1                                  SCHEDULE 14A
                                 (RULE 14a-101)14A-101)
                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
           PROXY STATEMENT PURSUANT TO SECTION 14(a)14(A) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

(AMENDMENT NO.  )[X]     Filed  by  the  registrant [X]Registrant
[ ]     Filed  by  a  party  other  than  the  registrant [ ]Registrant
Check  the  appropriate  box:
[ ]     Preliminary  proxy statement.Proxy  Statement
[ ]     Confidential,  for useFor  Use  of  the  Commission onlyOnly (as permitted by Rule
        14a-6(e)(2)).
[X]     Definitive  proxy statement.Proxy  Statement
[ ]     Definitive  additional materials.Additional  Materials
[ ]     Soliciting  material pursuant toMaterial  Under  Rule  14a-12

                            THE FEMALE HEALTH COMPANYThe Female Health Company
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

    Registrant
- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if Other Thanother than the Registrant)
Payment  of  filing  fee  (check(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:
                                 Not Applicable
- --------------------------------------------------------------------------------
(2)  Aggregate  number  of  securities  to  which  transaction  applies:
                                 Not Applicable
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange  Act  Rule  0-11  (set(Set  forth  the  amount  on  which the filing fee is
calculated  and  state  how  it  was  determined):

                                 Not Applicable
- --------------------------------------------------------------------------------
(4)  Proposed  maximum  aggregate  value  of  transaction:
                                 Not Applicable
- --------------------------------------------------------------------------------
(5)  Total  fee  paid:
                                 Not Applicable
- --------------------------------------------------------------------------------

[  ]     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  formForm  or  scheduleSchedule  and  the  date  of  its  filing.

(1)  Amount  Previously Paid:previously  paid:
                                 Not Applicable
- --------------------------------------------------------------------------------
(2)  Form,  Schedule  or  Registration  Statement  No.:
                                 Not Applicable
- --------------------------------------------------------------------------------
(3)  Filing  Party:
                                 Not Applicable
- --------------------------------------------------------------------------------
(4)  Date  Filed:
                                 Not Applicable
- --------------------------------------------------------------------------------

   2


                            THE FEMALE HEALTH COMPANY
                             875515 North Michigan AvenueState Street
                                   Suite 36602225
                             Chicago, Illinois 6061160610

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                            TO BE HELD APRIL 10, 2001MAY 8, 2002

     To  the  Shareholders  of  The  Female  Health  Company:

     Notice  is  hereby given that the Annual Meeting of the Shareholders of The
Female  Health Company (the "Company" or "FHC") will be held at the Westin Hotel,
Consort Room, 16th Floor, 909 NorthThe Courtyard by
Marriot  Chicago  Downtown,  30  East  Hubbard  Street,  Michigan  Avenue Room,
Chicago,  Illinois  60611,  on  Tuesday, April 10, 2001May  8,  2002  at 2:00 p.m., local time, for the
following  purposes:

     1.     To  amend  the  Company's  Amended  and  Restated  Articles  of
Incorporation  to  increase  the  number of shares of the Company's Common Stock
authorized  from  27,000,000 to 35,500,000.  Details of the proposed increase in
authorized  shares  of  Common  Stock  are  set  forth in the accompanying Proxy
Statement  which  you  are  urged  to  read  carefully.

     2.     To  elect seveneight members to the Board of Directors, the names of whom
are  set  forth  in  the  accompanying  proxy statement, to serve until the 20022003
Annual  Meeting of Shareholders.

     2.Meeting.

     3.     To  consider  and  act  upon a proposal to ratify the appointment of
McGladrey  & Pullen, LLP as the Company's independent public accountants for the
fiscal  year  ending  September  30,  2001.

     3.2002.

     4.     To  transact  such  other  business  as may properly come before the
Annual  Meeting  and  any  adjournments  thereof.

     Shareholders  of  record  at  the  close  of business on March 5, 200111, 2002 are
entitled  to  vote at the Annual Meeting. All shareholders are cordially invited
to  attend  the  Annual  Meeting  in  person.  Shareholders who are unable to be
present  in  person  are  requested  to execute and return promptly the enclosed
proxy,  which  is  solicited  by  the  Board  of  Directors  of  the  Company.

                                       By  Order  of  the  Board  of  Directors,


                                       William  R.  Gargiulo,  Jr.
                                       Secretary

Chicago,  Illinois
March  14, 200120,  2002

   3


                            THE FEMALE HEALTH COMPANY
                             875 NORTH MICHIGAN AVENUE
                                   SUITE 3660
                            CHICAGO, ILLINOIS 60611515 North State Street
                                   Suite 2225
                             Chicago, Illinois 60610

                                 PROXY STATEMENT
                               FOR THE 20012002 ANNUAL
                             MEETING OF SHAREHOLDERS

     This  Proxy  Statement  is furnished in connection with the solicitation of
proxies  by  the Board of Directors of The Female Health Company (the "Company")
to be voted at the Annual Meeting of Shareholders to be held at the Westin
Hotel, Consort Room, 16th Floor, 909 NorthThe Courtyard by
Marriot Chicago Downtown, 30 East Hubbard Street, Michigan Avenue Room, Chicago,
Illinois  60611, at 22:00 p.m. local time on Tuesday, April 10, 2001,May 8, 2002, and at any adjournments
thereof,  for  the purposes set forth in the accompanying Notice of Meeting. The
mailing  to  shareholders of this Proxy Statement and accompanying form of proxy
will  take  place  on  or  about  March  14, 2001.20,  2002.

                               GENERAL INFORMATION

     The  Board of Directors knows of no business which will be presented to the
Annual  Meeting other than the matters referred to in the accompanying Notice of
Meeting.  However,  if  any  other  matters are properly presented to the Annual
Meeting,  it  is  intended that the persons named in the proxy will vote on such
matters  in  accordance  with  their judgment.  If the enclosed form of proxy is
executed  and returned, it nevertheless may be revoked at any time before it has
been  voted  by  a  later dated proxy or a vote in person at the Annual Meeting.
Shares  represented  by  properly  executed  proxies  received  on behalf of the
Company will be voted at the Annual Meeting (unless revoked prior to their vote)
in  the  manner specified therein.  If no instructions are specified in a signed
proxy returned to the Company, the shares represented thereby will be voted FOR:
(a)  the  amendment  of  the  Company's  Amended  and  Restated  Articles  of
Incorporation;  (b)  the election of the directors listed in the enclosed proxy;
and  (b)(c)  ratification  of  McGladrey & Pullen, LLP as the Company's independent
auditors.

     Only holders of the common stock of the CompanyCompany's Common Stock (the "Common Stock") and holders
of  the  Company's  Class  A Convertible Preferred Stock-Series 1 (the "Series 1
Preferred  Stock")  whose  names appear of record on the books of the Company at
the  close  of  business  on  March  5, 200111, 2002 are entitled to vote at the Annual
Meeting.  On that date, there were 14,345,84116,000,316 shares of Common Stock and 660,000
shares  of Series 1 Preferred Stock outstanding.  Each share of Common Stock and
Series  1 Preferred Stock is entitled to one vote on each matter to be presented
at the Annual Meeting.  A majority of the votes entitled to be cast with respect
to each matter submitted to the shareholders, represented either in person or by
proxy,  shall  constitute  a  quorum  with  respect  to  such  matter.


Under  Wisconsin  law, directors are elected by plurality, meaning that the
seveneight  individuals  receiving  the  largest  number  of  votes  are  elected  as
directors,  and  the ratification of the appointment of the independent auditors
requires the affirmative vote of a majority of the shares represented, in person
or  by  proxy,  at  the  Annual  Meeting.  In  addition, under Wisconsin law, an
amendment  to  the Company's Amended and Restated Articles of Incorporation must
be  approved  by  the  affirmative  vote  of holders of two-thirds of the shares
"entitled"  to  vote  on  the  proposal.  Abstentions and broker nonvotes (i.e.,
shares  held  by  brokers  in  street  name,  voting  on  certain matters due to
discretionary authority or instruction from the beneficial owners but not voting
on  other  matters  due  to  lack  of  authority to vote on such matters without
instructions  from  the  beneficial  owners)  will  count  toward  the  quorum
requirement but will not count toward the determination of whether directors are
elected  or  the  appointment of the independent auditors is ratified.  However,
because  the  amendment  to  the  Company's  Amended  and  Restated  Articles of
Incorporation  must be approved by the affirmative vote of holders of two-thirds
of  the  Company's outstanding Common Stock and Series 1 Preferred Stock, voting
together,  abstentions  and  broker  nonvotes  will  act  as  a vote against the
proposed  amendment.

