<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K/A
AMENDMENT NO. 1
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 000-26487
WOMEN FIRST HEALTHCARE, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3919601
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
12220 EL CAMINO REAL, SUITE 400,
SAN DIEGO, CALIFORNIA 92130
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(858) 509-1171
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $ .001 PAR VALUE
(TITLE OF CLASS)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filer pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of February 29, 2000, the aggregate market value of the registrant's voting
stock held by non-affiliates of the registrant was approximately $44,283,941,
based on the closing price of the Company's Common Stock on the Nasdaq National
Market on February 29, 2000 of $5.875 per share.
As of February 29, 2000, 17,270,552 shares of the Company's Common Stock, $.001
par value, were outstanding.
<PAGE> 2
The following items of Women First HealthCare, Inc.'s Annual Report on
Form 10-K for the fiscal year ended December 31, 1999 are hereby amended. Each
such item is set forth in its entirety, as amended.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<S> <C> <C>
Edward F. Calesa............... 58 Chairman of the Board
David F. Hale.................. 51 President, Chief Executive Officer and Director
Debra P. Crawford.............. 42 Vice President, Chief Financial Officer, Treasurer and Secretary
Susan E. Dube.................. 53 Senior Vice President
Jeffrey W. Raser............... 39 Vice President, Professional Sales and Marketing
Randi C. Crawford.............. 31 Vice President, Educational Program Development
Wendy S. Johnson............... 48 Vice President, Business Development
Robert S. Plucinski............ 50 Vice President, Strategic Relationships and Education
Robert L. Jones................ 55 Vice President, Human Resources and Administration
Nancy J. Casey................. 48 Vice President, Public Relations
Meredith A. Brokaw............. 59 Director
Anthony P. Maris............... 66 Director
Gary V. Parlin................. 58 Director
Richard L. Rubin............... 70 Director
John Simon..................... 57 Director
</TABLE>
Edward F. Calesa co-founded Women First in November 1996 and has served
as a Director since that time. Mr. Calesa has served as Chairman of the Board of
Directors since December 1996. Mr. Calesa also served as our President and Chief
Executive Officer from November 1996 to January 1998. Mr. Calesa has an
extensive background in innovative health care marketing. In 1971, he co-founded
and served as Chairman of the Board of Health Learning Systems Inc. During his
tenure at Health Learning Systems, Mr. Calesa developed working relationships
with many academic medical specialists and medical organizations, including the
National Institutes of Health, National Board of Medical Examiners, Educational
Testing Services, Washington Business Group on Health, and Voluntary Hospitals
of America and numerous pharmaceutical companies. Mr. Calesa sold Health
Learning Systems in December 1988 to WPP Group, plc. From January 1989 to
November 1996, Mr. Calesa served as General Partner of an investment
partnership, Calesa Associates. Mr. Calesa received an M.B.A. in marketing from
Fairleigh Dickinson University and a B.A. in economics from Columbia College.
David F. Hale joined Women First as President and Chief Executive
Officer in January 1998 and has served as a Director since that time. Mr. Hale
served from May 1987 to November 1997 as President and Chief Executive Officer
of Gensia Inc., which became Gensia Sicor Inc. (now Sicor, Inc.), and as
Chairman of that company from May 1991 to November 1997. From 1986 to 1987, Mr.
Hale was President and CEO of Hybritech, Inc., a division of Eli Lilly &
Company. He joined Hybritech, Inc. in 1982 as Senior Vice President of Marketing
and Business Development, became Executive Vice President and Chief Operating
Officer in 1982 and became President in 1983. From 1981 to 1982, Mr. Hale was
Vice President and General Manager of BBL Microbiology Systems, a division of
Becton, Dickinson and Company, and from 1980 to 1981 he was Vice President,
Sales & Marketing. From 1971 to 1980, he held various marketing management
positions with Ortho Pharmaceutical Corporation, a division of Johnson &
Johnson, including Director of Marketing of the Ortho Dermatological Division
and Director of Product Management for Ortho Pharmaceutical Corporation. Mr.
Hale also serves on the Board of Directors of Dura Pharmaceuticals, Inc., LMA
North America and Metabasis Therapeutics. Mr. Hale received a B.A. in biology
from Jacksonville State University.
