<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Prospectus Statement
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ACUSON CORPORATION
(Name of Registrant as Specified In Its Charter)
ACUSON CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] 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:
----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
[_] 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:
---------------------------------------------
Notes:
<PAGE>
LOGO
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 17, 1994
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Acuson
Corporation, a Delaware corporation (the "Company"), will be held on Tuesday,
May 17, 1994 at 10:00 a.m., local time, at the Acuson Education Center, 1393
Shorebird Way, Mountain View, California, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year and until
their successors are elected.
2. To ratify the appointment of Arthur Andersen & Co. as independent
public accountants of the Company.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 18, 1994 are
entitled to notice of and to vote at the meeting and at any continuation or
adjournment thereof.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ CHARLES H. DEARBORN
Charles H. Dearborn
Secretary
Mountain View, California
April 8, 1994
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO VOTE,
SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID
ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE>
ACUSON CORPORATION
1220 CHARLESTON ROAD
P.O. BOX 7393
MOUNTAIN VIEW, CA 94039-7393
PROXY STATEMENT
----------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 17, 1994
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of Acuson
Corporation, a Delaware corporation (the "Company"), for use at the Annual
Meeting of Stockholders to be held on Tuesday, May 17, 1994, at 10:00 a.m.,
local time (the "Annual Meeting"), or at any continuation or adjournment of
that meeting, for the purposes set forth in the Notice of Annual Meeting of
Stockholders dated the date hereof. The Annual Meeting will be held at the
Acuson Education Center, 1393 Shorebird Way, Mountain View, California.
SOLICITATION
The Company will bear the entire cost of solicitation, including preparation,
assembly, printing and mailing of this proxy statement, the proxy and any
additional material furnished to stockholders. Copies of solicitation material
will be furnished to brokerage houses, fiduciaries, and custodians holding
shares in their names which are beneficially owned by others to forward to such
beneficial owners. In addition, the Company may reimburse such persons for
their cost of forwarding the solicitation material to such beneficial owners.
Original solicitation of proxies by mail may be supplemented by one or more of
telephone, telegram, facsimile, or personal solicitation by directors,
officers, or employees of the Company. No additional compensation will be paid
for any such services. Except as described above, the Company does not intend
to solicit proxies other than by mail.
The Company intends to mail this proxy statement and accompanying proxy on
approximately April 8, 1994.
VOTING
Only holders of Common Stock of record at the close of business on March 18,
1994, will be entitled to notice of and to vote at the Annual Meeting. As of
March 18, 1994, the Company had outstanding 28,507,489 shares of Common Stock.
Each share of Common Stock is entitled to one vote. The presence, in person or
by proxy duly authorized, of the holders of a majority of the outstanding
shares of Common Stock authorized to vote will constitute a quorum for the
transaction of business at the Annual Meeting and any continuation or
adjournment thereof. Broker non-votes held by persons abstaining will be
counted in determining whether a quorum is present at the Annual Meeting.
Directors are elected by a plurality of the votes of the shares present in
person or represented by proxy at the meeting. The other proposal submitted to
the stockholders in the enclosed proxy must be approved by the vote of the
holders of a majority of the shares of the Company represented in person or by
proxy and entitled to vote at the Annual Meeting. In determining whether such
proposal has been approved, abstentions are counted as votes against the
proposal and broker non-votes are not counted as votes for or against the
proposal or as votes represented in person or by proxy and entitled to vote at
the Annual Meeting.
1
<PAGE>
REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. It may be revoked by
filing with the Secretary of the Company at the Company's principal executive
office, 1220 Charleston Road, P.O. Box 7393, Mountain View, California, 94039-
7393, an instrument of revocation or a duly executed proxy bearing a later
date, or it may be revoked by attending the Annual Meeting and voting in
person.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1995 Annual Meeting of Stockholders (the "1995 Annual Meeting") must be
received by the Company no later than December 8, 1994 in order to be included
in the proxy statement and proxy relating to the 1995 Annual Meeting.
PROPOSAL 1
NOMINATION AND ELECTION OF DIRECTORS
One of the purposes of the Annual Meeting is the election of the Board of
Directors of the Company to hold office until the 1995 Annual Meeting or until
their successors are elected and have qualified. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election
of the nominees named below, unless one or more of such nominees should become
unavailable for election by reason of death or other unexpected occurrence, in
which event such shares shall be voted for the election of such substitute
nominees as the Board of Directors may propose. Each person nominated has
agreed to serve if elected, and the Company knows of no reason why any of the
listed nominees would be unavailable to serve.
NOMINEES AND PRESENT DIRECTORS
The By-Laws of the Company provide that the number of directors of the
Company shall be fixed from time to time by the Board of Directors. At present,
the authorized size of the Board of Directors is five. As of the date of the
Annual Meeting, the authorized size of the Board of Directors will be four. The
Board of Directors has nominated four persons for election to the Board of
Directors.