      AMENDMENT OF COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION
                                    (ITEM 1)

     The  Company's Amended and Restated Articles of Incorporation authorize the
issuance  of  32,015,000 shares consisting of:  (a) 27,000,000 shares designated
as  "Common  Stock"  with  a  par value of $0.01 per share; (b) 5,000,000 shares
designated as "Class A Preferred Stock" with a par value of $0.01 per share; and
(c)  15,000  shares  designated as "Class B Preferred Stock" with a par value of
$0.50  per  share.  The proposed amendment to the Company's Amended and Restated
Articles  of  Incorporation  will  increase the number of shares of Common Stock
which  the  Company  is  authorized to issue from 27,000,000 to 35,500,000.  The
additional  8,500,000  shares of Common Stock will be part of the existing class
of  Common  Stock,  and  if  and  when  issued,  will  have  the same rights and
privileges  as  the  shares  of  Common  Stock presently issued and outstanding.

PURPOSE  OF  THE  PROPOSED  AMENDMENT

     As  of  March  11, 2002, the Company had 16,000,316 shares of Common Stock,
and  660,000  shares of Series 1 Preferred Stock outstanding. In addition, as of
March  11,  2002, the Company has reserved 14,323,033 shares of Common Stock for
the  purposes  of  covering options outstanding under the Company's stock option
plans,  warrants  outstanding,  conversion  of  Series  1  Preferred  Stock  and
conversion  of  convertible  debentures.  In  September  2001,  the  holders  of
exercisable  stock  options  to  purchase  an


                                        2

4aggregate  of  2,659,800  shares of Common Stock agreed to waive their rights to
exercise  such options until the proposed amendment to the Company's Amended and
Restated  Articles  of  Incorporation  is filed following approval at the Annual
Meeting.  In  consideration  for these waivers, the Company agreed to reduce the
exercise  price  of such options to $0.56 per share.  The terms of these options
will otherwise remain unchanged.  The Company requested this modification to the
options  to prevent the total number of unreserved and unissued shares of Common
Stock  from exceeding the 27,000,000 shares of Common Stock authorized under the
Company's current Amended and Restated Articles of Incorporation.  Excluding the
stock  options covered by these waivers, as of the date of this proxy statement,
the  Company has 27,663,549 shares of Common Stock either outstanding or subject
to  commitments to be issued pursuant to outstanding stock options, warrants and
convertible  securities  and,  accordingly, there are no unreserved and unissued
shares  of  Common  Stock  available  for  future transactions.  If the proposed
amendment  to  the  Company's  Amended and Restated Articles of Incorporation is
approved  at the Annual Meeting, the stock options covered by these waivers will
become  exercisable  again  and  the Company would have 5,176,651 unreserved and
unissued  shares  of  Common  Stock  available  for future transactions.  If the
proposed  amendment  to  the  Company's  Amended  and  Restated  Articles  of
Incorporation  is  not approved, the stock options covered by these waivers will
not  become exercisable unless the Company's shareholders approve an increase in
the  number of authorized shares of Common Stock at a future meeting before such
options  expire.

     Except as described above, the Company has no present plans, understandings
or  requirements  for  the  issuance or use of the proposed additional shares of
Common  Stock.  However,  the  Board of Directors believes that the authority to
issue  additional  shares  of Common Stock is desirable so that, as the need may
arise,  the  Company  will have the flexibility to issue shares of Common Stock,
without  the  delay  of  a  special  shareholders'  meeting,  in connection with
possible  future  transactions,  including  equity  financings  and  management
incentive  or  employee  benefit  plans.

CERTAIN  EFFECTS  OF  THE  PROPOSED  AMENDMENT

     If the proposed amendment to the Company's Amended and Restated Articles of
Incorporation  is  approved  and  effected, future issuances of shares of Common
Stock  may not require the approval of the Company's shareholders.  As a result,
the Board of Directors could issue shares of Common Stock in a manner that might
have the effect of discouraging or making it more difficult for a third party to
acquire  control  of the Company through a tender offer or proxy solicitation or

                                        3

to  effect  a  merger  or  other business combination that is not favored by the
Board  of  Directors.  In  addition,  issuances  of  shares  of Common Stock may
increase the number of shares of Common Stock that may become available for sale
in the public market and could adversely affect the price of the Common Stock in
the public market.  The issuance of additional shares of Common Stock could also
adversely  affect  the  voting power of the existing shareholders, including the
loss  of  voting  control  to  others.  Holders  of  Common  Stock  do  not have
preemptive  rights  or  other  rights  to subscribe for additional shares in the
event  that  the  Board  of  Directors  determines to issue additional shares of
Common  Stock  in  the  future.


     The Company accounts for all of its stock options, including the options to
purchase  an  aggregate  of  2,659,800  shares  of  Common  Stock that have been
re-priced to an exercise price of $0.56 per share as described under "Purpose of
the  Proposed  Amendment"  above,  in  accordance  with variable plan accounting
guidance  provided  in  APB No. 25 and related interpretations.  This accounting
treatment  requires  the  Company  to  record  expense with respect to the stock
options  on  a  periodic  basis based upon the amount, if any, by which the fair
market  value  of  the  Common  Stock  exceeds  the  exercise price of the stock
options.  The  reduction  in  the  exercise  price  of the re-priced options may
result  in the Company recording significantly greater expense relating to these
options  in  future periods, which may adversely affect the Company's results of
operations.


NO  DISSENTER'S  RIGHTS

     Under  Wisconsin  law,  shareholders are not entitled to dissenters' rights
with  respect  to  the  proposed amendment to the Company's Amended and Restated
Articles  of  Incorporation.

RECOMMENDATION  OF  THE  BOARD  OF  DIRECTORS

     The  Board  of  Directors  recommends  that  the  shareholders vote FOR the
proposed  amendment  to  the  Company's  Amended  and  Restated  Articles  of
Incorporation.  All  shares  of  Common  Stock  represented by properly executed
proxies received prior to or at the Annual Meeting and not revoked will be voted
FOR  the  proposal  unless  a vote against or an abstention with respect to such
proposal is specifically indicated.  If the proposal is adopted by the requisite
vote  of  shareholders,  the  Board of Directors will promptly cause Articles of
Amendment to be filed with the Department of Financial Institutions of the State
of Wisconsin.  The Articles of Amendment will become effective upon such filing.

                              ELECTION OF DIRECTORS
                                    (ITEM 1)(Item 2)

     Pursuant  to the authority contained in the Amended and Restated By-Laws of
the  Company,  the Board of Directors has established the number of directors at
seven.eight.  The  Board of Directors has nominated O.B. Parrish,William R. Gargiulo, Jr., Mary Ann
Leeper,  Ph.D.,  William R. Gargiulo, Jr.,O.B. Parrish, Stephen M. Dearholt, David R. Bethune, Michael R.
Walton,  and James R. Kerber and Richard E. Wenninger for election as directors, all
to  serve  until  the  20022003  Annual  Meeting  of  Shareholders.


                                        4

     As  indicated  below,  all  persons nominated by the Board of Directors are
incumbent directors.  The Company anticipates that all of the nominees listed in
this  Proxy Statement will be candidates when the election is held.  However, if
for  any  reason  any  nominee  is not a candidate at that time, proxies will be
voted for any substitute nominee designated by the Company (except where a proxy
withholds  authority  with  respect  to  the  election  of  directors).

                       NOMINEES FOR ELECTION AS DIRECTORS

O.B.  PARRISH
Age:  67;68;  Elected  Director:  1987;  Present  Term  Ends:  20012002  Annual Meeting

     O.B.  Parrish  has  served  as Chief Executive Officer of the Company since
1994,  as  acting  Chief  Financial and Accounting Officer from February 1996 to
March  1999 and as the Chairman of the Board and a Director of the Company since
1987.  Mr.  Parrish  is  a  shareholder and has served as the President and as a
Director  of Phoenix Health Care of Illinois, Inc. ("Phoenix of Illinois") since
1987.  Phoenix  of  Illinois  owns approximately 295,000 shares of the Company's
outstanding Common Stock.
Mr.  Parrish  also was the Co-Chairman and a Director of
Inhalon Pharmaceuticals, Inc. until its sale to Medeva, Plc. and  is  Chairman  and  a Director of ViatiCare, L.L.C.,LLC, a financial
services  company,  Chairman  and  a  Director  of  MIICRO  Inc., a neuroimaging
company,  and  Chairman  and  a  Director  of  Amerimmune

Pharmaceuticals,  Inc.  Mr.  Parrish  is  also a trustee of Lawrence University.
From  1977  until  1986,  Mr. Parrish was the President of the Global Pharmaceutical
Group  of  G.D.  Searle  &  Co.  ("Searle"),  a pharmaceutical/consumer products
company.  From  1974  until  1977,  Mr.  Parrish  was  the  President  of Searle
International,  the  foreign  sales  operationoperations  of  Searle.  Prior to that, Mr.
Parrish  was  Executive  Vice  President  of  Pfizer's  International  Division.

