SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to SS 240.14a-11(c) or SS 240.14a-12
La Jolla Diagnostics, Inc.
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(Name of Registrant as Specified In Its Charter
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(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)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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[ ] 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:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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<PAGE>
LA JOLLA DIAGNOSTICS, INC.
7855 IVANHOE AVENUE, SUITE 322
LA JOLLA, CALIFORNIA 92037
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 2000
TO THE SHAREHOLDERS OF LA JOLLA DIAGNOSTICS, INC.:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of LA JOLLA DIAGNOSTICS, INC. ("La Jolla") will be held at the
La Jolla Country Club, 7301 High Avenue, La Jolla, California, on Thursday,
JUNE 29, 2000, at 10:00 a.m., for the following purposes:
1. ELECTION OF BOARD OF DIRECTORS. To elect a Board of Directors to
hold office for the ensuing year, until the next annual meeting and until their
successors are elected and qualified. The Board will present for election the
following four nominees:
Donald Brucker Thomas Cajka
Stephen Roberts Greg Caton
2. AMENDING ARTICLES OF INCORPORATION. The Board of Directors has
approved and recommends that the stockholders of La Jolla approve an amendment
to the articles of incorporation for the purpose of changing La Jolla's name
to NatureWell.com, Inc.
3. STOCK OPTION PLAN. To consider and vote upon the approval of an
Incentive Stock Bonus and Option Plan.
4. SELECTION OF AUDITORS. To consider and vote upon the ratification
and the selection of Logan Throop and Co. as independent auditors for La Jolla
for the year ending June 30, 2000.
5. OTHER BUSINESS. To transact such other business as may properly
come before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 15, 2000
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the Annual Meeting or any and all adjournment thereof.
By order of the
Board of Directors
of La Jolla Diagnostics, Inc.
Donald Brucker,
Chairman of the Board of Directors
La Jolla, California
April 15, 2000
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<PAGE>
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY
STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. THE PROXY MAY BE REVOKED AT
ANY TIME PRIOR TO ITS EXERCISE EITHER IN PERSON OR BY EXECUTING AND GRANTING A
LETTER-DATED PROXY. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF
RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING,
YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME. IT IS
IMPORTANT THAT ALL SHAREHOLDERS VOTE. SO THAT THE COMPANY CAN FINALIZE
ARRANGEMENTS FOR THE SHAREHOLDERS' MEETING, PLEASE INDICATE ON THE PROXY
WHETHER YOU PLAN TO ATTEND THE MEETING.
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<PAGE>
LA JOLLA DIAGNOSTICS, INC.
7855 IVANHOE AVENUE, SUITE 322
LA JOLLA, CALIFORNIA 92037
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
JUNE 29, 2000
INTRODUCTION
------------
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of LA JOLLA DIAGNOSTICS
("La Jolla" or the "Company") for use at the Annual Meeting of Shareholders
(the "Meeting") of La Jolla, to be held at the La Jolla Country Club,
7301 High Avenue, La Jolla, California on JUNE 29, 2000 at 10:00 a.m. and at any
and all adjournments thereof. It is anticipated that this Proxy Statement and
the accompanying Notice will be mailed to shareholders on or about May 1, 2000.
Matters To Be Considered at the Meeting
- ---------------------------------------
The Meeting will be held for the following purposes:
1. ELECTION OF BOARD OF DIRECTORS. To elect a board of four (4)
directors to serve for the ensuing year, until the next annual meeting of
shareholders and until their successors are duly elected and qualified.
2. AMENDMENT OF ARTICLES OF INCORPORATION. To amend the Articles
of Incorporation of La Jolla to change the Company's name to
NATUREWELL.COM, INC. with shareholder approval pursuant to Section 903 of
the Corporations Code.
THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS OF LA JOLLA UNANIMOUSLY
RECOMMEND A VOTE "FOR" THE PROPOSAL TO APPROVE THE AMENDMENT OF THE ARTICLES
OF INCORPORATION TO CHANGE THE COMPANY'S NAME TO NATUREWELL.COM, INC.
3. STOCK BONUS AND OPTION PLAN. To consider and vote upon the
approval of the Stock Bonus and Option Plan.
4. SELECTION OF AUDITORS. To consider and vote upon the
ratification and the selection of Logan Throop and Co. as independent
auditors for La Jolla for the year ending June 30, 2000.
5. OTHER BUSINESS. To transact such business as may properly
come before the Meeting or any adjournment thereof.
You are urged to sign and return the enclosed proxy as promptly as
possible, whether or not you attend the Meeting in person.
For additional information relating to the Meeting, See "Election
of Directors" and "Amendment of Articles."
Persons Making this Solicitation and Costs of Solicitation
- ----------------------------------------------------------
This solicitation of proxies is being made by the Board of Directors of
La Jolla. La Jolla will bear the cost of solicitation and the expense of
preparing, assembling, printing and mailing this Proxy Statement and any
other material used in this solicitation of proxies. It is contemplated that
proxies will be solicited through the mail, but directors, officers, and regular
employees of La Jolla may solicit proxies personally or by telephone.
Although there is no formal agreement to do so, La Jolla may reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
out-of-pocket expenses in connection with forwarding these proxy materials to
their principals. In addition, La Jolla may pay for and utilize the services of
individuals or companies not regularly employed by La Jolla in connection
with the solicitation of proxies if the officers of La Jolla determine that this
is advisable.
Revocability of the Proxy
- -------------------------
The proxy for use at the Meeting is enclosed. Any shareholder who
executes and delivers such proxy has the right to revoke it at any time before
it is executed. A shareholder may revoke a proxy at any time before it is
exercised by filing a written revocation or a duly executed proxy and voting in
person at the Meeting. Subject to such revocation, all shares represented by a
properly executed proxy received in time for the Meeting will be voted by
the proxyholders in accordance with the instructions on the proxy. It is not
anticipated that any matters will be presented at the Meeting other than as
set forth in the accompanying Notice of the Meeting. If any other matters are
properly presented at the Meeting, the proxy will be voted by the
proxyholders in accordance with the recommendation of the Board of Directors of
La Jolla.
Outstanding Securities and Voting Rights
- ----------------------------------------
There were issued and outstanding 19,813,014 shares of La Jolla Common
Stock, no par value, on April 15, 2000, which has been set as the record date
for the purpose of determining the shareholders entitled to notice of and to
vote at the Meeting ("Record Date"). La Jolla's Articles of Incorporation also
authorize the issuance of up to 5,000,000 shares of Preferred Stock, none of
which shares of Preferred Stock are issued or outstanding.