Set forth below is information regarding the nominees for election as
directors, including information furnished by them as to their principal
occupations for the last five years, certain other directorships held by them,
and their ages as of March 10, 1994.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
- ---- --- -------- --------------
<S> <C> <C> <C>
Thomas J. Perkins......... 62 Chairman of the Board and Director January 1982
Samuel H. Maslak.......... 45 President, Chief Executive Officer September 1981
and Director
Robert J. Gallagher....... 50 Executive Vice President --
Chief Operating Officer
Royce Diener.............. 75 Director October 1985
</TABLE>
Thomas J. Perkins became a director of the Company in January 1982 and has
been Chairman of the Board of Directors since February 1984. Mr. Perkins has
been a general partner of the venture capital partnerships of Kleiner, Perkins,
Caufield & Byers; Kleiner, Perkins, Caufield & Byers II; Kleiner, Perkins,
Caufield & Byers III; and Kleiner, Perkins, Caufield & Byers IV located
2
<PAGE>
in San Francisco and Palo Alto, California, since 1978, 1980, 1982 and 1986,
respectively. Mr. Perkins is Chairman of the Board of Directors of Tandem
Computers Incorporated and Chairman of the Executive Committee and a director
of Genentech, Inc.
Samuel H. Maslak co-founded the Company in September 1981 and has been
President, Chief Executive Officer and a director since that date.
Robert J. Gallagher joined the Company in January 1983 as Vice President,
Finance and Chief Financial Officer. He became Executive Vice President in
March 1991 and Chief Operating Officer of the Company in January 1994.
Royce Diener became a director of the Company in October 1985. From 1975 to
1979, Mr. Diener served as President and Chief Executive Officer of American
Medical International, Inc., a hospital management company ("AMI"). From 1979
to 1985, he was Chairman of the Board and Chief Executive Officer of AMI, and
he continued as Chairman of the Board until 1987 and as a director until
November 1989. He is now Retired Chairman of the Board of AMI. He is a director
of American Health Properties, Inc. and a member of the Board of Advisors for
Advance Technology Venture Fund II, which is registered as an investment
company under the Investment Company Act of 1940.
Two current directors, William H. Abbott and Karl H. Johannsmeier, have
informed the Company that they wish to retire from the Board effective as of
the Annual Meeting and not stand for re-election as directors of the Company.
Mr. Abbott will also be retiring as an officer of the Company, but has agreed
to be a consultant to the Company for two years following his retirement. See
"Certain Relationships and Other Transactions". Mr. Abbott joined the Company
in 1981 and served as Executive Vice President from July 1983 until his
election as Senior Executive Vice President in March 1991. Mr. Abbott became a
director of the Company in October 1985. Mr. Johannsmeier became a director of
the Company in January 1982. He founded Optimetrix Corporation, a semiconductor
processing equipment company ("Optimetrix"), where he served as President and
Chief Executive Officer from 1976 to 1981 and as Chairman of the Board of
Directors from 1976 until 1984. Optimetrix was acquired by Eaton Corporation in
1982. Mr. Johannsmeier has been a private investor over the last twenty years.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS.
The Board of Directors has four standing committees: the Executive Committee,
the Compensation Committee, the Audit Committee and the Non-Officer Stock
Option Administration Committee. The Board does not have a nominating
committee.
The Executive Committee was established in July 1988. The Executive Committee
may take all actions which may be taken by the Board, subject to the
limitations imposed by Delaware law. The current members of the Executive
Committee are Messrs. Perkins, Maslak and Abbott.
The Compensation Committee was established in February 1993 to determine
compensation to be paid to the Company's executive officers and to administer
the Company's stock plans generally. The current members of the Compensation
Committee are Messrs. Perkins, Diener and Johannsmeier.
The Audit Committee was established in October 1986 to recommend engagement
of the Company's independent public accountants, to approve services performed
by such accountants and to review, in consultation with the independent public
accountants, the Company's accounting system and system of internal controls.
The current members of the Audit Committee are Messrs. Perkins, Diener and
Johannsmeier.
The Non-Officer Stock Option Administration Committee was established in July
1987 to administer the Company's option plan only for non-officer employees of
the Company. Its member is Dr. Maslak.
3
<PAGE>
During the fiscal year ended December 31, 1993, the Board of Directors held
five meetings, the Audit Committee and the Compensation Committee each held
four meetings, and the Executive Committee held one meeting. The Non-Officer
Stock Option Administration Committee acted solely by unanimous written consent
in accordance with the Company's By-Laws and Delaware law. Each director
attended at least 75% of the aggregate of all meetings of the Board of
Directors and of the committees, if any, upon which such director served.
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen & Co. as the Company's
independent public accountants for the fiscal year ending December 31, 1994,
and has further directed that management submit the selection of independent
public accountants for ratification by the stockholders at the Annual Meeting.
Arthur Andersen & Co. has audited the Company's financial statements annually
since the Company's inception. Its representatives are expected to be present
at the Annual Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Arthur Andersen & Co. as the
Company's independent public accountants is not required by the Company's By-
Laws or otherwise. The Board of Directors is submitting the selection of Arthur
Andersen & Co. to the stockholders for ratification as a matter of good
corporate practice. In the event the stockholders fail to ratify the selection,
the Board of Directors will reconsider whether or not to retain that firm. Even
if the selection is ratified, the Board of Directors in its discretion may
direct the appointment of a different independent accounting firm at any time
during the year if the Board of Directors determines that such a change could
be in the best interests of the Company and its stockholders.
4
<PAGE>
SHARE OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of January 24, 1994, by (i) all
those known by the Company to be beneficial owners of more than five percent
(5%) of its Common Stock; (ii) all directors and nominees for director; (iii)
the executive officers of the Company included in the Summary Compensation
Table set forth under the caption "Compensation of Directors and Executive
Officers" below; and (iv) all current executive officers and directors of the
Company as a group. Messrs. Johannsmeier, Maslak, Abbott, Diener, Perkins,
Gallagher, Freund and Dugan can be contacted at the offices of the Company.
