<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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 Rule 14a-11(c) or Rule 14a-12.
Medwave, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if Other Than the 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:
- --------------------------------------------------------------------------------
<PAGE> 2
MEDWAVE, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Medwave, Inc., will be held on
January 12, 2000, at 3:00 p.m. (Minneapolis time), at the Minneapolis Marriott
City Center Hotel, 30 South 7th Street, Minneapolis, Minnesota, for the
following purposes:
1. To set the number of directors at five (5).
2. To elect directors for the ensuing year.
3. To consider and act upon such other matters as may properly come
before the meeting and any adjournments thereof.
Only shareholders of record at the close of business on December 6, 1999
are entitled to notice of and to vote at the meeting or any adjournment thereof.
Your vote is important. We ask that you complete, sign, date, and return
the enclosed proxy in the envelope provided for your convenience. The prompt
return of proxies will save the Company the expense of further requests for
proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Timothy J. O'Malley
President and Chief Executive Officer
Arden Hills, Minnesota
December 8, 1999
<PAGE> 3
MEDWAVE, INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 12, 2000
PROXY STATEMENT
INTRODUCTION
Your proxy is solicited by the Board of Directors of Medwave, Inc. ("the
Company") for use at the Annual Meeting of Shareholders to be held on January
12, 2000, at the location and for the purposes set forth in the notice of
meeting, and at any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly, and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to beneficial owners of stock, will be borne by the
Company. Directors, officers, and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a proxy may revoke it at any time prior to its use
at the meeting by giving written notice of such revocation to the Secretary of
the Company. Proxies not revoked will be voted in accordance with the choice
specified by shareholders by means of the ballot provided on the proxy for that
purpose. Proxies which are signed but which lack any such specification will,
subject to the following, be voted in favor of the proposals set forth in the
Notice of Meeting and in favor of the slate of directors proposed by the Board
of Directors and listed herein. If a shareholder abstains from voting as to any
matter, then the shares held by such shareholder shall be deemed present at the
meeting for purposes of determining a quorum and for purposes of calculating the
vote with respect to such matter, but shall not be deemed to have been voted in
favor of such matter. Abstentions, therefore, as to any proposal will have the
same effect as votes against such proposal. If a broker returns a "non-vote"
proxy, indicating a lack of voting instructions by the beneficial holder of the
shares and a lack of discretionary authority on the part of the broker to vote
on a particular matter, then the shares covered by such non-vote proxy shall be
deemed present at the meeting for purposes of determining a quorum but shall not
be deemed to be represented at the meeting for purposes of calculating the vote
required for approval of such matter.
The mailing address of the principal executive office of the Company is
4382 Round Lake Road West, Arden Hills, Minnesota 55112-3923. The Company
expects that this Proxy Statement, the related proxy and notice of meeting will
first be mailed to shareholders on or about December 8, 1999.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed December 6, 1999, as the
record date for determining shareholders entitled to vote at the Annual Meeting.
Persons who were not shareholders on such date will not be allowed to vote at
the Annual Meeting. At the close of business on December 6, 1999, 5,499,596
shares of the Company's Common Stock were issued and outstanding. The Common
Stock is the only outstanding class of capital stock of the Company entitled to
vote at the meeting. Each share of Common Stock is entitled to one vote on each
matter to be voted upon at the meeting. Holders of Common Stock are not entitled
to cumulative voting rights.
