<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended JULY 1, 1995 or
------------
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ___________
Commission file number 0-14953
-------
ACUSON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2784998
------------------------------ ---------------------------------
(State of Incorporation) (IRS Employer Identification No.)
1220 CHARLESTON ROAD
P. O. BOX 7393
MOUNTAIN VIEW, CA 94039-7393
(Address of principal executive offices)
Registrant's telephone number, including area code, is (415) 969-9112
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
-----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $.0001 par value 27,917,789 shares
------------------------------ ----------------------------
(Class) Outstanding at July 31, 1995
<PAGE>
________________________________________________________________________________
FORM 10-Q
ACUSON CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of
July 1, 1995 and December 31, 1994 1
Condensed Consolidated Statements of Operations
for the Three Months Ended July 1, 1995 and
July 2, 1994 and for the Six Months Ended July 1, 1995
and July 2, 1994 2
Condensed Consolidated Statements of Cash Flows
for the Six Months Ended July 1, 1995 and
July 2, 1994 3
Notes to Unaudited Condensed Consolidated
Financial Statements 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 8
ITEM 4. Submission of Matters to a Vote of Security Holders 8
ITEM 6. Exhibits and Reports on Form 8-K 9
Signature 10
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
ACUSON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
JULY 1, DECEMBER 31,
1995 1994
(Unaudited)
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 30,024 $ 28,671
Short-term investments 31,296 38,421
-------- --------
Total cash and short-term
investments 61,320 67,092
Accounts receivable, net 74,666 78,534
Inventories 51,754 49,926
Other current assets 39,242 39,637
-------- --------
Total current assets 226,982 235,189
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation and
amortization of $100,349 and $92,217
in 1995 and 1994, respectively 51,577 48,997
OTHER ASSETS, NET 24,235 20,452
-------- --------
Total Assets $302,794 $304,638
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 17,664 $ 16,295
Other accrued liabilities 84,963 80,558
-------- --------
Total current liabilities 102,627 96,853
-------- --------
Commitments and contingencies (Note 4)
STOCKHOLDERS' EQUITY
Preferred stock, par value
$.0001:
authorized, 10,000 shares;
outstanding, none -- --
Common stock and additional
paid-in capital, common stock
par value $.0001: authorized, 50,000
shares; outstanding, 27,954 shares
and 28,904 shares in 1995 and
1994, respectively 79,118 79,183
Cumulative translation adjustment (656) (1,240)
Unrealized holding loss on
investment securities (35) (370)
Retained earnings 121,740 130,212
-------- --------
Total stockholders' equity 200,167 207,785
-------- --------
Total Liabilities and
Stockholders' Equity $302,794 $304,638
======== ========
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to unaudited condensed consolidated financial statements.
1
<PAGE>
--------------------------------------------------------------------------------
ACUSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts, unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------ -------------------
JULY 1, JULY 2, JULY 1, JULY 2,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET SALES
Product $61,859 $69,568 $130,504 $144,256
Service 20,080 18,446 39,401 36,583
------- ------- -------- --------
Total net sales 81,939 88,014 169,905 180,839
------- ------- -------- --------
COST OF SALES
Product 28,517 29,720 60,363 60,852
Service 8,745 8,749 17,382 17,510
------- ------- -------- --------
Total cost of sales 37,262 38,469 77,745 78,362
------- ------- -------- --------
Gross profit 44,677 49,545 92,160 102,477
------- ------- -------- --------
OPERATING EXPENSES
Selling, general and
administrative 27,249 25,550 54,511 52,190
Product development 16,954 18,499 35,013 35,816
------- ------- -------- --------
Total operating expenses 44,203 44,049 89,524 88,006
------- ------- -------- --------
Income from operations 474 5,496 2,636 14,471
INTEREST INCOME, NET 954 795 1,945 1,950
------- ------- -------- --------
Income before income taxes 1,428 6,291 4,581 16,421
PROVISION FOR INCOME TAXES 414 2,202 1,328 5,748
------- ------- -------- --------
Net income $ 1,014 $ 4,089 $ 3,253 $ 10,673
======= ======= ======== ========
EARNINGS PER SHARE $ 0.04 $ 0.14 $ 0.11 $ 0.37
======= ======= ======== ========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 28,429 29,494 28,670 29,436
======= ======= ======== ========
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE>
--------------------------------------------------------------------------------
ACUSON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
--------------------
JULY 1, JULY 2,
1995 1994
---------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,253 $ 10,673
Adjustments to reconcile net
income to cash provided by
operating activities:
Depreciation and amortization 9,284 9,679
Changes in:
Accounts receivable 3,850 (15,919)
Leases receivable (4,076) 19,641
Inventories (1,473) (3,991)
Other current assets 329 5,712
Accounts payable 1,278 9,399
Other accrued liabilities 3,818 (8,492)
-------- --------
Net cash provided by
operating activities 16,263 26,702
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease in short-term
investments 7,618 6,596
Investment in property and
equipment (11,482) (12,547)
Decrease (increase) in other
assets 359 (1,981)
-------- --------
Net cash used in investing
activities (3,505) (7,932)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock (15,747) (1,458)
Issuance of common stock under
stock option and stock
purchase plans 3,957 2,558
-------- --------
Net cash provided by (used
in) financing activities (11,790) 1,100
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH 385 426
-------- --------
Net increase in cash and cash
equivalents 1,353 20,296
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 28,671 11,184
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 30,024 $ 31,480
======== ========
</TABLE>
--------------------------------------------------------------------------------
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
--------------------------------------------------------------------------------
ACUSON CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 - INTERIM STATEMENTS
In the opinion of management, the unaudited interim condensed consolidated
financial statements include all adjustments, which include only normal
recurring adjustments, necessary to summarize fairly Acuson Corporation's (the
"Company") condensed consolidated financial position as of July 1, 1995 and its
condensed consolidated results of operations and cash flows for the six-month
periods ended July 1, 1995 and July 2, 1994. The results of operations for the
three and six months ended July 1, 1995 are not necessarily indicative of the
results to be expected for the entire year ending December 31, 1995. Certain
information reported in the prior year has been reclassified to conform to the
1995 presentation.
The Company's principle accounting policies are set forth in the financial
statements for the year ended December 31, 1994 and notes thereto, contained in
the Company's Annual Report filed with the Securities and Exchange Commission.
NOTE 2 - INVESTMENTS
Under Statement of Financial Accounting Standards No. 115, the Company's
investments, which consisted entirely of debt securities (the "securities"),
were classified as available-for-sale. These securities mature at various dates
through the year 1996.
As of July 1, 1995, the securities' gross unrealized holding loss was
approximately $49,000. The unrealized holding loss of approximately $35,000, net
of the tax effect, was reported as a separate component of stockholders' equity.
The Company has determined that the unrealized holding loss is not a permanent
impairment of the fair value of its investments. During the six months ended
July 1, 1995, the Company sold certain of its available-for-sale securities at
approximately $1.7 million. The Company sold these securities for approximately
original cost.
NOTE 3 - INVENTORIES
The components of inventories were as follows (in thousands):
<TABLE>
<CAPTION>
JULY 1, DEC. 31,
1995 1994
-----------------------
<S> <C> <C>
Raw materials $29,295 $29,552
Work-in-process 3,804 3,783
Finished goods 18,655 16,591
------- -------
Total inventories $51,754 $49,926
======= =======
</TABLE>
NOTE 4 - LEGAL CONTINGENCIES
On July 1, 1993 and July 30, 1993, individuals purporting to represent a class
of persons who purchased Acuson common stock during the period between October
24, 1990, and July 22, 1992, filed two separate, but related, actions against
the Company and twelve of its officers and one former officer in the Federal
District Court for the Northern District of California alleging that the
defendants' statements about the Company were incomplete or inaccurate, in
4
<PAGE>
violation of Federal securities laws. Plaintiffs seek damages in an unspecified
amount, as well as equitable relief or injunctive relief and attorneys' fees,
experts' fees and costs.
On October 27, 1994, the Company was sued in Ghent, Belgium, by Cormedica NV,
in connection with the Company's termination of its distributor relationship
with Cormedica. In the suit, Cormedica seeks indemnities and damages in the
amount of approximately $2.5 million.
The Company intends to defend each of these pending suits vigorously.
Management believes that the ultimate outcome of any of these matters is not
anticipated to have a material adverse effect on the results of operations in
the period in which resolved and will not have a material adverse effect on the
Company's financial condition.
On September 14, 1994, the Company filed an action in the United States
District Court for the Northern District of California against Advanced
Technology Laboratories, Inc. ("ATL") of Bothell, Washington. In the action,
the Company accused ATL of infringing U.S. Letters Patent No. 4,058,003 for
"Ultrasonic Electronic Lens with Reduced Delay Range," a patent licensed
exclusively to the Company. In addition, the Company sought a declaration that
it infringed no valid claim of four ATL patents: U.S. Letters Patent No.
4,543,960 for "Transesophageal Echocardiography Scanhead," No. 5,050,610 for
"Transesophageal Ultrasonic Scanhead," No. 5,207,225 for "Transesophageal
Ultrasonic Scanhead," or No. 5,226,422 for "Transesophageal Echocardiography
Scanner with Rotating Image Plane." The Company was informed that, in August
1994, ATL filed an action against the Company in the United States District
Court for the Western District of Washington, in which ATL sought a declaration
that it infringed no valid claim of U.S. Letters Patent No. 4,058,003. On
October 31, 1994, ATL amended that action and added claims accusing the Company
of infringing U.S. Patent Nos. 4,543,960; 5,050,610; 5,207,225; and 5,226,422.
The patent litigation between the Company and ATL was settled in May 1995. As
part of the settlement, the lawsuits between the companies have been dismissed
with prejudice and each party has received a license to certain of the other
party's patents.
NOTE 5 - COMMON STOCK
The stockholders approved the 1995 Employee Stock Purchase Plan and the 1995
Stock Incentive Plan at the Annual Meeting of the Stockholders on May 31, 1995.
The earnings per share were calculated using the modified treasury stock
method.
--------------------------------------------------------------------------------
5
<PAGE>
--------------------------------------------------------------------------------
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net sales for the quarter ended July 1, 1995, were $81.9 million compared to
$88.0 million in the quarter ended July 2, 1994. For the first six months of
1995, net sales were $169.9 million, representing a decrease of 6.1% compared to
the first six months of 1994. The decrease in revenue in both periods was
primarily because of a decrease in domestic product revenue. Worldwide service
revenue increased 8.9% to $20.1 million from $18.4 million in the quarter ended
July 2, 1994 and increased 7.7% to $39.4 million from $36.6 million for the
first six months of 1994. The increase was primarily due to growing service
contract revenue from a larger base of installed systems. International revenue
increased to $60.9 million during the first six months of 1995, totalling 35.8%
of the Company's sales as compared to 30.3% in the comparable 1994 six-month
period. During the first six months of 1995, competitive pricing pressures
decreased the average realized price.
The Company believes that the trends of health-care-provider consolidation,
medical cost containment and intense competitive pressures which existed in
1994, are continuing in 1995. The Company believes that future revenues may
continue to be impacted by these uncertainties, especially in the domestic
ultrasound market. Although portions of the international ultrasound markets
are experiencing some economic growth, it is uncertain whether this is temporary
or permanent.
The gross profit for the second quarter of 1995 was 54.5% of net sales,
compared to 56.3% in the second quarter of 1994. For the six months ended July
1, 1995, gross profit was 54.2% of net sales, compared to 56.7% in the first six
months of 1994. The percentage change was primarily a reflection of reduced
product prices and of lower production volume, partially offset by improvement
in service margins.
Selling, general and administrative costs were $27.2 million or 33.3% in the
quarter ended July 1, 1995, as compared to $25.6 million or 29.0% in the prior
year's period. For the six months ended July 1, 1995, selling, general and
administrative expenses were $54.5 million or 32.1% compared to $52.2 million or
28.9% in the first six months of 1994. Dollar spending increased primarily
internationally due to an increase in personnel and the devaluation of the
dollar.
Product development costs in the second quarter of 1995 totalled $17.0
million or 20.7% of net sales, compared to $18.5 million or 21.0% of net sales
in the second quarter of 1994. For the six months ended July 1, 1995, product
development costs were $35.0 million or 20.6% of net sales compared to $35.8
million or 19.8% of net sales in the first six months of 1994. Product
development spending declined as a result of planned reduction in research and
development programs.
