<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[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 Section 240.14a-11(c) or Section 240.14a-12
MARQUETTE MEDICAL SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
MARQUETTE MEDICAL SYSTEMS, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
August 13, 1997
To the shareholders of Marquette Medical Systems, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders of Marquette
Medical Systems, Inc., a Wisconsin corporation (the "Company"), will be held on
Wednesday, August 13, 1997, at 9:00 a.m., at the Company's offices, 8200 West
Tower Avenue, Milwaukee, Wisconsin, 53223 for the following purposes:
1. To elect six directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for fiscal 1998;
3. To approve an amendment to the Company's Restated Articles of
Incorporation to eliminate the Class C Common Shares as an authorized class of
stock and to rename the Class A Common Shares to Common Shares;
4. To transact such other business as may properly come before the annual
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
The Board of Directors has fixed the close of business on July 11, 1997, as
the record date for the determination of shareholders entitled to notice of and
to vote at this annual meeting or any adjournment or postponement thereof.
<PAGE>
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN, AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN POSTAGE-PREPAID ENVELOPE IS ENCLOSED
FOR THAT PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN
PERSON IF YOU ATTEND THE MEETING.
By Order of the Board of Directors
Gordon W. Petersen, Secretary
Milwaukee, Wisconsin
July __, 1997
<PAGE>
Marquette Medical Systems, Inc.
--------------------------
PROXY STATEMENT
Annual Meeting of Shareholders
August 13, 1997
--------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors (the "Board") of Marquette
Medical Systems, Inc., a Wisconsin corporation (the "Company"), for use at the
Annual Meeting of shareholders to be held on August 13, 1997, at 9:00 a.m., or
any adjournment or postponement thereof (the "Meeting") for the purposes set
forth herein and in the accompanying Notice of Annual Meeting. The Meeting will
be held at the offices of the Company, 8200 West Tower Avenue, Milwaukee,
Wisconsin.
This Proxy Statement and accompanying Proxy are scheduled to be mailed to
all shareholders entitled to vote at the Meeting, commencing July 17, 1997.
Outstanding Shares and Voting Rights
Only shareholders of record at the close of business on July 11, 1997, will
be entitled to notice of and to vote at the Meeting. At the close of business on
July 11, 1997, the Company had outstanding _______ Class A Common Shares, $0.10
par value ("Common Stock").
Each share of Common Stock outstanding on the record date is entitled to
one vote. With respect to the election of directors, cumulative voting is not
permitted.
The presence, in person or by proxy, of the holders of record of a majority
of the outstanding shares of Common Stock entitled to vote will constitute a
quorum for the transaction of business at the Meeting or any adjournment or
postponement thereof.
The vote of (i) a plurality of the shares cast in person or by proxy is
required to elect the nominees for Directors (Proposal 1);
<PAGE>
(ii) a majority of the shares cast in person or by proxy is required to ratify
the selection of Arthur Andersen LLP as independent auditors of the Company's
financial statements for the fiscal year ending April 30, 1998 (Proposal 2), and
to approve a proposed amendment to the Company's Restated Articles of
Incorporation to eliminate the Class C Common Shares as an authorized class of
shares and to rename the Class A Common Shares as Common Shares (Proposal 3).
Votes cast by proxy or in person at the Meeting will be tabulated by the
inspector of election appointed for the Meeting who will also determine whether
or not a quorum is present. The inspector of election will treat abstentions
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval of
any matter submitted to the shareholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. A proxy may be revoked by (i) filing
with the Secretary of the Company at the Company's principal executive office,
at or before the taking of the vote at the Meeting, a written notice of
revocation bearing a later date than the proxy, (ii) duly executing a subsequent
proxy relating to the same shares and delivering it to the Secretary of the
Company before the Meeting, or (iii) attending the Meeting and voting in person
(although attendance at the Meeting will not in and of itself constitute a
revocation of a proxy). Any written notice revoking a proxy should be sent to
Marquette Medical Systems, Inc., 8200 West Tower Avenue, Milwaukee, Wisconsin
53223, Attention: Secretary or hand delivered to the Secretary at or before the
taking of the vote at the Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies in the
enclosed form, including the preparation, assembly, printing and mailing of this
proxy statement, the proxy and any additional information furnished to
shareholders. The original solicitation of proxies by mail may be supplemented
by telephone, telegram, or personal solicitation by directors, officers, or
other regular employees of the Company; no additional compensation will be paid
to directors, officers, or other regular employees for such services.
Arrangements will also be made with custodians, nominees, and fiduciaries for
forwarding of proxy solicitation material to beneficial owners of shares held of
record by such
2
<PAGE>
custodians, nominees, and fiduciaries. The Company will, upon request, reimburse
the custodians, nominees, and fiduciaries for reasonable expenses incurred in
connection with such arrangements.
PROPOSAL 1:
ELECTION OF DIRECTORS
The directors of the Company are elected annually. The terms of office of
all directors expire on the date of the Meeting. While there are presently seven
directors serving the Corporation, on June 24, 1997, the Board of Directors
amended the By-Laws to provide, effective as of the date of the Meeting, that
the Board of Directors of the Corporation shall consist of six persons.
Accordingly, six directors will be elected to hold office until the next annual
meeting of shareholders or until their respective successors are elected and
have qualified or until any such director's death, resignation, or removal from
office.
Each of the six nominees listed below is currently a director of the
Company and was elected to the Board of Directors by the shareholders at the
Company's 1996 annual shareholders' meeting. Mr. Peter P. Tong, currently a
director, will not stand for re-election to the Board.
Shares of Common Stock represented by executed proxies will be voted, if
authority to do so is not withheld, for the election of the seven nominees named
below. Should any nominee become unavailable to serve as a director or any
vacancy occur before the election (which events are not anticipated), such
shares will be voted for the election of such substitute nominee as management
may propose or the authorized number of directors may be reduced. If, for any
reason, the authorized number of directors is reduced, the proxies will be
voted, in the absence of instructions to the contrary, for the election of the
remaining nominees named in this proxy statement. Each person nominated for
election has agreed to serve if elected. The six candidates receiving the
highest number of the affirmative votes cast at the Meeting will be elected
directors of the Company.