Except as indicated in the footnotes to this table and pursuant to applicable
community property laws, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP
-----------------
BENEFICIAL OWNER SHARES PERCENT
---------------- --------- -------
<S> <C> <C>
Karl H. Johannsmeier(1)................................... 5,188,310 18.3
Samuel H. Maslak(2)....................................... 1,940,899 6.8
William H. Abbott(3)...................................... 311,767 1.1
Royce Diener(4)........................................... 26,887 *
Thomas J. Perkins(5)...................................... 389,467 1.4
Robert J. Gallagher(6).................................... 332,548 1.2
John G. Freund(7)......................................... 137,327 *
Daniel R. Dugan(8)........................................ 21,317 *
All Executive Officers and Directors as a group (15
persons)(9)(10).......................................... 8,857,703 29.7
</TABLE>
- --------
* Less than 1%
(1) Includes 9,887 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994, which are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
owned pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(2) Includes 418,412 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994. Also includes 13,780
shares of Common Stock for which Dr. Maslak disclaims beneficial
ownership.
(3) Includes 203,434 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994.
(4) Includes 9,887 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994. Also includes 2,000 shares
of Common Stock for which Mr. Diener disclaims beneficial ownership.
(5) Includes 87,274 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994.
(6) Includes 186,873 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994. Also includes 12,000
shares for which Mr. Gallagher disclaims beneficial ownership.
(7) Includes 136,398 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994.
(8) Includes 16,106 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994.
(9) Includes 30,680 shares as to which beneficial ownership is disclaimed by
certain executive officers of the Company.
(10) Includes 1,547,121 unissued shares of Common Stock subject to options
exercisable within 60 days of January 24, 1994.
5
<PAGE>
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's
President and Chief Executive Officer and the four most highly paid executive
officers for the three fiscal years ended December 31, 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------------- ------------ ALL OTHER
NAME AND SALARY BONUS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#) (1)($)
------------------ ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Samuel H. Maslak 1993 $650,000 $48,100 316,775(2) $500(9)
President and 1992 $622,000 $0 175,000 $500(9)
Chief Executive 1991 $576,000 $108,000 0
Officer
William H. Abbott 1993 $373,000 $29,840 175,068(3) $500(9)
Sr. Executive Vice 1992 $357,000 $0 90,000 $500(9)
President 1991 $330,000 $61,875 0
Robert J. Gallagher 1993 $293,000 $23,440 123,360(4) $500(9)
Executive Vice 1992 $280,000 $0 60,000 $500(9)
President, Chief 1991 $256,000 $48,000 20,000
Operating Officer
John G. Freund 1993 $287,000 $22,960 120,364(5) $72,036(10)
Executive Vice 1992 $275,000 $0 50,000 $71,929(11)
President, General 1991 $250,000 $63,674(14) 0
Manager AEGIS(TM)
Division
Daniel R. Dugan 1993 $209,000 $49,720(8) 130,040(6) $57,344(12)
Sr. Vice President, 1992 $200,000 $50,000(15) 70,000 $57,642(13)
Worldwide Sales, 1991 $118,462(7) $45,538 50,000
Service, Marketing
</TABLE>
- --------
(1) Pursuant to Release Nos. 33-6962 and 34-31327 issued by the Securities and
Exchange Commission on October 21, 1992, "All Other Compensation" is
reported only for 1992 and 1993.
(2) Includes options for 216,775 shares granted in exchange for the
cancellation of options for 325,000 shares during a Company-wide option
repricing. See "Report on Repricing of Options."
(3) Includes options for 135,068 shares granted in exchange for the
cancellation of options for 202,500 shares during a Company-wide option
repricing. See "Report on Repricing of Options."
(4) Includes options for 53,360 shares granted in exchange for the
cancellation of options for 80,000 shares during a Company-wide option
repricing. See "Report on Repricing of Options."
(5) Includes options for 60,364 shares granted in exchange for the
cancellation of options for 90,500 shares during a Company-wide option
repricing. See "Report on Repricing of Options."
(6) Includes options for 80,040 shares granted in exchange for the
cancellation of options for 120,000 shares during a Company-wide option
repricing. See "Report on Repricing of Options."
(7) Mr. Dugan joined the Company in April 1991.
(8) Consisting of $16,720 as a year-end bonus pursuant to the Company's
officer bonus plan and $33,000 as a bonus based upon the performance of
the Company's domestic field organization.
(9) Consisting of an employer contribution of $500 to each employee's 401(k)
plan account.
6
<PAGE>
(10) Consisting of an employer contribution of $500 to Dr. Freund's 1993 401(k)
plan account and forgiveness of loans from the Company in the amount of
$71,536. See "Certain Relationships and Other Transactions" for a
description of such loans.
(11) Consisting of an employer contribution of $500 to Dr. Freund's 1992 401(k)
plan account and forgiveness of loans from the Company in the amount of
$71,429. See "Certain Relationships and Other Transactions" for a
description of such loans.
(12) Consisting of an employer contribution of $500 to Mr. Dugan's 1993 401(k)
plan account and forgiveness of loans from the Company in the amount of
$56,844. See "Certain Relationships and Other Transactions" for a
description of such loans.
(13) Consisting of an employer contribution of $500 to Mr. Dugan's 1992 401(k)
plan account and forgiveness of loans from the Company in the amount of
$57,142. See "Certain Relationships and Other Transactions" for a
description of such loans.