-1-
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following table provides information concerning persons known to the
Company to be the beneficial owners of more than 5% of the Company's outstanding
Common Stock as of December 6, 1999. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
Number of Shares Percent of
Name and Address Beneficially Ownership
Owned(1)
- -------------------------------------------------------------------------------
<S> <C> <C>
John R. Albers 451,869 8.2%
3825 Gillon Avenue
Dallas, TX 75205
G. Kent Archibald 609,243(2) 10.3%
4382 Round Lake Road West
Arden Hills, MN 55112
Aaron Boxer, Revocable Trust 396,639 7.2%
Aaron Boxer, Trustee
5500 Wayzata Boulevard
8th Floor - Suite 800
Minneapolis, MN 55416
William D. Corneliuson 360,600 6.6%
777 East Wisconsin Avenue
Suite 3020
Milwaukee, WI 53202
David B. Johnson 494,400(3) 8.9%
5500 Wayzata Boulevard
8th Floor - Suite 800
Minneapolis, MN 55416
</TABLE>
(1) Shares not outstanding but deemed beneficially owned by virtue of the right
of a person to acquire them as of December 6, 1999, or within sixty days of
such date are treated as outstanding only when determining the percent
owned by such individual and when determining the percent owned by a group.
(2) Includes options to purchase 435,000 shares of Common Stock which are
currently exercisable as of December 6, 1999, or will become exercisable
within 60 days of such date.
(3) Includes 237,603 shares held by Mr. Johnson's spouse and minor children,
and 55,000 shares owned by a foundation over which he may be deemed to
share voting and disposition power, and includes warrants to purchase
70,000 shares of Common Stock which are exercisable as of December 6, 1999,
or will become exercisable within 60 days of such date.
-2-
<PAGE> 5
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of Common Stock
beneficially owned as of December 6, 1999, by the executive officers of the
Company named in the Summary Compensation Table, by each director and nominee
for director of the Company and by all directors and current executive officers
as a group. Unless otherwise indicated, the shareholders listed in the table
have sole voting and investment powers with respect to the shares indicated.
<TABLE>
<CAPTION>
Name and Address of Beneficial Number of Shares Percent of
Owner or Identity of Group Beneficially Owned(1) Ownership
- -------------------------------------------------------------------------------
<S> <C> <C>
G. Kent Archibald 609,243(2) 10.3%
4382 Round Lake Road West
Arden Hills, MN 55112
William D. Corneliuson 360,600 6.6%
777 East Wisconsin Avenue
Suite 3020
Milwaukee, WI 53202
Norman Dann 40,000(3) *
4382 Round Lake Road West
Arden Hills, MN 55112
Jeffrey W. Green 15,000(3) *
3401 4th Avenue North
Sioux Falls, SD 57104
Keith A. Libbey 6,700 *
900 Second Avenue South
1100 International Centre
Minneapolis, MN 55402
Timothy J. O'Malley -- *
4382 Round Lake Road West
Arden Hills, MN 55112
All current executive officers 1,091,543(4) 18.1%
and directors as a group
(7 persons)
</TABLE>
* Less than 1%
(1) See footnote (1) to preceding table.
(2) See footnote (2) to preceding table.
(3) Such shares are not outstanding but may be purchased upon exercise of
options which are exercisable as of December 6, 1999, or will become
exercisable within 60 days of such date.
(4) Includes 540,000 shares, which may be purchased upon exercise of options
which are exercisable as of December 6, 1999, or will become exercisable
within 60 days of such date.
-3-
<PAGE> 6
ELECTION OF DIRECTORS
(PROPOSAL #1 AND #2)
GENERAL INFORMATION
The Bylaws of the Company provide that the number of directors, which shall
not be less than one, shall be determined by the Board of Directors or by the
shareholders. Jeffrey W. Green, currently a director of the Company, has advised
the Company he does not wish to stand for reelection. Accordingly, the Board of
Directors recommends that the number of directors be set at five and that five
directors be elected at the Annual Meeting. Under applicable Minnesota law,
approval of the proposal to set the number of directors at five, as well as the
election of each nominee, requires the affirmative vote a majority of the voting
power of the shares represented in person or by proxy at the Annual Meeting with
authority to vote on such matter, but not less than the affirmative vote of
1,374,900 shares.