Each holder of La Jolla Common Stock will be entitled to one vote, in
person or by proxy, for each share of La Jolla Common Stock held of record on
the books of La Jolla as of the Record Date on any matter submitted for the
vote of the shareholders, except that in connection with the election of
directors, the shares may be voted cumulatively. In connection with the
election of directors, cumulative voting may be in effect if a shareholder
present at the Meeting has given notice at the Meeting prior to the voting of
his or her intention to vote his or her shares cumulatively. If any
shareholder has given such notice, all shareholders may cumulate their votes
for candidates whose names properly were placed in nomination prior to the
commencement of voting. Cumulative voting means that a shareholder has the
right to vote the number of shares he or she owns as of the record date,
multiplied by the number of directors to be elected. This total of votes may
be cast for one nominee or it may be distributed on the same principal among as
many nominees as the shareholder sees fit. In the election of directors, the
four (4) nominees receiving the highest number of votes are elected.
Discretionary authority to cumulate votes is hereby solicited by the Board
of Directors.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the shareholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter
has been approved.
PROPOSAL 1: ELECTION OF DIRECTORS
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The Board of Directors' Nominees
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La Jolla's Bylaws provide that La Jolla shall have not less than four (4)
nor more than seven (7) directors, the exact number of Directors to be fixed
from time to time within the limits specified in the Articles of Incorporation
or in this section, by a Bylaw or amendment thereof, duly adopted by
shareholders or by the Board of Directors. Under Article III, Section 2(b),
the number of directors was set at four.
The Board has nominated four (4) candidates for election at the Meeting.
The persons named below will be nominated for election to serve until the next
annual meeting of shareholders and until their successors shall be duly elected
and qualified. Votes will be cast by the management proxyholders in such a way
as to effect the election of all four (4) nominees, or as many thereof as
possible under the rules of cumulative voting. In the event that any of the
nominees should be unable to serve as a director, it is intended that the proxy
will be voted for the election of such substitute nominees, if any, as shall be
designated by the Board of Directors. The Board of Directors has no reason to
believe that any of the nominees shall be unable to serve.
The names of and certain information as of April 15, 2000 with respect to,
the persons nominated by the Board of Directors for election as directors and
those persons whose term of office will continue after the Meeting, are as
follows:
Directors and Executive Officers
- --------------------------------
The name, age and current positions(s) of each director and nominee of the
Company are set forth below:
Name Age Position
---------------------- --- ------------------------------------
Donald Brucker (1) 67 Chief Executive Officer,
Chief Financial Officer and Director
Stephen C. Roberts (1) 40 President, Secretary and Director
Thomas V. Cajka 47 Director
Greg Caton 44 Director
(1) Member of the Compensation Audit Committee of the Board of
Directors.
DONALD BRUCKER, O.D.
Dr. Brucker is a founder of the Company and currently serves as Chief
Executive Officer, Chief Financial Officer and Chairman and has served as
Director since 1995. Dr. Brucker has over 30 years experience in the medical
products business. He was a founder and the Chief Executive Officer of
Continuous Curve Contact Lenses, Inc., at one time the second largest
manufacturer of contact lens products. Continuous Curve was recognized as an
innovator in introducing new series of FDA approved contact lenses. As Chief
Executive Officer of Continuous Curve, Dr. Brucker administered their public
offering in 1977 and then the company's sale four years later to Revlon for
more than $100,000,000. Following the acquisition, Dr. Brucker became
President of Revlon Vision Care. From 1981 to 1982, Dr. Brucker served as
Chief Executive Officer of Immunotech Pharmaceuticals (now known as Dura
Pharmaceuticals). From 1982 to 1989 Dr. Brucker served as consultant for
several healthcare and medical device companies. Dr. Brucker was instrumental
in obtaining one of the first HIV diagnostic FDA approvals.
STEPHEN C. ROBERTS, M.D.
Dr. Roberts serves as President and Secretary and has served as a director
since September 1998 when he was appointed by the Board of Directors to fill a
vacancy on the Board. He is currently the President and Secretary of
DiagnosTech, Inc., a California corporation and subsidiary of La Jolla. From
1995 through 1997, Dr. Roberts was a Principal of Maven Securities, Inc. in
Minneapolis, Minnesota. Prior to this, from 1993 to 1995, he was self-employed
and primarily managed real estate. In 1991, he was self-employed doing
business as Talon and Associates, a consulting firm specializing in market
evaluation and planning for medical device companies. Dr. Roberts received his
Bachelor of Arts degree in 1985 from St. Olaf College in Northfield, Minnesota
where he majored in chemistry and biology. He graduated from the University of
Minnesota Medical School in 1991 and completed his medical internship at Bergen
Pines County Hospital, an affiliate of the University of Medicine and Dentistry
of New Jersey at Paramus, New Jersey.
THOMAS V. CAJKA
Mr. Cajka has served as a director since March 1998 when he was appointed
by the Board of Directors to fill a vacancy on the Board. He is currently the
owner and a CPA of Thomas Cajka & Associates. He graduated from San Diego
State University in 1978 with a B.A. in Business Administration and Accounting
and became a Certified Public Accountant. He began his career in the
entertainment industry at the well-known firm of Gelfand, Rennert and Feldman
and later moved to Breslauer, Jacobson and Rutman. Mr. Cajka worked in
business management where he advised top-rated entertainers in their financial
and business affairs. In 1986 Mr. Cajka joined The Michael Mann Company. As
producer and executive in charge of production, Mr. Cajka supervised the
business affairs of the company and coordinated all activities of the film and
television projects from budget preparation to negotiation of contracts to
hiring.
GREG CATON
Mr. Caton has served as a director and consultant to the Company since
March 2000 when he was appointed by the Board of Directors to fill a vacancy on
the Board. He is currently President of Lumen Foods, a Louisiana-based
company. He is a graduate of Louisiana Valley College and a veteran of the
Vietnam War. Mr. Caton was the initial founder of Nutrition for Life
International (now known as Advanced Nutraceuticals, Inc.) which became a $100
million revenue company. After leaving Nutrition for Life he founded Lumen
Foods in 1986 which today manufactures the best-selling vegetarian "meat" snack
on the North American continent called Stonewall's Jerquee. He is the author
of The Lumen Book (1986), an interdisciplinary work on vegetarianism and the
role of meat analogs, with over 40,000 copies in print. Mr. Caton has been a
speaker on the emerging importance of soy protein for over 10 years. A keynote
speaker at the International Soyfoods Conference in Mexico City in 1997, Mr.
Caton has been a proponent of the ecological need to substitute animal proteins
with vegetable proteins for nearly 20 years.
All members of the Board of Directors are elected to serve until their
respective successors have been elected and qualified or until their earlier
death, resignation or removal in the manner specified in the Company's
bylaws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
FOR DIRECTORS NOMINATED BY THE BOARD OF DIRECTORS. PROXIES RETURNED TO LA JOLLA
WILL BE VOTED "FOR" THE ELECTION OF THESE NOMINEES UNLESS OTHERWISE INSTRUCTED.
The Board of Directors and Committees
- -------------------------------------
During this past fiscal year the Board of Directors of La Jolla held two
(2) meetings. Each director of La Jolla, with the exception of Greg Caton who
was appointed by unanimous written consent of the Board of Directors subsequent
to the last Board meeting, attended both meetings of the Board of Directors of
La Jolla.