(14) Consisting of $46,875 as a year-end bonus pursuant to the Company's
officer bonus plan and $16,799 as an additional performance bonus.
(15) Consisting of a bonus based upon the performance of the Company's domestic
field organization.
During 1993, each non-employee director received an annual fee of $24,000 in
connection with his service on the Board of Directors of the Company and was
reimbursed for all travel expenses incurred in attending meetings of the Board.
In addition, Mr. Perkins received an annual fee of $24,000 in connection with
his service as Chairman of the Executive Committee. Pursuant to the 1991 Stock
Incentive Plan of the Company, each non-employee director was granted an option
to purchase 5,000 shares of the Company's Common Stock on April 29, 1993, the
date of the 1993 Annual Meeting of the Company, and each non-employee member of
the Executive Committee of the Board of Directors was granted an additional
option to purchase 5,000 shares of Common Stock of the Company on the same
date.
7
<PAGE>
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following two tables set forth certain information regarding stock
options granted to, exercised by, and owned by the executive officers named in
the foregoing Summary Compensation Table during 1993.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT ASSUMED
RATES OF STOCK
PRICE APPRECIATION
% OF TOTAL FOR
OPTIONS GRANTED OPTION TERM (5)
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION -------------------
NAME GRANTED (#) FISCAL YEAR PRICE/SHARE DATE 5% 10%
---- ----------- --------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Samuel H. Maslak........ 100,050(1)(4) 2% $10.75 06/04/03 $676,400 $1,714,130
116,725(2)(4) 3% $10.75 06/04/03 $789,133 $1,999,818
100,000(3) 2% $13.13 10/26/03 $825,739 $2,092,584
William H. Abbott....... 75,038(1)(4) 2% $10.75 06/04/03 $507,303 $1,285,606
60,030(2)(4) 1% $10.75 06/04/03 $405,840 $1,028,478
40,000(3) 1% $13.13 10/26/03 $330,295 $ 837,034
Robert J. Gallagher..... 53,360(2)(4) 1% $10.75 06/04/03 $360,747 $ 914,203
70,000(3) 2% $13.13 10/26/03 $578,017 $1,464,809
John G. Freund.......... 27,014(1)(4) 1% $10.75 06/04/03 $182,631 $ 462,824
33,350(2)(4) 1% $10.75 06/04/03 $225,467 $ 571,377
10,000(3) -- $13.13 10/26/03 $ 82,574 $ 209,258
50,000(6) 1% $13.13 10/26/03 $412,869 $1,046,292
Daniel R. Dugan......... 80,040(2)(4) 2% $10.75 06/04/03 $541,120 $1,371,304
50,000(3) 1% $13.13 10/26/03 $412,869 $1,046,292
</TABLE>
- --------
(1) Granted at fair market value on the date of grant with 365/1460 of the
shares vested on the date of grant and 1/1460 of the shares vesting daily
thereafter. Vesting may be accelerated and the options may be repriced at
the discretion of the Board of Directors. In the event of a dissolution,
merger or other reorganization of the Company in which more than 50% of the
Company's stock is exchanged, any surviving corporation shall assume the
options outstanding, substitute similar rights for outstanding options, or
the options shall continue. If the surviving corporation refuses to assume
or continue the options, vesting on such options shall be accelerated.
(2) Granted at fair market value on the date of grant with 1/1460 of the shares
vesting daily from the date of grant. Vesting may be accelerated and the
options may be repriced at the discretion of the Board of Directors. In the
event of a dissolution, merger or other reorganization of the Company in
which more than 50% of the Company's stock is exchanged, any surviving
corporation shall assume the options outstanding, substitute similar rights
for outstanding options, or the options shall continue. If the surviving
corporation refuses to assume or continue the options, vesting on such
options shall be accelerated.
(3) Granted at fair market value on the date of grant; vesting over five years
with 10% of the shares vesting six months after the date of grant and the
balance vesting daily over the remaining term. Vesting may be accelerated
and the options may be repriced at the discretion of the Board of
Directors. In the event of a dissolution, merger or other reorganization of
the Company in which more than 50% of the Company's stock is exchanged, any
surviving corporation shall assume the options outstanding, substitute
similar rights for outstanding options, or the options shall continue. If
the surviving corporation refuses to assume or continue the options,
vesting on such options shall be accelerated.
8
<PAGE>
(4) Granted as part of a Company-wide option repricing program in which, at the
election of the optionee, the Company canceled certain existing options
held by the optionee (the "Old Options") and in exchange granted new
options (the "New Options") for 2/3 of the number of shares underlying the
canceled Old Options. Vesting under the Old Options did not transfer to the
New Options. Vesting under the New Options is described in footnotes 1 and
2.
(5) The dollar amounts under these columns are the result of calculations at
the 5% and 10% annual rates of stock appreciation prescribed by the
Securities and Exchange Commission and are not intended to forecast
possible future appreciation, if any, of the Company's stock price.