In the absence of other instructions, each proxy will be voted for each of
the nominees listed below. If elected, each nominee will serve until the next
annual meeting of shareholders and until his successor shall be elected and
qualified. If, prior to the meeting, it should become known that any of the
nominees will be unable to serve as a director after the meeting by reason of
death, incapacity or other unexpected occurrence, the proxies will be voted for
such substitute nominee as is selected by the Board of Directors or,
alternatively, not voted for any nominee. The Board of Directors has no reason
to believe that any nominee will be unable to serve.
The names and ages of all the director nominees and the positions held by
each with the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- --------------------------------------- ------- -----------------------------------------------
<S> <C> <C>
G. Kent Archibald 59 Chairman, Secretary, and Director
William D. Corneliuson 56 Director
Norman Dann 1,2 72 Director
Keith A. Libbey 1,2 62 Director
Timothy J. O'Malley 38 President, Chief Executive Officer and Director
</TABLE>
- ---------------------------------------------
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
G. KENT ARCHIBALD is the Chairman, Secretary, and a director of the
Company. He has served in these positions since October 1991. In addition, Mr.
Archibald served as President and Chief Executive Officer from 1991 to 1999.
From 1988 to 1991, Mr. Archibald was a private consultant and investor. From
1978 to 1984, Mr. Archibald was founder, President and Director of AVI, Inc., a
medical device company acquired by 3M Company's Medical Products Division in
1984. After this acquisition, Mr. Archibald served until 1988 as a general
manager and engineering director for 3M. Prior to his involvement with AVI,
Inc., Mr. Archibald held engineering positions at 3M, Control Data Corporation,
and The Boeing Company, Inc. Mr. Archibald holds a B.S. degree in electrical
engineering and is a professional engineer in the State of Minnesota. He serves
as a director of RayMedica, Inc., a privately held company that is developing a
prosthetic disc nucleus.
WILLIAM D. CORNELIUSON, has been a director of the Company since May
1999. Mr. Corneliuson is President of B.C. Holdings, Inc., a registered
investment advisor. Mr. Corneliuson has been with B.C. Holdings, Inc., since
1993. Previously, Mr. Corneliuson was President, Co-Founder, and Vice Chairman
of the Board of Strong/Corneliuson Capital Management, Inc., from 1976 to 1993.
-4-
<PAGE> 7
NORMAN DANN, a director of the Company since August 1995, has extensive
experience in the medical device industry. Since 1992, Mr. Dann has been a
business consultant concentrating in the areas of venture capital, strategic
planning, marketing, and product development. Mr. Dann also currently serves as
a director of Minntech Corporation, Applied Biometrics, Inc., and several
private companies. From 1980 to 1992, Mr. Dann served as an executive officer of
and consultant to Pathfinder Ventures, Inc., a venture capital firm
("Pathfinder"), and served as a general partner of three of Pathfinder's funds
and partnerships. From 1971 to 1977, Mr. Dann served as Vice President of Sales
and Marketing and Senior Vice President of Development with Medtronic, Inc., a
leading manufacturer of cardiac pacemakers and other medical products. In 1960,
Mr. Dann founded The Dann Company, an independent representative and service
organization for medical products, which was acquired by Medtronic, Inc. in
1971. Mr. Dann holds a B.S. degree in industrial engineering from Pennsylvania
State University.
KEITH A. LIBBEY, has been a director of the Company since July 1999.
Mr. Libbey is Chairman Emeritus of the Board of Directors of Fredrikson & Byron,
P.A., a law firm in Minneapolis, Minnesota. Mr. Libbey has been with Fredrikson
& Byron, P.A. since 1969.
TIMOTHY J. O'MALLEY, is President and Chief Executive Officer and a
director of the Company. He has served in these positions since October 1999.