MARY  ANN  LEEPER,  PH.D.
Age:  60;61;  Elected  Director:  1987;  Present  Term  Ends:  20012002  Annual Meeting

     Dr.  Leeper  has served as the President and Chief Operating Officer of the
Company  since  1996  and as President and Chief Executive Officer of The Female
Health  Company  Division  from  May  1994  until  January  1996, and as Senior Vice
President -- DevelopmentPresident-Development  of  the  Company  from  1989 until January  1996.1996 and as a
Director  of the Company since 1987.  Dr. Leeper is a shareholder and has served
as  a  Vice President and Director of Phoenix of Illinois since 1987.  From 1981
until  1986, Dr. Leeper served as Vice President -- MarketPresident-Market Development for Searle's
Pharmaceutical  Group  and in various Searle research and development management
positions.  As Vice President -- MarketPresident-Market Development, Dr. Leeper was responsible for
worldwide  licensing and acquisition, marketing and market research.  In earlier
positions,  she was responsible for preparation of new drug applications and was
a  liaison  with the FDA.  Dr. Leeper currently serves on the Board of Directors
of  the  Temple University School of Pharmacy, and on the BoardUniversity of DirectorsVirginia School
of  Nursing and the Northwestern University School of Music.  SheDr. Leeper is also
on  the  Board of CEDPA, an international not-for-profit organization working on
women's  issues  in  the  developing  world. Dr. Leeperworld and is also a directorDirector of Influx, Inc., a
pharmaceutical  research  company.  She  is  also  an  adjunct  professor at the
University  of  Virginia  Darden  School  of  Business.


                                        5
WILLIAM  R.  GARGIULO,  JR.
Age:  72;73;  Elected  Director:  1987;  Present  Terms  Ends:  20012002 Annual Meeting

     William  R.  Gargiulo, Jr. has served as Secretary of the Company from 1996
to  present,  as  Vice  President  of the Company from 1996 to September 30, 1998, as Assistant
Secretary  of  the Company from 1989 to 1996, as Vice President -- InternationalPresident-International of
The  Female  Health  Company  Division  from  1994  until January 1996, as Chief

                                        2
   5
Operating  Officer  of  the Company from 1989 to 1994, and as General Manager of
the  Company  from  1988 to 1994.  Mr. Gargiulo has also served as a Director of
the  Company  since  1987.  Mr.  Gargiulo  is  a  Trustee  of a trust which is a
shareholder  of Phoenix of Illinois.  From 1984 until 1986, Mr. Gargiulo was the
Executive  Vice  President  of  the Pharmaceutical Group of G.D. Searle, & Co., in charge of
Searle's  European  operations.  From 1976 until 1984, Mr. Gargiulo was the Vice
President  of  Searle's  Latin  American  operations.

STEPHEN  M.  DEARHOLT
Age:  54;55;  Elected  Director:  1996;  Present  Term  Ends:  20012002  Annual Meeting

     Mr.  Dearholt has served as a Director since April 1996.  Mr. Dearholt is a
co-founder  of  and has been a partner in Insurance Processing Center, Inc., one
of  the  largest  privately  owned life insurance marketing organizations in the
United  States,  since  1972.  He  has  over  23  years  of experience in direct
response advertising and data based marketing of niche products.  Since 1985, Mr. Dearholthe
has  been a 50% owner of R.T. of Milwaukee, a private investment holding company
which  operates  a  stock  brokerage  business in Milwaukee, Wisconsin.  In late
1995,  Mr.  Dearholt  arranged,  on  very short notice, a $1 million bridge loan
which  assisted  the  Company  in its purchase of Chartex.  Mr. Dearholt is also
very  active in the nonprofit sector.  He is currently on the Board of Directors
of  Children's Hospital Foundation of Wisconsin, an honorary board member of the
Zoological  Society  of  Milwaukee,  and  the  national  Advisory Council of the
Hazelden  Foundation.  He  is  a  past  board  member  of  Planned  Parenthood
Association  of  Wisconsin,  and past Chairman of the Board of the New Day Club,
Inc.

DAVID  R.  BETHUNE
Age:  60;61;  Elected  Director:  1996;  Present  Term  Ends:  20012002  Annual Meeting

     Mr.  Bethune  has served as a Director since January 1996.  Mr. Bethune has
been  Chairman  and  Chief  Executive  Officer of Atrix Laboratories, Inc. since
1999.  From  1997  to 1998, Mr. Bethune held the position of President and Chief
Operating Officer of the IVAX Corporation.  From 1996 to 1997, Mr. Bethune was a
consultant  to  the pharmaceutical industry.  From 1995 to 1996, Mr. Bethune was
President  and  Chief Executive Officer of Aesgen, Inc., a generic pharmaceutical
company.  From  1992  to  1995, Mr. Bethune was Group Vice President of American
Cyanamid  Company  and a member of its Executive Committee until the sale of the
company  to American Home Products.  He had global executive authority for human
biologicals,  consumer  health products, pharmaceuticals and opthalmics, as well
as  medical  research.  Mr. Bethune is on the Board of Directors of the Southern
Research  Institute,  Atrix  PharmaceuticalsLaboratories,  Inc. and the American Foundation for
Pharmaceutical  Education, Partnership for Prevention.  He is a founding Trusteetrustee
of  the  American  Cancer  Society  Foundation  and  an  associate member of the
National  Wholesale Druggists' Association and the National Association of Chain
Drug  Stores.  He  is  the  founding  chairman  of  the Corporate Council of the
Children's  Health  Fund in New York City and served on the Arthritis Foundation
Corporate  Advisory  Council.


                                        6
MICHAEL  R.  WALTON
Age:  63;65;  Elected  Director:  1999;  Present  Term  Ends:  20012002  Annual Meeting

     Mr.  Walton  has  served  as  a  Director  since April 1999.  Mr. Walton is
President  and  owner  of  Sheboygan County Broadcasting Co., Inc., a company he
founded  in  1972.  In  addition  to  its  financial  assets,  Sheboygan  County
Broadcasting Co. currently owns four radio stations.  The company has focused on
start-up  situations,  and  growing  value  in  underperforming, and undervalued
business  situations.  It  has  purchased  and  sold  properties  in  Wisconsin,
Illinois,  and Michigan, and has grown to a multi-million dollar asset base from
a  start-up  capital  contribution  of  less  than $100,000.  Prior to 1972, Mr.
Walton was owner and President of Walton Co., an advertising representative firm
which  he  founded in New York City.  He has held sales and management positions
with  Forbes  Magazine, The Chicago Sun Times and Gorman Publishing Co., a trade
magazine  publisher specializing in new magazines which was subsequently sold to
a  large  international publishing concern.  Mr. Walton has served on the BoardBoards
of  the  American  Red  Cross,  The  Salvation Army and the Chamber of Commerce.

3
   6

JAMES  R.  KERBER
Age:  68;69;  Elected  Director:  1999;  Present  Term  Ends:  20012002  Annual Meeting

     Mr.  Kerber has served as a Director since April 1999.  Mr. Kerber has been
a business consultant to the insurance industry since January 1996.  He has over
40  years  of  experience  in operating insurance companies, predominantly those
associated with life and health.  From October
1994 until Januaryto 1996, he was Chairman, President,
Chief  Executive  Officer  and  director  of  the  22  life and health insurance
companies  which  comprise  the  ICH  Group.  In  1990,  Mr. Kerber was founding
partner  in the Life Partners Group where he was Senior Executive Vice President
and  a  director.  Prior  to that, he was involved with operating and consolidatingconsulting
over  200  life and health companies for ICH Corporation, HCA Corporation and US
Life  Corporation.