Assuming 5% and 10% compounded annual appreciation of the stock price over
the term of the option, the price of a share of Common Stock underlying an
option issued June 4, 1993 with an exercise price of $10.75 would be $17.51
and $27.88, respectively, on June 4, 2003, and the price of a share of
Common Stock underlying an option issued October 26, 1993 with an exercise
price of $13.13 would be $21.39 and $34.06, respectively, on October 26,
2003. The share price of Acuson stock on December 31, 1993 was $12.13.
(6) Granted at fair market value on the date of grant; vesting over five years
with 10% of the shares vesting six months after the date of grant and the
balance vesting daily over the remaining term, provided that vesting shall
continue only so long as Dr. Freund remains Manager of the Company's
AEGIS(TM) Division. Vesting may be accelerated and the options may be
repriced at the discretion of the Board of Directors. In the case of a
dissolution, merger or other reorganization of the Company in which more
than 50% of the Company's stock is exchanged, any surviving corporation
shall assume the options outstanding, substitute similar rights for
outstanding options, or the options shall continue. If the surviving
corporation refuses to assume or continue the options, vesting on such
options shall be accelerated.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NAME(1) AT FISCAL YEAR-END(#) AT FISCAL YEAR-END(2)
------- ----------------------------- ---------------------------
EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
----------------------------- ---------------------------
<S> <C> <C>
Samuel H. Maslak........ 403,252 / 273,523 $ 77,509 / $221,640
William H. Abbott....... 195,670 / 136,898 $109,900 / $133,719
Robert J. Gallagher..... 182,389 / 122,471 $ 85,033 / $ 63,054
John G. Freund.......... 132,928 / 104,936 $ 40,309 / $ 62,012
Daniel R. Dugan......... 11,504 / 118,873 $ 15,876 / $ 94,580
</TABLE>
- --------
(1) During 1993, none of the named executive officers exercised any stock
options.
(2) Value per share is defined as the market price of Acuson stock at year end
minus the per share exercise price of the option. The share price of Acuson
stock on December 31, 1993 was $12.13.
9
<PAGE>
REPORT ON REPRICING OF OPTIONS
In May 1993, the Compensation Committee of the Company (the "Committee")
approved resolutions authorizing the exchange and repricing ("repricing") of
certain outstanding non-qualified stock options held by employees and directors
of the Company whereby each employee or director could voluntarily surrender
and cancel certain existing non-qualified stock options and receive new options
exercisable for 2/3 of the number of shares underlying the previous options, on
the terms described below. The Committee noted that the overall purpose of the
Company's stock option plans had been to attract and retain the services of the
Company's employees and to provide incentives to such persons to exert maximum
efforts for the Company's success. The Committee concluded that the decline in
the market value of the Company's Common Stock had frustrated these purposes
and diminished the value of the Company's stock option program as an element of
the Company's compensation arrangements. Further, the Committee expressed its
view that a repricing program could also reduce the number of shares issuable
upon exercise of outstanding options. Accordingly, the Committee adopted a
repricing program with the following elements:
All employees and directors of the Company holding certain non-qualified
options (the "Old Options") to purchase shares of the Company's Common Stock at
the time of the repricing would be eligible to participate in the repricing
program. Each such participant who so chose could cancel any Old Options and in
exchange would receive a grant of new options (the "New Options") for 2/3 of
the number of shares underlying the canceled Old Options. Vesting under the Old
Options did not transfer to the New Options. New Options replacing Old Options
granted after June 30, 1990 would vest on a daily basis at the rate of 1/1460
per day. For New Options replacing Old Options granted on or before June 30,
1990, one-fourth of the shares underlying the New Options would vest
immediately, and the remainder would vest at the rate of 1/1460 per day. The
term of each New Option was ten years and the exercise price of the New Options
was the fair market value on the date of grant.
In connection with the repricing, the named executive officers exchanged an
aggregate of 818,000 Old Options for an aggregate of 545,607 New Options. At
the time of the repricing, the exercise prices of such Old Options ranged from
$19.09 to $30.87 per share, and the weighted average exercise price of all such
Old Options was $22.29 per share. The exercise prices of all such New Options
is $10.75 per share. In addition, the Old Options exchanged by the named
executive officers had remaining terms of between six and nine years at the
time of the repricing. The New Options issued in exchange for such Old Options
all have terms of ten years.
April 8, 1994 The Compensation Committee
Thomas J. Perkins
Karl H. Johannsmeier
Royce Diener
10
<PAGE>
The following table sets forth certain information concerning repricing
during the last ten years of options to purchase the Company's Common Stock
held by executive officers of the Company.
