsidiaries terminates, or a Non-Employee Director
or Consultant ceases to provide services to the Company,
if such termination or cessation is for any reason other
than Disability or death, (c) one year after the date
the Optionee's employment with
4
<PAGE>
the Company, and its subsidiaries, terminates, or a Non-
Employee Director or Consultant ceases to provide services
to the Company, if such termination or cessation is a result
of death or Disability; provided, however, that the Option
agreement for any Option may provide for shorter periods in
each of the foregoing instances. In the case of an Incentive
Stock Option granted to an employee who owns stock
possessing more than 10% of the total combined voting
power of all classes of stock of the Company, or any of
its parent or subsidiary corporations, the term set
forth in (a) above shall not be more than five years
after the date the Option is granted.
(e) Exercise of an Option. No Option shall be exercisable
during the lifetime of the Optionee by any person other
than the Optionee. Subject to the foregoing, the Plan
Administrator shall have the power to set the time or
times within which each Option shall be exercisable and
to accelerate the time or times of exercise; provided.
However the Option shall provide the right to exercise
at the rate of at least 20% per year over five years
from the date the Option is granted. Unless otherwise
provided by the Plan Administrator, each Option granted
under the Plan shall become exercisable on a cumulative
basis as to one-third (1/3) of the total number of
shares covered thereby at any time after one year from
the date the Option is granted and an additional
one-third (1/3) of such total number of shares at any
time after the end of each consecutive one-year period
thereafter until the Option has become exercisable as to
all of such total number of shares. To the extent that
an Optionee has the right to exercise an Option and
purchase shares pursuant hereto, the Option may be
exercised from time to time by written notice to the
Company, stating the number of shares being purchased
and accompanied by payment in full of the exercise price
for such shares.
(f) No Transfer of Option. No Option shall be transferable
by an Optionee otherwise than by will or the laws of
descent and distribution.
(g) Limit on Incentive Stock Option. The aggregate Fair
Market Value (determined at the time the Option is
granted) of the stock with respect to which an Incentive
Stock Option is granted and exercisable for the first
time by an Optionee during any calendar year (under all
Incentive Stock Option plans of the Company and its
subsidiaries) shall not exceed $100,000. To the extent
the aggregate Fair Market Value (determined at the time
the Stock Option is granted) of the Common Stock with
respect to which Incentive Stock Options are exercisable
for the first time by an Optionee during any calendar
year (under all Incentive Stock Option plans of the
Company and any parent or subsidiary corporations)
exceeds $100,000, such Stock Options shall be treated as
Non-Qualified Stock Options. The determination of which
Stock Options shall be treated as Non-Qualified Stock
Options shall be made by taking Stock Options into
account in the Order in which they were granted.
(h) Restriction on Issuance of Shares. The issuance of
Options and shares shall be subject to compliance with
all of the applicable requirements of law with respect
to the issuance and sale of securities, including,
without limitation, any required qualification under
state securities laws. If an Optionee acquires shares
of Common Stock pursuant to the exercise of an Option,
the Plan Administrator, in its sole discretion, may
require as a condition of issuance of shares covered by
the Option that the shares of Common Stock be subject to
restrictions on transfer. The Company may place a legend
on the share certificates reflecting the fact that they
are subject to restrictions on transfer pursuant to the
terms of this Section. In addition, the Optionee may be
required to execute a buy-sell agreement in favor of the
Company or its designee with respect to all or any of
5
<PAGE>
the shares so acquired. In such event, the terms of any
such agreement shall apply to the optioned shares.
(i) Investment Representation. Any Optionee may be
required, as a condition of issuance of shares covered
by his or her Option, to represent that the shares to be
acquired pursuant to exercise will be acquired for
investment and without a view toward distribution
thereof, and in such case, the Company may place a
legend on the share certificate(s) evidencing the fact
that they were acquired for investment and cannot be
sold or transferred unless registered under the
Securities Act of 1933, as amended, or unless counsel
for the Company is satisfied that the circumstances of
the proposed transfer do not require such registration.
(j) Rights as a Shareholder or Employee. An Optionee or
transferee of an Option shall have no right as a
stockholder of the Company with respect to any shares
covered by any Option until the date of the issuance of
a share certificate for such shares. No adjustment
shall be made for dividends (Ordinary or extraordinary,
whether cash, securities, or other property), or
distributions or other rights for which the record date
is prior to the date such share certificate is issued,
except as provided in paragraph (m) below. Nothing in
the Plan or in any Option agreement shall confer upon
any employee any right to continue in the employ of the
Company or any of its subsidiaries or interfere in any
way with any right of the Company or any subsidiary to
terminate the Optionee's employment at any time.
(k) No Fractional Shares. In no event shall the Company be
required to issue fractional shares upon the exercise of
an Option.
(l) Exercise in the Event of Death. In the event of the
death of the Optionee, any Option or unexercised portion
thereof granted to the Optionee, to the extent
exercisable by him or her on the date of death, may be
exercised by the Optionee's personal representatives,
heirs, or legatees subject to the provisions of
paragraph (d) above.
(m) Recapitalization or Reorganization of the Company.