The provision for income taxes was $0.4 million in the second quarter of 1995
versus $2.2 million in the second quarter of 1994. For the six months ended
July 1, 1995, the tax provision was $1.3 million versus $5.7 million in 1994.
The effective tax rate for the six months ended July 1, 1995 decreased to 29%
from 35% in the same period of the prior year, primarily due to the effects of
the current mix of income between domestic and international operations and
generally lower income levels.
6
<PAGE>
--------------------------------------------------------------------------------
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and short-term investments balance has decreased $5.8
million during the six months ended July 1, 1995 to $61.3 million. During the
six months ended July 1, 1995, the Company generated $16.3 million in cash from
operations, as compared to 1994 when operations generated $26.7 million in cash.
However, in the first quarter of 1994, the Company sold its lease portfolio
generating an additional $21.6 million in cash. The Company's investing and
financing activities for the six months ended July 1, 1995 have used $15.3
million, driven by the use of $15.7 million for share repurchases. Also,
included in the financing activities was $4.0 million raised through employee
participation in the Company's stock option and stock purchase plans, compared
to $2.6 million during the first six months of 1994.
In 1993, the Board of Directors authorized the repurchase of 4,000,000 shares
of common stock over an unspecified period of time. During the second quarter
the Company repurchased 875,800 shares. As of July 1, 1995, the Company had
repurchased a total of 1,693,500 shares toward the Board authorization and there
were 27,953,727 shares of Acuson common stock outstanding.
At July 1, 1995, the Company's working capital totalled $124.4 million. The
Company also has a revolving unsecured credit facility for $50 million which is
in effect through March 1997. No compensating balances are required and the
full amount is available under this credit facility. There were no draws on
this line of credit during the second quarter.
Based on its current operating plan, the Company believes that the liquidity
provided by cash generated from operations, its existing cash and short-term
investments, and the borrowing arrangements described above, will be sufficient
to meet the Company's operating and capital requirements for fiscal 1995.
--------------------------------------------------------------------------------
7
<PAGE>
--------------------------------------------------------------------------------
PART II
ITEM 1
LEGAL PROCEEDINGS
There has been no change, other than described in the following paragraph, in
the legal proceedings previously reported in the Company's Form 10-K for the
fiscal year ended December 31, 1994.
On September 14, 1994, the Company filed an action in the United States
District Court for the Northern District of California against Advanced
Technology Laboratories, Inc. ("ATL") of Bothell, Washington. In the action,
the Company accused ATL of infringing U.S. Letters Patent No. 4,058,003 for
"Ultrasonic Electronic Lens with Reduced Delay Range," a patent licensed
exclusively to the Company. In addition, the Company sought a declaration that
it infringed no valid claim of four ATL patents: U.S. Letters Patent No.
4,543,960 for "Transesophageal Echocardiography Scanhead," No. 5,050,610 for
"Transesophageal Ultrasonic Scanhead," No. 5,207,225 for "Transesophageal
Ultrasonic Scanhead," or No. 5,226,422 for "Transesophageal Echocardiography
Scanner with Rotating Image Plane." The Company was informed that, in August
1994, ATL filed an action against the Company in the United States District
Court for the Western District of Washington, in which ATL sought a declaration
that it infringed no valid claim of U.S. Letters Patent No. 4,058,003. On
October 31, 1994, ATL amended that action and added claims accusing the Company
of infringing U.S. Patent Nos. 4,543,960; 5,050,610; 5,207,225; and 5,226,422.
The patent litigation between the Company and ATL was settled in May 1995. As
part of the settlement, the lawsuits between the companies have been dismissed
with prejudice and each party has received a license to certain of the other
party's patents.
ITEM 4
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
a) The Annual Meeting of Stockholders of the Company was held on May 31, 1995.
c) The result of Stockholders' votes at the Annual Meeting were as follows:
(i) All nominees for director of the Company were
elected by the following vote:
Votes
Name Votes For Withheld
----------- ---------- ---------
Royce Diener 26,280,086 534,930
Robert J. Gallagher 26,032,218 782,798
Albert L. Greene 26,283,124 531,892
Karl H. Johannsmeier 26,293,631 521,385
Samuel H. Maslak 26,031,382 783,634
Alan C. Mendelson 26,293,081 521,935
(ii) Approval of 1995 Employee Stock Purchase Plan
Votes Broker
Votes For Against Abstain Non-Vote
---------- --------- --------- ---------
17,490,274 5,226,215 122,064 3,976,463
(iii) Approval of 1995 Stock Incentive Plan
Votes Broker
Votes For Against Abstain Non-Vote
---------- --------- --------- ---------
13,009,694 9,683,777 145,082 3,976,463
(iv) Ratification of appointment of Arthur Andersen
LLP as independent public accountants of the
Company
Votes Broker
Votes For Against Abstain Non-Vote
---------- --------- --------- ---------
26,680,226 89,322 45,468 0
--------------------------------------------------------------------------------
8
<PAGE>
--------------------------------------------------------------------------------
ITEM 6
EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
--------
3.1 Bylaws of Acuson Corporation, as amended
10.1 1995 Employee Stock Purchase Plan
10.2 1995 Stock Incentive Plan
27.1 Financial Data Schedule
b) Reports on Form 8-K
-------------------
The Company filed no reports on Form 8-K during the quarter ended July
1, 1995.
--------------------------------------------------------------------------------
9
<PAGE>
--------------------------------------------------------------------------------
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ACUSON CORPORATION
(Registrant)
August 15, 1995 By /s/ Stephen T. Johnson
--------------------------------------
Stephen T. Johnson
Vice President, Chief Financial
Officer and Treasurer
(duly authorized Officer and Principal
Financial and Accounting Officer)
10
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT INDEX
Sequentially
Page
Exhibit No. Number
----------- ------------
3.1 Bylaws of Acuson Corporation, as amended
10.1 1995 Employee Stock Purchase Plan
10.2 1995 Stock Incentive Plan
27.1 Financial Data Schedule
--------------------------------------------------------------------------------
<PAGE>
ACUSON CORPORATION EXHIBIT 3.1
--------------------------------------------------------------------------------
BYLAWS
OF
ACUSON CORPORATION
<PAGE>
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - Offices........................................................ 1
Section 1. Registered Office............................................ 1
Section 2. Other Offices................................................ 1
ARTICLE II - Corporate Seal................................................ 1
Section 3. Corporate Seal............................................... 1
ARTICLE III - Stockholders' Meetings....................................... 1
Section 4. Place of Meetings............................................ 1
Section 5. Annual Meeting............................................... 1
Section 6. Special Meetings............................................. 2
Section 7. Notice of Meetings........................................... 2
Section 8. Quorum....................................................... 2
Section 9. Adjournment and Notice of Adjourned
Meetings..................................................... 3
Section 10. Voting Rights................................................ 3
Section 11. Joint Owners of Stock........................................ 3
Section 12. List of Stockholders......................................... 4
Section 13. Action without Meeting....................................... 4
Section 14. Organization................................................. 4
ARTICLE IV - Directors..................................................... 5
Section 15. Number and Term of Office.................................... 5
Section 16. Powers....................................................... 5
Section 17. Vacancies.................................................... 5
Section 18. Resignation.................................................. 5
Section 19. Removal...................................................... 6
Section 20. Meetings..................................................... 6
(a) Annual Meetings................................................. 6
(b) Regular Meetings................................................ 6
(c) Special Meetings................................................ 6
(d) Telephone Meetings.............................................. 6
(e) Notice of Meetings.............................................. 7
(f) Waiver of Notice................................................ 7
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 21. Quorum and Voting........................................... 7
(a) Quorum.......................................................... 7
(b) Majority Vote................................................... 7
(c) Rights Agreement................................................ 7
Section 22. Action without Meeting...................................... 7
Section 23. Fees and Compensation....................................... 8
Section 24. Committees.................................................. 8
(a) Executive Committee............................................. 8
(b) Other Committees................................................ 8
(c) Term............................................................ 9
(d) Meetings........................................................ 9
Section 25. Organization................................................ 10
ARTICLE V - Officers....................................................... 10
Section 26. Officers Designated......................................... 10
Section 27. Tenure and Duties of Officers............................... 10
(a) General......................................................... 10
(b) Duties of Chairman of the Board of Directors.................... 9
(c) Duties of Chief Executive Officer............................... 9
(d) Duties of President............................................. 10
(e) Duties of Other Officers........................................ 11
(f) Duties of Secretary............................................. 11
(g) Duties of Chief Financial Officer............................... 11
Section 28. Resignations................................................ 12
Section 29. Removal..................................................... 12
ARTICLE VI - Execution of Corporate Instruments and
Voting of Securities Owned by the Corporation............... 12
Section 30. Execution of Corporate Instruments.......................... 12
Section 31. Voting of Securities Owned by the
Corporation............................................... 13
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE VII - Shares of Stock.............................................. 13
Section 32. Form and Execution of Certificates.......................... 13
Section 33. Lost Certificates........................................... 14
Section 34. Transfers................................................... 14
Section 35. Fixing Record Dates......................................... 14
Section 36. Registered Stockholders..................................... 14
ARTICLE VIII - Other Securities of the Corporation......................... 15
Section 37. Execution of Other Securities............................... 15
ARTICLE IX - Dividends..................................................... 15
Section 38. Declaration of Dividends.................................... 15
Section 39. Dividend Reserve............................................ 16
ARTICLE X - Fiscal Year.................................................... 16
Section 40. Fiscal Year................................................. 16
ARTICLE XI - Indemnification of Directors, Officers,
Employees and Other Agents.................................. 16
Section 41. Indemnification of Directors, Officers,
Employees and Other Agents................................ 16
(a) Directors and Executive Officers................................ 16
(b) Other Officers, Employees and Other Agents...................... 17
(c) Good Faith...................................................... 17
(d) Expenses........................................................ 17
(e) Enforcement..................................................... 18
(f) Non-Exclusivity of Rights....................................... 18
(g) Survival of Rights.............................................. 18
(h) Amendments...................................................... 19
(i) Savings Clause.................................................. 19
ARTICLE XII - Notices...................................................... 19
Section 42. Notices..................................................... 19
(a) Notice to Stockholders.......................................... 19
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
(b) Notice to Directors............................................. 19
(c) Address Unknown................................................. 19
(d) Affidavit of Mailing............................................ 19
(e) Time Notices Deemed Given....................................... 19
(f) Methods of Notice............................................... 20
(g) Failure to Receive Notice....................................... 20
(h) Notice to Person with Whom Communication Is
Unlawful...................................................... 20
ARTICLE XIII - Amendments.................................................. 20
Section 43. Amendments.................................................. 20
ARTICLE XIV - Loans of Officers and Others................................. 21
Section 44. Certain Corporate Loans and Guaranties...................... 21
</TABLE>
iv
<PAGE>
BYLAWS
ACUSON CORPORATION
(A Delaware corporation)
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the corporation
-----------------
in the State of Delaware shall be in the City of Dover, County of Kent. (Del.