Nominees
The names of the nominees and certain information about them, based on
information furnished by them, are set forth below:
3
<PAGE>
<TABLE>
<CAPTION>
Director
Name Age Position with the Company Since
- ---- --- ------------------------- --------
<S> <C> <C> <C>
Michael J. Cudahy/(1)(4)/ 73 Director and Chief
Executive Officer 1965
John G. Bollinger/(2)(3)/ 62 Director 1996
Timothy C. Mickelson/(1)/ 48 Director, President and
Chief Operating
Officer 1995
Frederick G. Luber/(1)(2)/ 71 Director 1968
Melvin S. Newman/(1)(2)/ 61 Director and Assistant
Secretary 1969
Walter L. Robb/(3)(4)/ 69 Director 1982
</TABLE>
/(1)/ Member of the Executive Committee of the Board of Directors
/(2)/ Member of the Audit Committee of the Board of Directors
/(3)/ Member of the Human Resources Committee of the Board of Directors
/(4)/ Member of the Nominating and Proxy Committee of the Board of Directors
There is no family relationship between any of the nominees or between any
nominee and any of the Company's executive officers.
John G. Bollinger has been Dean of the College of Engineering of the
University of Wisconsin-Madison, since 1982. Dr. Bollinger served as a director
of E for M Corporation, a wholly-owned subsidiary of the Company from March,
1992 until December, 1995. Dr. Bollinger also serves as a director of Andrea
Corporation.
Michael J. Cudahy co-founded the Company in July 1965, has served as Chief
Executive Officer and Chairman of the Board since 1965, and was President from
1965 until September, 1993.
Frederick G. Luber has been Chairman of the Board of Super Steel Products
Corp. of Milwaukee, Wisconsin, a steel fabricating company, since 1966.
Timothy C. Mickelson became President and Chief Operating Officer of the
Company on July 25, 1995 and was appointed as a director of the Company by the
Board of Directors on August 10, 1995. Dr. Mickelson served as President of
Corometrics Medical Systems, Inc., a wholly-owned subsidiary of the Company from
May 1, 1994 until his election to the presidency of the Company. For
approximately six years prior to May 1, 1994, Dr. Mickelson was Vice President-
Patient Monitoring Division of the Company.
4
<PAGE>
Melvin S. Newman is, and has been since 1965, a partner in Schoenberg,
Fisher, Newman & Rosenberg, Ltd., counsel for the Company.
Walter L. Robb served as Senior Vice President--Corporate Research and
Development for General Electric Company from September, 1986, until he retired
in December, 1992. He is the founder, and serves as President of Vantage
Management, Inc., a consulting and investment company. Dr. Robb also serves as
a director of Neopath, Inc., Cree Research, Inc. and Celgene Corp.
Certain Information Concerning the Board
The Board has standing Executive, Audit, Nominating and Proxy, and Human
Resources Committees which are appointed at the annual meeting of the Board of
Directors.
The Executive Committee, subject to certain limitations, has authority to
adopt resolutions on behalf of the Board and to perform its functions in the
absence of formal Board meetings. The current members of the Executive
Committee are Michael J. Cudahy, Frederick G. Luber, Timothy C. Mickelson and
Melvin S. Newman.
The Audit Committee recommends engagement of the Company's independent
accountants, reviews and approves services performed by such accountants,
reviews and evaluates the Company's accounting system and its system of internal
controls, and performs other related duties delegated to it by the Board. The
current members of the Audit Committee are John G. Bollinger, Frederick G.
Luber, and Melvin S. Newman.
The Human Resources Committee recommends the nature and amount of
compensation to be paid to the Company's officers, reviews and recommends the
adoption of compensation and benefit plans for the Company and authorizes the
grant of stock options and sets the terms of stock options granted under the
Company's Amended and Restated Stock Option Plan for Employees of Marquette
Medical Systems, Inc. (the "Stock Option Plan" or "Plan"). The current members
of the Human Resources Committee are John G. Bollinger and Walter L. Robb.
The Nominating and Proxy Committee recommends to the Board nominees for
directors, including individuals recommended by shareholders, for whom proxies
should be solicited by the Company, and recommends to the Board a nominee for
President of the Company. Any shareholder who wishes to have the Nominating and
Proxy Committee consider a candidate for nomination as a director should submit,
in writing, the name of the candidate, together with biographical or other
relevant information regarding his qualifications and the written consent of
the candidate to serve if nominated and elected. Such submissions should be
addressed to the Nominating and Proxy Committee, care of the Secretary of the
Company at the Company's address as set forth on the first page of this proxy
statement and delivered between May 5, 1998, and May 30, 1998 for consideration
for the 1998 annual meeting of shareholders.
5
<PAGE>
The current members of the Nominating and Proxy Committee are Michael J. Cudahy
and Walter L. Robb.
During the fiscal year ended April 30, 1997, the Board of Directors held
six meetings, the Audit Committee held two meetings, and the Human Resources
Committee held three meetings. Neither the Executive Committee nor the
Nominating and Proxy Committee held any meetings during the year, although
various actions were taken by the Executive Committee by unanimous written
consent of its members.
During fiscal 1997, no incumbent Board member attended fewer than 75% of
the aggregate of (i) the total number of meetings of the Board held during the
period for which he was a director and (ii) the total number of meetings of all
committees of the Board on which he served during the periods that he served.
Each non-employee director in August, 1996 was granted an option to
purchase 4,000 shares of Class A Stock at an exercise price of $18.50 (being the
last transaction price of such shares on the date preceding the date of the
grant as quoted on the NASDAQ National Market System) pursuant to the Marquette
Medical Systems, Inc. Directors (Non-Employee) Stock Option Plan ("Directors
Plan"). Each non-employee director elected at the Meeting will be granted,
pursuant to the Directors' Plan, another option to purchase 4,000 shares of
Common Stock at the last transaction price as quoted on the NASDAQ National
Market System of the shares on the date preceding the date of the grant.
Provided that the director continues to serve as such, each option granted
under the Directors Plan is exercisable for a period of ten years following the
date of the grant, subject to vesting at the rate of twenty-five percent (25%)
per year over the first four (4) years following the date of the grant. At such
time as a director no longer serves as such, vesting ceases and the remaining
term of the option is reduced to three years unless the termination occurs by
reason of the director's death or his belief that he has become permanently
physically or mentally disabled, in which event the remaining term is reduced to
five years.