TEN-YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
MARKET ORIGINAL
NUMBER OF NUMBER PRICE OF EXERCISE OPTION
ORIGINAL OF STOCK AT PRICE AT TERM
OPTIONS OPTIONS TIME OF TIME OF REMAINING
OUTSTANDING REPRICED REPRICING REPRICING NEW AT DATE OF
PRIOR TO OR OR OR EXERCISE REPRICING
DATE OF REPRICING AMENDED AMENDMENT AMENDMENT PRICE OR
NAME REPRICING (1) (#) ($) ($) ($) AMENDMENT
---- --------- ----------- -------- --------- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
SAMUEL H. MASLAK 6/4/93 150,000 100,050 $10.75 $23.67 $10.75 6.83 years
President and 6/4/93 175,000 116,725 $10.75 $21.63 $10.75 8.73 years
Chief Executive Officer
WILLIAM H. ABBOTT 6/4/93 112,500 75,038 $10.75 $19.09 $10.75 6.68 years
Sr. Executive Vice 6/4/93 90,000 60,030 $10.75 $21.63 $10.75 8.73 years
President
ROBERT J. GALLAGHER 6/4/93 20,000 13,340 $10.75 $30.87 $10.75 7.68 years
Executive Vice 6/4/93 60,000 40,020 $10.75 $21.63 $10.75 8.73 years
President
Chief Operating Officer
JOHN G. FREUND 6/4/93 40,500 27,014 $10.75 $19.09 $10.75 6.68 years
Executive Vice 6/4/93 50,000 33,350 $10.75 $21.63 $10.75 8.73 years
President,
General Manager
AEGIS(TM)
Division
BRADFORD C. ANKER 6/4/93 105,000 70,035 $10.75 $16.42 $10.75 5.39 years
Vice President, 6/4/93 39,000 26,013 $10.75 $19.09 $10.75 6.68 years
Manufacturing 6/4/93 20,000 13,340 $10.75 $30.87 $10.75 7.68 years
6/4/93 50,000 33,350 $10.75 $21.63 $10.75 8.73 years
DONALD J. BURCH 6/4/93 39,000 26,013 $10.75 $19.09 $10.75 6.68 years
Vice President, 6/4/93 50,000 33,350 $10.75 $30.87 $10.75 7.68 years
Engineering 6/4/93 50,000 33,350 $10.75 $21.63 $10.75 8.73 years
CHARLES H. DEARBORN 6/4/93 7,500 5,003 $10.75 $24.09 $10.75 6.44 years
General Counsel and 6/4/93 7,500 5,003 $10.75 $24.88 $10.75 7.43 years
Secretary 6/4/93 15,000 10,005 $10.75 $30.87 $10.75 7.68 years
6/4/93 20,000 13,340 $10.75 $21.63 $10.75 8.73 years
DANIEL R. DUGAN 6/4/93 50,000 33,350 $10.75 $30.37 $10.75 7.91 years
Senior Vice President, 6/4/93 70,000 46,690 $10.75 $21.63 $10.75 8.73 years
Worldwide Sales,
Service and Marketing
JUDITH A. HEYBOER 6/4/93 22,500 15,008 $10.75 $19.09 $10.75 6.68 years
Senior Vice President, 6/4/93 50,000 33,350 $10.75 $21.63 $10.75 8.73 years
Employee Relations
STEPHEN T. JOHNSON 6/4/93 40,000 26,680 $10.75 $21.63 $10.75 8.73 years
Vice President
Chief Financial Officer
and
Treasurer
L. THOMAS MORSE 6/4/93 37,500 25,013 $10.75 $18.59 $10.75 5.70 years
Vice President, 6/4/93 40,500 27,014 $10.75 $19.09 $10.75 6.68 years
Corporate Controller 6/4/93 30,000 20,010 $10.75 $21.63 $10.75 8.73 years
WILLIAM C. VARLEY 6/4/93 19,484 12,996 $10.75 $19.09 $10.75 6.68 years
Vice President, 6/4/93 15,000 10,005 $10.75 $30.87 $10.75 7.68 years
Cardiology Business 6/4/93 40,000 26,680 $10.75 $21.63 $10.75 8.73 years
Operations
J. NELSON WRIGHT 6/4/93 42,000 28,014 $10.75 $19.09 $10.75 6.68 years
Vice President, 6/4/93 125,000 83,375 $10.75 $21.63 $10.75 8.73 years
Advanced Development
</TABLE>
- --------
(1) In connection with the June 4, 1993 repricings, each participating employee
or director cancelled certain existing non-qualified stock options and
received new options exercisable for 2/3 of the number of shares underlying
the previous options. This column sets forth the number of previous options
outstanding prior to repricing which were cancelled.
11
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE--EXECUTIVE COMPENSATION
The Company believes that compensation of the Company's key executives should
be sufficient to attract and retain highly qualified personnel in the
competitive Silicon Valley area, and should also provide meaningful incentives
for measurably superior performance. The Company seeks to reward achievement of
long and short term performance goals measured by successful development of new
products, sales volume, meeting or exceeding financial targets, and other
factors. In addition, the Company's performance is considered on an absolute
basis and in comparison to other ultrasound companies in determining executive
remuneration.
The Company's executive compensation generally consists of a base salary, a
cash bonus and long term incentive compensation in the form of stock options.
Annual compensation for the Company's executive officers, other than for the
President, is recommended by the President, reviewed by the Chairman of the
Board and approved by the Compensation Committee. The annual compensation for
the President is recommended by the Chairman of the Board and approved by the
Compensation Committee. In determining his recommendations for initial salaries
of executive officers, the President does not employ a formulaic approach or
assign a predetermined weight to any specific objective or subjective criteria.
Rather, the President relies on a number of factors he subjectively deems
important in making his recommendation, including his view of the Company's
performance, the ultrasound market in general and the value of that executive's
position at Acuson. The President also relies on publicly available executive
compensation surveys chosen for their reputability and relevance to the Company
in terms of geographical area and size of companies surveyed and on a study of
executive compensation in publicly-held ultrasound companies and high
technology companies in the San Francisco Bay Area. Neither the surveys nor the
study specifically use data for the companies included in the groups listed in
the performance graph in this proxy statement.
The compensation for Dr. Maslak, the Company's President and Chief Executive
Officer, is determined using a similar process and philosophy as all other
executive officers. Generally, the Chairman of the Board considers the survey
data described above in concert with his own subjective assessment of the
Company's performance and Dr. Maslak's performance and contributions to the
Company, recommending a salary, bonus and stock options for the Compensation
Committee's approval. There is no formulaic tie between the Company's stated
goals and performance and the President's compensation in the Chairman's
recommendation; instead the Chairman's judgment and discretion is used in his
recommendations to the Compensation Committee.