Debra P. Crawford joined Women First in July 1998 as Vice President,
Chief Financial Officer, Treasurer and Assistant Secretary and was appointed
Secretary in March 1999. From March 1997 to August 1998, Ms. Crawford was
self-employed and provided financial consulting services in the capacity of
acting chief financial officer or as a corporate development financial
consultant. Ms. Crawford was Chief Financial Officer, Vice President, Finance
and Administration, Treasurer and Secretary of
2
<PAGE> 3
IVAC Medical Systems, Inc. from January 1995 to December 1996 and Chief
Financial Officer, Vice President, Finance and Administration and Treasurer of
IVAC Holdings, Inc. from January 1996 to December 1996. Ms. Crawford served as
Vice President, Finance and Administration, Treasurer and Assistant Secretary of
IVAC Corporation from May 1994 to December 1994. From May 1992 to May 1994, Ms.
Crawford was Director of Finance and Manufacturing Controller of Advanced
Cardiovascular Systems, Inc. Ms. Crawford is a CPA and holds a B.S. in business
administration with an emphasis in accounting from San Diego State University.
Ms. Crawford is resigning from Women First effective May 5, 2000.
Susan E. Dube joined Women First in July 1998 as Vice President,
Strategic Planning & Acquisitions and was promoted to Senior Vice President in
December 1999. From October 1997 until she joined Women First, Ms. Dube was
Senior Vice President, Strategy & Corporate Development for Imagyn Medical
Technologies, Inc. From January 1996 to September 1997, Ms. Dube served as Vice
President, Marketing and Business Development and Vice President, Business
Development at Imagyn Medical, Inc. From August 1995 to December 1995, Ms. Dube
served as a consultant for LifeScience Economics, Inc. during which time she
consulted for Imagyn Medical, Inc. Ms. Dube also served as President and Chief
Executive Officer of BioInterventions, Inc. from June 1994 to August 1995. From
August 1993 to May 1994, she served as an independent consultant to a number of
health care companies. From May 1991 to August 1993, she was Executive Vice
President and Chief Operating Officer of Adeza Biomedical, Inc. She was employed
as Vice President, Ventures at the Brigham and Women's Hospital from 1985 to
1991. Ms. Dube holds an M.B.A. from Harvard University and a B.A. in government
from Simmons College.
Jeffrey W. Raser joined Women First in March 1998 as Vice President,
Professional Sales and Marketing. From January 1995 until he joined Women First,
Mr. Raser was Director, Business Operations at Roche Laboratories, Inc. Mr.
Raser held a number of positions at Roche Laboratories, including Director of
Customer Marketing from December 1992 to December 1994, Market Segment Manager,
Director of Managed Care and Entitlement Programs from January 1991 to December
1992 and Senior Regional Manager, State Government Affairs from February 1990 to
January 1991. Mr. Raser worked for Lederle Laboratories as Manager, Marketing
Communications from January 1988 to January 1990 and Regional Manager, State
Government Relations from June 1985 to December 1987. Mr. Raser holds a B.A. in
government from Franklin and Marshall College.
Randi C. Crawford co-founded Women First and served as Vice President,
Marketing Research from February 1997 to February 1998. She served as Secretary
of Women First from January 1997 through March 1998. She assumed the role of
Vice President, Educational Program Development in February 1998 and currently
holds this position. From November 1995 until joining Women First, Ms. Crawford
was a research analyst with Calesa Associates specializing in investment
opportunities in health care companies. From October 1991 to November 1995, Ms.
Crawford worked as a consultant engaging in the creation and production of
children's television programming for Fox Television, Lifetime Television, DIC
Entertainment and Saban Entertainment, Inc. Ms. Crawford received a B.A. in
liberal arts from Villanova University. Ms. Crawford is the daughter of Edward
F. Calesa and is not related to Debra P. Crawford.
Wendy S. Johnson joined Women First in July 1998 as Vice President,
Business Development. From July 1994 until joining Women First, Ms. Johnson was
Vice President, Corporate Development & Operations at Prizm Pharmaceuticals,
currently Selective Genetics Incorporated. From July 1990 to June 1994, Ms.
Johnson was Vice President, Business Development and Regulatory Affairs with
Cytel Corporation. From June 1988 to June 1990, Ms. Johnson was with Synbiotics
Corporation as Manager, Business Development. She worked for Coralab Research as
International Affairs Administrator from 1986 to 1988. From 1976 to 1986, Ms.
Johnson served as Assistant Director with the Center for Devices and
Radiological Health at the Food and Drug Administration. Ms. Johnson holds an
M.B.A. from Loyola University, an M.S. in clinical microbiology from the
Hahnemann Medical School and a B.S. in microbiology from the University of
Maryland.