Except for options granted under the Directors' Plan, no fee or other
compensation is paid for Board or committee meetings attended or services as a
director. Mr. Warren B. Cozzens, who retired as an officer and employee of the
Company on April 30, 1994 and who resigned from the Board on November 21, 1995
is paid a $70,000 per year retirement benefit that will continue for the
remainder of his life. Directors are reimbursed for out of pocket travel
expenses associated with their attendance at Board meetings.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
IN FAVOR OF EACH NAMED NOMINEE.
6
<PAGE>
PROPOSAL 2:
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending April 30, 1998, and
has directed that this selection be submitted for ratification by the
shareholders at the Meeting. Arthur Andersen LLP. was engaged by the Company in
1970, to audit its statements and has continued to audit the Company's financial
statements since that time. Representatives of Arthur Andersen LLP. are expected
to be present at the Meeting, will have an opportunity to make a statement if
they so desire, and will be available to respond to appropriate questions.
Shareholder ratification of the selection of Arthur Andersen LLP. as the
Company's independent public accountants is not required by the Company's By-
laws or otherwise. However, the Board is submitting the selection of Arthur
Andersen LLP. to the shareholders for ratification as a matter of good
corporate practice. If the shareholders fail to ratify the selection, the Board
will reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
feels that such a change would be in the best interests of the Company and its
shareholders. The affirmative vote of the holders of a majority of the shares of
Common Stock represented and voting at the Meeting will be required to ratify
the selection of Arthur Andersen LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
IN FAVOR OF PROPOSAL 2.
PROPOSAL 3:
APPROVAL OF AN AMENDMENT TO THE COMPANY'S RESTATED
ARTICLES OF INCORPORATION
The Board of Directors has proposed, subject to shareholder approval, an
amendment (the "Amendment") to Articles 4 and 5 of the Company's Restated
Articles of Incorporation (the "Current Articles") to eliminate the Class C
Common Shares as an authorized class of shares of the Company and to rename the
Class A Common Shares as "Common Shares". The Board of Directors recommends that
you vote for the proposal to approve the Amendment. If the Amendment is approved
by the shareholders, the Amendment will be promptly filed with the Secretary of
State of Wisconsin.
7
<PAGE>
The Corporation's Current Articles authorize the issuance of 110,000,000
shares consisting of 30,000,000 Class A Common Shares, $.10 par value,
50,000,000 Class C Common Shares, $.01 par value, and 30,000,000 Preferred
Shares, without par value. The Class C Common Shares have been an authorized
class of shares of the Company since 1982 when the Company was closely held and
when the Articles of Incorporation were amended to authorize the issuance of
such shares. The Class C Common Shares have the same voting power as the Class A
Common Shares but, by their nature, have a significantly lower value than do the
Class A Common Shares. There are no Class C Common Shares outstanding and the
Board does not foresee the need to issue Class C Common Shares in the future.
Moreover, the Board believes that the existence of Class C Common Shares as an
authorized class of stock presents an unnecessarily complicated capital
structure and adds an element of uncertainty as perceived by the investment
community.
If approved, Articles 4 and 5 of the Current Articles will be changed to
read as set forth in Appendix A to this Proxy Statement.
The affirmative vote of the holders of a majority of the Common Stock
represented and voting at the Meeting will be required to approve the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE IN FAVOR OF PROPOSAL 3
STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth the beneficial ownership of the Company's
Common Stock as of June 15, 1997, by each director, each person known by the
Company to own beneficially more than five percent of the Company's Common
Stock, and all directors, nominees for directors and executive officers as a
group, based upon information furnished by such persons. Except as indicated in
the footnotes, the persons listed have sole voting and investment power over the
shares beneficially owned.
8
<PAGE>
<TABLE>
<CAPTION>
Common Stock Beneficially Owned
-------------------------------
Percentage
Number of of Class
Name and Address Shares Outstanding
- ---------------- --------- -----------
<S> <C> <C>
Michael J. Cudahy 3,251,079/(1)(2)/ 18.4%
8200 West Tower Avenue
Milwaukee, Wisconsin 53223
Norwest Bank Minnesota (N.A.)
6th Street and Marquette Avenue
Minneapolis, Minnesota 55479
As trustee under the Marquette 1,971,553/(3)/ 11.2%
Electronics, Inc. Profit Sharing
401(k) Plan
As trustee under other trusts 155,400 *
John G. Bollinger -0-
Frederick G. Luber 305,045/(4)(5)/ 1.7%
Timothy C. Mickelson 88,002/(1)(6)/ *
Melvin S. Newman 67,000/(4)(7)/ *
Walter L. Robb 16,100/(4)/ *
All directors and
officers as a group
(16 persons) 3,985,506/(1),(2)(4(5)(7))(8)/ 22.3%
- ---------------
</TABLE>
* The amount shown is less than one percent of the outstanding shares of such
class.
(1) Includes shares allocated to the shareholder's account under the Company's
Profit Sharing and 401(k) Plan.
(2) Includes 5,000 shares owned by The Michael J. Cudahy Charitable Foundation.
(3) Participants in the Profit Sharing-401(k) Plan have the right to direct the
voting of allocated shares by Norwest Bank Minnesota (N.A.), the trustee.
(4) Includes shares covered by options issued under the Directors Plan
exercisable within 60 days to acquire 7,000 shares of Common Stock.
(5) Includes 28,300 shares owned by The Anne and Fred Luber Foundation.
(6) Includes shares covered by options granted under the Stock Option Plan
exercisable within 60 days to acquire 78,000 shares of Common Stock.
(7) Includes 1,000 shares owned by The Melvin and Susan Newman Foundation.
(8) Includes shares covered by options granted under the Stock Option Plan
exercisable within 60 days to acquire 226,882 shares of Common Stock.