Code Ann., tit. 8, (S) 131)
Section 2. Other Offices. The corporation shall also have and
-------------
maintain an office or principal place of business at such place as may be fixed
by the Board of Directors, and may also have offices at such other places, both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the corporation may require. (Del. Code
Ann., tit. 8, (S) 122(8))
ARTICLE II
Corporate Seal
Section 3. Corporate Seal. The corporate seal shall consist of a die
--------------
bearing the name of the corporation and the inscription, "Corporate Seal-
Delaware." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. (Del. Code Ann., tit. 8, (S)
122(3))
ARTICLE III
Stockholders' Meetings
Section 4. Place of Meetings. Meetings of the stockholders of the
-----------------
corporation shall be held at such place, either within or without the State of
Delaware, as may be designated from time to time by the Board of Directors, or,
if not so designated, then at the office of the corporation required to be
maintained pursuant to Section 2 hereof. (Del. Code Ann., tit. 8, (S) 211(a))
Section 5. Annual Meeting. The annual meeting of the stockholders of
--------------
the corporation shall be held on any date and time which may from time to time
be designated by the Board of Directors. At such annual meeting, directors shall
be elected and any other business may be transacted that may properly come
before the meeting. (Del. Code Ann., tit. 8, (S) 211(b))
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Section 6. Notice of Meetings. Except as otherwise provided by law or
------------------
the Certificate of Incorporation, written notice of each meeting of stockholders
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting to each stockholder entitled to vote at such meeting, such
notice to specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of stockholders
may be waived in writing, signed by the person entitled to notice thereof,
either before or after such meeting, and will be waived by any stockholder by
his attendance thereat in person or by proxy, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of such meeting shall be
bound by the proceedings of any such meeting in all respects as if due notice
thereof had been given. (Del. Code Ann., tit. 8, (S)(S) 222, 229)
Section 7. Quorum. At all meetings of stockholders, except where
------
otherwise provided by statute or by the Certificate of Incorporation, or by
these Bylaws, the presence, in person or by proxy duly authorized, of the
holders of a majority of the outstanding shares of stock entitled to vote shall
constitute a quorum for the transaction of business. Any shares, the voting of
which at said meeting has been enjoined, or which for any reason cannot be
lawfully voted at such meeting, shall not be counted to determine a quorum at
such meeting. In the absence of a quorum any meeting of stockholders may be
adjourned, from time to time, by vote of the holders of a majority of the shares
represented thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at which a quorum
is present, may continue to transact business until adjournment, notwithstanding
the withdrawal of enough stockholders to leave less than a quorum. Except as
otherwise provided by law, the Certificate of Incorporation or these Bylaws, all
action taken by the holders of a majority of the voting power represented at any
meeting at which a quorum is present shall be valid and binding upon the
corporation. (Del. Code Ann., tit. 8, (S) 216)
Section 8. Adjournment and Notice of Adjourned Meetings. Any meeting of
--------------------------------------------
stockholders, whether annual or special, may be adjourned from time to time by
the vote of a majority of the shares, the holders of which are present either in
person or by proxy. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and place thereof
are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. (Del. Code Ann., tit. 8,
(S) 222(c))
Section 9. Voting Rights. For the purpose of determining those
-------------
stockholders entitled to vote at any meeting of the stockholders, except as
otherwise provided by law, only persons in whose names shares stand on the stock
records of the corporation on the record date, as provided in Section 11 of
these Bylaws, shall be entitled to vote at any meeting of stockholders. Every
person
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entitled to vote or execute consents shall have the right to do so either in
person or by an agent or agents authorized by a written proxy executed by such
person or his duly authorized agent, which proxy shall be filed with the
Secretary at or before the meeting at which it is to be used. An agent so
appointed need not be a stockholder. No proxy shall be voted on after three (3)
years from its date of creation unless the proxy provides for a longer period.
All elections of Directors shall be by written ballot, unless otherwise provided
in the Certificate of Incorporation. (Del. Code Ann., tit. 8, (S)(S) 211(e),
212(b))
Section 10. Joint Owners of Stock. If shares or other securities
---------------------
having voting power stand of record in the names of two (2) or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
tenants by the entirety, or otherwise, or if two (2) or more persons have the
same fiduciary relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy of the
instrument or order appointing them or creating the relationship wherein it is
so provided, their acts with respect to voting shall have the following effect:
(a) if only one (1) votes, his act binds all; (b) if more than one (1) votes,
the act of the majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may vote the
securities in question proportionally, or may apply to the Delaware Court of
Chancery for relief as provided in the General Corporation Law of Delaware,
Section 217(b). If the instrument filed with the Secretary shows that any such
tenancy is held in unequal interests, a majority or even-split for the purpose
of this subsection (c) shall be a majority or even-split in interest. (Del. Code
Ann., tit. 8, (S) 217(b))
Section 11. List of Stockholders. The Secretary shall prepare and
--------------------
make, at least ten (10) days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at said meeting, arranged in
alphabetical order, showing the address of each stockholder and the number of
shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not
specified, at the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present. (Del. Code
Ann., tit. 8, (S) 219(a))
Section 12. Action without Meeting. Unless otherwise provided in the
----------------------
Certificate of Incorporation, any action required by statute to be taken at any
annual or special meeting of the stockholders, or any action which may be taken
at any annual or special meeting of the stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
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consent shall be given to those stockholders who have not consented in writing.
(Del. Code Ann., tit. 8, (S) 228(a), (c))
Section 13. Organization. At every meeting of stockholders, the
------------
Chairman of the Board, or, if the Chairman of the Board is absent, the Chief
Executive Officer or, if the Chief Executive Officer is absent, the most senior
officer present, or in the absence of any such officer, a chairman of the
meeting chosen by a majority in interest of the stockholders entitled to vote,
present in person or by proxy, shall act as chairman. The Secretary, or, in his
absence, an Assistant Secretary directed to do so by the Chairman of the Board,
shall act as secretary of the meeting.
ARTICLE IV
Directors
Section 14. Number and Term of Office. The authorized number of
-------------------------
directors of the corporation shall be fixed from time to time by the board of
directors either by a resolution or a bylaw duly adopted by the board of
directors. The number of directors presently authorized is six. Except as
provided in Section 16, the Directors shall be elected by the stockholders at
their annual meeting in each year and shall hold office until the next annual
meeting and until their successors shall be duly elected and qualified.
Directors need not be stockholders unless so required by the Certificate of
Incorporation. If for any cause, the Directors shall not have been elected at an
annual meeting, they may be elected as soon thereafter as convenient at a
special meeting of the stockholders called for that purpose in the manner
provided in these Bylaws. (Del. Code Ann., tit. 8, (S)(S) 141(b), 211(b), (c))
Section 15. Powers. The powers of the corporation shall be exercised,
------
its business conducted and its property controlled by the Board of Directors,
except as may be otherwise provided by statute or by the Certificate of
Incorporation. (Del. Code Ann., tit. 8, (S) 141(a))
Section 16. Vacancies. Unless otherwise provided in the Certificate of
---------
Incorporation, vacancies and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a majority of
the Directors then in office, although less than a quorum, or by a sole
remaining Director, and each Director so elected shall hold office for the
unexpired portion of the term of the Director whose place shall be vacant and
until his successor shall have been duly elected and qualified. A vacancy in
the Board of Directors shall be deemed to exist under this Section 16 in the
case of the death, removal or resignation of any Director, or if the
stockholders fail at any meeting of stockholders at which Directors are to be
elected (including any meeting referred to in Section 19 below) to elect the
number of Directors then constituting the whole Board of Directors. (Del. Code
Ann., tit. 8, (S) 223(a), (b))
Section 17. Resignation. Any Director may resign at any time by
-----------
delivering his written resignation to the Secretary, such resignation to specify
whether it will be effective at a particular
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time, upon receipt by the Secretary or at the pleasure of the Board of
Directors. If no such specification is made, it shall be deemed effective at the
pleasure of the Board of Directors. When one or more Directors shall resign from
the Board of Directors, effective at a future date, a majority of the Directors
then in office, including those who have so resigned, shall have power to fill
such vacancy or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective, and each Director so chosen shall hold
office for the unexpired portion of the term of the Director whose place shall
be vacated and until his successor shall have been duly elected and qualified.
(Del. Code Ann., tit. 8, (S)(S) 141(b), 223(d))
Section 18. Removal. At a special meeting of stockholders called for
-------
the purpose in the manner hereinabove provided, the Board of Directors, or any
individual Director, may be removed from office, with or without cause, and a
new Director or Directors elected by a vote of stockholders holding a majority
of the outstanding shares entitled to vote at an election of Directors. (Del.
Code Ann., tit. 8, (S) 141(k))
Section 19. Meetings.
--------
(a) Annual Meetings. The annual meeting of the Board of Directors
---------------
shall be held immediately after the annual meeting of stockholders and at the
place where such meeting is held. No notice of an annual meeting of the Board of
Directors shall be necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may lawfully come
before it.
(b) Regular Meetings. Except as hereinafter otherwise provided,
----------------
regular meetings of the Board of Directors shall be held in the office of the
corporation required to be maintained pursuant to Section 2 hereof. Unless
otherwise restricted by the Certificate of Incorporation, regular meetings of
the Board of Directors may also be held at any place within or without the State
of Delaware which has been designated by resolution of the Board of Directors or
the written consent of all Directors. (Del. Code Ann., tit. 8, (S) 141(g))
(c) Special Meetings. Unless otherwise restricted by the Certificate
----------------
of Incorporation, special meetings of the Board of Directors may be held at any
time and place within or without the State of Delaware whenever called by the
Chairman of the Board, the Chief Executive Officer, the President or a majority
of the Directors. (Del. Code Ann., tit. 8, (S) 141(g))
(d) Telephone Meetings. Any member of the Board of Directors, or of
------------------
any committee thereof, may participate in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
by such means shall constitute presence in person at such meeting. (Del. Code
Ann., tit. 8, (S) 141(i))
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(e) Notice of Meetings. Written notice of the time and place of all
------------------
regular and special meetings of the Board of Directors shall be given at least
one (1) day before the date of the meeting. Notice of any meeting may be waived
in writing at any time before or after the meeting and will be waived by any
Director by attendance thereat, except when the Director attends the meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. (Del. Code Ann., tit. 8, (S) 229)
(f) Waiver of Notice. The transaction of all business at any meeting
----------------
of the Board of Directors, or any committee thereof, however called or noticed,
or wherever held, shall be as valid as though had at a meeting duly held after
regular call and notice, if a quorum be present and if, either before or after
the meeting, each of the Directors not present shall sign a written waiver of
notice, or a consent to holding such meeting, or an approval of the minutes
thereof. All such waivers, consents or approvals shall be filed with the
corporate records or made a part of the minutes of the meeting. (Del. Code Ann.,
tit. 8, (S) 229)
Section 20. Quorum and Voting.
-----------------
(a) Quorum. Unless the Certificate of Incorporation requires a
------
greater number, a quorum of the Board of Directors shall consist of a majority
of the exact number of Directors fixed from time to time in accordance with
Section 14 of these Bylaws, but not less than one (l); provided, however, at any
meeting whether a quorum be present or otherwise, a majority of the Directors
present may adjourn from time to time until the time fixed for the next regular
meeting of the Board of Directors, without notice other than by announcement at
the meeting. (Del. Code Ann., tit. 8, (S) 141(b))
(b) Majority Vote. At each meeting of the Board of Directors at
-------------
which a quorum is present all questions and business shall be determined by a
vote of a majority of the Directors present, unless a different vote be required
by law, the Certificate of Incorporation or these Bylaws. (Del. Code Ann., tit.
8, (S) 141(b))
(c) Rights Agreement. Notwithstanding any of the foregoing, any
----------------
action stated in the Rights Agreement dated as of May 5, 1988 between this
Corporation and First National Bank of Boston, as such agreement may be amended
from time to time (the "Rights Agreement") to be taken by the Board of Directors
after a Person has become an Acquiring Person shall require the presence in
office of Continuing Directors and the concurrence of a majority of the
Continuing Directors. Capitalized terms in this paragraph shall have the
meanings indicated in the Rights Agreement.
Section 21. Action without Meeting. Unless otherwise restricted by
----------------------
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of
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<PAGE>
the Board of Directors or committee, as the case may be, consent thereto in
writing, and such writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee. (Del. Code Ann., tit. 8, (S) 141(f))
Section 22. Fees and Compensation. Directors shall not receive any
---------------------
stated salary for their services as Directors, but by resolution of the Board of
Directors a fixed fee, with or without expense of attendance, may be allowed for
attendance at each meeting and at each meeting of any committee of the Board of
Directors. Nothing herein contained shall be construed to preclude any Director
from serving the corporation in any other capacity as an officer, agent,
employee, or otherwise and receiving compensation therefor. (Del. Code Ann.,
tit. 8, (S) 141(h))
Section 23. Committees.