RICHARD  E.  WENNINGER
Age:  54;  Director:  2001;  Present  Term  Ends:  2002  Annual  Meeting

     Mr.  Wenninger  has  served  as  a Director since July 2001.  Mr. Wenninger
currently  serves  as  Chairman  of  Wenninger  Company,  Inc.,  a  mechanical
contracting and engineering company.  From 1976 to 2001, Mr. Wenninger served as
President  and  Chief  Executive  Officer of Wenninger Company, Inc.  He is also
Secretary  of Wenn Soft, Inc., a software development, sales and service company
he  founded  in  1997.  From  1992 to 1999, Mr. Wenninger served as Secretary of
Liftco,  Inc.  Mr.  Wenninger is a current board member of the Boys & Girls Club
of  Milwaukee,  a  former  President  and board member of the Milwaukee Athletic
Club, a former board member of the Wisconsin Psychoanalytic Foundation, a former
board  member  of  University  Lake  School,  the

                                        7

former  President  and  a  current  board  member of the Plumbing and Mechanical
Contractors  Association  of  Milwaukee, the former President and a former board
member  of  the  Sheet  Metal  Contractors Association of Milwaukee and a former
board  member  of  the  Mechanical  Contractors  Association  of  America.

     The  Board of Directors recommends that shareholders vote FOR all nominees.

                         INDEPENDENT PUBLIC ACCOUNTANTS
                                    (ITEM 2)(Item 3)

     The  Board  of Directors has appointed McGladrey & Pullen, LLP, independent
public  accountants,  to  audit  the financial statements of the Company for the
fiscal year ending September 30, 2001.2002.  The Board proposes that the shareholders
ratify  this  appointment.  McGladrey  &  Pullen,  LLP  audited  the  Company's
financial  statements for the fiscal year ended September 30, 2000.2001.  The Company
expects  that  representatives of McGladrey & Pullen, LLP will be present at the
Annual  Meeting, with the opportunity to make a statement if they so desire, and
will  be  available  to  respond  to  appropriate  questions.

     In  the  event  that ratification of the appointment of McGladrey & Pullen,
LLP as the independent public accountants for the Company is not obtained at the
Annual  Meeting,  the  Board  of  Directors  will  reconsider  its  appointment.

     A  majority of the shares represented, in person or by proxy, at the Annual
Meeting  is  required  to  ratify  the  appointment  of  the  independent public
accountants.

     The  Board  of  Directors  recommends  that  shareholders  vote  FOR  the
ratification  of  McGladrey  & Pullen, LLP as the independent public accountants
for  the  Company.

AUDIT FEES  OF  INDEPENDENT  AUDITORS

     Audit Fees.  McGladrey & Pullen, LLP billed the Company $106,325$81,225 in fees for
professional  services  rendered  for  the  audit  of  the  Company's  financial
statements  for  the fiscal year ended September 30, 2000,2001, and for the review of
the  interim  financial  statements  in  the Company's Quarterly Reports on Form
10-QSB  during  the  fiscal  year  ended  September  30,  2000.2001.

     Financial  Information Systems Design and Implementation Fees.  McGladrey &
Pullen,  LLP  did  not  performrender  any  professional  services  to  the Company for
information  technology  advice during the fiscal year ended September 30, 2001.

     All  Other Fees.  McGladrey & Pullen, LLP billed the Company $9,750 in fees
for  all  other  professional services forrendered to the Company during the fiscal
year  ended  September  30,  2000.2001.  These  services  primarily  consisted of tax
services.

     The  Audit  Committee  of  the Board of Directors of the Company considered
that  the  provision of the services and the payment of the fees described above
are  compatible  with  maintaining  the independence of McGladrey & Pullen, LLP.


                                        8

DIRECTORS

     The  Board of Directors currently consists of seveneight members:  O.B. Parrish,
William  R. Gargiulo, Jr., Mary Ann Leeper, Ph.D., William R. Gargiulo, Jr., Stephen M. Dearholt, David R.
Bethune,  Michael  R. Walton, and James R. Kerber.Kerber and Richard E. Wenninger.  At each
annual  meeting of shareholders, directors are elected for a term of one year to
succeed  those  directors  whose  terms  are  expiring.

COMMITTEE  OF  THE  BOARD  OF  DIRECTORS  AND  MEETING  ATTENDANCE

     The  Company  has  an  Audit  Committee.  The  Board's  Audit  Committee is
comprised  of Mr. Bethune, Mr. Dearholt and Mr. Kerber.  The responsibilities of
the Audit Committee, in addition to such other duties as may be specified by the
Board  of  Directors, include the following:  (a) recommendation to the Board of
Directors  of  independent  auditors  for the Company; (b) review of the timing,
scope  and results of the independent auditorsauditors' audit examination; (c) review of
periodic  comments  and  recommendations  by  the  auditors and of the Company's
response  thereto;  (d)  review  of  the  Company's  balance sheet, statement of
4
   7

operations  and cash flows; and (e) review of the scope and adequacy of internal
accounting  controls.  The  Audit Committee met one timetwo times during the fiscal year
ended  September  30,  2000.2001.

     The  Board  of  Directors held six13 meetings during the Company's fiscal year
ended  September  30,  2000.2001.  Other  than  Mr.  Bethune,  no  incumbent director
attended  fewer than 75% of the aggregate of (a) the total number of meetings of
the  Board  of  Directors  and  (b)  the  total  number  of meetings held by all
committees  of  the  Board  on  which  he  or  she  served,  if  any.

REPORT  OF  THE  AUDIT  COMMITTEE

     The Audit Committee is comprised of three members of the Company's Board of
Directors.  Because  the Company's Common Stock is traded on the Over the Counter Bulletin
Board,  the Company is not subject to the listing requirements of any securities
exchange  or  Nasdaq  regarding the membership of the Company's Audit Committee.
However,  each  member  of the Audit Committee is independent as defined in Rule
4200(a)(15)(14)  for  the  listing  standards of the Nasdaq Stock Market.  The Audit
Committee  does  not  have  a  written  charter.

     The  Audit  Committee  has:

     -    reviewed  and discussed the Company's audited financial statements for
          the  fiscal  year  ended  September  30,  2000,2001,  with  the  Company's
          management  and  with  the  Company's  independent  auditors;

                                        9


     -    discussed with the Company's independent auditors the matters required
          to  be  discussed  by  SAS 61 (Codification for Statements on Auditing
          Standards);  and

     -    received  and  discussed  with  the Company's independent auditors the
          written  disclosures  and  the  letter  from the Company's independent
          auditors  required  by  Independence  Standards  Board Statement No. 1
          (Independence  discussions  with  Audit  Committees).

     Based  on  such  review and discussions with management and the independent
auditors,  the  Audit  Committee  recommended to the Board of Directors that the
audited  financial statements be included in the Company's Annual Report on Form
10-KSB  for  the  fiscal  year  ended  September  30,  2000,2001, for filing with the
Securities  and  Exchange  Commission.

                                AUDIT COMMITTEE:
                                David R. Bethune
                              Stephen M. Dearholt
                                James R. Kerber

DIRECTOR  COMPENSATION  AND  BENEFITS

     Directors  who  are officers of the Company do not receive compensation for
serving  in  such  capacity.  Individual  directors  who are not officers of the
Company receive $1,000 for attendance in person at each board meeting or meeting
of  a  committee of which he or she is a member.  In addition, each director who
is  not  an  employee  of  the Company receives an automatic grant of options to
purchase  30,000  shares of the Company's Common Stock under the Company's Outside Director Stock
Option  Plan.  This grant is made upon the director's initial appointment to the
Board  of Directors and the options vest in accordance with the vesting criteria
set  forth  in  the  plan.