Robert S. Plucinski joined Women First in March 2000 as Vice President,
Strategic Relationships and Education. Prior to joining Women First, Mr.
Plucinski worked at Health Learning Systems for twelve years. During his tenure
at Health Learning Systems, he held various management positions, including
Executive Vice-President, Client Services, President, Disease Management
Systems, President, Health Learning Systems Clinical Systems and President of
Health Learning Systems. Mr. Plucinski has extensive experience in women's
health care, having been involved for ten years in the contraception marketplace
with Ortho-McNeil Pharmaceuticals. Mr. Plucinski's background also includes
pharmaceutical advertising, clinical research and pharmaceutical sales.
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<PAGE> 4
Mr. Plucinski received his M.B.A. from Adelphi University, M.S. in
neuroendocrine physiology from New York University, and a B.S. from Fairfield
University.
Robert L. Jones joined Women First in February 1998 as Vice President,
Human Resources and Administration. From March 1996 until he joined Women First,
Mr. Jones was Vice President, Human Resources and Training with Rally's
Hamburgers, Inc. From June 1995 to March 1996, Mr. Jones was a partner with Dick
Wray and Consultants, Inc. From January 1984 to November 1994, Mr. Jones served
as the Corporate Vice President, Human Resources with Foodmaker, Inc. From 1980
to 1984, Mr. Jones served in a number of positions with General Foods
Corporation including Vice President, Personnel, Theme Restaurant Division from
1980 to 1984 and Personnel Director, Foodservice Products Division from 1982 to
1984. Mr. Jones received an M.A. in personnel administration from Ball State
University and a B.S. in education and speech from Ball State University.
Nancy J. Casey joined Women First in October 1998 as Vice President,
Catalog Operations and in February 1999 became Vice President, Public Relations.
From August 1995 until October 1998, Ms. Casey was a Co-Chief Executive Officer
of As We Change, LLC and was a co-founder of that company. From June 1985 to
January 1997, Ms. Casey was the owner of Nancy Casey Public Relations. Ms. Casey
was a Sales Assistant with Dale Fitzmorris from September 1990 to November 1992.
From May 1987 to September 1990, she served as the Director of Public Relations
with WestCom Group. Ms. Casey holds a B.A. in English from San Diego State
University.
Meredith A. Brokaw has served as a Director of Women First since March
1998. Ms. Brokaw is a business consultant and author. She was founder and
President of Penny Whistle Toys, Inc. from 1978 until February 1997 when it was
sold. Ms. Brokaw has written eight books relating to parenting and children's
activities, which are distributed under the Penny Whistle Series label by Simon
and Schuster. Currently, she is on the Board of Trustees of the Educational
Broadcasting Corporation and Conservation International. Ms. Brokaw is also a
Director of the Gannett Co., Inc. Ms. Brokaw holds a B.A. in English and
communications from the University of South Dakota and received an Honorary
Doctor of Laws Degree from St. John's University.
Anthony P. Maris has served as a Director of Women First since April
2000 and effective April 17, 2000, Mr. Maris became our interim Vice President,
Chief Financial Officer, Treasurer and Secretary. Mr. Maris joined Women First
in September 1997 and served as Vice President and Chief Financial Officer from
September 1997 to July 1998. He served as Vice President, Finance until
February 1999 at which time he became a consultant to Women First. Prior to
joining Women First, Mr. Maris was Vice President, Treasurer, Chief Financial
Officer and Director of Roberts Pharmaceutical Co. He also held various
positions at Hoffman-LaRoche including that of Vice President, Chief Financial
Officer and Member of the Executive Committee and Board of Directors. Mr. Maris
has, for several years, served as an adjunct Professor at Rutgers Graduate
School of Business and Monmouth University Graduate School of Business. He is a
member of the Board of Directors of Pentegra Dental Group. Mr. Maris received a
B.S. from the University of Rhode Island and an M.B.A. from New York University.
Gary V. Parlin has served as a Director of Women First since November
1997 and a consultant from February 1998 to August 1999. Mr. Parlin retired from
Johnson & Johnson in July 1997 after 33 years with that corporation. At
retirement, he was a Company Group Chairman and previously had worldwide
responsibility for the Cilag Pharmaceutical Group and Ortho Biotech. Mr. Parlin
joined Ortho Pharmaceutical Corporation in 1964 and held a number of sales and
marketing positions. In 1997, he was promoted to Vice President, Sales and
Marketing and became a member of the Ortho Pharmaceutical Corporation Board of
Directors at that time. In 1980, Mr. Parlin was appointed Managing Director of
Ortho-Cilag Limited and in 1983 he was named President of Ortho Pharmaceuticals,
Inc. Mr. Parlin was appointed to the Pharmaceutical/Diagnostics Group Operating
Committee in 1985. Mr. Parlin holds a B.S. in business from California State
University, San Jose.