The Compensation Committee met in February 1993 to determine executive
officer salaries for 1993. The President reported that survey data received
placed the Company's officers' salary compensation, including bonuses, between
the 50th and 75th percentile of executive compensation for high technology
companies of a similar size in the Northern California area. The President then
noted that weak worldwide economic conditions, together with uncertainties
about United States governmental health care reimbursement, would continue to
impact sales in ultrasound markets. Further, the President reported that the
Company would continue to make substantial investments in field operations and
product development, which would have an immediate effect on profits for the
year. Given these factors, the President recommended, and the Compensation
Committee accepted, that salary raises for all executive officers, other than
the President, be limited to 4.5%, the amount of the average merit budget for
1993 for the Company's employees as a whole. The Chairman of the Board then
recommended that based on these same factors, the President's salary increase
should be 4.5%, and the Compensation Committee accepted that recommendation.
Individual performance of the officers, including the President, was not a
factor in determining these raises.
12
<PAGE>
The amount of any bonus awarded under the Company's Officer Bonus Plan for
all officers other than the President is based on the successful and timely
achievement of Company goals, including financial performance and positioning
for future results. The Compensation Committee met in February 1994 to
determine officer bonuses for 1993. The President reported to the Compensation
Committee that sales for the Company had declined for 1993 compared to 1992,
due in large part to the economic recession and uncertainty about United States
health reform. However, the Company had successfully controlled expenses, due
to the June 1993 reduction in force and other factors; the Company had been
significantly more profitable, even with reduction in force charges, than its
competitors; the Company believes it maintained its overall market share in an
increasingly competitive market; and product development milestones for the
year had been met on a timely basis. Based on these factors, the President
recommended that bonuses of 8% of salary (constituting approximately one-third
of the target bonus under the Officer Bonus Plan) for all executive officers
other than the President be granted, with the exception of one executive
officer, who, because of exceptional performance, should be granted a larger
bonus. The Chairman of the Board then recommended, based on these same factors
as well as on Dr. Maslak's request that his bonus be less than that of the
other officers, that the President be granted a bonus equal to 7.4% of his 1993
salary. The Compensation Committee accepted these recommendations.
In addition to the Officer Bonus Plan, Mr. Dugan, the Company's Senior Vice
President, Worldwide Sales, Service and Marketing, received a bonus based upon
the performance of the Company's domestic field organization. Also, the Company
has a merit bonus program that applies to employees (including officers) to
recognize special accomplishments or significant efforts. The President has the
discretion to grant a bonus to any officer consistent with the principles of
this program. No bonuses were awarded to executive officers under this program
in 1993.
Stock options are awarded to provide incentives to the officers to improve
long-term performance of the Company. With respect to the 1993 option grants to
officers, the President made an initial recommendation of stock option grants
for all executive officers other than the President and Senior Executive Vice
President, based in part upon the survey and study data used in considering
salaries. Other factors on which the President relied were his subjective view
of individual performance, his evaluations of the relative importance of that
individual in meeting the Company's objectives, and advice from the Company's
Employee Relations department on compensation necessary to hire and retain
senior executives in the Silicon Valley Area. The President also recommended an
additional grant of options to Dr. Freund, the Company's Executive Vice
President, in connection with Dr. Freund's agreement to accept responsibility
for formation and management of an operating division to develop and market the
Company's AEGIS(TM) product, a position that entailed increased accountability,
risk and responsibility. The Compensation Committee accepted all of these
recommendations. Based upon these same factors, the Chairman recommended a
grant of options for the President and the Senior Executive Vice President, and
the Compensation Committee also accepted that recommendation.
April 8, 1994 The Compensation Committee
Thomas J. Perkins
Royce Diener
Karl J. Johannsmeier
13
<PAGE>
PERFORMANCE GRAPH
(PERFORMANCE GRAPH APPEARS HERE)
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
AMONG S&P 500 INDEX, S&P MEDICAL PRODUCTS AND SUPPLIES INDEX(2), AND
ACUSON CORPORATION
<TABLE>
<CAPTION>
S&P MEDICAL
PRODUCTS
Measurement Period S&P AND ACUSON
(Fiscal Year Covered) 500 INDEX SUPPLIES CORPORATION
- ------------------- --------- ----------- -----------
<S> <C> <C> <C>
Measurement Pt-
1988 $100 $100 $100
FYE 1989 $132 $137 $122
FYE 1990 $127 $161 $156
FYE 1991 $166 $263 $184
FYE 1992 $179 $225 $ 90
FYE 1993 $197 $172 $ 70
</TABLE>
Assumes $100 invested on December 31, 1988 in S&P 500 index, S&P Medical
Products and Supplies Index and Acuson Corporation
Notes: (1) Total Return assumes reinvestment of dividends.
(2) Medical Products & Supplies Index includes Bard (C.R.) Inc., Baxter
International Inc, (Becton, Dickinson), Bausch & Lomb, Medtronic
Inc, St. Jude Medical, Biomet, Inc, Allergan, Inc, U.S. Surgical
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
During 1993, the Compensation Committee consisted of Messrs. Perkins, Diener
and Johannsmeier, none of whom has ever been an officer or employee of the
Company.