The Board of Directors has a Compensation Audit Committee, currently
comprised of Messrs. Brucker & Roberts. The Compensation Audit Committee makes
recommendations concerning salaries and bonuses for executive officers and
reviews the results and scope of the audits and other services provided by the
Company's independent auditors. The Committee did not formally meet during
this past fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than 10% beneficial owners are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms
they file.
Donald Brucker
- --------------
For the fiscal years ending June 30, 1997 and June 30, 1998, Dr. Brucker
failed to timely file a Form 4, Statement of Changes in Beneficial
Ownership, with the SEC with respect to his disposition by gift of 5,300 shares
on July 1, 1996 and a disposition by sale, in an open market transaction, of
92,840 shares on September 10, 1997. A substitute Form 5, Annual Statement
of Changes in Beneficial Ownership, for fiscal years ending 1997 and 1998 was
filed by Dr. Brucker on or about April 14, 2000 to report the aforementioned
dispositions.
Stephen Roberts
- ---------------
Dr. Roberts failed to timely file a Form 3, Initial Statement of
Beneficial Ownership, with the SEC after his election as President, Secretary
and a director of the Company. In addition, Dr. Roberts failed to timely file
a Form 4 with the SEC with respect to his disposition by gift of 300,000 shares
on February 14, 2000. A substitute Form 5 was filed by Dr. Roberts in lieu of
the delinquent Form 3 and Form 4 to report the above disposition, on or
about May 1, 2000.
Thomas Cajka
- ------------
Mr. Cajka failed to timely file a Form 3 with the SEC with respect to his
election onto the Board of Directors of the Company. In addition, Mr. Cajka
failed to timely file a Form 4 with the SEC with respect to the following
dispositions: 5,000 shares on August 25, 1999; 25,000 shares on
September 9, 1999; 10,000 shares on September 10, 1999; 10,000 shares on
September 13, 1999; 5,000 shares on January 28, 2000; 11,500 shares on
February 17, 2000; and 8,500 shares on February 23, 2000. A substitute
Form 5 was filed by Mr. Cajka in lieu of the delinquent Form 3 and Form 4 to
report the above dispositions, on or about May 1, 2000.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------
Principal Stockholders
- ----------------------
The following table sets forth information with respect to the beneficial
ownership of Common Stock as of April 15, 2000 (assuming the exercise of options
and warrants exercisable within 60 days of the date hereof) by (i) each person
known to the Company to beneficially own more than 5% of the outstanding shares
of commons Stock, (ii) each of the Company's directors, (iii) each of the
Company's executive officers named in the Summary Compensation Table above, and
(iv) all directors and officers of the Company as a group. Unless otherwise
indicated below, the persons and entities named in the table have sole voting
and sole investment power with respect to all the shares beneficially owned,
subject to community property laws where applicable. Percentage ownership
assumes all warrants and options of listed person exercised and all other
warrants and options unexercised.
Name and Address Amount Percent
--------------------------- ---------- -------
Donald Brucker (1) 1,557,832 8%
2838 Caminito Turnberry
La Jolla, California 92037
Stephen Roberts 2,450,000 12%
6542 Regency Lane, #204
Eden Prairie, NM 55344
Thomas Cajka (2) 125,000 <1%
3202 Third Avenue, #103
San Diego, California 92103
All directors and executive
officers as a group 4,132,832 21%
(3 individuals)
(1) Includes 190,000 shares subject to a Warrant.
(2) Includes 100,000 shares subject to a Warrant.
EXECUTIVE COMPENSATION
----------------------
Executive Cash Compensation
- ---------------------------
The following table shows, for the most recent three fiscal years, the
cash compensation paid by the Company, as well as all other compensation paid
or accrued for those years to the Chief Executive Officer and the Company's
other executive officers as of June 30, 1999.
SUMMARY COMPENSATION TABLE
--------------------------
<TABLE>
Annual Compensation Long Term Compensation (1)
--------------------- ------------------------------------------
Name and Fiscal Stock LTIP All Other
Principal Position Year Salary Bonus Other Awards Warrants Payouts Compensation($)
- ------------------- ------ ------- ----- ----- ------ -------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald Brucker, 1999 $96,000 $0 $0 0 0 $0 $0
Chairman, Chief 1998 $96,000 $0 $0 0 0 $0 $0
Executive Officer 1997 $96,000 $0 $0 0 0 $0 $0
and Chief Financial
Officer
Stephen C. Roberts 1999 $46,000 $0 $0 0 0 $0 $0
President & 1998 $ 0 $0 $0 0 0 $0 $0
Secretary (2) 1997 $ 0 $0 $0 0 0 $0 $0
</TABLE>
(1) No Common Stock, Performance Warrants, stock appreciation rights, or
stock options were granted to any officer during the past 3 fiscal
years.
(2) Stephen Roberts was elected during fiscal year 1999.
Stock Option Grants and Exercises
- ---------------------------------
As of April 15, 2000, all options of the Company's 1996 Incentive Stock
Bonus and Option Plan were granted and exercised.
There were no stock options granted to executive officers during fiscal
year 1999.
Long-Term Incentive Plan ("LTIP") Awards
- ----------------------------------------
As of April 15, 2000, there were no awards made to executive officers
under any LTIP of the Company.
Defined Benefit or Pension Plan
- -------------------------------
The Company has no defined benefit or pension plans.
Compensation of Directors
- -------------------------
No director of the Company receives any cash compensation for his service
as a director. No Common Stock or Performance Warrants were granted to
directors during fiscal year 1999. All directors are entitled to be reimbursed
for travel and other expenses incurred in attending meetings of the Board of
Directors.
Employment Contracts
- --------------------
The Company has no employment contracts or compensatory plans or
arrangements or change-in-control arrangements with respect to any of its
executive officers.
PROPOSAL 2: AMENDMENT TO ARTICLES OF INCORPORATION
TO CHANGE COMPANY'S NAME TO NATUREWELL.COM, INC.
---------------------------------------------------
Presently, Article I of a Certificate of Amendment of Articles of
Incorporation of La Jolla filed with the California Secretary of State on
April 17, 1995 states that the name of the Company is
La Jolla Diagnostics, Inc. At the Meeting on JUNE 29, 2000, management intends
to request shareholder approval of an amendment to its Articles of
Incorporation in the form of Exhibit "A" attached hereto and incorporated
herein by this reference. The proposed amendment shall change the name of
La Jolla Diagnostics, Inc. to NatureWell.com, Inc.
The principal reason for the proposed name change is to improve name
recognition and to reflect the Company's involvement in E-commerce.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
APPROVAL OF AMENDMENT OF THE ARTICLES OF INCORPORATION TO CHANGE THE
COMPANY'S NAME TO NATUREWELL.COM, INC.
PROPOSAL 3: APPROVAL OF 2000 INCENTIVE BONUS AND STOCK OPTION PLAN
-------------------------------------------------------------------
Introduction and Background
- ---------------------------
The Board of directors deems it to be in the best interest of La Jolla,
subject to shareholder approval, that La Jolla adopt an Incentive Stock Bonus
and Option Plan (the "Plan") whereby stock, bonuses and incentive options to
purchase shares of La Jolla's Common Stock may be granted to eligible
employees, directors and consultants of La Jolla.