----------
(a) Executive Committee. The Board of Directors may by resolution
-------------------
passed by a majority of the whole Board of Directors, appoint an Executive
Committee to consist of one (l) or more members of the Board of Directors. The
Executive Committee, to the extent permitted by law and specifically granted by
the Board of Directors, shall have and may exercise when the Board of Directors
is not in session all powers of the Board of Directors in the management of the
business and affairs of the corporation, including, without limitation, the
power and authority to declare a dividend or to authorize the issuance of stock,
except such committee shall not have the power or authority to amend the
Certificate of Incorporation (except that the committee may, to the extent
authorized in the resolution or resolutions providing for the issuance of shares
of stock adopted by the Board of Directors as provided by law, fix any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for shares of any other class or classes or
any other series of the same or any other class or classes of stock of the
corporation), to adopt an agreement of merger or consolidation, to recommend to
the stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, to recommend to the stockholders a
dissolution of the corporation or a revocation of a dissolution or to amend
these Bylaws. (Del. Code Ann., tit. 8, (S) 141(c))
(b) Other Committees. The Board of Directors may, by resolution
----------------
passed by a majority of the whole Board of Directors, from time to time appoint
such other committees as may be permitted by law. Such other committees
appointed by the Board of Directors shall consist of one (1) or more members of
the Board of Directors, and shall have such powers and perform such duties as
may be prescribed by the resolution or resolutions creating such committees, but
in no event shall such committee have the powers denied to the Executive
Committee in these Bylaws. (Del. Code Ann., tit. 8, (S) 141(c))
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(c) Term. The members of all committees of the Board of Directors
----
shall serve a term coexistent with that of the Board of Directors which shall
have appointed such committee. The Board of Directors, subject to the provisions
of subsections (a) or (b) of this Section 24, may at any time increase or
decrease the number of members of a committee or terminate the existence of a
committee. The membership of a committee member shall terminate on the date of
his death or voluntary resignation. The Board of Directors may at any time for
any reason remove any individual committee member and the Board of Directors may
fill any committee vacancy created by death, resignation, removal or increase in
the number of members of the committee. The Board of Directors may designate one
or more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee, and, in addition,
in the absence or disqualification of any member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. (Del. Code Ann., tit. 8, (S) 141(c))
(d) Meetings. Unless the Board of Directors shall otherwise provide,
--------
regular meetings of the Executive Committee or any other committee appointed
pursuant to this Section 24 shall be held at such times and places as are
determined by the Board of Directors, or by any such committee, and when notice
thereof has been given to each member of such committee, no further notice of
such regular meetings need be given thereafter. Special meetings of any such
committee may be held at the principal office of the corporation required to be
maintained pursuant to Section 2 hereof, or at any place which has been
designated from time to time by resolution of such committee or by written
consent of all members thereof, and may be called by any Director who is a
member of such committee, upon written notice to the members of such committee
of the time and place of such special meeting given in the manner provided for
the giving of written notice to members of the Board of Directors of the time
and place of special meetings of the Board of Directors. Notice of any special
meeting of any committee may be waived in writing at any time before or after
the meeting and will be waived by any Director by attendance thereat, except
when the Director attends such special meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority of the
authorized number of members of any such committee shall constitute a quorum for
the transaction of business, and the act of a majority of those present at any
meeting at which a quorum is present shall be the act of such committee. (Del.
Code Ann., tit. 8, (S)(S) 141(c), 229)
Section 24. Organization. At every meeting of the Directors, the
------------
Chairman of the Board of Directors, or, if a Chairman has not been appointed or
is absent, the President or if the President is absent, the most senior Vice
President, or, in the absence of any such officer, a chairman of the meeting
chosen by a majority of the Directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed to do so by
the Chairman of the Board, shall act as secretary of the meeting.
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ARTICLE V
Officers
Section 25. Officers Designated. The officers of the corporation
-------------------
shall be the Chief Executive Officer, the President, the Chief Financial Officer
and the Secretary, all of whom shall be elected at the annual meeting of the
Board of Directors. The Board of Directors may also appoint a Chairman of the
Board of Directors and such other officers and agents with such powers and
duties as it shall deem necessary. The order of the seniority of the officers
other than the Chief Executive Officer and the President shall be in the order
of their nomination, unless otherwise determined by the Board of Directors. The
Board of Directors may assign such additional titles to one or more of the
officers as it shall deem appropriate. Any one person may hold any number of
offices of the corporation at any one time unless specifically prohibited
therefrom by law. The salaries and other compensation of the officers of the
corporation shall be fixed by or in the manner designated by the Board of
Directors. (Del. Code Ann., tit. 8, (S)(S) 122(5), 142(a), (b))
Section 26. Tenure and Duties of Officers.
-----------------------------
(a) General. All officers shall hold office at the pleasure of the
-------
Board of Directors and until their successors shall have been duly elected and
qualified, unless sooner removed. Any officer elected or appointed by the Board
of Directors may be removed at any time by the Board of Directors. If the office
of any officer becomes vacant for any reason, the vacancy may be filled by the
Board of Directors. (Del. Code Ann., tit. 8, (S) 141(b), (e))
(b) Duties of Chairman of the Board of Directors. The Chairman of
--------------------------------------------
the Board of Directors shall preside at all meetings of the stockholders and of
the Board of Directors. The Chairman of the Board of Directors shall perform
other duties commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall designate from
time to time. (Del. Code Ann., tit. 8, (S) 142(a))
(c) Duties of Chief Executive Officer. The Chief Executive Officer
---------------------------------
shall be the chief executive officer of the corporation and shall, subject to
the control of the Board of Directors, have general supervision, direction and
control of the business and officers of the corporation. The Chief Executive
Officer shall perform other duties and have other powers commonly incident to
his office, including the power to appoint a Treasurer and one or more Assistant
Treasurers with powers and duties commonly incident to such offices, and shall
also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. (Del. Code Ann., tit. 8,
(S) 142(a))
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(d) Duties of President. The President may assume and perform the
-------------------
duties of the Chief Executive Officer in the absence or disability of the Chief
Executive Officer or whenever the office of the Chief Executive Officer is
vacant. The President shall perform such other duties and have such other powers
as the Board of Directors or the Chief Executive Officer shall designate from
time to time. (Del. Code Ann., tit. 8, (S) 142(a))
(e) Duties of Other Officers. The other officers, in the order of
------------------------
their seniority, may assume and perform the duties of the Chief Executive
Officer in the absence or disability of the Chief Executive Officer and the
President or whenever the offices of the Chief Exective Officer and the
President are vacant. The officers shall perform other duties commonly incident
to their office and shall perform such other duties and have such other powers
as the Board of Directors or the Chief Executive Officer shall designate from
time to time. (Del. Code Ann., tit. 8, (S) 142(a))
(f) Duties of Secretary. The Secretary or Assistant Secretary shall
-------------------
attend all meetings of the stockholders and of the Board of Directors, and shall
record all acts and proceedings thereof in the minute book of the corporation.
The Secretary shall give notice in conformity with these Bylaws of all meetings
of the stockholders, and of all meetings of the Board of Directors and any
committee thereof requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his office and
shall also perform such other duties and have such other powers as the Board of
Directors shall designate from time to time. The Chief Executive Officer may
direct any Assistant Secretary to assume and perform the duties of the Secretary
in the absence or disability of the Secretary, and each Assistant Secretary
shall perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board of Directors
or the Chief Executive Officer shall designate from time to time. (Del. Code
Ann., tit. 8, (S) 142(a))
(g) Duties of Chief Financial Officer. The Chief Financial Officer
---------------------------------
shall keep or cause to be kept the books of account of the corporation in a
thorough and proper manner, and shall render statements of the financial affairs
of the corporation in such form and as often as required by the Board of
Directors or the Chief Executive Officer. The Chief Financial Officer, subject
to the order of the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall perform other
duties commonly incident to his office and shall also perform such other duties
and have such other powers as the Board of Directors or the Chief Executive
Officer shall designate from time to time. The Chief Executive Officer may
direct the Treasurer or any Assistant Treasurer to assume and perform the duties
of the Chief Financial Officer in the absence or disability of the Chief
Financial Officer. The Treasurer and each Assistant Treasurer shall perform
other duties commonly incident to their offices and shall also perform such
other duties and have such other powers as the Board of Directors or the Chief
Executive Officer shall designate from time to time. (Del. Code Ann., tit. 8,
(S) 142(a))
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Section 27. Resignations. Any officer may resign at any time by giving
------------
written notice to the Board of Directors or to the Chief Executive Officer or to
the President or to the Secretary. Any such resignation shall be effective when
received by the person or persons to whom such notice is given, unless a later
time is specified therein, in which event the resignation shall become effective
at such later time. Unless otherwise specified in such notice, the acceptance of
any such resignation shall not be necessary to make it effective. (Del. Code
Ann., tit. 8, (S) 142(b))
Section 28. Removal. Any officer may be removed from office at any
-------
time, either with or without cause, by the Chief Executive Officer or by the
vote or written consent of a majority of the Directors in office at the time, or
by any committee of superior officers upon whom such power of removal may have
been conferred by the Board of Directors.
ARTICLE VI
Execution of Corporate Instruments and
Voting of Securities Owned by the Corporation
Section 29. Execution of Corporate Instruments. The Board of Directors
----------------------------------
may, in its discretion, determine the method and designate the signatory officer
or officers, or other person or persons, to execute on behalf of the corporation
any corporate instrument or document, or to sign on behalf of the corporation
the corporate name without limitation, or to enter into contracts on behalf of
the corporation, except where otherwise provided by law or these Bylaws, and
such execution or signature shall be binding upon the corporation. (Del. Code
Ann., tit. 8, (S)(S) 103(a), 142(a), 158)
Unless otherwise specifically determined by the Board of Directors or
otherwise required by law, promissory notes, deeds of trust, mortgages and other
evidences of indebtedness of the corporation, and other corporate instruments or
documents requiring the corporate seal, and certificates of shares of stock
owned by the corporation, shall be executed, signed or endorsed by the Chairman
of the Board of Directors, the Chief Executive Officer, the President, the Chief
Financial Officer, the Secretary or any other officer. All other instruments and
documents requiring the corporate signature, but not requiring the corporate
seal, may be executed as aforesaid or in such other manner as may be directed by
the Board of Directors. (Del. Code Ann., tit. 8, (S)(S) 103(a) 142(a), 158)
All checks and drafts drawn on banks or other depositaries on funds to
the credit of the corporation or in special accounts of the corporation shall be
signed by such person or persons as the Board of Directors shall authorize so to
do. (Del. Code Ann., tit. 8, (S)(S) 103(a), 142(a), 158)
Section 30. Voting of Securities Owned by the Corporation. All stock
---------------------------------------------
and other securities of other corporations owned or held by the corporation for
itself, or for other parties in any capacity, shall be voted, and all proxies
with respect thereto shall be executed, by the person
11
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authorized so to do by resolution of the Board of Directors, or, in the absence
of such authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, the Secretary or any other officer. (Del. Code
Ann., tit. 8, (S) 123)
ARTICLE VII
Shares of Stock
Section 31. Form and Execution of Certificates. The shares of the
----------------------------------
corporation shall be represented by certificates, provided that the Board of
Directors of the corporation may provide by resolution or resolutions that some
or all of any or all classes or series of its stock shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock represented by certificates and upon request every holder
of uncertificated shares shall be entitled to have a certificate signed by, or
in the name of the corporation by the chairman or vice-chairman of the Board of
Directors, the Chief Executive Officer, the President or any other officer, and
by the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer of the corporation representing the number of shares registered in
certificate form. Any or all the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue. (Del. Code Ann.,
tit. 8, (S) 158)
Section 32. Lost Certificates. The corporation may issue a new
-----------------
certificate of stock or uncertificated shares in place of any certificate
theretofore issued by the corporation alleged to have been lost, stolen, or
destroyed, and the corporation may require the owner of such lost, stolen, or
destroyed certificate, or his legal representative, to give the corporation a
bond sufficient to indemnify it against any claim that may be made against the
corporation on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate or uncertificated shares.
(Del. Code Ann., tit. 8, (S) 167)
Section 33. Transfers. Transfers of record of shares of stock of the
---------
corporation shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a properly endorsed
certificate or certificates for a like number of shares. (Del. Code Ann., tit.
6, (S) 8-401(1))
Section 34. Fixing Record Dates. In order that the corporation may
-------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other
12
<PAGE>
lawful action, the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty (60) nor less than ten (10) days before the date of
such meeting, nor more than sixty (60) days prior to any other action. If no
record date is fixed: (a) the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; (b) the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and (c) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting. (Del. Code Ann., tit. 8, (S) 213)
Section 35. Registered Stockholders. The corporation shall be entitled
-----------------------
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws of Delaware.