From 1984 until 1999, Mr. O'Malley was an employee of Siemens Medical Systems,
Inc. Throughout his employment he served in a variety of technical, sales,
marketing and general management roles. At the time of his departure from
Siemens, Mr. O'Malley was Vice President/Division Manager of Siemens Medical
Systems, Electromedical Division for North America. Prior to joining Siemens,
Mr. O'Malley worked as a biomedical engineer at a small privately held company
in the Chicago area, selling and supporting medical equipment service and
maintenance agreements. Mr. O'Malley received his Associates of Applied Science
degree in 1983 from Oakton College in Desplaines, Illinois and attended DePaul
University of Chicago from 1986 until 1991, with an emphasis in Business
Management and Marketing.
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee is responsible for
reviewing the Company's internal control procedures and the quarterly and annual
financial statements of the Company, and reviewing with the Company's
independent public accountants the results of the annual audit. The Audit
Committee held one formal meeting during fiscal 1999. The Compensation Committee
recommends to the Board of Directors from time to time the salaries and
incentive compensation to be paid to executive officers of the Company and
administers the Company's Stock Option Plan. The Compensation Committee held one
formal meeting during fiscal 1999. Members of both of such Committees also meet
informally from time to time throughout the year on Committee matters.
The directors often communicate informally to discuss the affairs of the
Company and, when appropriate, take formal Board action by unanimous written
consent of all directors, in accordance with Minnesota law, rather than hold
formal meetings. During fiscal 1999, the Board of Directors held twelve formal
meetings. Each incumbent director attended 75% or more of the total number of
meetings (held during the period(s) for which he has been a director or served
on committee(s)) of the Board and of committee(s) of which he was a member.
DIRECTOR FEES
Directors are not currently paid fees for attending meetings, but
non-employee directors have been granted options in connection with their
election to the Board of Directors. In August 1995, Mr. Dann received a
non-qualified option to purchase 30,000 shares of Common Stock at an exercise
price of $3.00
-5-
<PAGE> 8
per share. In May 1999, Mr. Corneliuson received a non-qualified option to
purchase 30,000 shares of Common Stock at an exercise price of $8.94, and in
July 1999, Mr. Libbey received a non-qualified option to purchase 30,000 shares
of Common Stock at an exercise price of $7.50. Each such option is for a term of
ten years and vests over a four-year period. In addition, after three years of
service each non-employee director receives a ten-year non-qualified option for
10,000 shares vesting after one year, each year he or she continues to serve as
a director. Mr. Dann received an option for 10,000 shares in November 1998 at an
exercise price of $13.50.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding
compensation earned or awarded to G. Kent Archibald, the Chairman and formerly
President and Chief Executive Officer of the Company, and Mr. Richard Harbaugh,
formerly the Vice President of Marketing of the Company, during the Company's
last three fiscal years ended April 30, 1999, 1998, and 1997. No other executive
officer of the Company received total salary and bonus compensation in excess of
$100,000 for fiscal 1999.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Underlying
Options (# of All Other
Name and Principal Position Year Salary Bonus shares)(1) Compensation
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
G. Kent Archibald, 1999 $150,000 --- --- $4,500(2)
Chairman and former President and Chief 1998 150,000 --- --- 4,500(2)
Executive Officer 1997 150,000 --- --- 4,500(2)
- --------------------------------------------------------------------------------------------------------------------
Richard Harbaugh, 1999 $145,833 --- --- $4,375(2)
Former Vice President of Marketing 1998 92,000 --- 175,000 300(2)
1997 --- --- --- ---
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Number of shares of Common Stock subject to options that were granted during
the fiscal year.
(2) Reflects the Company's contribution to executive's individual retirement
account under the Company's Simplified Employee Pension Plan.
EMPLOYMENT AGREEMENTS
Although the Company has non-compete and confidentiality agreements
with its employees, the Company does not have an employment agreement with, or
key-man life insurance on, Mr. Archibald or any other individual.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
No options were granted during fiscal year 1999 to the Named Executive
Officers.
-6-
<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth certain information concerning each
exercise of stock options during the fiscal year ended April 30, 1999 by each
Named Executive Officer and the aggregated fiscal year-end value of the
unexercised options of such Named Executive Officer.