9
<PAGE>
EXECUTIVE OFFICER COMPENSATION
The following table shows the compensation for the past three fiscal years
of the Company for (i) the Chief Executive Officer; and (ii) each of the
Company's four other most highly compensated executive officers serving as
executive officers on April 30, 1997 and Frederick A. Robertson who, but for the
fact that he was not serving as an executive officer as of April 30, 1997, would
have been among the four most highly compensated executive officers (the "Named
Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Long-Term
Compensation Compensation
--------------------------------------- Awards
------------
Other Securities
Name and Year Annual Underlying All Other
Principal Position (April 30) Salary Bonus Compensation/(1)/ Options Compensation/(2)/
<S> <C> <C> <C> <C> <C> <C>
Michael J. Cudahy 1997 $300,000 $22,471 $ -0- $ -0- $6,756
Chairman and 1996 300,000 2,262 -0- -0- 6,003
Chief Executive 1995 300,000 12,017 -0- -0- 4,513
Officer
Timothy C. Mickelson 1997 250,000 57,402 72,954/(3)/ 11,900 9,458
President and Chief 1996 229,280 35,473 -0- 100,000 8,253
Operating Officer 1995 160,000 42,827 54,505/(4)/ -0- 6,179
Frederick A./(5)/ 1997 184,750 57,062 -0- -0- 9,135
Robertson, 1996 175,000 76,283 -0- 9,700 8,146
Division President- 1995 160,000 74,528 -0- -0- 6,763
Monitoring
Mary M. Kabacinski
Senior Vice 1997 170,000 36,748 -0- 8,000 9,458
President and Chief 1996 160,000 25,291 -0- 8,900 7,993
Financial Officer 1995 160,000 31,005 -0- -0- 6,963
P. Michael Breedlove/(6)/ 1997 160,000 67,092 -0- 7,600 9,458
Division President- 1996 66,667 37,500 -0- -0- -0-
E For M Imaging
Louis P. Scafuri/(7)/ 1997 160,000 64,092 91,777/(8)/ 7,600 9,458
Division President- 1996 105,539 2,407 -0- 100,000 1,595
Corometrics Medical
Systems
</TABLE>
10
<PAGE>
(1) While the Named Executive Officers enjoy certain perquisites, for the year
ending April 30, 1997 these did not exceed $50,000 or ten percent (10%) of
any officer's salary and bonus.
(2) These figures represent the amount of the Company's contribution to its
Profit Sharing and 401(k) Plan allocated to the officer.
(3) Reimbursement of expenses incurred by Mr. Mickelson in relocating from
Connecticut to Wisconsin.
(4) Reimbursement of expenses incurred by Mr. Mickelson in relocating from
Wisconsin to Connecticut.
(5) Dr. Robertson served as Division President-Monitoring until January 17,
1997, when he resigned and became a part-time employee of the Company. The
amounts shown for 1997 combine amounts paid to him as an executive officer
and as a part-time employee.
(6) Mr. Breedlove became employed by the Company on December 11, 1995.
(7) Mr. Scafuri became employed by the Company on September 5, 1995.
(8) Reimbursement of expenses incurred by Mr. Scafuri in relocating from
Massachusetts to Connecticut.
Options Granted in Last Fiscal Year
The following table provides information related to options granted to
the Chief Executive Officer and Named Executive Officers during the fiscal
year ending April 30, 1997 and the number and value of options held at year
end:
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------- Potential Realizable
Number of Percent of Value at Assumed Annual
Securities Total Options Rates of Stock Appre-
Underlying Granted to ciation for Option Term
Options Employees in Exercise or Compounded Annually/(2)/
Granted Fiscal Year Base Price Expiration --------------------------
Name (#)/(1)/ (%) ($/Share) Date 5% ($) 10% ($)
-------- ------------ ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Cudahy -0- -0- -0- -- -0- -0-
Timothy C. Mickelson 11,900 3.0 20.25 2/20/07 151,546 384,048
Frederick A. Robertson -0- -0- -0- -- -0- -0-
Mary M. Kabacinski 8,000 2.0 20.25 2/20/07 101,880 258,186
P. Michael Breedlove 7,600 1.9 20.25 2/20/07 96,786 245,275
Louis P. Scafuri 7,600 1.9 20.25 2/20/07 96,786 245,275
</TABLE>
(1) Exercisable to the extent of 20% of the shares as of the first anniversary
of the date of the grant and an additional 20% on or after each of the next
four anniversaries of the date of the grant.
(2) The realizable values are reported net of the option exercise price. The
dollar amounts under these columns are the result of calculations at the
five percent and ten percent rates (determined from the price at the date
of the grant and not the stock's current market value) and therefore are
not intended to forecast possible future appreciation, if any, of the
Company's Class A Stock price. The actual gains, if any, on stock option
exercises are dependent on the future performance of the Class A Stock, as
well as the option holder's continued employment with the Company through
the vesting period. The potential realizable
11
<PAGE>
value calculation assumes that the option holder waits until the end of the
option term (10 years from the date of grant) to exercise the option.
(3) Aggregated Option Exercises in Last
Fiscal Year and Year End Option Value
The following table provides information related to options exercised by
the Chief Executive Officer and the Named Executive Officers during the fiscal
year ending April 30, 1997, and the number and value of options held at year
end:
12
<PAGE>
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In-the-Money Options
Shares Acquired Value Options at Options at April 30,
Name On Exercise (#) Realized April 30, 1997 1997 ($)
($)/(1)/ (#)
Exercisable/ Exercisable/
Unexercisable Unexercisable/(2)/
<S> <C> <C> <C> <C> <C> <C>
Michael J. Cudahy -0- -0- -0- -0- -0- -0-
Timothy C. Mickelson -0- -0- 68,000 201,900 334,500 786,500
Frederick A. Robertson 20,000 120,650 25,000 74,700 121,875 387,188
Mary M. Kabacinski -0- -0- 53,000 76,900 306,625 380,313
P. Michael Breedlove -0- -0- 8,506 23,398 62,647 116,352
Louis P. Scafuri 10,000 41,200 10,000 87,600 34,952 279,600
- ----------
</TABLE>
(1) Based on the closing price of the Common Stock on the date of exercise as
quoted on the NASDAQ National Market System, less the exercise price.
(2) Based on the closing price of the Common Stock on April 30, 1997 as quoted
on the NASDAQ National Market System ($20.125) less the exercise price.
13
<PAGE>
P. Michael Breedlove, Division President-E For M Imaging, is employed
pursuant to an Employment Agreement dated September 20, 1995, with E For M
Corporation, a wholly-owned subsidiary of the Company. Under the terms of the
Employment Agreement, which expires on October 9, 1997, Mr. Breedlove is to be
compensated at an annual base rate of $160,000. The Employment Agreement may be
terminated by Mr. Breedlove or the E For M Corporation at any time. In the
event the E For M Corporation terminates Mr. Breedlove for reasons other than
fraud or habitual neglected duty, the Company will be obliged to continue to pay
Mr. Breedlove his annual base rate of compensation until October 9, 1997. The
Agreement also provides that Mr. Breedlove will refrain from competing with E
For M Corporation for one year following his termination of employment.