(Del. Code Ann., tit. 8, (S)(S) 213(a), 219)
ARTICLE VIII
Other Securities of the Corporation
Section 36. Execution of Other Securities. All bonds, debentures and
-----------------------------
other corporate securities of the corporation, other than stock certificates,
may be signed by the Chairman of the Board of Directors, the Chief Executive
Officer, the President or any other officers, or such other person as may be
authorized by the Board of Directors, and the corporate seal impressed thereon
or a facsimile of such seal imprinted thereon and attested by the signature of
the Secretary or an Assistant Secretary, the Chief Financial Officer or the
Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual
signature of a trustee under an indenture pursuant to which such bond, debenture
or other corporate security shall be issued, the signatures of the persons
signing and attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures of such
persons. Interest coupons appertaining to any such bond, debenture or other
corporate security, authenticated by a trustee as aforesaid, shall be signed by
the Chief Financial Officer or by the Treasurer or an Assistant Treasurer of the
corporation or such other person as may be authorized by the Board of Directors,
or bear imprinted thereon the facsimile signature of such person. In case any
officer who shall have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on any
13
<PAGE>
such interest coupon, shall have ceased to be such officer before the bond,
debenture or other corporate security so signed or attested shall have been
delivered, such bond, debenture or other corporate security nevertheless may be
adopted by the corporation and issued and delivered as though the person who
signed the same or whose facsimile signature shall have been used thereon had
not ceased to be such officer of the corporation.
ARTICLE IX
Dividends
Section 37. Declaration of Dividends. Dividends upon the capital
------------------------
stock of the corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors pursuant to law
at any regular or special meeting. Dividends may be paid in cash, in property,
or in shares of the capital stock, subject to the provisions of the Certificate
of Incorporation. (Del. Code Ann., tit. 8, (S)(S) 170, 173)
Section 38. Dividend Reserve. Before payment of any dividend, there
----------------
may be set aside out of any funds of the corporation available for dividends
such sum or sums as the Board of Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the Board of Directors shall think
conducive to the interests of the corporation, and the Board of Directors may
modify or abolish any such reserve in the manner in which it was created. (Del.
Code Ann., tit. 8, (S) 171)
ARTICLE X
Fiscal Year
Section 39. Fiscal Year. Unless otherwise fixed by resolution of the
-----------
Board of Directors, the fiscal year of the corporation shall end December 31 of
each year.
ARTICLE XI
Indemnification of Directors, Officers,
Employees and Other Agents
Section 40. Indemnification of Directors, Officers, Employees and Other
-----------------------------------------------------------
Agents.
-------
(a) Directors and Executive Officers. The corporation shall
--------------------------------
indemnify its directors and executive officers to the full extent permitted by
the Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the corporation to provide broader indemnification rights than
14
<PAGE>
said Law permitted the corporation to provide prior to such amendment);
provided, however, that the corporation may limit the extent of such
indemnification by individual contracts with its directors and executive
officers; and, provided, further, that the corporation shall not be required to
indemnify any director or executive officer in connection with any proceeding
(or part thereof) initiated by such person or any proceeding by such person
against the corporation or its directors, officers, employees or other agents
unless (i) such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the board of directors of the corporation or
(iii) such indemnification is provided by the corporation, in its sole
discretion, pursuant to the powers vested in the corporation under the Delaware
General Corporation Law.
(b) Other Officers, Employees and Other Agents. The corporation
------------------------------------------
shall have power to indemnify its other officers, employees and other agents as
set forth in the Delaware General Corporation Law.
(c) Good Faith. For purposes of any determination under this By-Law,
----------
a director or executive officer shall be deemed to have acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or proceeding, to
have had no reasonable cause to believe that his conduct was unlawful, if his
action is based on the records or books of account of the corporation or another
enterprise, or on information supplied to him by the officers of the corporation
or another enterprise in the course of their duties, or on the advice of legal
counsel for the corporation or another enterprise or on information or records
given or reports made to the corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the corporation or another enterprise. The term "another
enterprise" as used in this paragraph (c) shall mean any other corporation or
any partnership, joint venture, trust or other enterprise, including any
employee benefit plan, of which such person is or was serving at the request of
the corporation as a director, officer, employee or other agent. The provisions
of this paragraph (c) shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth by the Delaware General Corporation Law.
(d) Expenses. The corporation shall advance, prior to the final
--------
disposition of any proceeding, promptly following request therefor, all expenses
incurred by any director or executive officer in connection with such proceeding
upon receipt of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not entitled
to be indemnified under this By-Law or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
paragraph (e) of this By-Law, no advance shall be made by the corporation if a
determination is reasonably and promptly made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to the
proceeding, or (2) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel in a
written
15
<PAGE>
opinion that, based upon the facts known to the decision making party at the
time such determination is made, such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best interests
of the corporation, or, with respect to any criminal proceeding, such person
believed or had reasonable cause to believe that his conduct was unlawful.
(e) Enforcement. Without the necessity of entering into an express
-----------
contract, all rights to indemnification and advances under this By-Law shall be
deemed to be contractual rights and be effective to the same extent and as if
provided for in a contract between the corporation and the director or executive
officer who serves in such capacity at any time while this By-Law and other
relevant provisions of the Delaware General Corporation Law and other applicable
law, if any, are in effect. Any right to indemnification or advances granted by
this By-Law to a director or executive officer shall be enforceable by or on
behalf of the person holding such right in any court of competent jurisdiction
if (i) the claim for indemnification or advances is denied, in whole or in part,
or (ii) no disposition of such claim is made within ninety (90) days of request
therefor. The claimant in such enforcement action, if successful in whole shall
be entitled to be paid also the expense of prosecuting his claim. It shall be a
defense to any such action that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the corporation. Neither the failure of the
corporation (including its board of directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the corporation
(including its board of directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that claimant has not
met the applicable standard of conduct.
(f) Non-Exclusivity of Rights. The rights conferred on any person by
-------------------------
this By-Law shall not be exclusive of any other right which such person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-Laws, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of its directors,
officers, employees or agents respecting indemnification and advances, as
provided by law.
(g) Survival of Rights. The rights conferred on any person by this
------------------
By-Law shall continue as to a person who has ceased to be a director, officer,
employee or other agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(h) Amendments. Any repeal or modification of this By-Law shall only
be prospective and shall not affect the rights under this By-Law in effect at
the time of the alleged
16
<PAGE>
occurrence of any action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Savings Clause. If this By-Law or any portion hereof shall be
--------------
invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each agent to the full extent permitted
any applicable portion of this By-Law that shall not have been invalidated, or
by any other applicable law.
ARTICLE XII
Notices
Section 41. Notices.
-------
(a) Notice to Stockholders. Whenever, under any provisions of these
----------------------
Bylaws, notice is required to be given to any stockholder, it shall be given in
writing, timely and duly deposited in the United States mail, postage prepaid,
and addressed to his last known post office address as shown by the stock record
of the corporation or its transfer agent. (Del. Code Ann., tit. 8, (S) 222)
(b) Notice to Directors. Any notice required to be given to any
-------------------
Director may be given by the method stated in subsection (a), or by telegram,
except that such notice other than one which is delivered personally shall be
sent to such address as such Director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known post office
address of such Director.
(c) Address Unknown. If no address of a stockholder or Director be
----------------
known, notice may be sent to the office of the corporation required to be
maintained pursuant to Section 2 hereof.
(d) Affidavit of Mailing. An affidavit of mailing, executed by a duly
--------------------
authorized and competent employee of the corporation or its transfer agent
appointed with respect to the class of stock affected, specifying the name and
address or the names and addresses of the stockholder or stockholders, or
Director or Directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall be conclusive evidence of the
statements therein contained. (Del. Code Ann., tit. 8, (S) 222)
(e) Time Notices Deemed Given. All notices given by mail, as above
-------------------------
provided, shall be deemed to have been given as at the time of mailing and all
notices given by telegram shall be deemed to have been given as at the sending
time recorded by the telegraph company transmitting the notices.
(f) Methods of Notice. It shall not be necessary that the same
-----------------
method of giving notice be employed in respect of all Directors, but one
permissible method may be employed in
17
<PAGE>
respect of any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(g) Failure to Receive Notice. The period or limitation of time
-------------------------
within which any stockholder may exercise any option or right, or enjoy any
privilege or benefit, or be required to act, or within which any Director may
exercise any power or right, or enjoy any privilege, pursuant to any notice sent
him in the manner above provided, shall not be affected or extended in any
manner by the failure of such stockholder or such Director to receive such
notice.
(h) Notice to Person with Whom Communication Is Unlawful. Whenever
----------------------------------------------------
notice is required to be given, under any provision of law or of the Certificate
of Incorporation or Bylaws of the corporation, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be
required and there shall be no duty to apply to any governmental authority or
agency for a license or permit to give such notice to such person. Any action or
meeting which shall be taken or held without notice to any such person with whom
communication is unlawful shall have the same force and effect as if such notice
had been duly given. In the event that the action taken by the corporation is
such as to require the filing of a certificate under any provision of the
Delaware General Corporation Law, the certificate shall state, if such is the
fact and if notice is required, that notice was given to all persons entitled to
receive notice except such persons with whom communication is unlawful. (Del.
Code Ann., tit. 8, (S) 230)
ARTICLE XIII
Amendments
Section 42. Amendments. These Bylaws may be repealed, altered or
----------
amended or new Bylaws adopted by the stockholders. The Board of Directors shall
also have the authority, if such authority is conferred upon the Board of
Directors by the Certificate of Incorporation, to repeal, alter or amend these
Bylaws or adopt new Bylaws (including, without limitation, the amendment of any
Bylaw setting forth the number of Directors who shall constitute the whole Board
of Directors) subject to the power of the stockholders to change or repeal such
Bylaws and provided that the Board of Directors shall not make or alter any
Bylaws fixing the qualifications, classifications, term of office or
compensation of Directors. (Del. Code Ann., tit. 8, (S)(S) 109(a), 122(6))
ARTICLE XIV
Loans of Officers and Others
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<PAGE>
Section 43. Certain Corporate Loans and Guaranties. If the corporation
--------------------------------------
has outstanding shares held of record by 100 or more persons on the date of
approval by the Board of Directors, the corporation may make loans of money or
property to, or guarantee the obligations of, any officer of the corporation or
its parent or any subsidiary, whether or not a director of the corporation or
its parent or any subsidiary, or adopt an employee benefit plan or plans
authorizing such loans or guaranties, upon the approval of the Board of
Directors alone, by a vote sufficient without counting the vote of any
interested director or directors, if the Board of Directors determines that such
a loan or guaranty or plan may reasonably be expected to benefit the
corporation.
19
<PAGE>
ACUSON CORPORATION EXHIBIT 10.1
--------------------------------------------------------------------------------
ACUSON CORPORATION
1995 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
The following constitute the provisions of the 1995 Employee Stock
Purchase Plan of Acuson Corporation.
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. The Company, by
means of the Plan, seeks to retain the services of its employees, to secure and
retain the services of new employees, and to provide incentives for such persons
to exert maximum efforts for the success of the Company by providing eligible
employees with an opportunity to participate as shareholders in the Company's
future growth. It is the intention of the Company to have the Plan qualify as
an "Employee Stock Purchase Plan" under Section 423 of the Code. Accordingly,
the provisions of the Plan, and the discretion granted to the Plan Administrator
hereunder shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
2. Definitions.
-----------
(a) "Applicable Discount" shall mean, with respect to any given
-------------------
Purchase Period, the discount fixed by the Plan Administrator pursuant to
paragraph 4(b) with respect to such Purchase Period, which discount shall be no
less than 0% and no more than 15% (in whole percentages).
(b) "Board" shall mean the Board of Directors of the Company.
-----
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(d) "Common Stock" shall mean the common stock, par value $.0001 per
------------
share, of the Company.
(e) "Company" shall mean Acuson Corporation, a Delaware corporation.
-------
(f) "Compensation" shall mean, with respect to any given Purchase
------------
Period, the components of each Participant's total compensation that will be
treated as compensation for purposes of the Plan during such Purchase Period as
determined by the Plan Administrator pursuant to paragraph 4(b).
(g) "Designated Subsidiaries" shall mean the Subsidiaries which have
-----------------------
been designated by the Plan Administrator from time to time in its sole
discretion as eligible to participate in the Plan.
(h) "Employee" shall mean any individual who is regularly engaged in
--------
the rendition of personal services to the Company or a Designated Subsidiary for
earnings considered wages under Section 3121(a) of the Code. For purposes of the
Plan, the employment relationship shall be treated as continuing intact while
the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual's right to
reemployment is not guaranteed either by statute or by contract, the employment
relationship will be deemed to have terminated on the 91st day of such leave.