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-the-Money
Securities Underlying Options at Options at Fiscal Year- End ($)(1)
Fiscal Year-End (#)(1)
----------------------------------------------------------------------
Shares
Acquired
on Value
Exercise Realized ($)
Name (#) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
G. Kent Archibald -0- $ -0- 391,250 43,750 $2,943,438 $ 295,313
Richard Harbaugh -0- -0- 43,750 131,250 ----- ----
</TABLE>
(1) Based on the difference between the closing price of the Company's Common
Stock at fiscal year-end and the option exercise price.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY The Compensation Committee is currently composed of two
of the Company's outside directors. The Compensation Committee's
responsibilities are to:
- Review and recommend compensation policies and compensation levels for
the Company's executive officers to the Board;
- Review and recommend plans to provide management continuity to the
Board; and
- Administer the Company's stock-based compensation plan. The
Compensation Committee determines who will participate in the Company's
stock-based compensation plans and the extent and terms of such
participation.
The Compensation Committee's objectives in recommending executive compensation
policies and compensation levels for the Company's executive officers are: (i)
to attract and retain qualified executive officers; (ii) to align the interest
of those executive officers with those of the Company's shareholders; and (iii)
to encourage the development of a cohesive management team. The Compensation
Committee believes that base salaries need to be competitive to attract and
retain qualified executive officers and that the executive officers need to be
provided with stock ownership opportunities to align their interests with those
of the Company's shareholders.
EXECUTIVE COMPENSATION PROGRAM COMPONENTS
The Company's executive compensation program focuses on Company and
individual performance as determined by the Compensation Committee. The
Compensation Committee places primary emphasis on Company performance rather
than individual performance in order to inspire the Company's executives to work
as a team to accomplish Company objectives. Components of the Company's
executive officer compensation program include base salary and stock option
grants, as well as various benefits which are presently available to all
employees of the Company. Each component of the executive officer compensation
program is discussed in greater detail below.
-7-
<PAGE> 10
Base Salary The Compensation Committee's recommendations regarding the base
salary of each of the Company's executive officers are based on a number of
factors, including the executive officer's experience and past performance, the
level of skill and responsibility required by the executive's position and his
or her qualifications for the position. The Compensation Committee also
considers competitive salary information pertaining specifically to the medical
device industry as well as to companies of similar size in other industries. In
general, the Compensation Committee seeks to set executive officer base salary
at competitive levels in relation to the companies with which the Company
competes for executives. Base salaries are determined prior to the beginning of
each fiscal year following a review of the above factors by the Compensation
Committee and may also be adjusted based on Company performance and the
executive officer's impact thereon, cost of living, promotion, or merit factors.
The base salary compensation component for each executive officer, other than
Mr. Archibald, was determined by Mr. Archibald and reviewed and approved by the
Compensation Committee based on the factors discussed above. Mr. Archibald's
compensation has remained the same since 1995.
Stock Option Program By granting options to purchase Common Stock to the
executive officers of the Company, the Compensation Committee seeks to align the
long-term interests of the Company's executive officers with those of its
shareholders by creating a strong and direct nexus between executive
compensation and shareholder return and to enable executives to develop and
maintain a significant ownership position in the Company.
The Company's Amended and Restated Stock Option Plan (Stock Option Plan)
authorizes the Compensation Committee to issue executive officers incentive
stock options having an exercise price not less than the fair market value of
the Common Stock on the date of grant (or, for an incentive option granted to a
person holding more than 10% of the Company's voting stock, at not less than
110% of fair market value), and non-statutory options having an exercise price
not less than 85% of the fair market value of the Common Stock on the date of
grant. Options granted under the Stock Option Plan have a term fixed by the
Compensation Committee at the time of grant, which term may not exceed 10 years.