REPORT OF THE HUMAN RESOURCES COMMITTEE
Human Resources Committee Interlocks
and Insider Participation
The Human Resources Committee is comprised of Drs. John G. Bollinger
and Walter L. Robb. Neither of the members of the Human Resources Committee
is or has been an employee or officer of the Company.
Overview and Philosophy
The Human Resources Committee is responsible for authorizing grants of
stock options under the Stock Option Plan and for establishing and
administering the Company's executive compensation policies and recommends
to the Board of Directors the compensation to be paid to the Company's
executive officers, including the Company's Chief Executive Officer. In
formulating its recommendations, the Human Resources Committee relies on
information from surveys, consultants and Company officers.
In adopting and administering its policies, the Committee pursues the
following objectives as guidelines:
To provide a compensation package competitive with those offered by
other health care equipment and health care product manufacturers to
attract and retain talented and devoted key executives.
To reward successful achievement by executive officers of defined
objectives, subject, to some extent, to the
14
<PAGE>
overall success of the Company during the measurement period.
To align the executive officers' interest with that of the Company's
shareholders through the grant of stock options.
The Committee resorts to reports prepared by one or more nationally
recognized consulting firms who provide information on salaries paid by health
care equipment manufacturers and who publish surveys containing such information
to determine competitive compensation levels.
Executive Officer Compensation
Program Components
For the past fiscal year, the executive compensation program consisted of
three principal elements:
1. A base compensation targeted at competitive medians of a peer group of
successful health care device manufacturers, guided by an independent salary
survey. A number of the health care device manufacturers with whom the
Company's salary levels are compared are normally included among those companies
used to determine the S&P Medical Products and Supplies Index displayed in the
stock price performance graph (see page ___), although the performance of
additional companies are used in the preparation of that index.
2. The Company maintains an Incentive Compensation Plan ("ICP") in which
the Company's executive officers and key managers participate. The ICP is an
annual incentive plan that provides cash compensation based on the achievement
of goals set by the Committee for each of the Company's executive officers and
other key managers whose participation is approved by the Board of Directors.
For fiscal 1997, various corporate and divisional performance goals were set for
each officer and the key manager such as the attainment of corporate or
divisional revenue, net income and cash flow targets, as were set forth in the
Company's business plan for that fiscal year.
The actual award earned depends upon the degree of attainment of
several Company and/or divisional goals established by the Committee, the goals
for each executive officer differing, depending on his or her function and
responsibilities. The goals are based on internal business plan objectives that
incorporate aggressive growth assumptions and each executive officer is assigned
several goals of varying weights. Participants in the ICP may earn between 0%
and 150% of the bonus target, depending upon the degree of goal attainment. The
Company's President has the
15
<PAGE>
power to increase or decrease the bonus earned by any Participant in the ICP by
up to ten percent, based upon the President's evaluation of the participant's
overall performance.
For fiscal 1997, executive officers earned an average of 61.9% of
their bonus targets under the ICP.
3. Incentive and non-qualified stock options are awarded by the Human
Resources Committee, based upon the recommendation of the Chief Executive
Officer and the President. The Human Resources Committee believes that the
Company's interest is furthered by requiring its executive officers to benefit
from option exercises over an extended period. During the past fiscal year
stock options were granted to the executive officers of the Company covering an
aggregate of 176,400 shares of Common Stock. The Human Resources Committee does
consider prior options granted to executive officers in determining any
subsequent grants.
Chief Executive Officer Compensation
Mr. Cudahy's base compensation of $300,000 for the year ended April 30,
1997, has remained in effect since July, 1989. The Board, which set Mr.
Cudahy's compensation, did not consider the Company's performance, in either a
qualitative or quantitative sense, in determining his compensation. Although
the Board and the Human Resources Committee believe that the Chief Executive
Officer is modestly compensated compared to compensation levels being paid to
chief executive officers of other medical equipment manufacturing companies of
like size, Mr. Cudahy has refused to accept increases, noting that he is a
shareholder holding the largest amount of Company stock and will benefit to the
extent that the value of the Company and its shares increase. Mr. Cudahy did
not participate in the ICP during fiscal 1997. Mr. Cudahy's bonus of $22,471
for fiscal year 1997 was determined at and was equal to the amount paid by Mr.
Cudahy to lease his automobile. Mr. Cudahy had no options nor were there other
incentive compensation arrangements in effect between him and the Company.
On June 24, 1997, pursuant to resolutions adopted by the Board on May 28,
1997, the Company granted to Mr. Cudahy a non-transferable Stock Option covering
250,000 shares of Common Stock at an exercise price of $20.63 per share. The
last trade of the Common Stock on May 27, 1997 as reported on the NASDAQ
National Market System was at $20.625 per share. The option expires on May 27,
2007, but terminates on the 180th day following the last to occur of (i) Mr.
Cudahy's death or termination of employment with the Company, or (ii) such date
as he no longer serves as a director of the Company. Such option was not
granted under the terms of the Company's Stock Option Plan.
16
<PAGE>
Section 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation in excess of $1
million paid during the taxable year (in the case of the Company, its fiscal
year) to a Company's Chief Executive Officer and the four other most highly
compensated executive officers. Qualifying performance-based compensation is
not subject to the deduction limit if certain requirements are met.
For fiscal 1998, the Committee does not contemplate that there will be non-
deductible compensation for the five Company positions in question, although the
exercise by Mr. Cudahy of his option granted on June 24, 1997, would, if the
fair value of the Common Stock purchased exceeds the exercise price by more than
$1,000,000, result in non-deductibility of such excess. The Human Resources
Committee plans to review this matter for 1998, and, unless circumstances
justify otherwise, take such actions as are necessary to comply with Section
162(m)to avoid non-deductible compensation payments.