Subject to shareholder approval, the Board of Directors has approved the
Plan and reserved 5,000,000 shares of La Jolla's Common Stock for issuance in
connection with stock bonuses and options granted under the Plan. A copy of
the Plan is attached hereto as Exhibit "B."
Purpose
- -------
The purpose of the Plan is to advance the interests of La Jolla and its
shareholders by compensating employees, directors and consultants for services
rendered to La Jolla and providing an entrepreneurial incentive to (i) provide
high levels of performance, (ii) undertake extraordinary efforts to increase
the earnings of La Jolla, (iii) increase their proprietary interest in
La Jolla, and (iv) remain in the employ and continue providing services to
La Jolla.
The primary reasons for adopting the Plan now, is to enhance La Jolla's
ability to attract, compensate and retain qualified employees, directors and
consultants by providing an opportunity to acquire a proprietary interest in
the success of La Jolla.
Administration
- --------------
The Plan shall be administered by a committee of the Board of Directors of
La Jolla of not less than two directors (the "Committee").
Subject to the provisions of the Plan, the Committee has the authority to
interpret the Plan and apply its provisions; to prescribe, to adopt, amend or
rescind rules, procedures and forms relating to the Plan; to determine persons
who may participate in the Plan; to determine the time at which bonuses or
options are granted under the Plan; to determine the number of shares of stock
to be subject to each bonus or option and the vesting provisions of such
bonuses or options; and to take any other action deemed necessary or advisable
for the administration of the Plan.
Eligibility for the Plan
- ------------------------
As of April 15, 2000 there would be eight (8) eligible participants under
the Plan, including three (3) executive officers, four (4) directors and four
(4) other employees and consultants.
Following its approval, the Plan will provide for the grant of stock
bonuses and both incentive stock options ("ISO's") intended to qualify as such
under former Section 422A (now Section 422) of the Internal Revenue Code, as
amended, and nonstatutory stock options ("NSO's"). ISO's may be granted only
to salaried officers and full-time employees. Any option granted that does not
meet the required conditions of an ISO (as set forth above) will be deemed an
NSO. If any options granted under the Plan shall for any reason expire or be
canceled or otherwise terminate without having been exercised in full, the
shares allocable to the unexercised portion of such options shall again become
available for the Plan.
Terms, Price and Transferability
- --------------------------------
Stock bonuses and options granted pursuant to the Plan will vest at the
time or times determined by the Committee.
The maximum term of each option granted under the Plan is ten years.
Stock options granted under the Plan must be exercised by the optionee during
the earlier of their term or within three (3) months after termination of the
optionee's employment or other relationship, except that the period may be
extended if so provided in the agreement pursuant to which the option is
granted. During said period such option may be exercised in accordance with
its terms, but only for the number of shares with respect to its installments
as have accrued and vested as set forth in the optionee's option as of the date
of termination of employment. Unvested stock bonuses will be forfeited upon
termination of the employment or other relationship with La Jolla, unless
otherwise provided in the Agreement pursuant to which the bonus was granted.
Unvested bonuses and all options under the Plan are not transferable
except by will or by the laws of descent and distribution as defined in the
Code, and options may be exercised during the lifetime of the person to whom
the option is granted only by such person or by such person's guardian or legal
representative.
The exercise price of shares of Common Stock subject to options qualifying
as ISO's must not be less than the fair market value of the Common Stock on the
date of grant. Under the Plan, the exercise price is payable in cash, by check
or money order, or at the discretion of the committee by transfer of previously
acquired shares of La Jolla Common Stock.
Adjustments
- -----------
The number of shares of Common Stock subject to an option granted under
the Plan will be adjusted for any increase or decrease in the number of issued
shares of La Jolla resulting from the subdivision, combination or consolidation
of shares or other capital adjustment, or the payment of a stock dividend,
stock split or other increase or decrease in the outstanding shares insofar as
effected without receipt of consideration by La Jolla.
In the event of a merger or other reorganization, all outstanding options
granted will immediately prior to, or concurrently with, such reorganization
become exercisable in full, unless the agreements with respect to the
reorganization provide for the assumption of such options, in which case the
surviving corporation shall honor such options in full. Any such adjustment
shall be made by the Committee, whose determination as to what adjustments
shall be made, and the extent thereof, shall be final and conclusive. No
fractional shares of stock will be issued under the Plan on account of any
such adjustment.
Federal Income Tax Consequences of Options Under the Employee Option Plan
- -------------------------------------------------------------------------
The following discussion is only a summary of the principal federal income
tax consequences of the stock bonuses and options to be granted under the Plan,
and is based on existing federal law (including administrative regulations and
rulings) which is subject to change, in some cases retroactively. This
discussion is also qualified by the particular circumstances of individual
optionees, which may substantially alter or modify the federal income tax
consequences herein discussed.
Generally under present law, when an option qualifies as an ISO: (i) an
optionee will not realize taxable income either upon the grant or the exercise
of the option, (ii) any gain or loss upon a qualifying disposition of the
shares acquired upon exercise of the option will be treated as capital gain or
loss and (iii) no deduction will be allowed to La Jolla for federal income tax
purposes in connection with the grant or exercise of the option or a qualifying
disposition of the shares acquired upon exercise thereof. A disposition by an
optionee of stock acquired upon exercise of an ISO will constitute a qualifying
disposition if it occurs more than two years after the grant of the option and
more than one year after the issuance of the shares to the optionee. La Jolla
obtains no deduction in connection with the grant or exercise of an ISO or a
qualifying disposition of the shares. If such stock is disposed of by the
optionee before the expiration of those time limits, the transfer would be a
"disqualifying disposition" and the optionee, in general, will recognize
ordinary income equal to the lesser of (i) the aggregate fair market value of
the shares as of the date of exercise less the option price or (ii) the amount
realized on the disqualifying disposition less the option price. Ordinary
income from a disqualifying disposition will constitute compensation for which
withholding may be required under federal and state law. Any gain in
addition to the amount reportable as ordinary income from a "disqualifying
disposition" generally will be capital gain.
Upon exercise of an ISO, the difference between the fair market value of
stock on the date of exercise and the option price generally is treated as a
"tax preference" item in that taxable year for alternative minimum tax
purposes, as are a number of other items specified by the Code. Such tax
preference items (with adjustments) form the basis for the alternative minimum
tax, which may apply depending on the amount of the computed "regular tax" of
the employee for that year. Under certain circumstances, the amount of
alternative minimum tax is allowed as a carry forward credit against regular
tax liability in subsequent years.