1
<PAGE>
(i) "Enrollment Date" shall mean the first day of each Purchase
---------------
Period.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
------------
amended.
(k) "Exercise Date" shall mean, with respect to any given Purchase
-------------
Period, the date or dates fixed by the Plan Administrator with respect to such
Purchase Period pursuant to paragraph 4(b).
(l) "Fair Market Value" shall mean, as of any date, the value of
-----------------
Common Stock determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the
National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market
Value shall be the closing sales price for such stock (or the closing
bid, if no sales were reported), as quoted on such exchange (or the
exchange with the greatest volume of trading in the Common Stock) or
system on the day of such determination, if such day is a Trading Day,
or the previous Trading Day, if such day is not a Trading Day, as
reported in The Wall Street Journal or such other source as the Board
-----------------------
deems reliable; or
(2) If the Common Stock is quoted on the NASDAQ system (but not on
the National Market system thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high and low asked
prices for the Common Stock on the day of such determination, if such
day is a Trading Day, or the previous Trading Day, if such day is not
a Trading Day, as reported in The Wall Street Journal or such other
-----------------------
source as the Board deems reliable; or
(3) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the
Board.
(m) "Participant" means an eligible Employee of the Company or
-----------
Designated Subsidiary who is actively participating in the Plan.
(n) "Plan" shall mean this Employee Stock Purchase Plan.
----
(o) "Plan Administrator" shall mean either the Board or a committee of
------------------
the Board that is responsible for the administration of the Plan.
(p) "Purchase Period" shall mean a purchase period established by the
---------------
Plan Administrator pursuant to paragraph 4 hereof.
(q) "Purchase Price" shall mean, with respect to any given Exercise
Date, the amount determined by applying the Applicable Discount to the lower of
(i) the Fair Market Value of the Common Stock as of such Exercise Date and (ii)
the Fair Market Value of the Common Stock as of the first date of the Purchase
Period in which such Exercise Date falls; provided, however, that the Plan
Administrator may, in its discretion, determine that the Purchase Price for all
Exercise Dates within a given Purchase Period shall be the amount determined by
applying the Applicable Discount to the Fair Market Value of the Common Stock as
of the first date of such Purchase Period, but only if the Plan Administrator
does so upon establishing such Purchase Period.
(r) "Replacement Purchase Period" shall mean a replacement purchase
---------------------------
period established pursuant to paragraph 4(e) hereof.
2
<PAGE>
(s) "Reserves" shall mean the number of shares of Common Stock
--------
covered by all purchase rights granted under the Plan which have not yet been
exercised and the number of shares of Common Stock which have been authorized
for issuance under the Plan but as to which purchase rights have not yet been
granted (or as to which purchase rights have previously been granted but have
expired unexercised).
(t) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary, except that as used in paragraph
18(b), "Subsidiary" shall have the meaning set forth in paragraph 18(c).
(u) "Trading Day" shall mean a day on which The New York Stock
-----------
Exchange is open for trading.
3. Eligibility.
-----------
(a) Any Employee who has been continuously employed by the Company
prior to the applicable Enrollment Date for such minimum period of time (not to
exceed two years), if any, as the Plan Administrator may require and who is
employed by the Company on such Enrollment Date shall be eligible to participate
in the Plan for the Purchase Period commencing with such Enrollment Date.
Members of the Board who are eligible Employees are permitted to participate in
the Plan except to the extent limited by paragraph 13(b).
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted purchase rights under the Plan (i) if, immediately
after the grant, such Employee (taking into account stock owned by any other
person whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own stock and/or hold outstanding options or rights to
purchase stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Subsidiary, or
(ii) which permits his/her rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the
Fair Market Value of the shares at the time such purchase right is granted) for
each calendar year in which such purchase right is outstanding at any time. The
determination of the accrual of the right to purchase stock shall be made in
accordance with Section 423(b)(8) of the Code and the regulations thereunder.
(c) Notwithstanding paragraph (a) above, the Plan Administrator shall
have the discretion to exclude any one or more of the following categories of
Employees from participation in the Plan: (i) Employees whose customary
employment is 20 hours or less per week; (ii) Employees whose customary
employment is five months or less in any calendar year; (iii) Employees who have
been employed by the Company or any Designated Subsidiary for less than two
years; and (iv) highly compensated Employees (within the meaning of Section
414(q) of the Code).
4. Purchase Periods.
----------------
(a) The Plan shall be implemented by Purchase Periods until such time
as (i) the maximum number of shares of Common Stock available for issuance under
the Plan shall have been purchased or (ii) the Plan shall have terminated in
accordance with paragraph 19 or paragraph 24 hereof. Each Purchase Period shall
be of such duration (not to exceed twenty-seven months per Purchase Period) as
determined by the Plan Administrator upon establishment of such Purchase Period.
Purchase Periods will commence on such dates as may be determined by the Plan
Administrator during the period in which the Plan remains in existence. The Plan
Administrator shall have the discretion to establish overlapping Purchase
Periods.
3
<PAGE>
(b) Upon establishing each Purchase Period, the Plan Administrator
shall fix (i) one or more Exercise Dates with respect to such Purchase Period,
one of which shall be on the last day of such Purchase Period, (ii) the
Applicable Discount with respect to such Purchase Period, (iii) the Compensation
with respect to such Purchase Period and (iv) the maximum number of shares that
may be purchased by any Participant on any Exercise Date during such Purchase
Period (the "Per-Participant Limit"). In addition, the Plan Administrator may,
in its discretion, fix a maximum number of shares of Common Stock that may be
purchased by all Participants in the aggregate during such Purchase Period
and/or on any given Exercise Date therein. Once fixed, the Exercise Date or
Dates, the Applicable Discount, the Compensation, the Per-Participant Limit and
any aggregate share purchase limits with respect to a given Purchase Period may
not be changed, except upon the occurrence of a Corporate Transaction as
provided in paragraph 18(b).
(c) A Participant shall be granted a separate purchase right for each
Purchase Period in which he/she participates. The purchase right shall be
granted on the first day of the Purchase Period and shall be automatically
exercised in successive installments on each Exercise Date during the Purchase
Period.
(d) If the Plan Administrator establishes overlapping Purchase
Periods, the Plan Administrator may, in its discretion, permit Participants to
participate in more than one Purchase Period at a time.
(e) If on the Trading Day following any Exercise Date in a Purchase
Period the Fair Market Value of the Common Stock is less than the Fair Market
Value of the Common Stock on the first day of such Purchase Period (after taking
into account any adjustment during the Purchase Period pursuant to paragraph
18(a)), the Plan Administrator may, in its discretion, provide that the Purchase
Period shall be terminated and that all Participants therein shall be enrolled
in a new Purchase Period, other than any such Participants who are not eligible
to participate in the Plan on that date or who have elected to terminate
participation in the Plan. Any such new Purchase Period (a "Replacement
Purchase Period") shall be established by the Plan Administrator pursuant to
paragraph 4(a) and shall commence on the date that such previous Purchase Period
is terminated. The Plan Administrator shall fix one or more Exercise Dates, the
Applicable Discount, the Compensation and the Per-Participant Limit, and may fix
aggregate share purchase limits, pursuant to paragraph 4(b) with respect to such
Replacement Purchase Period.
(f) Except as specifically provided herein, the acquisition of Common
Stock through participation in the Plan for any Purchase Period shall neither
limit nor require the acquisition of Common Stock by a Participant in any
subsequent Purchase Period.
5. Participation.
-------------
(a) An eligible Employee may become a Participant in the Plan by
completing a subscription agreement authorizing payroll deductions in a form
designated by the Company and filing it with the Company's payroll office prior
to the Enrollment Date for the Purchase Period in which such participation will
commence in accordance with the filing deadline established by the Company.
Such agreement will remain effective under subsequent Purchase Periods unless
and until such Employee files a new agreement or terminates his/her
participation in the Plan in accordance with paragraph 6(c), provided that such
Employee must file a new subscription agreement to enroll in any Purchase Period
that overlaps with a Purchase Period in which such Employee has previously
enrolled.
(b) Payroll deductions for a Participant shall commence with the first
payroll following the Enrollment Date and shall end on the last complete payroll
period during the Purchase Period, unless sooner terminated by the Participant
as provided in paragraph 10.
6. Payroll Deductions.
------------------
4
<PAGE>
(a) At the time a Participant files his/her subscription agreement,
he/she shall elect to have payroll deductions made on each pay day during the
Purchase Period in an amount from three to fifteen percent (in whole percentages
only) of the Compensation which he/she receives on each such pay day.
(b) All payroll deductions made for a Participant shall be credited to
his/her account under the Plan. A Participant may not make any additional
payments into such account.
(c) A Participant may discontinue his/her participation in the Plan as
provided in paragraph 10. A Participant's subscription agreement shall remain
in effect for successive Purchase Periods unless and until such Participant
files a new agreement or terminates his/her participation in the Plan as
provided in paragraph 10. The Plan Administrator may, in its discretion, permit
Participants to amend their subscription agreements to increase and/or decrease
the rate of their payroll deductions during any given Purchase Period.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) herein, a Participant's
payroll deductions may be decreased to 0% at such time during any Purchase
Period which is scheduled to end during the current calendar year (the "Current
Purchase Period") that the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in any other Purchase Period
that ended or that will end during that calendar year plus all payroll
deductions accumulated with respect to the Current Purchase Period equal the
maximum amount permitted under Section 423 of the Code. Payroll deductions shall
recommence at the rate provided in such Participant's subscription agreement at
the beginning of the first Purchase Period which is scheduled to end in the
following calendar year, unless terminated by the Participant as provided in
paragraph 10.
7. Grant of Purchase Right. On the first day of each Purchase
-----------------------
Period, each Participant in such Purchase Period shall be granted the right to
purchase on each Exercise Date of such Purchase Period (at the applicable
Purchase Price) up to a number of shares of Common Stock determined by dividing
such Participant's payroll deductions accumulated prior to such Exercise Date
and retained in the Participant's account as of the Exercise Date by the
applicable Purchase Price; provided that such purchase shall be subject to the
limitations set forth in paragraphs 3(b), 4(b), 6(d), 8(b) and 12(a) hereof.
Exercise of the purchase right shall occur as provided in paragraph 8, unless
the Participant has withdrawn from the Plan pursuant to paragraph 10, and the
purchase right, to the extent not exercised, shall expire on the last day of the
Purchase Period.
8. Exercise of Purchase Right.
--------------------------
(a) Unless a Participant withdraws from the Plan as provided in
paragraph 10 below, his/her right to purchase shares will be exercised
automatically on each Exercise Date, and the maximum number of full shares
subject to such right shall be purchased for such Participant at the applicable
Purchase Price with the accumulated payroll deductions in his/her account. No
fractional shares will be purchased; any payroll deductions accumulated in a
Participant's account which are not sufficient to purchase a full share shall be
carried over to the next Exercise Date under the Plan or returned to the
Participant, provided that, if the next Exercise Date falls within a new
Purchase Period, such payroll deductions shall be carried over to such Exercise
Date only if the Participant participates in such new Purchase Period. Any
amount remaining in a Participant's account at the close of any Exercise Date
caused by anything other than a surplus due to fractional shares (including the
accumulated payroll deductions in any Participant's account as of any Exercise
Date that are in excess of the amount needed to purchase the maximum number of
full shares which may be purchased by such Participant based on the limitations
in paragraphs 3(b), 4(b), 6(d), 8(b) and 12(a) hereof) shall be refunded to the
Participant in cash as soon as practicable and shall not be carried over to the
next Exercise Date. During a Participant's lifetime, a Participant's right to
purchase shares hereunder is exercisable only by him/her.
5
<PAGE>
(b) If, on a given Exercise Date, the aggregate purchase of shares
upon the exercise in full of all purchase rights would exceed the aggregate
share purchase limit, if any, fixed by the Plan Administrator pursuant to
paragraph 4(b) with respect to the applicable Purchase Period, the Company shall
make a pro-rata allocation of the available shares in as nearly uniform a manner
as shall be practicable and as it shall determine to be equitable.
9. Delivery. The Company shall arrange the delivery to each
--------
Participant of a certificate representing the shares of Common Stock purchased
upon exercise of his/her purchase right based upon instructions provided to the
Company by the Participant from time to time, but subject to paragraph 12(c).