HUMAN RESOURCES COMMITTEE
John G. Bollinger
Walter L. Robb
STOCK PRICE PERFORMANCE GRAPH
The following performance graph compares the Company's cumulative total
shareholder return on its Common Stock for a five-year period (May 1, 1992 to
April 30, 1997) with the cumulative total return of the NASDAQ Composite Stock
Index and the S&P Medical Products and Supplies Index (dividends invested). The
graph assumes $100 was invested on May 1, 1992 in the Common Stock, the NASDAQ
Stock Market-U.S. Index and the S&P Medical Products and Supplies Index.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG MARQUETTE MEDICAL SYSTEMS, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S&P HEALTH CARE (MEDICAL PRODUCTS & SUPPLIES) INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
----------------------------------------------
4/92 4/93 4/94 4/95 4/96 4/97
<S> <C> <C> <C> <C> <C> <C> <C>
Marquette Med Sys Inc MARQA 100 92 95 117 111 124
NASDAQ STOCK MARKET (U.S.) INAS 100 115 128 149 212 225
S & P HLTH CARE (MED PRODS & SUPPLS) IMDP 100 80 75 117 158 183
</TABLE>
* $100 INVESTED ON 4/30/92 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING APRIL 30.
2474RMAR
17
<PAGE>
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company will neither make or endorse any predictions as to future
stock performance.
The stock price performance graph above shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement to any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934 except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under either of such Acts.
Certain Transactions
During the fiscal year ending April 30, 1997, the Company paid to Cozzens &
Cudahy Air, Inc., a corporation, all of whose shares of stock are owned by
Michael J. Cudahy, the sum of $344,226 as compensation for the use by the
Company of a jet airplane. The Company believes that the rates paid by the
Company were competitive with those available from third parties and were at
prevailing market rates.
During the year ending April 30, 1997, the Company leased from Marquette
Capital Company, a partnership whose general partners are Michael J. Cudahy and
Frederick G. Luber, 39 automobiles at an aggregate annual rental of $313,823.
Each lease was written for 40 months at rates the Company believes were
competitive with those available from third parties. The Company has the right
to continue to lease the vehicles upon expiration of the leases at a nominal
monthly rate.
On December 20, 1996, the Company issued and exchanged 262,500 of its
shares of Common Stock with Michael J. Cudahy, a director and the Company's
Chief Executive Officer, for 26,250,000 Class C Common Shares held by Mr.
Cudahy. The Class C Common Shares received by the Company in the exchange were
the only Class C Common Shares of the Company outstanding. The Class C Common
Shares have the same voting power per share as does each share of Common Stock
but are entitled to only one one-hundredth of the amount of dividends paid on
shares of Common Stock and to one one-
18
<PAGE>
hundredth of the amount paid to holders of Common Stock in the event of
dissolution of the Company. The Board of Directors determined the exchange rate
at one hundred Class C Common Shares for each share of Common Stock following
consultation with an investment banking firm.
Schoenberg, Fisher, Newman and Rosenberg, Ltd. ("SFNR"), 222 South
Riverside Plaza, Chicago, Illinois has served as general counsel to the Company
since 1965. Melvin S. Newman is a partner in SFNR. The Company paid SFNR legal
fees in the amount of $291,855 during the Company's last fiscal year.
FUTURE SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented by such
shareholders at the Company's 1998 annual meeting of shareholders must be
received by the Company at its offices at 8200 West Tower Avenue, Milwaukee,
Wisconsin between April 22, 1998 and May 15, 1998, in order to be included in
the proxy statement and proxy relating to that meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent 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 equity securities of the Company. Officers, directors, and greater
than ten percent shareholders are required by regulation to furnish the Company
with copies of all section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, the Company believes that its officers, directors, and
greater than ten percent beneficial owners complied with all applicable section
16(a) filing requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Meeting.
However, if any other matters are properly presented to the Meeting, it is the
intention of the persons named in the accompanying proxy to vote in respect
thereof in accordance with their best judgment.
The Board of Directors hopes that shareholders will attend the Meeting.
Whether or not you plan to attend, you are urged to
19
<PAGE>
complete, sign, and return the enclosed proxy in the accompanying envelope. A
prompt response will greatly facilitate arrangements for the Meeting, and your
cooperation will be appreciated. Shareholders who attend the Meeting may vote
their shares personally even though they have sent in their proxies.
ADDITIONAL FINANCIAL INFORMATION
The Company will furnish to any shareholder of record as of July 11, 1997
(or any beneficial owner representing that he is or was entitled to vote at the
Meeting) a copy of its Form 10-K Annual Report for the year ended April 30, 1997
(including statements and financial statement schedules, but excluding other
exhibits) without charge, upon written request addressed to the Secretary of the
Company at its principal offices located at 8200 West Tower Avenue, Milwaukee,
Wisconsin, 53223.
By Order of the Board of Directors
Gordon W. Petersen, Secretary
Milwaukee, Wisconsin
July __, 1997
20
<PAGE>
APPENDIX A
----------
MARKED TO SHOW PROPOSED CHANGES TO ARTICLE 4 AND 5 OF RESTATED ARTICLES OF
INCORPORATION DATED JULY 13, 1990
[underlined text to be added-lined out text to be eliminated]
Article 4. The total number of shares of all classes which it shall
have authority to issue is One Hundred Ten Sixty Million (110,000,000)
(60,000,000) shares consisting of and designated as Thirty Million
(30,000,000) Class A Common Shares, Ten ($.10) cents par value, Fifty
Million (50,000,000) Class C Common Shares, One ($.01) cent par value, and
Thirty Million (30,000,000) Preferred Shares, without par value.
Article 5. The preferences, limitations and relative rights of each
class of shares are:
Class A Common Shares and Class C Common Shares:
-----------------------------------------------
(1) Dividends
- -------------
Dividends payable in cash may be declared on the Class A Common Shares without
the declaration of any dividend on the Class C Common Shares, but no such
dividend may be declared on the Class C Common Shares unless a dividend payable
at the same time and in an amount one hundred (100) times as great per share is
concurrently declared on the Class A Common Shares then outstanding.
(2) Liquidation Rights
- ----------------------
(i) In the event of any liquidation, dissolution or winding up of the
corporation, whether voluntary or involuntary, the holders of all of the Common
Shares then outstanding shall be entitled to be paid out of the assets of the
corporation available for distribution to its shareholders, whether such assets
are capital surplus or earnings, based on the number of Common Shares held by
each holder, provided that the amount distributed with respect to each Class A
common Share shall be one hundred (100) times as great as the amount distributed
with respect to each Class C Common Share.