5
   8

EXECUTIVE  OFFICERS

     The  names of, and certain information regarding, executive officers of the
Company  who  are  not  directors  of  the  Company,  are  set  forth  below.
NAME AGE POSITION - ---- --- --------Name Age Position Jack Weissman............................. 53Weissman 54 Vice President-Sales Michael Pope 45 Vice President -- Trade Sales Michael Pope.............................. 44 Vice President,and General Manager --of The Female Health Company (UK) Plc. Mitchell Warren........................... 34Warren 35 Vice President -- InternationalPresident-International Affairs Robert R. Zic............................. 37Zic 38 Principal Accounting Officer
10 JACK WEISSMAN Vice President -- Trade SalesPresident-Sales Mr. Weissman has served as Vice President -- Trade SalesPresident-Sales since June 1995. From 1992 to 1994, Mr. Weissman was Vice President -- SalesPresident-Sales for Capitol Spouts, Inc., a manufacturer of pouring spouts for gable paper cartons. FromDuring the period from 1989 to 1992, he acted as General Manager -- HTVManager-HTV Group, an investment group involved in the development of retail stores. Mr. Weissman joined Searle's Consumer Products Group in 1979 and held positions of increasing responsibility, including National Account and Military Sales Manager. From 1985 to 1989, he was Director -- RetailDirector-Retail Business Development for The NutraSweet Company, a G.D. Searle & Co. subsidiary. Prior to Searle, Mr. Weissman worked in the consumer products field as account manager and territory manager for Norcliff Thayer and Whitehall Laboratories. MICHAEL POPE Vice President, General Manager -- TheManager-The Female Health Company (UK) Plc. Mr. Pope has served as Vice President of the Company since 1996 and as General Manager of The Female Health Company (UK) Plc. (formerly Chartex International, Plc.) since the Company's 1996 acquisition of Chartex. Mr. Pope has also served as a Director of The Female Health Company, Ltd. (formerly Chartex Resources Limited) and The Female Health Company (UK) Plc. since 1995. From 1990 until 1996, Mr. Pope was Director of Technical Operations for Chartex with responsibility for manufacturing, engineering, process development and quality assurance. Mr. Pope was responsible for the development of the high-speedhigh speed proprietary manufacturing technology for the female condom and securing the necessary approvals of the manufacturing process by regulatory organizations, including the FDA. Mr. Pope was also instrumental in developing and securing Chartex's relationship with its Japanese marketing partner. Prior to joining Chartex, from 1986 to 1990, Mr. Pope was Production Manager and Technical Manager for Franklin Medical, a manufacturer of disposable medical devices. During the period from 1982 to 1986, Mr. Pope was Site Manager, Engineering and Production Manager, Development Manager and Silicon Manager for Warne Surgical Products. MITCHELL WARREN Vice President -- International AffairsPresident-International Affairs. Mr. Warren has served as Vice President --- International Affairs of the Company since February 2000 and as Director of International Affairs of the Company from January 1999 to February 2000. From 1993 to 1998, Mr. Warren was employed by Population Services International (PSI), an international social marketing and communications organization, first as Executive Director of PSI/South Africa and then of PSI/Europe. From 1989 to 1993, Mr. Warren was Program Director of Medical Education for South African Blacks. 611 9 ROBERT R. ZIC Principal Accounting Officer Mr. Zic has served as the Company's Principal Accounting Officer since March 1999. From 1998 to 1999, Mr. Zic held the dual positions of Acting Controller and Acting Chief Financial Officer at Ladbroke's Pacific Racing Association division. From 1995 to 1998, Mr. Zic served as the Chief Accounting Manager and Assistant Controller at Argonaut Insurance Company. In this capacity, he was responsible for the financial and accounting operations of Argonaut and its four subsidiaries. From 1990 to 1994, Mr. Ziche was the Assistant Controller of CalFarm Insurance Company, where he was responsible for the company's external financial reporting duties. From 1988 to 1990, Mr. Zic was a Senior Accountant responsible for the statutory-based financials of Allstate Insurance Company. Mr. Zic's career began in 1986 as an auditor with Arthur Andersen & Co. EXECUTIVE COMPENSATION The following table sets forth the annual and long-term compensation for each of the last three fiscal years for the Company's Chief Executive Officer and the one highest-paidonly executive officer other than the Chief Executive Officer (the "named executive officers"), who served in such capacity as of September 30, 2000, as well as the total compensation paid to the named executive officers during the Company's last three fiscal years. No other executive officers of the Company who received salary and bonus in excess of $100,000 during the fiscal year ended September 30, 2000.2001 (the "named executive officers"). 12 SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM COMPENSATION COMPENSATION AWARDS ANNUAL ------------------------------------ COMPENSATION------------ ---------------------------- RESTRICTED STOCK SECURITIES FISCAL ------------ RESTRICTED STOCKSALARY AWARDS UNDERLYING NAME AND PRINCIPAL POSITION YEAR SALARY ($) AWARDS (1)($) OPTIONS/SARS (#) - --------------------------- ------------------ ------------ ---------- ---------------- ---------------- O.B. Parrish................................ 2000Parrish 2001 90,000 -- --- - Chairman and Chief 2000 90,000 - - Executive Officer 1999 90,000 --- 200,000 Executive Officer 1998 90,000 117,955(2) 264,000 Mary Ann Leeper, Ph.D....................... 2000Ph.D. 2001 225,000 -- --- - President and Chief 2000 225,000 - - Operating Officer 1999 225,000 --- 500,000 Operating Officer 1998 225,000 84,210(2) 290,000- --------------------------- ------------ ------------ ---------- ----------------
- ------------------------- (1) Represents fair market value of restricted Common Stock on the date of grant based on the $2.88 closing price of the Company's Common Stock on such date. (2) At September 30, 1998, each named executive officer owned 25,000 shares of restricted Common Stock, having a fair market value of $71,875 on such date, based on the closing price of the Company's Common Stock on such date, and a fair market value of $40,625 on September 30, 1999, based on the closing price of the Company's Common Stock on such date and a fair market value of $17,188 on September 30, 2000, based on the closing price of the Company's Common Stock on such date. For Mr. Parrish, also includes his pro rata portion of 25,000 shares of restricted stock granted to Phoenix of Illinois, based on his 64% ownership of such entity. For Dr. Leeper, also includes her pro rata portion of such restricted stock based on her approximately 16.7% ownership of such entity. All of these shares were granted on May 5, 1998 and vest in full on the first anniversary of the grant date. The owner is entitled to receive any dividends declared on these shares of restricted stock. OPTION GRANTS DURING THE YEAR ENDED SEPTEMBER 30, 20002001 No stock options were granted to the named executive officers of the Company during the fiscal year ended September 30, 2000. 7 102001. AGGREGATED OPTION VALUES AT SEPTEMBER 30, 20002001 The following table presents the value of unexercised options held by the named executive officers at September 30, 2000:2001:
NUMBER OF SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED UNDERLYING UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS SEPTEMBER 30, 2000 AT SEPTEMBER 30, 20002001 AT SEPTEMBER 30, 2001 (1) ------------------------- ------------------------------------------------------- --------------------------- NAME EXERCISABLE/EXERCISABLE / UNEXERCISABLE EXERCISABLE/UNEXERCISABLE ---- ------------------------- -------------------------- ---------------------- ------------------------------ --------------------------- O.B. Parrish...................................... 88,000/376,000 $0/Parrish 0 / 464,000 (2) $ 0/0 Mary Ann Leeper, Ph.D............................. 96,667/693,333 $0/Ph.D. 0 / 790,000 (2) $ 0/0 - ---------------------- ------------------------------ --------------------------- (1) Values are calculated by subtracting the exercise price from the $0.51 per share closing price of the Common Stock on September 28, 2001. 13 (2) In September 2001, Mr. Parrish and Dr. Leeper each agreed to waive their rights to exercise outstanding options until the Company amends its Amended and Restated Articles of Incorporation to increase the number of shares of Common Stock authorized for issuance. As of September 30, 2001, Mr. Parrish held options to purchase 88,000 shares of Common Stock that were exercisable but for the effect of his waiver and Dr. Leeper held options to purchase 96,667 shares of Common Stock that were exercisable but for the effect of her waiver. In consideration for these waivers, the Company agreed to reduce the exercise price of such options to $0.56 per share.