10. Withdrawal; Termination of Employment.
-------------------------------------
(a) A Participant may withdraw all but not less than all the payroll
deductions credited to his/her account and not yet used to exercise his/her
purchase right under the Plan at any time by giving written notice to the
Company in a form designated by the Company. All of the Participant's payroll
deductions credited to his/her account will be paid to such Participant as soon
as practicable after receipt of such notice of withdrawal. Upon receipt of such
notice of withdrawal, the Participant's purchase right for the Purchase Period
will be automatically terminated, and no further payroll deductions for the
purchase of shares will be made during the Purchase Period. If a Participant
withdraws from a Purchase Period, payroll deductions will not resume at the
beginning of the succeeding Purchase Period unless the Participant delivers to
the Company a new subscription agreement.
(b) Upon a Participant's ceasing to be an eligible Employee for any
reason other than retirement, the payroll deductions credited to such
Participant's account during the Purchase Period but not yet used to exercise
his/her purchase right will be returned to such Participant or, in the case of
his/her death, to the person or persons entitled thereto under paragraph 14, and
such Participant's purchase right will be automatically terminated.
(c) Upon a Participant's ceasing to be an eligible Employee by reason
of his/her retirement, the provisions of this paragraph 10(c) shall apply. If
such retirement occurs three months or less prior to the next Exercise Date, the
retired Participant shall have the option of withdrawing from the Plan as
provided in paragraph 10(a), or taking no action and thereby continuing
participation in the Purchase Period in which he/she was participating at the
time of retirement. If retirement occurs more than three months prior to the
next Exercise Date, the payroll deductions credited to such retired
Participant's account during the Purchase Period but not yet used to exercise
his/her purchase right will be returned to such Participant and such
Participant's purchase right will be automatically terminated. The Plan
Administrator shall have the discretion to shorten or lengthen such period from
time to time during the term of the Plan, but such period shall in no event
exceed three months.
11. Interest. No interest shall accrue on the payroll deductions of
--------
a Participant in the Plan.
12. Stock.
-----
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 2,000,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 18. If on a given Exercise Date the aggregate number of shares
with respect to which purchase rights are to be exercised exceeds the number of
shares then available under the Plan, the Company shall make a pro rata
allocation of the shares remaining available for purchase in as uniform a manner
as shall be practicable and as it shall determine to be equitable. If any
purchase right granted under the Plan shall terminate for any reason without
having
6
<PAGE>
been exercised, the Common Stock not purchased under such right shall
again become available under the Plan.
(b) A Participant will have no interest or voting right in shares
covered by his/her purchase right until such shares are actually purchased on
the Participant's behalf in accordance with the applicable provisions of the
Plan. No adjustment shall be made for dividends, distributions or other rights
for which the record date is prior to the date of such purchase.
(c) Shares to be delivered to a Participant under the Plan will be
registered in the name of the Participant, in the name of the Participant and
his/her spouse, in the name of the stockbroker at which the Participant
maintains an account in accordance with instructions provided to the Company by
the Participant pursuant to paragraph 9 or in the name of any permitted
transferee of the Participant pursuant to paragraph 15.
(d) The Common Stock subject to the Plan may be unissued shares,
treasury shares or shares purchased by the Company on the open market or
otherwise.
13. Administration.
--------------
(a) The Plan shall be administered by the Plan Administrator, which
shall have full and exclusive discretionary authority to construe, interpret and
apply the terms of the Plan, to determine eligibility and to adjudicate all
disputed claims filed under the Plan. Every finding, decision and determination
made by the Plan Administrator shall, to the full extent permitted by law, be
final and binding upon all parties.
(b) Notwithstanding the provisions of paragraph 13(a), in the event
that Rule 16b-3 promulgated under the Exchange Act or any successor provision
("Rule 16b-3") provides specific requirements for the administrators of plans of
this type, the Plan shall be only administered by such a body and in such a
manner as shall comply with the applicable requirements of Rule 16b-3. Unless
permitted by Rule 16b-3, no discretion concerning decisions regarding the Plan
shall be afforded to any committee or person that is not "disinterested" as that
term is used in Rule 16b-3.
14. Designation of Beneficiary.
--------------------------
(a) Participants may file a written designation of a beneficiary, on a
form designated by the Company, who is to receive any shares and cash, if any,
from the Participant's account under the Plan in the event of such Participant's
death. If a Participant is married and the designated beneficiary is not the
spouse, spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the Participant
(and his/her spouse, if any) at any time by written notice. In the event of the
death of a Participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such Participant's death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the Participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.
15. Transferability. Neither payroll deductions credited to a
---------------
Participant's account nor any rights with regard to the exercise of a purchase
right or to receive shares under the Plan may be assigned, transferred, pledged
or otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 14 hereof) by the Participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from a Purchase Period in accordance with paragraph 10.
7
<PAGE>
16. Use of Funds. All payroll deductions received or held by the
------------
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each
-------
Participant in the Plan. Such accounts will be unfunded. Statements of account
will be given to Participants as soon as practicable following each Exercise
Date, which statements will set forth the amounts of payroll deductions, the
Purchase Price, the number of shares purchased and the remaining cash balance,
if any.
18. Adjustments Upon Changes in Capitalization or Ownership.
-------------------------------------------------------
(a) Subject to any required action by the shareholders of the Company,
the Reserves, as well as the Purchase Price with respect to each purchase right
under the Plan that has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Plan
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to purchase
rights granted under the Plan. The Plan Administrator may, if it so determines
in the exercise of its sole discretion, make provision for adjusting the
Reserves, as well as the price per share of Common Stock covered by each
outstanding purchase right, in the event the Company effects one or more
reorganizations, recapitalizations, rights offerings or other increases or
reductions of shares of its outstanding Common Stock.
(b) In the event that any Corporate Transaction occurs or becomes
imminent, the Board may determine, in the exercise of its sole discretion, to
shorten any Purchase Period or Purchase Periods then in progress by setting a
new Exercise Date (the "New Exercise Date"). If it elects to fix a New Exercise
Date, the Board also may, in its discretion, change the Applicable Discount, the
Compensation, the Per-Participant Limit and any aggregate share purchase limits
previously established with respect to the shortened Purchase Period or Periods.
If the Board shortens any such Purchase Period, the Board shall notify each
Participant in writing that the Exercise Date for his/her purchase right has
been changed to the New Exercise Date and that his/her purchase right will be
exercised automatically on the New Exercise Date, unless prior to such date
he/she has withdrawn from such Purchase Period as provided in paragraph 10.
Such written notice shall also include a description of any changes made to the
Applicable Discount, the Compensation, the Per-Participant Limit and any
aggregate share purchase limits made pursuant to this paragraph 18(b).
(c) For purposes of paragraph 18(b), the following definitions shall
apply:
"Acquiring Person" means any Person who or which, together with all
----------------
Affiliates and Associates of such Person, shall be the Beneficial
Owner of 20% or more of the Common Stock then outstanding, but shall
not include the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Stock for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an
Acquiring Person as the result of an acquisition of Common Stock by
the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Stock of the Company then
outstanding; provided, however, that if a Person becomes the
-----------------
Beneficial Owner of 20% or more of the Common Stock of the
8
<PAGE>
Company then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Stock of the Company, then
such Person shall be deemed to be an Acquiring Person.
"Affiliate" and "Associate" have the respective meanings ascribed to
--------- ---------
such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
"Approved Transaction" means any transaction that occurs at a time
--------------------
when Continuing Directors are in office and a majority of the
Continuing Directors then in office has determined that the
transaction is in the best interest of the Company and its
stockholders.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
----------------
to "beneficially own" any securities: (i) which such Person or any of
such Person's Affiliates or Associates beneficially owns, directly or
indirectly; (ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
-----------------
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
-----------------
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to
such person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or (iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to clause (ii)(B) of this
definition) or disposing of any securities of the Company; provided
further, however, that nothing in this paragraph 18 shall cause a
Person to be the Beneficial Owner of, or to beneficially own, any
securities (x) acquired through such Person's participation in the
business of underwriting securities in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition or (y) which such Person has reported on Schedule 13G
under the Exchange Act and has not ceased to be eligible to report on
Schedule 13G pursuant to Rule 13d-1 under the Exchange Act.
"Common Stock" has the meaning set forth in paragraph 2(d).
------------
"Corporate Transaction" means any of the following events: (a) a Share
---------------------
Acquisition Date; (b) a dissolution or liquidation of the Company; (c)
a merger or consolidation in which the Company is not the surviving
corporation; (d) a merger in which the Company is the surviving
corporation but the shares of Common Stock outstanding immediately
prior to the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash or otherwise; (e)
any capital reorganization in which more than 50% of the shares of the
Company entitled to vote are exchanged; and (f) any other event that
the Board deems, in its discretion, to constitute a change in control
of the Company.
"Continuing Director" means (i) any member of the Board, while such
-------------------
Person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, and
9
<PAGE>
who was, if applicable, a member of the Board prior to the time that
any Person becomes an Acquiring Person, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is a
member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of Continuing Directors.
"Exchange Act" has the meaning set forth in paragraph 2(j).
------------
"Person" means any individual, firm, partnership, corporation or other
------
entity, and shall include any successor (by merger or otherwise) of
such entity.
"Rights" means the rights granted to the Company's shareholders to
------
purchase additional Common Stock under certain circumstances, as
described in that certain Rights Agreement, dated as of May 5, 1988,
by and between the Company and The First National Bank of Boston, as
rights agent.
"Share Acquisition Date" means the first date of public announcement
----------------------
by the Company or an Acquiring Person that a Person has become an
Acquiring Person; provided, however, that no "Share Acquisition Date"
-----------------
shall occur as a result of any Person becoming an Acquiring Person
pursuant to an Approved Transaction.
"Subsidiary" of any Person means any corporation or other entity of
----------
which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person,
or which is otherwise controlled by such Person.
19. Amendment or Termination.
------------------------
(a) The Board may at any time and for any reason terminate or amend
the Plan. Except as provided in paragraph 18 and paragraph 19(b), no such
termination can affect purchase rights previously granted, provided that a
Purchase Period may be terminated by the Board on any Exercise Date if the Board
determines that the termination of the Plan is in the best interests of the
Company and its shareholders. Except as provided in paragraph 18, no amendment
may make any change in any purchase rights theretofore granted which adversely
affects the rights of any Participant. To the extent necessary to comply with
Rule 16b-3 or Section 423 of the Code (or any successor rule or provision or any
other applicable law or regulation), the Company shall obtain shareholder
approval of any amendment to the Plan in such a manner and to such a degree as
required.
(b) Without shareholder consent and without regard to whether any
Participant rights may be considered to have been "adversely affected," the Plan
Administrator shall be entitled to change Purchase Periods, limit the frequency
and/or number of changes in the amount withheld during Purchase Periods,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a Participant in order to adjust for delays or mistakes in the Company's
processing of properly completed withholding elections, establish reasonable
waiting and adjustment periods and/or accounting and crediting procedures to
ensure that amounts applied toward the purchase of Common Stock for each
Participant properly correspond with amounts withheld from the Participant's
Compensation, and establish such other limitations or procedures as the Plan
Administrator determines in its sole discretion are advisable and that are
consistent with the Plan.
20. Notices. All notices or other communications by a Participant to
-------
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.
10
<PAGE>
21. Conditions Upon Issuance of Shares. Shares of Common Stock shall
----------------------------------
not be issued with respect to a purchase right unless the exercise of such
purchase right and the issuance and delivery of such shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange or any automated inter-dealer quotation
system maintained by the National Association of Securities Dealers, Inc. upon
which the Common Stock may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance. As a
condition to the exercise of a purchase right, the Company may require the
person exercising such purchase right to represent and warrant at the time of
any such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
22. Additional Restrictions of Rule 16b-3. The terms and conditions
-------------------------------------
of purchase rights granted hereunder to, and the purchase of shares by, persons
subject to Section 16 of the Exchange Act shall comply with the applicable
provisions of Rule 16b-3. This Plan shall be deemed to contain, such purchase
rights shall contain, and the shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by
Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange
Act with respect to Plan transactions.
23. Effective Date. The Plan shall become effective on the date it
--------------
is approved by the stockholders (the "Effective Date").