Except as otherwise provided herein, appropriate and
proportionate adjustments shall be made (1) in the
number and class of shares subject to the Plan, (2) to
the Option rights granted under the Plan, and (3) in the
exercise price of such Option rights, in the event that
the number of shares of Common Stock of the Company are
increased or decreased as a result of a stock dividend
(but only on Common Stock), stock split, reverse stock
split, recapitalization, reorganization, merger,
consolidation, separation, or like change in the
corporate or capital structure of the Company. In the
event there shall be any other change in the number or
kind of the outstanding shares of Common Stock of the
Company, or any stock or other securities into which
such common stock shall have been changed, or for which
it shall have been exchanged, whether by reason of a
complete liquidation of the Company or a merger,
reorganization, or consolidation with any other
corporation in which the Company is not the surviving
corporation, or the Company becomes a wholly-owned
subsidiary of another corporation, then if the Plan
Administrator shall, in its sole discretion, determine
that such change equitably requires an adjustment to
shares of Common Stock currently subject to Options
under the Plan, or to prices or terms of outstanding
Options, such adjustment shall be made in accordance
with such determination.
6
<PAGE>
To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustment
shall be made by the Plan Administrator, the
determination of which in that respect shall be final,
binding, and conclusive. No right to purchase fractional
shares shall result from any adjustment of Options
pursuant to this Section. In case of any such
adjustment, the shares subject to the Option shall he
rounded down to the nearest whole share. Notice of any
adjustment shall be given by the Company to each
Optionee whose Options shall have been so adjusted and
such adjustment (whether or not notice is given) shall
be effective and binding for all purposes of the Plan.
In the event of a complete liquidation of the Company or
a merger, reorganization, or consolidation of the
Company with any other corporation in which the Company
is not the surviving corporation, or the Company becomes
a wholly-owned subsidiary of another corporation, any
unexercised Options granted under the Plan shall be
deemed cancelled unless the surviving corporation in any
such merger, reorganization, or consolidation elects to
assume the Options under the Plan or to issue substitute
Options in place thereof; provided, however, that
notwithstanding the foregoing, if such Options would be
cancelled in accordance with the foregoing, the Optionee
shall have the right exercisable during a ten-day period
ending on the fifth day prior to such liquidation,
merger, or consolidation to exercise such Option in
whole or in part without regard to any installment
exercise provisions in the Option agreement.
(n) Modification, Extension and Renewal of Options.
Subject to the terms and conditions and within the
limitations of the Plan, the Plan Administrator may
modify, extend or renew outstanding options granted
under the Plan and accept the surrender of outstanding
Options (to the extent not theretofore exercised). The
Plan Administrator shall not, however, without the
approval of the Board, modify any outstanding Incentive
Stock Option in any manner that would cause the Option
not to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code. Notwithstanding the
foregoing. no modification of an Option shall, without
the consent of the Optionee, alter or impair any rights
of the Optionee under the Option.
(o) Other Provisions. Each Option may contain such other
terms, provisions, and conditions not inconsistent with
the Plan as may be determined by the Plan Administrator.
8. Termination or Amendment of the Plan
The Board may at any time terminate or amend the Plan;
provided that, without approval of the holders of a
majority of the shares of Common Stock of the Company
represented and voting at a duly held meeting at which a
quorum is present or the written consent of a majority of
the outstanding shares of Common Stock, there shall be
(except by operation of the provisions of paragraph (m)
above) no increase in the total number of shares covered
by the Plan, no change in the class of persons eligible to
receive options granted under the Plan, no reduction in
the exercise price of Options granted under the Plan, and
no extension of the latest date upon which Options may be
exercised; and provided further that, without the consent
of the Optionee, no amendment may adversely affect any
then outstanding Option or any unexercised portion
thereof.
7
<PAGE>
9. Indemnification
In addition to such other rights of indemnification as
they may have as members of the Board Committee that
administers the Plan, the members of the Plan
Administrator shall be indemnified by the Company against
reasonable expense, including attorney's fees, actually
and necessarily incurred in connection with the defense of
any action, suit or proceeding, or in connection with any
appeal therein to which they, or any of them, may be a
party by reason of any action taken or failure to act
under or in connection with the Plan or any Option granted
thereunder, and against any and all amounts paid by them
in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the
Company). In addition, such members shall be indemnified
by the Company for any amount paid by them in satisfaction
of a judgment in any action, suit, or proceeding, except
in relation to matters as to which it shall have been
adjudged that such member is liable for negligence or
misconduct in the performance of his or her duties,
provided however that within 60 days after institution of
any such action, suit, or proceeding, the member shall in
writing offer the Company the opportunity, at its own
expense, to handle and defend the same.
10. Effective Date and Term of the Plan
This Plan shall become effective (the "Effective Date") on
the date of adoption by the board of directors as
evidenced by the date and signature below. Options
granted under the Plan prior to shareholder approval are
subject to cancellation by the Plan Administrator if
shareholder approval is not obtained within 12 months of
the date of adoption. Unless sooner terminated by the
Board in its sole discretion, this Plan will expire on
December 31, 2008.
IN WITNESS WHEREOF, the Company by its duly authorized
officer, has caused this Plan to be executed this 23rd day
of March, 1999.
MW MEDICAL, INC.
\s\ Jan Wallace
_____________________________________
By: Jan Wallace
Its: Chairman of the Board
8