- ------------------------- (1) Values are calculated by subtracting the exercise price from the $0.6875 per share closing price of the Company's Common Stock on September 30, 2000. EMPLOYMENT AGREEMENTS The Company entered into an employment agreement with Dr. Leeper effective May 1, 1994. The original term of Dr. Leeper's employment extended to April 30, 1997 and after April 30, 1997 her employment term renews automatically for additional three-year terms unless notice of termination is given. The employment agreement has automatically renewed for a term ending on April 30, 2003. The Company may terminate the employment agreement at any time for cause. If Dr. Leeper's employmentLeeper is terminated without cause, the Company is obligated to continue to pay Dr. Leeper her base salary and any bonus to which she would otherwise have been entitled for a period equal to the longer of two years from date of termination or the remainder of the then applicable term of the employment agreement. In addition, the Company is obligated to continue Dr. Leeper's participation in any of its health, life insurance or disability plans in which Dr. Leeper participated prior to her termination of employment. Dr. Leeper's employment agreement provided for a base salary of $175,000 for the first year of her employment term, $195,000 for the second year of her employment term and $225,000 for the third year of her employment term, subject to the achievement of performance goals established by Dr. Leeper and the Board of Directors. If the employment agreement is renewed beyond the initial three-year term, it requires her base salary to be increased annually by the Board of Directors based upon her performance and any other factors that the Board of Directors considers appropriate. For fiscal 1998, 19992000 and 2000,2001, Dr. Leeper's base salary was $225,000 per year. The employment agreement also provides Dr. Leeper with various fringe benefits including an annual cash bonus of up to 100% of her base salary. The Board of Directors may award the cash bonus to Dr. Leeper in its discretion. To date, Dr. Leeper has not been awarded a cash bonus. 14 CHANGE OF CONTROL AGREEMENTS In fiscal 1999, the Company entered into Change of Control Agreements with each of O.B. Parrish, the Company's Chairman and Chief Executive Officer, Mary Ann Leeper, Ph.D., the Company's President and Chief Operating Officer, and Michael Pope, the Company's Vice President. In fiscal 2000, the Company entered into a Change of Control Agreement with Mitchell Warren, the Company's Vice President -- InternationalVice-President-International Affairs. These agreements essentially act as springing employment agreements which provide that, upon a change of control, as defined in the agreement, the Company will continue to employ the executive for a period of three years in the same capacities and with the same compensation and benefits as the executive was receiving prior to the change of control, in each case as specified in the agreements. If the executive is terminated without cause or if he or she quits for good reason, in each case as defined in the agreements, after the change of control, the executive is generally entitled to receive a severance payment from the Company equal to the amount of compensation remaining to be paid to the executive under the agreement for the balance of the three-year term. 8 11 SECURITY OWNERSHIP The following table sets forth certain information as of FebruaryMarch 15, 20012002 with respect to (a) each person known to the Company to own beneficially own more than 5% of the Company's Common Stock, (b) each named executive officer, and(c) each director of the Company, and (c)(d) all directors and executive officers as a group. The Company has determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission.Commission (the "SEC"). Unless otherwise indicated, the persons and entities included in the table have sole voting and investment power with respect to all shares beneficially owned, except to the extent authority is shared by spouses under applicable law. Shares of Common Stock subject to options or warrants that are either currently exercisable or exercisable within 60 days of FebruaryMarch 15, 2001,2002, and shares of Common Stock subject to the conversion of preferred stock or convertible debentures outstanding as of FebruaryMarch 15, 2001,2002, are treated as outstanding and beneficially owned by the holder for the purpose of computing the percentage ownership of the holder. However, these shares are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
AMOUNT OF BENEFICIAL OWNERSHIP --------------------------------------- NAME AND ADDRESS OF BENEFICIAL OWNER (1) SHARES PERCENT ------------------------ ------ -------- ------------------------------------------------ --------- -------- O.B. Parrish (1)............................................ 506,501 3.5%(2) (3) . . . . . . . . . . . . . . 832,501 5.1% William R. Gargiulo, Jr. (2) (3) . . . . . . . . 335,001 2.1% Mary Ann Leeper, Ph.D. (1).................................. 462,068 3.2% William R. Gargiulo, Jr. (1)................................ 352,168 2.4%(2) (3) . . . . . . . . . 370,901 2.3% Stephen M. Dearholt (2)..................................... 2,705,583 17.3%(3) (4). . . . . . . . . . . 4,095,112 21.9% David R. Bethune (3)........................................ 50,000 * . . . . . . . . . . . . . . 0 0% James R. Kerber (3) (5). . . . . . . . . . . . . 543,710 3.4% Michael R. Walton (4)....................................... 539,900 3.7% James R. Kerber............................................. 343,710 2.4%(6). . . . . . . . . . . . . . 509,000 3.1% Richard E. Wenninger (7) . . . . . . . . . . . . 3,371,552 19.1% Gary Benson (5)............................................. 4,380,699 23.6%(8). . . . . . . . . . . . . . . . . 1,701,450 9.7% All directors, nominees and executive officers, as a group (eleven(12 persons) (1)(2)(3)(4)..................................... 4,340,928 26.7%(5)(6)(7) . . . 9,423,775 44.2% - ------------------------------------------------ --------- -------- 15 (1) Unless otherwise indicated, the address of each beneficial owner is 515 North State Street, Suite 2225, Chicago, IL 60610; the address of Mr. Dearholt is 759 North Milwaukee Street, Suite 316, Milwaukee, WI 53202; the address of Mr. Kerber is 8547 East Arapahoe Road, #J217, Englewood, CO 80112; the address of Mr. Walton is 1626 North Prospect Avenue, No. 2310, Milwaukee, WI 53202; the address of Mr. Wenninger is 855 W. Dean Road, Milwaukee, WI 53217; and the address of Mr. Benson is 2925 Dean Parkway, Minneapolis, MN 55416. (2) Includes 294,501 shares owned by and 30,000 shares under option to Phoenix of Illinois. Under the rules of the SEC, Messrs. Parrish and Gargiulo and Dr. Leeper may be deemed to share voting and dispositive power as to such shares since Mr. Gargiulo is a trustee of a trust which is a shareholder, and Mr. Parrish and Dr. Leeper are officers, directors and shareholders, of Phoenix of Illinois. For Dr. Leeper, also includes 46,400 shares owned by her; for Mr. Parrish, also includes 71,500 shares owned by him, 36,500 shares under warrants to him and 400,000 shares under warrants held by the Geneva O. Parrish 1996 Living Trust of which Mr. Parrish is beneficiary and for which Mr. Parrish may be deemed to share voting and investment power; and for Mr. Gargiulo, also includes 10,500 shares owned by him. (3) Does not include the following shares under options that were exercisable but for the effect of a waiver by the holder of his or her rights to exercise such options until the Company amends its Amended and Restated Articles of Incorporation to increase the number of shares of Common Stock authorized for issuance: Mr. Parrish, 88,000 shares under such options; Mr. Gargiulo, 16,667 shares under such options; Dr. Leeper, 96,667 shares under such options; Mr. Dearholt, 50,000 shares under such options; Mr. Bethune, 50,000 shares under such options; Mr. Kerber, 30,000 shares under such options; and all directors, nominees and executive officers as a group, 331,334 shares under such options. In consideration for these waivers, the Company agreed to reduce the exercise price of such options to $0.56 per share. (4) Includes 693,605 shares owned directly by Mr. Dearholt. Also includes 69,500 shares held by the Dearholt, Inc. Profit Sharing Plan, 9,680 shares held by Response Marketing Money Purchase Plan, 17,200 shares held in a self-directed IRA, 186,427 shares held by the Mary C. Dearholt Trust of which Mr. Dearholt, a sibling and his mother are trustees, 18,100 shares held by Mr. Dearholt's minor child, 418,100 shares held by the John W. Dearholt Trust of which Mr. Dearholt is a co-trustee with a sibling, and 60,000 shares of preferred stock held by the Mary C. Dearholt Trust, of which Mr. Dearholt, a sibling and his mother are trustees, that are convertible share-for-share into shares of Common Stock. Mr. Dearholt shares the power to vote and dispose of 664,527 shares of Common Stock (including 60,000 shares of preferred stock convertible into Common Stock) held by the Mary C. Dearholt Trust and the John W. Dearholt Trust. Mr. Dearholt has sole power to vote and dispose of the remaining shares of Common Stock, except that North Central Trust has the sole power to vote and dispose of the 9,680 shares of Common Stock held by the Response Marketing Money Purchase Plan. Also includes warrants to purchase 2,622,500 shares of Common Stock (of which warrants to purchase up to 1,100,000 shares have been pledged to a bank to secure a guarantee by Mr. Dearholt on behalf of the Company). 16 (5) Includes 200,000 shares subject to exercise of warrants. The warrants have been pledged to a bank to secure a guarantee by Mr. Kerber on behalf of the Company. (6) Includes 200,000 shares of Common Stock owned directly by Mr. Walton, 173,030 shares of preferred stock owned by Mr. Walton and 135,970 shares of preferred stock held by a trust of which Mr. Walton is trustee. (7) Includes (a) 500,000 shares of Common Stock subject to conversion of a convertible debenture due March 30, 2004 (based upon $250,000 of principal under such convertible debenture, divided by the conversion rate of $0.50), (b) 5,000 shares of Common Stock held by Mr. Wenninger's spouse (Mr. Wenninger disclaims beneficial ownership of the shares held by his spouse), (c) 1,100,000 shares of Common Stock subject to exercise of warrants, consisting of a warrant to purchase 100,000 shares and a warrant to purchase a maximum of 1,000,000 shares and (d) 60,000 shares of preferred stock held by Mr. Wenninger. The warrants described in (c) above have been pledged to a bank to secure a guarantee by Mr. Wenninger on behalf of the Company. (8) Includes warrants to purchase 1,500,000 shares of Common Stock and 21,000 shares of preferred stock.