Richard L. Rubin, Ph.D. has served as a Director of Women First since
November 1996 and held the positions of Vice President from December 1996 to
March 1998, Secretary from December 1996 to January 1997 and Treasurer from
December 1996 to August 1997. Mr. Rubin is President of the Dedalus Foundation,
Chairman of New Dimensions in Education and a Professor of Political Science and
Public Policy at Swarthmore College. Since 1968, Dr. Rubin has served as a
business and investment consultant for various companies. From 1963 to 1968, Dr.
Rubin was the Director of Planning & Research for United Merchants &
Manufacturers, Inc. In 1957, Dr. Rubin was appointed Chairman and Chief
Executive Officer of Dorman Mills where he served until 1962. Dr. Rubin holds a
Ph.D. in political science from Columbia University and a B.A. in economics from
Brown University.
4
<PAGE> 5
John Simon has served as a Director of Women First since January 1998.
Mr. Simon is a Managing Director of the investment banking firm Allen & Company
Incorporated, where he has been employed for over 20 years. He is on the Board
of Directors of Neurogen Corporation, Advanced Technical Products, Inc. and
Realty Information Group, Inc. Mr. Simon holds an M.B.A. and J.D. from Columbia
University, a Ph.D. in chemical engineering from Rice University and a B.S. in
chemistry from The College of William & Mary.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Exchange Act, directors, officers and
beneficial owners of ten percent or more of our common stock ("Reporting
Persons") are required to report to the Securities and Exchange Commission on a
timely basis the initiation of their status as a Reporting Person and any
changes regarding their beneficial ownership of our common stock. Based solely
on our review of such forms received by us and the written representations of
our Reporting Persons, we have determined that no Reporting Person known to us
was delinquent with respect to their reporting obligations as set forth in
Section 16(a) of the Exchange Act, except that Ms. Brokaw filed an Initial
Statement of Beneficial Ownership of Securities on Form 3 after the effective
date of our registration statement on Form S-1.
5
<PAGE> 6
ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
the years ended December 31, 1999, 1998 and 1997 received by the Chief Executive
Officer and our four most highly compensated executive officers other than the
Chief Executive Officer who were serving as executive officers at the end of the
1999 fiscal year (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------------------------------- --------------------------
Other Shares All Other
Annual Underlying Compensation
Name and Principal Position Year Salary($) Bonus($) Compensation($) Options(#) ($)
- -------------------------------- ---- --------- ------- --------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Edward F. Calesa, Chairman 1999 362,512 140,000 95,392(1) -- --
of the Board 1998 252,308 -- -- -- --
1997 66,346 -- -- -- --
David F. Hale, President and 1999 350,016 280,000 6,357(3) -- 14,532(4)
Chief Executive Officer 1998 340,577(2) 75,000 -- 805,200 --
1997 -- -- -- -- --
Debra P. Crawford, Vice 1999 187,500 26,797 -- 18,300 --
President, Chief Financial 1998 67,308(5) -- -- 45,750 --
Officer, Treasurer & Secretary 1997 -- -- -- -- --
Susan E. Dube, Senior Vice 1999 187,500 27,179 22,007(6) 18,300 --
President 1998 87,500(7) 17,528 -- 45,750 --
1997 -- -- --
Jeffrey W. Raser, Vice President 1999 178,500 37,931 -- 18,300 --
Professional Sales and 1998 131,423(8) -- -- 45,750 --
Marketing 1997 -- -- -- -- --
</TABLE>
- ----------
(1) Includes relocation expenses and related tax gross-ups paid to Mr. Calesa
of $95,392 in 1999.
(2) Mr. Hale joined Women First on January 14, 1998. The amount shown in the
salary column reflects amounts actually paid to Mr. Hale during 1998.
(3) Includes an auto allowance for 1999 in the amount of $6,357 paid to Mr.
Hale.
(4) Includes $14,532 paid to Mr. Hale for premiums paid on a personal life
insurance policy on Mr. Hale's behalf.
(5) Ms. Crawford joined Women First on July 1, 1998. The amount shown in the
salary column reflects amounts actually paid to Ms. Crawford during 1998.