All other terms of options granted under the Stock Option Plan may be determined
by the Compensation Committee and different restrictions may be established with
respect to different recipients of stock options.
The Compensation Committee determines the number of options and the terms and
conditions of such options based on certain factors, including the past
performance of the executive officer, the executive officer's potential impact
on the achievement of the Company's objectives, past grants or awards of
stock-based compensation and on comparative compensation data regarding option
grants by companies within the medical device industry as well as within a
broader group of companies of comparable size and complexity. Additionally,
options may be granted to an executive officer as an incentive at the time the
executive officer joins the Company.
In fiscal 1991, Mr. Archibald received an award of 75,000 stock options
concurrent with assuming the positions of President and Chief Executive Officer
of the Company and has received other stock options for various Company
milestones. He has not received additional options since 1995.
Benefits The Company provides medical insurance benefits as well as a SEP
retirement plan to the executive officers. The same benefits are available to
all Company employees. The amount of these benefits, as determined in accordance
with the rules of the Securities and Exchange Commission relating to executive
compensation, did not exceed 10% of each executive officer's annual salary for
fiscal 1999.
-8-
<PAGE> 11
SECTION 162(M) Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), limits the deductibility of certain compensation paid to the chief
executive officer and each of the four other most highly compensated executives
of a publicly held corporation to $1,000,000. In fiscal 1999, the Company did
not pay "compensation" within the meaning of Section 162(m) to such executive
officers in excess of $1,000,000 and does not believe it will do so in the near
future. Therefore, the Company does not have a policy at this time regarding
qualifying compensation paid to its executive officers for deductibility under
Section 162(m), but will formulate such a policy if compensation levels ever
approach $1 million.
Current Directors who Served as Members of the Compensation Committee
for 1999 Fiscal Year
Norman Dann
Jerry E. Robertson
PERFORMANCE GRAPH
In accordance with the rules of the Securities and Exchange Commission, the
following performance graph compares the performance of the Company's Common
Stock on the Nasdaq Small Cap Market to an index for the Nasdaq Stock Market
(U.S. Companies) prepared by the Center for Research in Securities Prices and to
Nasdaq stocks for companies with an SIC code of 3840-3849, which is for
Surgical, Medical, and Dental Instruments and Supplies. The graph compares the
cumulative total stockholder return as of the end of each of the Company's
fiscal years on $100 invested since the Company went public on November, 1995
and assumes reinvestment of all dividends.
[LINE GRAPH]
LEGEND
<TABLE>
<CAPTION>
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 11/1995 04/1996 04/1997 04/1998 04/1999
- ------ ---------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
- ------ - Medwave, Inc. 100.0 156.1 190.2 200.0 175.6
- ------ * Nasdaq Stock Market (US Companies) 100.0 112.3 118.8 177.7 242.0
- ------ /\ NASDAQ Stocks (SIC 3840-3849 US Companies)
Surgical, Medical, and Dental Instruments
and Supplies 100.0 108.9 89.3 123.6 144.7
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 11/10/1995.
-9-
<PAGE> 12
INDEPENDENT PUBLIC ACCOUNTANT
Ernst & Young, LLP acted as the Company's independent public accountant for
fiscal 1999. Representatives from Ernst & Young LLP are expected to be present
at the meeting, will be given an opportunity to make a statement regarding
financial and accounting matters of the Company if they so desire, and will be
available at the meeting to respond to appropriate questions from the Company's
shareholders.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than 10% of the
Company's Common Stock, to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors, and greater
than 10% shareholders ("Insiders") are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Form 5 was
required for such persons, the Company believes that during the fiscal year
ending April 30, 1999 all filing requirements applicable to its officers,
directors, and greater than 10% beneficial owners were complied with.