In the case of NSO's, no income generally is recognized by the optionee at
the time of the grant of the option. The optionee generally will recognize
ordinary income at the time the NSO is exercised equal to the aggregate fair
market value of the shares acquired less the option price. However, if the
shares received upon the exercise of a NSO are subject to certain restrictions,
the taxable event is postponed until the restriction lapse. For example, if a
sale of the shares at a profit would subject an optionee to liability under
Section 16(b) of the 1934 Act, the optionee generally will recognize taxable
income on the date that the optionee is no longer subject to such liability in
an amount equal to the fair market value of the shares on such date less the
option price. Notwithstanding the foregoing, the optionee may make a special
election within thirty days of receiving restricted shares to recognize taxable
income as of the date of exercise. Ordinary income for a NSO will constitute
compensation for which withholding may be required under federal and state law.
Subject to special rules applicable when an optionee uses stock of
La Jolla to exercise an option, shares acquired upon exercise of a NSO will
have a tax basis equal to their fair market value on the exercise date or other
relevant date on which ordinary income is recognized, and the holding period
for the shares generally will begin on the date of exercise or such other
relevant date. Upon subsequent disposition of the shares, the optionee
generally will recognize capital gain or loss. Provided the shares are held by
the optionee for more than one year prior to disposition, such gain or loss
will be long-term capital gain or loss.
In the case of stock bonuses, ordinary income is generally recognized by
the recipient at the time of receipt of the stock bonus unless that stock
received is nontransferable and subject to substantial risks of forfeiture. In
the case of nontransferable and non-vested stock bonuses, the recipient will
generally recognize ordinary income at the time of vesting or the lapse of
transfer restrictions, whichever is earlier.
La Jolla will generally be entitled to a deduction equal to the ordinary
income (i.e. compensation) recognized by the recipient of a stock bonus or by
the optionee in the case of a "disqualifying disposition" of an ISO or in
connection with the exercise of a NSO provided La Jolla complies with
withholding requirements of federal and state law.
Duration, Amendment and Termination
- -----------------------------------
The Committee may, from time to time, alter or suspend and at any time
discontinue the Plan. However, no action of the Committee may, without the
approval of the shareholders of La Jolla, materially increase the maximum
number of shares of stock to be issued pursuant to the Plan, modify the
provisions of eligibility under the Plan, reduce the option price at which
shares of stock may be offered pursuant to options granted under the Plan,
materially increase the benefits accruing to participants under the Plan or
extend the expiration of the Plan. Unless sooner terminated by the Committee,
the Plan will terminate ten years after the date of adoption, and no further
stock bonuses or options may be granted pursuant to the Plan, while it is in
effect, shall not be altered or impaired by suspension or termination of
such Plan, except with the consent of the person to whom the award was granted.
Required Vote
- -------------
Approval of the Plan, as discussed above, requires the affirmative vote of
a majority of the shares represented and voting at the Meeting and a majority
of the disinterested shares represented and voting at the Meeting.
Disinterested shares means those shares held by shareholders who are not
entitled to participate as optionees under the Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF
THE INCENTIVE STOCK BONUS AND OPTION PLAN OF LA JOLLA.
PROPOSAL 4: SELECTION OF INDEPENDENT AUDITORS
----------------------------------------------
The Board of Directors has appointed Logan Throop and Co. as independent
auditors for La Jolla for the fiscal year ending June 30, 2000. The firm of
Logan Throop and Co. as independent auditors has examined the financial
statements of La Jolla since 1998 and has no relationship with La Jolla
except in its capacity as auditors. A representative of Logan Throop and Co. is
expected to attend the Meeting, will have an opportunity to make a statement
if he or she desires and will be available to respond to appropriate questions.
The selection of Logan Throop and Co. as La Jolla's independent auditors will
be approved if ratified by the affirmative vote of a majority of shares
represented and voting at the Meeting.
OTHER MATTERS
-------------
The Board of Directors has no knowledge of any other matter which may come
before the Meeting, and does not intend to present any other matters. However,
if any other matters shall come before the Meeting or any adjournment thereof
(including the election of any substitute for any of the foregoing nominees who
is unable to, or for good reason will not, serve on the Board of Directors),
the persons named as proxies will have the discretion and authority to vote the
shares represented by a proxy in accordance with their best judgment.
ANNUAL REPORT
-------------
Enclosed herewith is La Jolla's annual report for the fiscal year ending
June 30, 1999. The annual report for fiscal year ending June 30, 2000 shall
be forthcoming on schedule. The annual report contains consolidated
financial statements of La Jolla thereon of Logan Throop and Co.
By order of the Board of Directors of La Jolla Diagnostics
Donald Brucker, Chairman of the Board of Directors
===============================================================================
<PAGE>
EXHIBIT "A"
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
Donald Brucker and Stephen Roberts certify that:
1. They are the Chief Executive Officer and the Secretary, respectively,
of La Jolla Diagnostics, Inc., a California corporation (the "Company").
2. Article I of the Articles of Incorporation of this Company is amended
and restated to read as follows:
"ARTICLE I
----------
The name of this Company is NATUREWELL.COM, INC."
3. The foregoing Amendment of Articles of Incorporation has been duly
approved by the Board of Directors of the Company.
4. The foregoing Amendment of Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with Section 903 of
the Corporations Code. The total number of outstanding shares of Common Stock
of the Company is 19,813,014. No Preferred Stock of the Company is
outstanding. The number of shares voting in favor of the amendment equaled or
exceeded the vote required, such required vote being a majority of the
outstanding shares of Common Stock.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Effective as of: ___________________
---------------------------------------
Donald Brucker, Chief Executive Officer
---------------------------------------
Stephen Roberts, Secretary
===============================================================================
<PAGE>
EXHIBIT "B"
LA JOLLA DIAGNOSTICS, INC.
2000 INCENTIVE STOCK BONUS AND OPTION PLAN
1. PURPOSE OF THE PLAN.
The purpose of this 2000 Incentive Stock Bonus and Option Plan (the "Plan") of
LA JOLLA DIAGNOSTICS, INC., a California corporation (the "Company") is to
provide the Company with a means of attracting, compensating, and retaining the
services of selected employees, directors and consultants. The Plan is intended
to advance the interests of the Company by affording to selected employees,
directors and consultants, an opportunity for investment in the Company and the
incentives inherent in stock ownership in the Company. For purposes of this
Plan, the term Company shall include subsidiaries, if any, of the Company.
2. LEGAL COMPLIANCE.
It is the intent of the Plan that options may be granted under it
("Options")as either "Incentive Stock Options" ("ISOs"), as such term is defined
in Section 422 of the Internal Revenue Code of 1986, as amended ("Code") or non-
qualified stock options ("NQOs"); provided, however, ISOs shall be granted only
to employees of the Company. An option shall be identified as an ISO or an NQO
in writing in the document or documents evidencing the grant of the option. All
options that are not so identified as ISOs are intended to be NQOs. It is the
further intent of the Plan that it conform in all respects with the requirements
of Rule 16b-3 of the Securities and Exchange Commission under the Securities
Exchange Act 1934, as amended ("Rule 16b-3"). To the extent that any aspect of
the Plan or its administration shall at any time be viewed as inconsistent with
the requirements of Rule 16b-3 or, in connection with ISOs, the Code, as the
same shall be amended from time to time, such aspect shall be deemed to be
modified, deleted, or otherwise changed as necessary to ensure
continued compliance with such provisions.