(6) Includes relocation expenses and related tax gross-ups paid to Ms. Dube
of $22,007 in 1999.
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<PAGE> 7
(7) Ms. Dube joined Women First on July 6, 1998. The amount shown in the
salary column reflects amounts actually paid to Ms. Dube during 1998.
(8) Mr. Raser joined Women First on March 27, 1998. The amount shown in the
salary column reflects amounts actually paid to Mr. Raser during 1998.
OPTION GRANTS DURING FISCAL YEAR 1999
The following table sets forth information regarding options to
purchase common stock granted during the year ended December 31, 1999 to each of
the Named Executive Officers. We do not have any outstanding stock appreciation
rights.
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed Annual Rates of Stock
Securities Options Exercise or Price Appreciation
Underlying Granted to Base Price for Option Term(1)
Options Employees in per Share Expiration ---------------------------------
Name Granted(#) Fiscal Year(%) ($/share) Date 0%($) 5%($) 10%($)
- ---- ---------- -------------- ----------- ---------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Edward F. Calesa ........ -- -- -- -- -- -- --
David F. Hale ........... -- -- -- -- -- -- --
Debra P. Crawford ....... 18,300 3.78% $4.81 2/21/09 $73,017 $174,294 $329,673
Susan E. Dube ........... 18,300 3.78% $4.81 2/21/09 $73,017 $174,294 $329,673
Jeffrey W. Raser ........ 18,300 3.78% $4.81 2/21/09 $73,017 $174,294 $329,673
</TABLE>
- ----------
(1) The potential realizable values are based on an assumption that the price
of our common stock will appreciate at the annual rate shown (compounded
annually) from the date of grant until the end of the option term. These
values do not take into account amounts required to be paid as income
taxes under the Internal Revenue Code and any applicable state laws or
option provisions providing for termination of an option following
termination of employment, non-transferability or vesting. These amounts
are calculated based on the requirements promulgated by the Securities
and Exchange Commission and do not reflect our estimate of future stock
price growth of the shares of our common stock.
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OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth certain information with respect to the
exercise of options to purchase common stock during the year ended December 31,
1999, and the unexercised options held and the value thereof at that date, for
each of the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT FISCAL YEAR FISCAL YEAR END($)(1)
ACQUIRED VALUE END(#) EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- -------------- ----------- ---------------------- -----------------------
<S> <C> <C> <C> <C>
Edward F. Calesa............. -- -- -- --
David F. Hale................ -- -- 538,656/266,544 $2,377,574/$1,176,499
Debra P. Crawford............ -- -- 21,068/42,982 77,462/132,526
Susan E. Dube................ -- -- 20,911/43,139 76,769/133,219
Jeffrey W. Raser............. -- -- 27,074/39,976 90,730/119,258
</TABLE>
- ------------------
(1) Based on the closing sale price of the common stock on December 31, 1999
($5.25), as reported by the Nasdaq National Market, less the option
exercise price.
COMPENSATION OF DIRECTORS
We reimburse Directors for their travel expenses incurred in attending
meetings of the Board. Directors currently do not receive any regular fees for
their services as such, although we may pay directors' fees in the future if we
believe the payment of such fees is necessary or appropriate to attract and
retain high-quality directors. Gary V. Parlin, a Director of Women First, served
as a consultant with us through August 1999 under which Mr. Parlin received fees
of $5,000 per month. Anthony P. Maris, a Director of Women First, had a
consulting arrangement with us under which Mr. Maris provided part-time
consulting services and received a minimum monthly consulting fee of $8,750 and
reimbursement for travel expenses incurred in performing his consulting duties.
Effective April 17, 2000, Mr. Maris joined Women First as Interim Vice
President, Chief Financial Officer, Treasurer and Secretary. Our outside
directors who are not employees of Women First also are eligible to receive
stock options under our 1998 Long-Term Incentive Plan.
EMPLOYMENT AGREEMENTS
On January 8, 1998, we entered into an employment agreement with Edward
F. Calesa, setting forth his duties, compensation, employee benefits and other
terms of employment. Pursuant to this agreement, Mr. Calesa was entitled to
receive a base annual salary of $150,000, which was increased by the
Compensation Committee of the Board of Directors on July 16, 1998 to $350,000
per year, effective July 1, 1998. At the time of this salary increase, the
Compensation Committee determined that Mr. Calesa was eligible to receive a
special bonus allocation. On July 7, 1999, the Compensation Committee approved
an increase in Mr. Calesa's annual base salary to $375,000. Effective April 1,
2000, the Compensation Committee approved a car allowance for Mr. Calesa in the
amount of $1,000 per month. Effective May 1, 2000, Mr. Calesa agreed to a
compensation reduction in the amount of $56,250.