(ii) A consolidation or merger of the corporation with or into any other
corporation or corporations shall not be deemed to be liquidation, dissolution
or winding up of the corporation as those terms are used in this Paragraph (2).
(3) Reorganizations
- -------------------
21
<PAGE>
In the event of a consolidation or merger of the corporation with or into any
other corporation or any other form of reorganization (other than a sale of
assets) in which the corporation is not the surviving entity, the amount
distributable with respect to or the number of shares or other securities of the
surviving entity or other consideration payable or distributable with respect to
each Class A Common Share shall be one hundred (100) times as great as the
amount distributed or paid with respect to each Class C Common Share.
(4) Voting Rights
- -----------------
(A) Except as otherwise expressly provided herein, each holder of any of the
Common Shares shall be entitled to one vote for each share thereof held and
except as required by the statutes of the State of Wisconsin, the holders of
Class A Common Shares and Class C Common Shares shall vote together and not as
separate classes.
(B) The voting requirements of Subsections 180.1003(3), 180.1103(3),
180.1202(3), 180.1402(3) and 180.1404(2) of the Wisconsin Business Corporation
Law shall apply and govern the shareholder vote required on a proposal
concerning a subject covered by Subsection 180.1003(3), 180.1103(3),
180.1202(3), 180.1402(3) and 180.1404(2).
(C) Inapplicability of Wisconsin Business Corporation Law Section 180.1131
- --------------------------------------------------------------------------
The voting rights of the respective classes of shareholders of this corporation
otherwise entitled to vote hereunder and, the manner in which such voting rights
may be exercised shall not be governed by Wisconsin Business Corporation Law
Section 180.1131 notwithstanding that the subject matter to be voted upon might
otherwise be subject thereto.
(5) Right of First Refusal -- Class C Common Shares
- ---------------------------------------------------
No holder of the Class C Common Shares may sell, encumber or transfer for value,
any Class C Common Shares without first depositing the certificate(s) evidencing
such shares with the Corporation, duly endorsed for transfer, and simultaneously
notifying the Corporation, in writing, of the proposed transaction including the
identity of the transferee and the price or other consideration to be paid.
Within thirty (30) days following such deposit and notification, the Corporation
may purchase such Class C Common Shares by paying to the holder of such shares
the lower of the price offered by the proposed transferee, or one (1c) cent per
share by delivery of the purchase price to the holder of such shares, failing
which the shares evidenced by the certificate(s) so deposited may be sold in
accordance with the proposed transaction. The Corporation shall not be obliged
to accept, transfer or to re-
22
<PAGE>
register certificates evidencing any Class C Common Shares without an affidavit
of the transferor and transferee or other evidence to the effect that such
transfer is without value. A transfer for value, for purposes of this paragraph,
shall include a transfer by any person which is part of a series of transfers or
transactions in which the transferee, or a party or entity related to, or
affiliated with, the transferee provides value, directly or indirectly, to the
transferor or a person or entity related to, or affiliated with, the transferor.
(b) (a) Preferred Shares
- ------------------------
(1) The Preferred Shares may be issued from time to time in one or
more series. The Board of Directors is hereby authorized, by filing an
Articles of Amendment to the Corporation's Articles of Incorporation,
without vote of shareholders and in accordance with Section 180.0602 of the
Wisconsin Business Corporation Law (a "Preferred Shares Amendment"), to fix
or alter from time to time, the designa tion, powers, preferences and
rights of the shares of each such series, and the qualifications,
limitations or restrictions thereof so far as not inconsistent with the
provisions of this Article 5 and to the full extent now or hereafter
permitted by the laws of the State of Wisconsin, including the following:
(A) The distinctive designation of such series and the number of
shares which shall constitute such series, which number may be increased
(except where otherwise provided by the Board of Directors in creating such
series) or decreased (but not below the number of shares thereof then
outstanding) from time to time by like action of the Board of Directors;
(B) The annual rate or rates of dividends payable on shares of
such series, whether dividends shall be cumulative and, if so, the date or
dates from which dividends shall be cumulative on the shares of such
series, the preferences, restrictions, limitations and conditions upon the
payment of dividends, and the dates on which dividends, if declared, shall
be payable;
(C) Whether shares of such series shall be redeem able and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
23
<PAGE>
(D) The rights of the shares of such series in the event of
voluntary or involuntary liquidation, dissolu tion or winding up of the
corporation, and the relative rights of priority, if any, of payment of
shares of such series;
(E) Whether shares of such series shall have a purchase,
retirement or sinking fund for the purchase, retirement, or redemption of
shares of such series and, if so, the terms and provisions thereof;
(F) Whether shares of such series shall have conversion
privileges and, if so, the terms and provi sions thereof, including
provision for adjustment of the conversion rate in such events as the Board
of Directors shall determine;
(G) Whether shares of such series shall have voting rights, in
addition to voting rights provided by law, and, if so, the terms and
provisions thereof; and
(H) Any other preferences and relative, partici pating, optional
or other special rights, and qualifica tions, limitations or restrictions
thereof.
(2) The holders of the Preferred Shares of each series shall be
entitled to receive dividends, when and as declared by the Board of
Directors from the funds legally therefor, as they may be entitled to in
accordance with the Preferred Share Amendment adopted by the Board of
Directors providing for the issuance of such series, payable on such dates
as may be fixed in such Amendment. So long as there shall be outstanding
any shares of Preferred Shares of any series entitled to cumula tive
dividends pursuant to any such Preferred Share Amendment providing for the
issue of such series, no dividend, whether in cash or property, shall be
paid or declared, nor shall any distribution be made on the Common
Shares (Class A or Class C), nor shall any Common Shares be purchased,
redeemed or other wise acquired for value by the Corporation (except as
provided in Section 5) if at the time of making such payment, declaration,
distribution, purchase, redemption or acquisi tion, the Corporation shall
be in default with respect to any dividend payable on or obligation to
maintain a purchase, retirement or sinking fund with respect to or to
redeem shares of Preferred Shares of any series. The foregoing provisions
of this Subsection (b)(2) shall not, however, apply to a dividend payable
in Common Shares or to the acquisition of Common Shares in exchange for or
through the application of the proceeds of the sale of shares of Common
Shares. Subject to the foregoing and to any further limitations prescribed
in accordance with the provisions of this Section (a) of this
24
<PAGE>
Article 5, the Board of Directors may declare, out of any funds legally
available therefor, dividends upon the then outstanding Common Shares and
the Preferred Shares of any series shall not be entitled to participate
therein.