3. ADMINISTRATION OF THE PLAN.
3.1 PLAN COMMITTEE.
The Plan shall be administered by a committee (the "Committee"). The
members of the Committee shall be appointed from time to time by the Board of
Directors of the Company (the "Board") and shall consist of not less than two
(2)directors. If required to be in compliance with Rule 16b-3, members of the
Committee shall be disinterested persons as defined in Rule 16b-3.
3.2 GRANTS OF STOCK BONUSES AND OPTIONS BY THE COMMITTEE
In accordance with the provisions of the Plan, the Committee, by
resolutions, shall select those eligible persons to whom stock bonuses or
options shall be granted ("Optionees"); shall determine the time or times at
which each option shall be granted, whether an option is an ISO or an NQO and
the number of shares to be subject to each bonus or option; and shall fix the
time and manner in which options may be exercised and the terms over which stock
bonuses will not and become nonforfeitable, the option exercise price, and the
option period. The Committee shall determine the form of option agreement to
evidence the foregoing terms and conditions of each option, which need not be
identical, in the form referred to below in Section 7. Such agreement may
include such other provisions as the Committee may deem necessary or desirable
and consistent with the Plan, the Code and Rule 16b-3.
3.3 COMMITTEE PROCEDURES.
The Committee from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company. The Committee shall keep minutes of its meetings
and records of its actions. A majority of the members of the Committee shall
constitute a quorum for the transaction of any business by the Committee. The
Committee may act at any time by an affirmative vote of a majority of these
members voting. Such vote may be taken at a meeting (which may be conducted in
person or by any telecommunication medium) or by written consent of Committee
members without a meeting.
3.4 FINALITY OF COMMITTEE ACTION.
The Committee shall resolve all questions arising under the Plan and
agreements entered into pursuant to the Plan. Each determination,
interpretation, or other action made or taken by the Committee shall be final
and conclusive and binding on all persons, including, without limitation, the
Company, its shareholders, the Committee and each of the members of the
Committee, and the directors, officers, and employees of the Company, including
Optionees and their respective successors in interest.
3.5 NON-LIABILITY OF COMMITTEE MEMBERS.
No Committee member shall be liable for any action or determination made by
him in good faith with respect to the Plan or any bonus or option granted under
it.
4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN.
The Board may from time to time make such changes in or additions to the
Plan as it may deem proper and in the best interests of the Company and its
shareholders. The Board may also suspend or terminate the Plan at any time,
without notice, and in its sole discretion.
Notwithstanding the foregoing, no such change, addition, suspension, or
termination by the Board shall (i) materially impair any right previously
granted under the Plan without the express written consent of the Optionee;
or (ii) materially increase the number of shares subject to the Plan,
materially increase the benefits accruing under the Plan, materially modify the
requirements as to eligibility to participate in the Plan or alter the
method of determining the option exercise price described in Section 8, without
shareholder approval.
5. SHARES SUBJECT TO THE PLAN.
For purposes of the Plan, the Committee is authorized to grant Stock Bonuses
and Options for up to an aggregate of Five Million (5,000,000) shares of the
Company's Common Stock, no par value per share ("Common Stock"), either
treasury or authorized but unissued shares, or the number and kind of shares of
stock or other securities which, in accordance with Section 13, shall be
substituted for such shares of Common Stock or to which such shares shall be
adjusted. The Committee is authorized to grant Stock Bonuses and Options under
the Plan with respect to such shares. Any or all unsold shares subject to an
Option which for any reason expires or otherwise terminates (excluding shares
returned to the Company in payment of the exercise price for additional shares)
may again be made subject to grant under the Plan.
6. PARTICIPANTS.
ISOs shall be granted only to full-time elected or appointed officers or other
full-time key employees of the Company including, without limitation, members
of the Board who are also full-time officers or key employees at the time of
grant. NQOs and Stock Bonuses may be granted to employees (including officers)
and directors of and consultants to the Company. Any Optionee may hold more
than one option to purchase Common Stock, whether such option is an Option held
pursuant to the Plan or otherwise.
7. GRANTS OF BONUSES AND OPTIONS.
The Committee shall have the sole discretion to grant Stock Bonuses and Options
under the Plan and to determine whether any Option shall be an ISO or an NQO.
The terms and conditions of Stock Bonuses and Options granted under the Plan
may differ from one another, as the Committee, in its absolute discretion,
shall determine as long as all grants under the Plan satisfy the requirements
of the Plan. Upon determination by the Committee that a Stock Bonus or Option
is to be granted to an Optionee, a written agreement evidencing such Stock
Bonus or Option shall be given to the Optionee, specifying the number of shares
subject to the Stock Bonus or Option, the exercise price, whether an Option is
an ISO or an NQO, and the other individual terms and conditions of such Stock
Bonus or Option. Such agreement may incorporate generally applicable
provisions from the Plan, a copy of which shall be provided to all Optionees at
the time of their initial grants under the Plan. The stock bonus or Option
shall be deemed granted as of the date specified in the grant resolution of the
Committee, and the agreement shall be dated as of the date of such
resolution.
8. OPTION EXERCISE PRICE.
The price per share to be paid by the Optionee at the time an ISO is exercised
shall not be less than one hundred percent (100%) of the Fair Market Value (as
hereinafter defined) of one share of the optioned Common Stock on the date on
which the Option is granted. No ISO may be granted under the Plan to any
person who, at the time of such grant, owns (within the meaning of Section
424(d) of the Code) stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or of any parent
thereof, unless the exercise price of such ISO is at least equal to one hundred
and ten percent (110%) of Fair Market Value on the date of grant. The price
per share to be paid by the Optionee at the time an NQO is exercised shall not
be less than eighty-five percent (85%) of the Fair Market Value on the date on
which the NQO is granted, as determined by the Committee.
For purposes of the Plan, the "Fair Market Value" of a share of the Company's
Common Stock as of a given date shall be: (i) the closing price of a share of
the Company's Common Stock on the principal exchange on which shares of the
Company's Common Stock are then trading, if any, on such date, or, if shares
were not traded on such date, then on the next preceding trading day during
which a sale occurred; or (ii) if the Company's Common Stock is not traded on
an exchange but is quoted on NASDAQ or successor quotation system, (1) the last
sales price (if the Common Stock is then listed as a National Market Issue
under the NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Common Stock
on such date as reported by NASDAQ or such successor quotation system; or (iii)
if the Company's Common Stock is not publicly traded on an exchange and not
quoted on NASDAQ or a successor quotation system, the mean between the closing
bid and asked prices for the Common Stock on such date as determined in good
faith by the Committee; or (iv) if the Company's Common Stock is not publicly
traded, the fair market value established by the Committee acting in good
faith. In addition, with respect to any ISO, the Fair Market Value on any
given date shall be determined in a manner consistent with any regulations
issued by the Secretary of the Treasury for the purpose of determining fair
market value of securities subject to an ISO plan under the Code.
9. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.