On January 14, 1998, we entered into an employment agreement with David
F. Hale, setting forth his duties, compensation, employee benefits and other
terms of employment. Under the employment agreement, Mr. Hale is eligible to
receive the following cash compensation: (i) a base annual salary of $350,000,
which is subject to increase upon annual review by the Compensation Committee of
the Board of Directors, (ii) a bonus for each fiscal quarter of $25,000 based
upon Mr. Hale's performance, and (iii) an annual bonus in addition to his
quarterly bonus based upon his participation in our Management Incentive
Compensation
8
<PAGE> 9
Plan. Under the employment agreement, we agreed to grant Mr. Hale options to
purchase up to 805,200 shares of our common stock at an exercise price of $0.84
per share. Effective May 1, 2000, Mr. Hale agreed to a compensation reduction in
the amount of $52,500.
COMPENSATION PLANS
Long-Term Incentive Plan. On March 31, 1998, we adopted the Women First
HealthCare 1998 Long-Term Incentive Plan (the "Plan"), in which 2,249,985 shares
of common stock were reserved for issuance upon exercise of options granted to
officers, employees and directors of, and consultants to, Women First. Our
stockholders approved the adoption of the Plan in May 1998. The Plan permits the
award of non-qualified and incentive stock options, restricted stock, stock
appreciation rights, dividend equivalents, stock payments or performance awards.
The Board of Directors approved an increase in the number of shares reserved for
issuance under the Plan to 2,949,985 in March 2000, which is subject to
shareholder approval. The principal purposes of the Plan are to attract and
retain key employees, directors and independent consultants of our company and
our subsidiaries and to promote the identification of their interests with those
of our stockholders.
The Plan provides for grants up to 2,949,985 shares of our common stock.
As of March 31, 2000, awards have been granted (net of those grants that have
been cancelled) to purchase an aggregate of 1,908,889 shares of common stock at
prices ranging from $0.8361 to $ 13.813 under the Plan.
Incentive Stock Plan. The Women First, Inc. Incentive Stock Plan (the
"Incentive Plan") was adopted by the Board of Directors on May 7, 1997, and
approved by our stockholders on May 7, 1997, for the benefit of our employees,
directors and consultants. As of March 31, 2000, there were 27,450 shares of
common stock subject to incentive stock options outstanding under the Incentive
Plan. All outstanding options under the Incentive Plan have fully vested. No
additional awards will be made under the Incentive Plan because it was replaced
by Women First's 1998 Long-Term Incentive Plan on March 31, 1998.
Management Incentive Compensation Plan. We adopted the Women First
HealthCare Management Incentive Compensation Plan (the "MICP") to offer
incentive compensation to key employees by rewarding the achievement of
corporate goals and specifically measured individual goals. The MICP is governed
by the Compensation Committee of the Board of Directors and administered by our
President and Chief Executive Officer. The Compensation Committee, however, is
responsible for approving any incentive awards to our officers and for
determining and approving any incentive awards to the President and Chief
Executive Officer or Chairman. Awards under the MICP are based upon the
achievement of both individual and corporate objectives.
Non-Qualified Stock Option Plan. On March 7, 2000, we adopted the 1999
Non-Qualified Stock Option Plan of Women First HealthCare, Inc. (the "1999
Plan") that was approved by the Board of Directors, in which 250,000 shares of
common stock were reserved for issuance upon exercise of non-qualified stock
options granted to:
- key employees who are not officers or directors of Women First,
- newly hired employees who (i) have not previously been employed
by us, and (ii) with respect to whom options are to be granted
as an inducement to join Women First, and
- consultants who are not officers or directors of Women First.
In consideration for the granting of an option, the optionee must agree to
remain in the employ of (or to consult for) us or any subsidiary of us for a
period of at least one year after the option is granted, unless otherwise
provided by the committee or the written stock option agreement. The principal
purpose of the 1999 Plan is to further our growth, development and financial
success by providing additional incentives to key employees and independent
consultants who have been or will be given responsibility for the management or
administration of our business affairs. As of March 31, 2000, we have not
awarded any options under the 1999 Plan.