- ------------------------- * Less than 1% (1) Includes 294,501 shares owned by and 30,000 shares under option to Phoenix of Illinois. Messrs. Parrish and Gargiulo and Dr. Leeper may be deemed to share voting and dispositive power as to such shares since Mr. Gargiulo is a trustee of a trust which is a shareholder of, and Mr. Parrish and Dr. Leeper are officers, directors and shareholders of, Phoenix of Illinois. For Mr. Parrish also includes 71,500 shares owned by him, 22,500 shares under warrants to him and 88,000 shares under option to him; for Dr. Leeper, also includes 40,900 shares owned by her and 96,667 shares under option to her; and for Mr. Gargiulo, also includes 500 shares held by the William R. Gargiulo 1991 Convertible Trust of which Mr. Gargiulo and his spouse are the trustees and share voting and investment power over such shares, 10,500 shares owned by him and 16,667 shares under option to him. (2) Includes 733,605 shares owned directly by Mr. Dearholt. Also includes 69,500 shares held by the Dearholt, Inc. Profit Sharing Plan; 9,680 shares held by Response Marketing Money Purchase Plan; 11,200 shares held in a self-directed IRA; 162,898 shares held by the Mary C. Dearholt Trust of which Mr. Dearholt, a sibling and his mother are trustees; 18,100 shares held by Mr. Dearholt's minor child; 418,100 shares held by the John W. Dearholt Trust of which Mr. Dearholt is a co-trustee with a sibling; and 60,000 shares of preferred stock held by the Mary C. Dearholt Trust, of which Mr. Dearholt, a sibling and his mother are trustees, that are convertible share-for-share into the Company's Common Stock. Mr. Dearholt shares the power to vote and dispose of 640,998 shares of Common Stock (including 60,000 shares of preferred stock convertible into common stock) held by the Mary C. Dearholt Trust and the John W. Dearholt Trust. Mr. Dearholt has sole power to vote and dispose of the remaining shares of Common Stock, except that North Central Trust has the sole power to vote and dispose of the 9,680 shares of Common Stock held by the Response Marketing Money Purchase Plan. Also includes warrants to purchase 1,172,500 shares of Common Stock and options to purchase 50,000 shares of Common Stock. (3) Includes 50,000 shares under option to Mr. Bethune. 9 12 (4) Includes 200,000 shares of Common Stock owned directly by Mr. Walton, 155,999 shares of preferred stock owned by Mr. Walton, warrants to purchase 30,900 shares of Common Stock owned by Mr. Walton and 153,001 shares of preferred stock held by a trust of which Mr. Walton is trustee. (5) Includes 180,450 shares of Common Stock owned directly by Mr. Benson. Also includes warrants to purchase 1,500,000 shares of Common Stock. Mr. Benson also holds convertible debentures in the principal amount of $1,000,000. The original principal balance plus any accrued but unpaid interest of the convertible debentures may be converted into Common Stock at Mr. Benson's election based on a per share price equal to the lesser of (a) 70% of the market price of the Company's Common Stock at the time of conversion; or (b) $1.00. If these debentures were converted as of February 15, 2001, all principal and accrued but unpaid interest would be convertible into 2,700,249 shares of Common Stock. Mr. Benson's address is 2925 Dean Parkway, Minneapolis, Minnesota 55416. The above beneficial ownership information is based on information furnished by the specified person and is determined in accordance with Rule 13d-3 ofunder the Securities Exchange Act of 1934, as amended, as required for purposes of this Proxy Statement. This information should not be construed as an admission of beneficial ownership for other purposes. SECTION 16(a)16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934 as amended, requires the Company's directorsofficers and executive officers,directors, and persons who own more than ten percent10% of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of Common Stockwith the SEC on Form 3, 4 and other equity securities of the Company.5. Officers, directors and greater-than ten percent shareholdersgreater than 10% stockholders are also required by SEC regulation to furnish the Company with copies of all reports filed pursuant to Section 16(a). To the Company's knowledge, basedForms 3, 4 and 5 they file. Based solely on a review of the copies of such reportsforms furnished to the Company, or written representations that no Forms 5 were required, the Company believes that during fiscal 2001 all Sectionsection 16(a) filing requirements applicable to its officers, directors and greater than ten-percent10% beneficial owners were satisfied.complied with, except that Mr. Wenninger filed a Form 3 in August 2001 to report his beneficial ownership of more than 10% of the Common Stock as of May 2001, Dr. Leeper filed a Form 4 in November 2001 to report a transaction completed in September 2001 and Mr. Dearholt filed a Form 5 in November 2001 to report a transaction completed in August 2001. 17 CERTAIN TRANSACTIONS On March 25, 1997, 1998, 1999, 2000, and 2000,2001 the Company extended a $1 million one-year promissory note payable by the Company to Mr.Stephen M. Dearholt, a current director of the Company, in connection with a previous loan Mr. Dearholt made to the Company. The promissory note is now payable in full on March 25, 20012002 and bears interest at 12% per annum payable monthly. The note proceeds were initially used by the Company to provide working capital needed to fund the initial stages of the Company's U.S. marketing campaign ($0.2 million) and to fund operating losses ($0.8 million). The borrowing transactions were effected in the form of a promissory note from the Company to Mr. Dearholt and related Note Purchase and Warrant Agreements and Stock Issuance Agreements. Under the 1997, 1998 and 1999 Note Purchase and Warrant Agreements, the Company issued to Mr. Dearholt warrants to purchase 200,000 shares of the Company's Common Stock for each of the three years respectively, at exercise prices of $1.848, $2.25 and $1.16 per share, respectively. Under theIn 2000, Note Purchase and Warrant Agreements, the Company issued to Mr. Dearholt warrants to purchase 250,000 shares of the Company's Common Stock at an exercise price of $0.71 per share. In 2001, the Company issued to Mr. Dearholt warrants to purchase 280,000 shares of Common Stock at an exercise price of $0.40 per share. The warrants expire upon the earlier of their exercise or five years afteron March 25, 2005 for the date of their issuances.warrants issued in 1997, March 25, 2007 for the warrants issued in 1998, March 25, 1998 for the warrants issued in 1999, March 25, 2010 for the warrants issued in 2000, and March 25, 2011 for the warrants issued in 2001. Under the Stock Issuance Agreements, if the Company fails to pay the $1 million under the note when due, the Company must issue 250,000280,000 shares of its Common Stock to Mr. Dearholt. This issuance will not, however, alleviate the Company from its liability under the note. The Company also granted Mr. Dearholt certain securities registration rights with respect to any Common Stock he receives from the Company under these warrants or the Stock Issuance Agreement. Mr. Dearholt has agreed that, if the Company requests, he will extend the promissory note for an additional one-year term to be due and payable on March 25, 20022003 upon the same terms as the prior note extension.extension, and we currently plan to extend this note. Additionally, during 2000 and 2001 the Company extended notes of $250,000 from Stephen M. Dearholt and $50,000 from O.B. Parrish.Parrish, each a current director of the Company. Each note payable bears interest at 12% and is nowwas payable in full in 2001.2002. As part of the transactions,2000 renewal, the Company issued Mr. Dearholt and Mr. Parrish warrants to purchase 62,500 and 10 13 12,500 shares of the Company's Common Stock at $0.77 and $0.72 per share, respectively. As part of the 2001 renewal, the Company issued Mr. Dearholt and Mr. Parrish warrants to purchase 70,000 and 14,000 shares of Common Stock at $0.40 and $0.40 per share, respectively. Any stock issued under the warrants carry certain registration rights. The warrants expire in 2010. Also if the Company defaults on its obligation under the note, the Company is required to issue an additional 62,500 and 12,500 shares2011. Each of its Common Stock to Mr. Dearholt and Mr. Parrish, respectively,these notes was subsequently paid off in addition to all other remedies to which each is entitled. On September 24, 1999, the Company completed a private placement of 666,671 shares of Common Stock to various investors at a purchase price of $0.75 per share, representing a discount of 12% from the closing price of a share of the Company's Common Stock on the Over the Counter Bulletin Board on that date. Stephen M. Dearholt purchased 266,667 shares for $200,000 in this private placement. The terms of Mr. Dearholt's purchase were identical to the terms offered to the other, unrelated investors.June 2001. 