9.1 OPTION PERIOD.
The option period shall be determined by the Committee with respect to each
option granted. In no event, however, may the option period exceed ten (10)
years from the date on which the option is granted.
9.2 EXERCISABILITY OF OPTIONS, ACCELERATION OF EXERCISABILITY AND
FORFEITABILITY OF STOCK BONUSES.
Each Option shall be exercisable in whole or in consecutive installments,
cumulative or otherwise, during its term, and Stock Bonuses shall vest and
become nonforfeitable, as determined in the discretion of the Committee.
9.3 TERMINATION OF OPTIONS.
An Option shall terminate three (3) months, and unvested Stock Bonuses shall be
forfeited immediately, after termination of the Optionee's employment or
relationship as a consultant or director with the company, unless the Stock
Bonus or Option Agreement by its terms specifies otherwise.
10. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.
10.1 WRITTEN NOTICE OF EXERCISE.
An Optionee may elect to exercise an Option in whole or in part, from time to
time, subject to the terms and conditions contained in the Plan and in the
agreement evidencing such Option, by giving written notice of exercise to the
Company at its principal executive office.
10.2 CASH PAYMENT FOR OPTIONED SHARES.
If an Option is exercised for cash, such notice shall be accompanied by a
cashier's or personal check, or money order, made payable to the Company for
the full exercise price of the shares purchased.
10.3 STOCK SWAP FEATURE.
At the time of the Option exercise, and subject to the discretion of the
Committee to accept payment in cash only, the Optionee may determine whether
the total purchase price of the shares to be purchased shall be paid solely in
cash or by transfer form the Optionee to the Company of previously acquired
shares of Common Stock, or by a combination thereof. In the event that the
Optionee elects to pay the total purchase price in whole or in part with
previously acquires shares of Common Stock, the value of such shares shall be
equal to their Fair Market Value on the date of exercise, determined by the
Committee in the same manner used for determining Fair Market Value at the time
of grant for purposes of Section 8.
10.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND LEGALITY OF
ISSUANCE.
The receipt of shares of Common Stock in a Stock Bonus or upon the exercise of
an Option shall be conditioned upon the Optionee (or any other person who
exercises the Option on his or her behalf as permitted by Section 14) providing
to the Committee a written representation that, at the time of such grantor
exercise, it is the intent of such person(s) to acquire the shares for
investment only and not with a view toward distribution. The certificate for
unregistered shares issued for investment shall be restricted by the Company as
to transfer unless the Company receives an opinion of counsel satisfactory to
the Company to the effect that such restriction is not necessary under then
pertaining law. The providing of such representation and such restrictions on
transfer shall not, however, be required upon any person's receipt of shares of
Common Stock under the Plan if, the shares subject to the Option shall be (i)
covered by an effective and current registration statement under the Securities
Act of 1933, as amended, and (ii) either qualified or exempt from qualification
under applicable state securities laws. The Company shall, however, under no
circumstances be required to sell or issue any shares under the Plan if, in the
opinion of the Committee, (i) the issuance of such shares would constitute a
violation by the Optionee or the Company of any applicable law or regulation of
any governmental authority, or (ii) the consent or approval of any governmental
body is necessary or desirable as a condition of, or in connection with, the
issuance of such shares.
10.5 SHAREHOLDER RIGHTS OF OPTIONEE.
Upon issuance of a Stock Bonus or exercise of an Option, the Optionee (or any
other person who exercises the Option on his or her behalf as permitted by
Section 14) shall be recorded on the books of the Company as the owner of the
shares, and the company shall deliver to such record owner one (1) or more duly
issued stock certificates evidencing such ownership. No person shall have any
rights as a shareholder with respect to any shares of Common Stock covered by
the Plan until such person shall have become the holder of record of such
shares. Except as provided in Section 13, no adjustments shall be made for
cash dividends or other distributions or other rights as to which there is a
record date preceding the date such person becomes the holder of record of
such shares.
10.6 HOLDING PERIODS FOR TAX PURPOSES.
The Plan does not provide that an Optionee must hold shares of Common Stock
acquired under the Plan for any minimum period of time. Optionees are urged to
consult with their own tax advisors with respect to the tax consequences to
them of their individual participation in the Plan.
11. SUCCESSIVE GRANTS.
Successive grants of Options may be made to any Optionee under the Plan.
12. ADJUSTMENTS.
If the outstanding Common Stock shall be hereafter increased or decreased, or
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation, by reason of a
recapitalization, reclassification, reorganization, merger, consolidation,
share exchange, or other business combination in which the Company is the
surviving parent corporation, stock split-up, combination of shares, or
dividend or other distribution payable in capital stock or rights to acquire
capital stock, appropriate adjustment shall be made by the Committee in the
number and kind of shares for which options may be granted under the Plan. In
addition, the Committee shall make appropriate adjustment in the number and
kind of shares as to which outstanding and unexercised options shall be
exercisable, to the end that the proportionate interest of the holder of the
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustment in outstanding options shall be made without
change in the total price applicable to the unexercised portion of the Option
but with a corresponding adjustment in the exercise price per share. In the
event of the dissolution or liquidation of the Company, any outstanding and
unexercised options shall terminate as of a future date to be fixed by the
Committee.
In the event of a Reorganization (as hereinafter defined), then,
a. If there is no plan or agreement with respect to the Reorganization
("Reorganization Agreement"), or if the Reorganization Agreement does not
specifically provide for the adjustment, change, conversion, or exchange of the
outstanding and unexercised options for cash or other property or securities of
another corporation, then any outstanding and unexercised options shall
terminate as of a future date to be fixed by the Committee; or
b. If there is a Reorganization Agreement, and the Reorganization Agreement
specifically provides for the adjustment, change, conversion, or exchange of
the outstanding and unexercised options for cash or other property or
securities of another corporation, then the Committee shall adjust the shares
under such outstanding and unexercised options, and shall adjust the shares
remaining under the Plan which are then available for the issuance of options
under the Plan if the Reorganization Agreement makes specific provisions
therefor, in a manner not inconsistent with the provisions of Reorganization
Agreement for the adjustment, change, conversion, or exchange of such options
and shares.
The term "Reorganization" as used in this Section 12 shall mean any
reorganization, merger, consolidation, share exchange, or other business
combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or
lease of all or substantially all of the assets of the Company. Nothing herein
shall require the Company to adopt a Reorganization Agreement, or to make
provision for the adjustment, change, conversion, or exchange of any options,
or the shares subject thereto, in any Reorganization Agreement which it does
adopt.
The Committee shall provide to each Optionee then holding an outstanding and
unexercised Option no less than thirty (30) calendar days' advanced written
notice of any date fixed by the Committee pursuant to this Section 12 and of
the terms of any Reorganization Agreement providing for the adjustment, change,
conversion, or exchange of outstanding and unexercised Options. Except as the
Committee may otherwise provide, each Optionee shall have the right during such
period to exercise his or her Option only to the extent that the option was
exercisable on the date such notice was provided to the Optionee.