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<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Currently, Gary V. Parlin and Richard L. Rubin, both Directors of Women
First, serve on the Compensation Committee of the Board of Directors. Mr. Parlin
has served since March 1998 and Mr. Rubin since March 1999. Until August 1999,
Mr. Parlin had a consulting agreement with us under which Mr. Parlin received a
monthly consulting fee of $5,000. Mr. Parlin purchased $100,000 principal amount
of short-term notes and warrants to purchase 811 shares of common stock in a
private placement in March 1999. The short-term notes had an interest rate of 9%
per annum, payable quarterly. All principal and unpaid interest was repaid in
August 1999. The warrants are exercisable for a period of five years with an
exercise price of $9.35. Mr. Rubin previously held the positions of Vice
President, Secretary and Treasurer of Women First.
From March, 1998 until March, 1999, Edward F. Calesa, the Chairman of
the Board, JoAnn Heffernan Heisen, a former Director, and Gary V. Parlin served
on the Compensation Committee of the Board of Directors. Mr. Calesa is an
employee and receives an annual salary of $375,000 per year. He is a party to an
employment agreement with us for a term of four years commencing on January 8,
1998. Mr. Calesa also purchased $340,000 principal amount of short-term notes
and warrants to purchase 2,758 shares of common stock in a private placement in
March 1999. Ms. Calesa-Sherman, Mr. Calesa's daughter, purchased $110,000
principal amount of short-term notes and warrants to purchase 892 shares of
common stock in a private placement in March 1999.
Ms. Heisen is the Vice President, Chief Information Officer and a
member of the executive committee of Johnson & Johnson. Ms. Heisen resigned from
the Board of Directors of Women First on March 19, 1999. Johnson & Johnson
purchased $1.5 million principal amount of short-term notes and warrants to
purchase 12,169 shares of common stock in a private placement in March 1999.
No interlocking relationship exists between any member of the
Compensation Committee and any member of any other company's Board of Directors
or Compensation Committee.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 2000
regarding the beneficial ownership of our common stock by (a) each person known
to the Board of Directors to own beneficially 5% or more of our common stock;
(b) each director of Women First; (c) the Named Executive Officers; and (d) all
directors and executive officers of Women First as a group. Information with
respect to beneficial ownership has been furnished by each director, officer or
5% or more stockholder, as the case may be. The address for all executive
officers and directors is c/o Women First HealthCare, Inc., 12220 El Camino
Real, Suite 400, San Diego, California 92130.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission which generally attribute beneficial
ownership of securities to persons who possess sole or shared voting power or
investment power with respect to those securities and includes shares of common
stock issuable pursuant to the exercise of stock options or warrants that are
immediately exercisable or exercisable within 60 days. Unless otherwise
indicated, the persons or entities identified in this table have sole voting and
investment power with respect to all shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
OF COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OWNED(1) OWNED
- ---------------- ----------------- -------------
<S> <C> <C>
Edward F. Calesa ................................................. 5,286,082 30.41%
David F. Hale(2) ................................................. 688,488 3.82%
Debra P. Crawford ................................................ 28,843 *
Susan E. Dube .................................................... 27,531 *
Jeffrey W. Raser ................................................. 40,693 *
Meredith A. Brokaw ............................................... 8,538 *
Gary V. Parlin ................................................... 37,939 *
Richard L. Rubin ................................................. 183,000 1.05%
John Simon(3) .................................................... 9,112 *
Randi C. Crawford(4) ............................................. 1,064,347 6.11%
Johnson & Johnson Development Corporation(5) ..................... 2,137,769 12.15%
Capital Research and Management Company .......................... 1,160,000 6.67%
Executive Officers and Directors as a Group(13 persons)(6) ....... 7,462,770 40.92%
</TABLE>
- -----------------
* Less than 1%.
(1) The following table indicates those people whose total number of
beneficially owned shares include shares subject to options or warrants
exercisable within 60 days of March 31, 2000:
<TABLE>
<CAPTION>
Shares Subject to Shares Subject to
Options Warrants
----------------- -----------------
<S> <C> <C>
Edward F. Calesa ........................................... -- 2,758
David F. Hale .............................................. 621,864 324
Debra P. Crawford .......................................... 27,687 81
Susan E. Dube .............................................. 27,531 --
Jeffrey W. Raser ........................................... 30,693 --
Meredith A. Brokaw ......................................... 8,538 --
Gary V. Parlin ............................................. 37,128 811
</TABLE>
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<PAGE> 12
<TABLE>
<S> <C> <C>
Richard L. Rubin ........................................... -- --
John Simon ................................................. 9,112 --
Randi C. Crawford .......................................... 27,450 --
</TABLE>
(2) Includes 66,300 shares held by the David F. & Linda C. Hale Trust, of
which Mr. Hale is a trustee.