14
<PAGE>
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
In connection with Dr. Freund's relocation to California, in April 1989 the
Company loaned Dr. Freund a total of $600,000 under two separate loans to
assist him in the purchase of a home in California. The two loans, one in the
amount of $500,000 and the other in the amount of $100,000, are secured by Dr.
Freund's residence.
The $500,000 loan to Dr. Freund is interest-free and will be fully forgiven
on a daily basis over a seven year period which commenced on June 1, 1990. The
Company paid in 1990 Dr. Freund's federal and state income tax liability of
approximately $266,000 incurred as a result of the proposed forgiveness of this
loan. The loan will be automatically forgiven upon termination of Dr. Freund's
employment by the Company without "cause" as defined in the promissory note,
Dr. Freund's death, reduction of Dr. Freund's salary below $200,000, or a
"change in control" of the Company, as defined in the note. If Dr. Freund
voluntarily terminates his employment with the Company or if he is terminated
by the Company for "cause," he must repay the outstanding balance of the loan
plus any tax savings to him resulting from any repayment of the loan, no later
than the second anniversary of the date of termination.
The $100,000 loan to Dr. Freund is interest-free until May 1, 1994, at which
time it bears interest at 11.25% per year. Interest on this loan is payable
quarterly commencing on May 1, 1994 and the principal is payable in eight equal
quarterly installments commencing on May 1, 1997 and ending on May 1, 1999.
Upon termination of Dr. Freund's employment, the entire unpaid balance of the
loan, together with accrued and unpaid interest, is due and payable no later
than the second anniversary of the date of termination. The loan may be prepaid
at any time without penalty.
As of December 31, 1993, approximately $243,744 of the $500,000 loan was
outstanding and the largest aggregate amount outstanding during the year was
approximately $315,280. The full amount of the $100,000 loan was outstanding
during the year and was outstanding on December 31, 1993.
In connection with Mr. Dugan's relocation to the San Francisco Bay Area in
August 1991, the Company loaned Mr. Dugan $400,000 to assist him in the
purchase of a home in the San Francisco Bay Area. The loan is secured by Mr.
Dugan's residence.
The loan to Mr. Dugan is interest-free and will be fully forgiven on a daily
basis over a seven year period which commenced on August 8, 1991. The Company
paid in 1991 Mr. Dugan's federal and state income tax liability of
approximately $213,000 incurred as a result of the proposed forgiveness of this
loan. The loan will be automatically forgiven upon termination of Mr. Dugan's
employment by the Company without "cause" as defined in the promissory note,
Mr. Dugan's death, reduction of Mr. Dugan's salary below $200,000, or a "change
in control" of the Company, as defined in the note. If Mr. Dugan voluntarily
terminates his employment with the Company or if he is terminated by the
Company for "cause," he must repay the outstanding balance of the loan plus any
tax savings to him resulting from any repayment of the loan, no later than the
second anniversary of the date of termination.
As of December 31, 1993, approximately $262,000 of the loan was outstanding
and the largest aggregate amount outstanding during the year was approximately
$318,844.
The Company has agreed in principle that upon Mr. Abbott's retirement as
Senior Executive Vice President of the Company in June 1994, the Company will
enter into a two-year agreement with Mr. Abbott pursuant to which Mr. Abbott
will provide consulting services for an annual consulting fee of $234,000 in
the first year and $156,000 in the second year. In addition, Mr. Abbott will be
reimbursed for his reasonable out-of-pocket expenses in performing his
consulting services and vesting of certain options held by Mr. Abbott will be
accelerated.
15
<PAGE>
ANNUAL REPORT AND FORM 10-K
The Company's annual report for the year 1993 is being mailed with this proxy
statement to stockholders entitled to notice of the meeting. A COPY OF THE
COMPANY'S 1993 FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND FINANCIAL
STATEMENT SCHEDULES, WILL BE PROVIDED UPON WRITTEN REQUEST AND WITHOUT CHARGE
TO EACH SUCH STOCKHOLDER. Requests should be sent to Stockholder Relations,
Acuson Corporation, P.O. Box 7393, Mountain View, California 94039-7393.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting. If other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ CHARLES H. DEARBORN
Charles H. Dearborn
Secretary
16
<PAGE>
PROXY
ACUSON CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 17, 1994
The undersigned hereby appoints Samuel H. Maslak and Robert J. Gallagher,
and each of them, with full power of substitution, as proxies and
attorneys-in-fact to vote the shares of Common Stock of Acuson Corporation (the
"Company") which the undersigned is entitled to vote at the Annual Meeting of
Stockholders of the Company to be held May 17, 1994 and at any adjournment(s)
thereof, on the following matters as set forth in the Notice of said meeting
and Proxy Statement related thereto, and, in their discretion, upon such other
matters which may properly come before the meeting or any adjournment(s)
thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
(X) Please mark votes as in this example.
THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS SPECIFIED, FOR ITEMS 1
AND 2.
1. ELECTION OF DIRECTORS:
NOMINEES: Royce Diener, Robert J. Gallagher,
Samuel H. Maslak, Thomas J. Perkins
FOR ( ) WITHHELD ( )
( )
-----------------------------------
For all nominees except as noted above
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ARTHUR ANDERSEN & CO. AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY. FOR ( ) AGAINST ( ) ABSTAIN ( )
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT ( )
Please sign exactly as your name or names
appear hereon. If more than one name
appears, all persons so designated should
sign. When signing in a representative
capacity, please give your full title.
Signature: Date:
--------------- --------
Signature: Date:
--------------- --------