Any adjustment to any outstanding ISO pursuant to this Section 12, if made by
reason of a transaction described in Section 424(a) of the Code, shall be made
so as to conform to the requirements of that section and the regulations
thereunder. If any other transaction described in Section 424(a) of the Code
affects the Common Stock subject to any unexercised ISO theretofore granted
under the Plan (hereinafter for purposes of this Section 12 referred to as the
"old options"), the Board of Directors of the Company or of any surviving or
acquiring corporation may take such action as it deems appropriate, in
conformity with the requirements of that Code section and the regulations
thereunder, to substitute a new option for the old option, in order to make the
new option, as nearly as may be practicable, equivalent to the old option, or
to assume the old option.
No modification, extension, renewal, or other change in any option granted
under the Plan may be made, after the grant of such option, without the
Optionee's consent, unless the same is permitted by the provisions of the Plan
and the option agreement. In the case of an ISO, Optionees are hereby
advised
that certain changes may disqualify the ISO from being considered as such under
Section 424(h) of the Code.
All adjustments and determinations under this Section 12 shall be made by
the Committee in good faith in its sole discretion.
13. NON-TRANSFERABILITY OF OPTIONS AND UNVESTED BONUSES.
An Option shall be exercisable only by the Optionee, or in the event of his or
her disability, by his or her guardian(s), conservator(s), or other legal
representative(s), during the Optionee's lifetime. In the event of the death
of the Optionee, an Option shall be exercisable by his or her legal
representative(s), legatee(s), or heir(s), as the case may be, or by such
person(s) as he or she may designate as his or her beneficiary or beneficiaries
in a signed statement included as part of the option agreement.
Unvested Stock Bonuses and all Options shall not be transferable by the
Optionee, either voluntarily or involuntarily, except by Will or the laws of
descent and distribution. Any attempt to exercise, transfer or otherwise
dispose of an interest in an Option in contravention of the terms and
conditions of the Plan, or of the agreement for the Stock Bonus or Option,
shall immediately void the Option and cause the unvested shares of a Stock
Bonus to be forfeited.
14. CONTINUED EMPLOYMENT.
Neither the creation of the Plan nor the granting of Stock Bonuses or Option(s)
under it shall be deemed to create a right in an Optionee to continued
employment or other affiliation with the Company, and each such Optionee shall
be and shall remain subject to discharge by the Company as though the Plan had
never come into existence. Except as specifically provided by the Committee in
any particular case, the loss of existing or potential profit in Stock Bonuses
or Options granted under this Plan shall not constitute an element of damages
in the event of termination of the employment of an employee even if the
termination is in violation of an obligation of the Company to the employee by
contract or otherwise.
15. TAX WITHHOLDING.
The grant of a Stock Bonus and the exercise of any option granted under the
Plan is subject to the condition that if at any time the Company shall
determine, in its discretion, that the satisfaction of withholding tax or other
withholding liabilities under any federal, state or local law is necessary or
desirable as a condition of, or in connection with, such grantor exercise or a
later lapsing of time or restrictions on or disposition of the shares of Common
Stock received upon such grantor exercise, then in such event, the exercise of
the Option shall not be effective unless such withholding shall have been
effected or obtained in a manner acceptable to the Company.
16. TERM OF PLAN.
16.1 EFFECTIVE DATE.
Subject to shareholder approval, the Plan shall become effective on
July 1, 2000.
16.2 TERMINATION DATE.
Except as to Options previously granted and outstanding under the Plan, the
Plan shall terminate at midnight on July 1, 2010 and no Option shall be granted
after that time. Options then outstanding may continue to be exercised in
accordance with their terms. The Plan may be suspended or terminated at any
earlier time by the Board within the limitations set forth in Section 4.
17. NON-EXCLUSIVITY OF THE PLAN.
Nothing contained in the Plan is intended to amend, modify, or rescind any
previously approved compensation plans, programs or options entered into by the
Company. This Plan shall be construed to be in addition to and independent of
any and all such other arrangements. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the shareholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt, with or without shareholder approval, such
additional or other compensation arrangements as the Board may from time to
time deem desirable.
18. GOVERNING LAW.
The Plan and all rights and obligations under it shall be construed and
enforced in accordance with the laws of the State of California.
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<PAGE>
PROXY
LA JOLLA DIAGNOSTICS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 29, 2000
The undersigned shareholder of La Jolla Diagnostics, Inc. (the "Company"),
a California corporation, hereby acknowledges the receipt of the Notice of
Annual Meeting of Shareholders and Proxy Statement with respect to the Annual
Meeting of Shareholders of La Jolla Diagnostics, Inc. to be held at the La
Jolla Country Club located at 7301 High Avenue, La Jolla, California 92037, on
JUNE 29, 2000 at 10:00 a.m., local time, and hereby appoints DONALD BRUCKER or
failing him STEPHEN ROBERTS or failing him THOMAS CAJKA, as attorney and proxy
of the undersigned, with full power of substitution, to vote all of the shares
of stock of LA JOLLA DIAGNOSTICS, INC. which the undersigned may be entitled to
vote at such meeting, and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1, FOR PROPOSAL 2, FOR PROPOSAL 3, AND FOR
PROPOSAL 4 AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES
FOR DIRECTOR LISTED BELOW
PROPOSAL 1: To elect directors to hold office until next Annual Meeting of
Shareholders and until their successors are elected.
FOR all nominees listed below (except as marked to the contrary below).
WITHHOLD AUTHORITY to vote all nominees listed below.
Nominees: Donald Brucker, O.D. Stephen Roberts, M.D.
Thomas Cajka Greg Caton.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE SUCH NOMINEE(S)'
NAME(S) BELOW:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2
PROPOSAL 2: To approve the name change of the Company from
La Jolla Diagnostics, Inc. to NatureWell.com, Inc. and that
the Company's Articles of Incorporation be altered accordingly.
FOR
AGAINST
ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 3
PROPOSAL 3: To approve the Company's 2000 Stock Bonus and Option Plan.
FOR
AGAINST
ABSTAIN
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 4
PROPOSAL 3: To approve the selection of Logan Throop and Co. as independent
auditors for the Company.
FOR
AGAINST
ABSTAIN
THIS PROXY HAS BEEN SOLICITED BY OR FOR THE BENEFIT OF THE BOARD OF DIRECTORS
OF THE COMPANY. I UNDERSTAND THAT I MAY REVOKE THIS PROXY ONLY BY WRITTEN
INSTRUCTIONS TO THAT EFFECT, SIGNED AND DATED BY ME, WHICH MUST BE ACTUALLY
RECEIVED BY THE COMPANY PRIOR TO THE COMMENCEMENT OF THE ANNUAL MEETING.
DATED: ________________, 2000
________________________________________
________________________________________
Signature(s)
Please sign exactly as your name appears
hereon. If the stock is registered in the
names of two or more persons, each should
sign. Executors, administrators,
trustees, guardians and attorneys-in-fact
should add their titles. If signer is a
corporation, please give full corporate
name and have a duly authorized officer
sign, stating title. If signer is a
partnership, please sign in partnership
name by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
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