(3) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the Preferred
Shares of each series shall be entitled to receive, out of the assets of
the Corporation available for distribution to its stockholders before any
distribution of assets shall be made to the holders of the Common Shares,
the amount per share, if any, fixed by the Board of Directors in the
Preferred Shares Amendment, plus in each such case an amount equal to any
cumulative dividends thereon to the date of final distribution to the
holders of the Preferred Shares, and the holders of the Common Shares shall
be entitled, to the exclusion of the holders of the Preferred Shares of any
and all series to participate ratably in all the assets of the Corporation
then remaining in accordance with their respective rights and preferences.
If upon any liquidation, dissolution or winding up of the Corporation the
assets available for distribution shall be insufficient to pay the holders
of all outstanding shares of Preferred Shares the full amounts to which
they shall be entitled, the holders of Preferred Shares of all series shall
participate ratably in any distribution of assets according to the
respective amounts which would be payable in respect of the Preferred
Shares held by them upon such distribution if all amounts payable in
respect of the Preferred Shares of all series were paid in full. Neither
the statutory merger nor consolidation of the Corporation into or with any
other corporation, nor the statutory merger or consolidation of any other
corporation into or with the Corporation, nor a sale, transfer or lease of
all or any part of the assets of the Corporation, shall be deemed to be a
liquidation, dissolution or winding up of the corporation within the
meaning of this Subsection (3).
(4) The Corporation, at the option of the Board of Directors, may
redeem the whole or any part of the Preferred Shares of any series at the
price or prices and on the terms and conditions provided in the Preferred
Shares Amendment adopted by the Board of Directors providing for the issue
of such series.
(5) Anything herein or in any Preferred Shares Amendment adopted by
the Board of Directors providing for the issue of any series of Preferred
Shares contained to the contrary notwithstanding, the rights of the holders
of all classes of stock of the Corporation in respect of dividends and
purchase, retirement or sinking funds, if any, shall at all times be
25
<PAGE>
subject to the power of the Board of Directors from time to time to set
aside such reserves and to make such other provisions, if any, as the Board
of Directors shall deem to be necessary or advisable for working capital,
for expansion of the Corporation's business (including the acquisition of
real and personal property for the purpose) and for any other purpose of
the Corporation.
(6) Except as otherwise provided by the statutes of the State of
Wisconsin or by the Preferred Shares Amendment adopted by the Board of
Directors providing for the issue of any series of Preferred Shares, the
holders of the Preferred Shares shall have no right to vote. The holders of
the Preferred Shares shall not be entitled to receive notice of any meeting
of shareholders at which they are not entitled to vote or consent.
(7) Except as otherwise provided by the statutes of the State of
Wisconsin or by the Preferred Shares Amendment adopted by the Board of
Directors providing for the issue of any series of Preferred Shares, the
vote of the holders of all or any portion of the Preferred Shares, as a
class, shall not be required for any action whatsoever to be taken or autho
rized by the shareholders of the Corporation, including any amendment of
the Articles of Incorporation.
(c)(b) Waiver of Preemptive Rights
---------------------------
No holder of any of the shares of this Corporation shall be entitled,
as of right, to purchase or subscribe for any unissued stock of any class,
or any additional shares of any class to be issued by reason of any
increase of the authorized shares of the Corporation of any class, or
bonds, certificates of indebtedness, debentures or other securities
convertible into shares of the Corporation, or carrying any right to
purchase any stock of any class and any unissued shares, or such additional
authorized issue of any shares or other securities convertible into shares
or carrying any rights to purchase such shares may be issued and disposed
of, pursuant to resolutions of the Board of Directors, to such persons,
firms, corporations or associations and upon such other terms as may be
deemed advisable by the Board of Directors in the exercise of its
discretion.
26
<PAGE>
Marquette Medical Systems, Inc.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R
O FOR THE ANNUAL MEETING OF SHAREHOLDERS - AUGUST 13, 1997
X
Y
Michael J. Cudahy and Mary M. Kabacinski, or either of them, each with the
power of substitution and revocation, are hereby authorized to represent the
undersigned, with all powers which the undersigned would possess if personally
present, to vote the Class A Common Stock of the undersigned at the Annual
Meeting of shareholders of Marquette Medical Systems, Inc. (the "Company"), to
be held at the Company's offices at 8200 West Tower Avenue, Milwaukee,
Wisconsin, 53223 at 9:00 a.m. on August 13, 1997, or any adjournment or
postponement thereof, as set forth on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES FOR
DIRECTOR LISTED ON THE REVERSE SIDE AND FOR APPROVAL OF THE OTHER PROPOSALS
LISTED ON THE REVERSE SIDE.
This proxy will be voted as specified or, if no choice is specified,
will be voted FOR the election of the nominees named and FOR the other
proposals listed on the reverse side.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
1. To elect six directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified.
Nominees: John G. Bollinger, Michael J. Cudahy, Frederick G. Luber, Timothy C.
Mickelson, Melvin S. Newman and Walter L. Robb
FOR WITHHELD
[ ] [ ]
____________________ MARK HERE
For all nominees FOR ADDRESS
except as noted above CHANGE AND
NOTE BELOW
[ ]
2. To ratify the selection of Arthur Andersen LLP. as the Company's indepen-
dent public accountants for fiscal 1998.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve an amendment to Articles 4 and 5 of the Company's Restated
Articles of Incorporation to eliminate the Class C Common Shares as an
authorized class of stock and rename the Class A Common Shares to Common Shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, the proxy holders are authorized to vote upon such
other business as may properly come before the 1997 annual meeting or any
adjournment or postponement thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Please sign exactly as name appears at left. Executors, administrators,
trustees, guardians, attorneys-in-fact, etc., should give their full titles. If
signor is a corporation, please give full corporate name and have a duly
authorized officer sign stating title. If a partnership, please sign partner
ship name by authorized person. If share certificate is registered in two names
both should sign.
<PAGE>
Signature______________Date______
Signature______________Date______
PLEASE MARK, SIGN, DATE AND RETURN
THIS PROXY CARD PROMPTLY USING THE
ENCLOSED POSTAGE-PREPAID ENVELOPE.