OTHER BUSINESS
Management knows of no other matters to be presented at the meeting. If any
other matter properly comes before the meeting, the appointees named in the
proxies will vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Company anticipates that the next annual meeting of shareholders will be
held within six months after the close of the current fiscal year. Accordingly,
any appropriate proposal submitted by a shareholder of the Company and intended
to be presented at the next annual meeting of shareholders must be received by
the Company by April 30, 2000, to be considered for inclusion in the Company's
proxy statement and related proxy for the next annual meeting.
Also, if a shareholder proposal intended to be presented at the next annual
meeting but not included in the Company's proxy statement and proxy is received
by the Company after July 15, 2000, then management named in the Company's proxy
form for the next annual meeting will have discretionary authority to vote
shares represented by such proxies on the shareholder proposal, if presented at
the meeting, without including information about the proposal in the Company's
proxy material.
-10-
<PAGE> 13
FORM 10-K
A COPY OF THE COMPANY'S FORM 10-K ANNUAL REPORT FOR THE FISCAL YEAR ENDED
APRIL 30, 1999 (WITHOUT EXHIBITS) ACCOMPANIES THIS NOTICE OF ANNUAL MEETING AND
PROXY STATEMENT. NO PORTION OF SUCH REPORT IS INCORPORATED HEREIN OR IS TO BE
CONSIDERED PROXY SOLICITING MATERIAL. THE COMPANY WILL FURNISH TO ANY
SHAREHOLDER, UPON WRITTEN REQUEST, ANY EXHIBIT DESCRIBED IN THE LIST
ACCOMPANYING THE FORM 10-K UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES
RELATED TO THE COMPANY'S FURNISHING SUCH EXHIBIT(S). ANY SUCH REQUEST SHOULD
INCLUDE A REPRESENTATION THAT THE SHAREHOLDER WAS THE BENEFICIAL OWNER OF SHARES
OF MEDWAVE COMMON STOCK ON DECEMBER 6, 1999, THE RECORD DATE FOR THE 1999 ANNUAL
MEETING AND SHOULD BE DIRECTED TO MR. MARK T. BAKKO, CHIEF FINANCIAL OFFICER, AT
THE COMPANY'S PRINCIPAL ADDRESS.
BOARD OF THE BOARD OF DIRECTORS
Dated: December 8, 1999 Timothy J. O'Malley
Arden Hills, Minnesota President and Chief Executive Officer
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MEDWAVE, INC.
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PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints TIMOTHY J. O'MALLEY and MARK T. BAKKO, or
either of them acting alone, with full power of substitution, as proxies to
represent and vote, as designated on the reverse side, all the shares of Common
Stock of Medwave, Inc. registered in the name of the undersigned, at the Annual
Meeting of the Shareholders to be held on Wednesday, January 12, 2000 at 3:00
p.m., Minneapolis Time, at the Minneapolis Marriott City Center Hotel, 30 South
7th Street, Minneapolis, Minnesota, and at all adjournments of such meeting.
The undersigned hereby revokes all proxies previously granted with respect to
such meeting.
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| The Board of Directors recommends that you vote "FOR" the following proposals: |
1. SET NUMBER OF DIRECTORS AT FIVE: | | For | | Against | | Abstain
2. ELECT DIRECTORS: Nominees G. Kent Archibald, William D. Corneliuson, Norman Dann, | | FOR all nominees | | WITHHOLD AUTHORITY
Keith A. Libbey and Timothy J. O'Malley (except as marked to vote for all
to the contrary) nominees listed at
left
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(Instructions: To withhold authority to vote for any indicated nominee, write that | |
nominee's name in the box provided to the right.) |___________________________________________|
3. OTHER MATTERS. In their discretion, the appointed proxies are authorized to vote
upon such other business as may properly come before the Meeting or any adjournment.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH PROPOSAL.
Date _____________________________________
___________________________________________
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Signature(s) in Box
PLEASE DATE AND SIGN ABOVE exactly as name
appears at the left, indicating, where
appropriate, official position or
representative capacity. If stock is held in
joint tenancy, each joint owner should sign.
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