18 On June 14, 2000, the Company completed a private placement of 400,000 shares of Common Stock to The John W. Dearholt Trust at a price of $0.50 per share, representing a discount of 6% from the closing price of the Company's Common Stock on the Over the Counter Bulletin Board on that date. Stephen M. Dearholt is a co-trustee of this trust. As part of this private placement, the Company granted the investor registration rights which require that the Company register the investor's resale of those shares. On October 2, 2000,The Company entered into a loan agreement on May 18, 2001, providing for a three-year loan commitment from a bank of up to $2,000,000. The Company may borrow under this loan agreement from time to time subject to a number of conditions, including obtaining personal guarantees of 125% of the amount outstanding under the loan. In May 2001, the Company completedborrowed a private placementtotal of 200,000$1.5 million under this loan agreement. Five persons provided guarantees equal in total to the $1.5 million outstanding under the loan. The guarantors included James R. Kerber, Stephen M. Dearholt, Richard E. Wenninger and a trust for the benefit of O.B. Parrish. Each guarantor may be liable to the lender for up to 125% of the guarantor's guarantee amount if the Company defaults under the loan. The Company issued warrants to the guarantors to purchase the number of shares of Common Stock equal to Michael R. Waltonthe guarantee amount of such guarantor divided by the warrant purchase price as of the date of exercise. The warrant purchase price is the price per share equal to 70% of the market price of the Common Stock at athe time of exercise, but in no event will the warrant purchase price be less than $0.50 per share or more than $1.00 per share. The Company also issued additional warrants to purchase 100,000 shares of Common Stock at an exercise price of $0.50 per share representing a discountto each of 12% fromStephen M. Dearholt and Richard E. Wenninger because each of them guaranteed $500,000 under the closing priceloan. The Company granted all of the Company's Common Stock on the Over the Counter Bulletin Board on that date. As part of this private placement, the Company granted the investorguarantors registration rights which require that the Company register the investor's resaleshares of those shares.Common Stock underlying the warrants. Effective March 30, 2001, the Company issued a $250,000 convertible debenture to Richard E. Wenninger. Mr. Wenninger subsequently became a member of the Company's board of directors in July 2001. The convertible debenture bears interest at 12% per annum and has a three-year term. Mr. Wenninger may convert the convertible debenture into Common Stock at any time based on a conversion rate of $0.50 per share. In August 2001, the Company issued 1,000,000 shares of Common Stock to Richard E. Wenninger for a total purchase price of $500,000. The Company granted Mr. Wenninger registration rights which require that the Company register the shares of Common Stock it issued to Mr. Wenninger. 19 During fiscal 2001, the Board of Directors of the Company elected to extend the terms of warrants held by Mr. Dearholt, consisting of warrants to purchase a total of 240,000 shares of Common Stock at exercise prices between $3.00 and $3.10, for an additional five years. It has been and currently is the policy of the Company that transactions between the Company and its officers, directors, principal shareholders or affiliates are to be on terms no less favorable to the Company than could be obtained from unaffiliated parties. The Company intends that any future transactions between the Company and its officers, directors, principal shareholders or affiliates will be approved by a majority of the directors who are not financially interested in the transaction. INDEPENDENT ACCOUNTANTS For the fiscal year endedending September 30, 2000,2001, McGladrey & Pullen, LLP served as the Company's independent auditors. PROPOSALS FOR 20022003 ANNUAL MEETING Any shareholder who desires to submit a proposal for inclusion in the Company's 20022003 Proxy Statement should submit the proposal in writing to Mr. O.B. Parrish, Chief Executive Officer, The Female Health Company, 875515 North Michigan Avenue,State Street, Suite 3660,2225, Chicago, Illinois, 60611.60610. The Company must receive a proposal by November 14, 200120, 2002 in order to consider it for inclusion in the Company's 20022003 Proxy Statement. Any shareholder who intends to present a proposal at the 20022003 Annual Meeting of Shareholders without inclusion of such proposal in the Company's proxy materials are required to provide notice of such proposal to the Company no later than January 27, 2002.February 3, 2003. ANNUAL REPORT CopiesThe Company is required to file an Annual Report, called a Form 10-KSB, with the SEC. A copy of the Company's Annual Report to Shareholderson Form 10-KSB for the year ended September 30, 2000 accompanies this Proxy Statement. Copies of the Annual Report on Form 10-K for the year ended September 30, 20002001 will be provided without charge on written request of any shareholder whose proxy is being solicited by the Board of Directors. The written request should be directed to: Corporate Secretary, The Female Health Company, 875515 North Michigan Avenue,State Street, Suite 3660,2225, Chicago, Illinois 60611. 1160610. 20 14 EXPENSES OF SOLICITATION The cost of this solicitation of proxies will be paid by the Company. It is anticipated that the proxies will be solicited only by mail, except that solicitation personally or by telephone may also be made by the Company's regular employees who will receive no additional compensation for their services in connection with the solicitation. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material and annual reports to beneficial owners of stock held by such persons. The Company will reimburse such parties for their expenses in so doing. INCORPORATION BY REFERENCE A copy of the Company's 2001 Annual Report to Shareholders and a copy of the Company's Quarterly Report on Form 10-QSB for the quarter ended December 31, 2001 (without exhibits) accompany this proxy statement. The Company incorporates by reference into this proxy statement the information in its Quarterly Report on Form 10-QSB for the quarter ended December 31, 2001 and the following information in its 2001 Annual Report to Shareholders: (i) the information on pages 1 to 4 under the heading "Management's Discussion and Analysis" and (ii) the Company's audited financial statements on pages 5 to 22. The information incorporated by reference is an important part of this proxy statement. By Order of the Board of Directors, William R. Gargiulo, Jr., Secretary Chicago, Illinois March 14, 2001 1220, 2002 21 15 PROXY THE FEMALE HEALTH COMPANY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints O.B. Parrish and William R. Gargiulo, Jr., or either one of them, each with full power of substitution and resubstitution, as proxy or proxies of the undersigned to attend the Annual Meeting of Shareholders of The Female Health Company to be held at The Courtyard by Marriot Chicago Downtown, 30 East Hubbard Street, Michigan Avenue Room, Chicago, IL 60611 on April 10, 2001May 8, 2002 at 2:00 p.m., local time, at the Westin Hotel, Consort Room, 16th Floor, 909 North Michigan Avenue, Chicago, Illinois 60611, and at any adjournment thereof, there to vote all shares of Common Stock and Class A Convertible Preferred Stock - Series 1 which the undersigned would be entitled to vote if personally present as specified upon the following matters and in their discretion upon such other matters as may properly come before the meeting. The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and accompanying Proxy Statement, ratifies all that said proxies or their substitutes may lawfully do by virtue hereof, and revokes all former proxies. Please sign exactly as your name appears hereon, date and return this Proxy. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO GRANT AUTHORITY TO APPROVE AND ADOPT THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED ARTICLES OF INCORPORATION, TO ELECT THE NOMINATED DIRECTORS AND TO RATIFY THE APPOINTMENT OF MCGLADREY & PULLEN, LLP AS THE COMPANY'S AUDITORS. IF OTHER MATTERS COME BEFORE THE MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXIES APPOINTED. DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
-------- ------- ----------------------------------------------------------------------------------------------------------------------------------- | | | | | | THE FEMALE HEALTH COMPANY ANNUAL MEETING OF SHAREHOLDERS | | | 1. To approve and adopt the amendment to the Company's Amended and Restated [ ] FOR [ ] AGAINST [ ] ABSTAIN Articles of Incorporation to increase the total number of authorized shares of the Company's common stock from 27,000,000 to 35,500,000 shares. 2. ELECTION OF DIRECTORS: [ ] FOR all [ ] WITHHOLD (terms expiring at the 20022003 1-O.B. PARRISH 2-MARY ANN LEEPER, PH.D. 3-WILLIAM R. nominees listed to AUTHORITY to Annual Meeting) GARGIULO, JR. 4-STEPHEN M. DEARHOLT 5-DAVID R. BETHUNE to the left (except as vote for all 6-MICHAEL R. WALTON 7-JAMES R. KERBER (except as nominees listed 8-RICHARD E. WENNINGER specified below). nominees listed to the left. -------------------------------------- (Instructions: To withhold authority to vote for any indicated nominee, ---------------------------------- write the number(s) of the nominee(s) in the box provided to the right.) ----------> -------------------------------------- [ ] FOR [ ] AGAINST [ ] ABSTAIN 2.| | | | ---------------------------------- 3. To ratify the appointment of McGladrey & Pullen, LLP as the Company's [ ] FOR [ ] AGAINST [ ] ABSTAIN auditors for the fiscal year ending September 30, 2001. 3.2002. 4. In their discretion, the Proxies are authorized to vote upon such other matters as may properly come before the meeting. Date NO. OF SHARES -------------------------------------------------------------------------- CHECK APPROPRIATE BOX Indicate changes below: --------------------------------------------- | | | | Address Change? [ ] Name Change? [ ] | | | | --------------------------------------------- Signature(s)in Box If signing as attorney, executor, administrator, trustee or guardian, please add your full title as such. If shares are held by two or more persons, all holders must sign the Proxy. | | | | | | -------- -------- -----------------------------------------------------------------------------------------------------------------------------------