(3) Excludes shares and currently exercisable warrants held by Allen &
Company Incorporated and certain of its other officers and affiliates.
Mr. Simon is a Managing Director of Allen & Company Incorporated, but
disclaims beneficial ownership of the shares held by Allen & Company
Incorporated.
(4) Ms. Crawford is Edward F. Calesa's daughter.
(5) Includes 218,042 shares subject to currently exercisable warrants.
(6) See note (1). Includes 24,179 shares held by Nancy J. Casey and 8,577,
25,598 and 29,762 shares subject to options exercisable within 60 days
of the date of this table by Nancy J. Casey, Wendy S. Johnson and Robert
L. Jones respectively. Includes 81 shares subject to warrants
exercisable by Wendy S. Johnson.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
In January 1999, we satisfied certain milestones that were set forth in
a Series A Purchase Agreement and in February 1999 issued 550,000 shares of
Series A preferred stock (equivalent to 1,006,500 shares of common stock) for
total proceeds of $5.5 million.
In the Series A preferred stock private placement, which commenced in
January 1998, Edward F. Calesa, our Chairman of the Board, purchased 75,000
shares of Series A preferred stock (equivalent to 137,250 shares of common
stock) for $750,000, Janice Calesa-Sherman, Mr. Calesa's daughter, purchased
25,000 shares of Series A preferred stock (equivalent to 45,750 shares of common
stock) for $250,000, a trust of which David F. Hale, our President and Chief
Executive Officer, is a trustee, purchased 10,000 shares of Series A preferred
stock (equivalent to 18,300 shares of common stock) for $100,000, Johnson &
Johnson Development Corporation purchased 900,000 shares of Series A preferred
stock (equivalent to 1,647,000 shares of common stock) for $9.0 million, and
Allen & Company Incorporated purchased 100,000 shares of Series A preferred
stock (equivalent to 183,000 shares of common stock) for $1.0 million. We also
issued warrants to purchase 205,873 shares of common stock, with an exercise
price of $5.46 per share, to Johnson & Johnson Development Corporation in
connection with the private placement. Allen & Company Incorporated received
warrants to purchase an aggregate of 274,499 shares of common stock with an
exercise price of $5.46 per share, and other customary fees and expenses, as
consideration for serving as the placement agent for the private placement.
In March 1999, Johnson & Johnson Development Corporation purchased $1.5
million principal amount of short-term notes and warrants to purchase 12,169
shares of common stock for $1.5 million. Mr. Calesa purchased $340,000 principal
amount of the short-term notes and warrants to purchase 2,758 shares of common
stock for $340,000. Janice Calesa-Sherman, Mr. Calesa's daughter, purchased
$110,000 principal amount of the short-term notes and warrants to purchase 892
shares of common stock for $110,000. These short-term notes bear interest at a
rate of 9% per annum, payable quarterly. All principal and unpaid interest was
repaid in August 1999.
In May 1999, we entered into a co-promotion agreement with Ortho-McNeil
Pharmaceutical, Inc., a subsidiary of Johnson & Johnson pursuant to which we
agreed to co-promote Ortho Tri-Cyclen(R), a leading oral contraceptive, and
Ortho-Prefest(TM), a new oral hormonal replacement therapy product. The
agreement runs through December 31, 2002 and may be extended by us for one
additional year if specified sales goals are met. Effective as of March 31,
2000, we discontinued the co-promotion of Ortho Tri-Cyclen(R).
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<PAGE> 13
Until August, 1999 Gary V. Parlin, a Director of Women First, had a
consulting arrangement with us pursuant to which Mr. Parlin received a monthly
consulting fee of $5,000. In March 1999, Mr. Parlin purchased $100,000 principal
amount of the short-term notes and warrants to purchase 811 shares of common
stock for $100,000.
Until April 17, 2000, Anthony P. Maris, a Director of Women First, had
a consulting arrangement with us under which Mr. Maris provided part-time
consulting services and received a minimum monthly consulting fee of $8,750 and
reimbursement for travel expenses incurred in performing his consulting duties.
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<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Amendment No. 1 to Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.
WOMEN FIRST HEALTHCARE, INC.
May 1, 2000
By: /s/ DAVID F. HALE
----------------------------------
David F. Hale,
President and CEO
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