24. Term of Plan. The Plan shall continue in effect for a term of
------------
ten (10) years after the Effective Date unless sooner terminated under paragraph
19. No rights may be granted under the Plan following its termination.
25. Shareholder Approval. Continuance of the Plan shall be subject
--------------------
to approval by the shareholders of the Company within twelve (12) months before
or after the date the Plan is adopted by the Board. If such shareholder approval
is obtained at a duly held shareholders' meeting, the Plan must be approved by a
majority of the votes cast at a shareholders' meeting at which a quorum
(consisting of at least a majority of all outstanding voting stock of the
Company) is, either in person or by proxy, present and voting on the Plan, or,
if such shareholder approval is obtained by written consent, it must be obtained
by the written consent of the holders of a majority of all outstanding voting
stock of the Company; provided, however, that approval at a meeting or by
written consent may be obtained by a lesser degree of shareholder approval if
the Board determines, in its discretion after consultation with the Company's
legal counsel, that such a lesser degree of shareholder approval will comply
with all applicable laws and will not adversely affect the qualification of the
Plan under Section 423 of the Code.
26. No Employment Rights. The Plan does not, directly or indirectly,
--------------------
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company,
and it shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, an employee's employment at any time.
27. Effect of Plan. The provisions of the Plan shall, in accordance
--------------
with its terms, be binding upon, and inure to the benefit of, all successors of
each Participant, including, without limitation, such Participant's estate and
the executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such
Participant.
28. Governing Law. The law of the State of California will govern
-------------
all matters relating to this Plan except to the extent it is superseded by the
laws of the United States.
11
<PAGE>
ACUSON CORPORATION EXHIBIT 10.2
--------------------------------------------------------------------------------
ACUSON CORPORATION
1995 STOCK INCENTIVE PLAN
-------------------------
1. Establishment, Purpose, and Definitions.
---------------------------------------
(a) Acuson Corporation (the "Company") hereby adopts the Acuson Corporation
1995 Stock Incentive Plan (the "Plan").
(b) The purpose of the Plan is to allow the Company to provide incentives to
Eligible Individuals (as defined in Section 4, below) for employment, increased
efforts and successful achievements on behalf of or in the interests of the
Company and its Affiliates and to maximize the rewards due them for those
efforts and achievements. In the case of Employees (including officers and
directors who are Employees) of the Company and of its Affiliates such
incentives include (i) an opportunity to purchase shares of common stock, par
value $.0001 per share, of the Company ("Stock") pursuant to options which may
qualify as incentive stock options (referred to as "incentive stock options")
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) an opportunity to purchase shares of Stock pursuant to options which are
not described in Sections 422 or 423 of the Code (referred to as "nonqualified
stock options"), (iii) the sale or bonus of restricted Stock ("Restricted
Stock"), and (iv) the grant of stock appreciation rights ("SARs"), either
separately or in relation ("tandem") with stock options, entitling holders to
compensation measured by appreciation in the value of Stock. The Plan also
provides for the grant of similar incentives (other than incentive stock
options) to independent contractors and consultants to the Company and its
Affiliates. Finally, the Plan provides for the automatic, nondiscretionary grant
of nonqualified stock options to directors of the Company who are not Employees
of the Company or any Affiliate ("Non-Employee Directors").
(c) Except for purposes of Section 12, the term "Affiliate" means parent or
subsidiary corporations of the Company, as defined in Sections 424(e) and (f) of
the Code (but substituting "the Company" for "employer corporation"), including
parents or subsidiaries of the Company that become such after adoption of the
Plan.
(d) The term "Employee" means any person, including officers and directors,
who is an employee of the Company or an Affiliate for purposes of income tax
withholding under the Code. Neither service as a director nor payment of a
director's fee by the Company shall be sufficient to constitute a person an
Employee.
2. Administration of the Plan.
--------------------------
(a) If permitted by Rule 16b-3 (or any successor thereto) promulgated under
the Securities Exchange Act of 1934, as amended ("Rule 16b-3"), the Plan may be
administered by different committees with respect to: (i) Non-Employee
Directors; (ii) Eligible Individuals who are (A) officers or directors subject
to Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or (B) "covered employees" within the meaning of Section
162(m)(3) of the Code ("Covered Employees"); and (iii) Eligible Individuals who
are neither officers or directors subject to Section 16(b)
1
<PAGE>
of the Exchange Act nor Covered Employees. Each committee, in addition to
satisfying any specific requirements imposed by this Section 2, shall also
satisfy any legal requirements relating to the administration of stock-based
compensation plans under applicable state corporate and securities laws and the
Code ("Applicable Laws"). References herein to the "Plan Administrator" shall
refer to the applicable committee(s) or, if the Board of Directors of the
Company (the "Board") does not delegate administration of some aspects of the
Plan to a committee, shall be construed to refer to the Board.
(b) The Secretary of the Company shall administer the provisions of Section
5 of the Plan (providing for stock option grants to Non-Employee Directors).
This function shall be limited to matters of interpretation and administrative
oversight.
(c) With respect to awards made to Eligible Individuals who are officers or
directors subject to Section 16(b) of the Exchange Act or Covered Employees, the
Plan shall be administered by a committee of the Board, which committee shall be
constituted to comply with the rules governing a plan intended to qualify as a
discretionary plan under Rule 16b-3 and a "committee comprised solely of two or
more outside directors" for purposes of Section 162(m) of the Code. Once
appointed, such committee shall continue to serve in its designated capacity
until otherwise directed by the Board. From time to time, the Board may increase
the size of the committee and appoint additional members, remove members (with
or without cause) and substitute new members, fill vacancies (however caused),
all to the extent permitted by Rule 16b-3, Section 162(m) of the Code, the rules
and regulations with respect to each, and Applicable Laws. The committee shall
select one of its members as chair of the committee and shall hold meetings at
such times and places as it may determine. To the extent permitted by Rule 16b-
3, Section 162(m) of the Code, the rules and regulations with respect to each,
and Applicable Laws, a majority of the committee shall constitute a quorum, and
acts of the committee at which a quorum is present, or acts reduced to or
approved in writing by all the members of the committee, shall be the valid acts
of the committee.
(d) With respect to awards made to Eligible Individuals who are neither
officers nor directors subject to Section 16(b) of the Exchange Act nor Covered
Employees, the Plan shall be administered by (i) the Board; or (ii) a committee
of one or more persons (which may be the committee established pursuant to
Section 2(c), above) designated by the Board. Once appointed, such committee
shall continue to serve in its designated capacity until otherwise directed by
the Board. From time to time, the Board may increase the size of the committee
and appoint additional members, remove members (with or without cause) and
substitute new members, fill vacancies (however caused), and remove all members
of the committee and thereafter directly administer the Plan, all to the extent
permitted by Applicable Laws. The committee shall select one of its members as
chair of the committee and shall hold meetings at such times and places as it
may determine. To the extent permitted by Applicable Laws, a majority of the
committee shall constitute a quorum, and acts of the committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of the
committee, shall be the valid acts of the committee.
(e) The Plan Administrator shall determine which Eligible Individuals shall
be granted options under the Plan, the timing of such grants, the terms thereof
(including any restrictions on the Stock), and the number of shares subject to
such options.
(f) The Plan Administrator shall also determine which Eligible Individuals
shall be granted or issued SARs or Restricted Stock (other than pursuant to the
exercise of options) under the Plan, the timing of such grants or issuances, the
terms thereof (including any restrictions and the consideration, if any, to be
paid therefor) and the number of shares or SARs to be granted.
(g) Except for options granted to Non-Employee Directors pursuant to Section
5, the Plan Administrator may amend the terms of any outstanding option or SAR
granted under this Plan, but any amendment that would adversely affect the
holder's rights under an outstanding option or SAR shall not be made without the
holder's written consent. The Plan Administrator may, with the holder's written
2
<PAGE>
consent, cancel any outstanding option or SAR or accept any outstanding option
or SAR in exchange for a new option or SAR. The Plan Administrator also may
amend any Restricted Stock purchase agreement or Restricted Stock bonus
agreement relating to sales or bonuses of Restricted Stock under the Plan, but
any amendment that would adversely affect the individual's rights to the
Restricted Stock shall not be made without his or her written consent.
(h) The Plan Administrator shall have the sole authority, in its absolute
discretion, to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable for the administration of the Plan, to construe and
interpret the Plan, the rules and the regulations, and the instruments
evidencing options, SARs or Restricted Stock granted or issued under the Plan
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and interpretations
of the Plan Administrator shall be binding on all participants. Notwithstanding
the foregoing, the Plan Administrator shall not exercise any discretionary
functions with respect to options granted to Non-Employee Directors pursuant to
Section 5.
3. Stock Subject to the Plan.
-------------------------
(a) The maximum aggregate number of shares of Stock available for issuance
under the Plan and during the life of the Plan shall equal 3,500,000 shares,
subject to adjustment from time to time in accordance with this Section 3. The
Stock subject to the Plan may be unissued shares, treasury shares or shares
purchased by the Company on the open market or otherwise.
(b) For purposes of the limitation specified in Section 3(a), the following
principles shall apply, provided that no Stock shall be treated as issuable
under the Plan to persons subject to Section 16 of the Exchange Act if otherwise
prohibited from issuance under Rule 16b-3:
(1) the following transactions, if granted pursuant to this Plan, shall
count against and decrease the number of shares of Stock that may be
issued for purposes of Section 3(a): (i) shares of Stock subject to
outstanding options, outstanding shares of Restricted Stock, and shares
subject to SARs granted independently of options (based upon a good
faith estimate by the Company or the Plan Administrator of the maximum
number of shares for which the SAR may be settled (assuming payment in
full in shares of Stock), and (ii) in the case of options granted in
tandem with SARs, the greater of the number of shares of Stock that
would be counted if one or the other alone was outstanding (determined
as described in clause (i) above);
(2) the following shall be added back to the number of shares of Stock
that may be issued for purposes of Section 3(a): (i) shares of Stock
with respect to which options, SARs granted independent of options, or
Restricted Stock awards expire, are cancelled, or otherwise terminate
without being exercised, converted, or vested, as applicable, and (ii)
in the case of options granted in tandem with SARs, shares of Stock as
to which an option has been surrendered in connection with the exercise
of a tandem SAR, to the extent the number surrendered exceeds the
number issued upon exercise of the SAR; provided that, in any case, the
-------------
holder of such awards did not receive any dividends or other benefits
of ownership with respect to the underlying shares being added back,
other than voting rights and the accumulation (but not payment) of
dividends of Stock;
(3) shares of Stock subject to SARs granted independently of options
(calculated as provided in clause (1) above) that are exercised and
paid in cash shall be added back to the number of shares of Stock that
may be issued for purposes of Section 3(a), provided that the holder of
such SAR did not receive any dividends or other benefits of ownership,
other
3
<PAGE>
than voting rights and the accumulation (but not payment) of dividends,
relative to the shares of Stock subject to the SARs;
(4) shares of Stock that are transferred by a holder of an award (or
withheld by the Company) as full or partial payment to the Company of
the purchase price of shares of Stock subject to an option or the
Company's or any Affiliate's tax withholding obligations shall not be
added back to the number of shares of Stock that may be issued for
purposes of Section 3(a) and shall not again be subject to awards; and
(5) if the number of shares of Stock counted against the number of
shares that may be issued for purposes of Section 3(a) is based upon an
estimate made by the Company or the Plan Administrator as provided in
clause (1) above and the actual number of shares of Stock issued
pursuant to the applicable award is greater or less than the estimated
number, then upon such issuance, the number of shares of Stock that may
be issued pursuant to Section 3(a) shall be further reduced by the
excess issuance or increased by the shortfall, as applicable.
(c) If there is any change in the Stock through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of 2%), or other change in the capital structure of the Company,
appropriate adjustments shall be made by the Plan Administrator, in order to
preserve but not to increase the benefits to the outstanding options, SARs and
Restricted Stock purchase or Restricted Stock bonus awards under the Plan,
including adjustments to the aggregate number and kind of shares subject to the
Plan, or to outstanding Restricted Stock purchase or Restricted Stock bonus
agreements, or SAR agreements, and the number and kind of shares and the price
per share subject to outstanding options.
(d) The Plan Administrator shall have the discretion, to the extent
permitted by Applicable Law, to include provisions in any agreements evidencing
awards granted under the Plan providing that, in the event of a dissolution,
liquidation, merger or consolidation of the Company, or any other event that the
Plan Administrator deems to have effected a change in control of the Company,
any such awards shall accelerate and become fully vested, and all forfeiture
and/or transfer restrictions with respect thereto shall lapse, regardless of
whether such awards are otherwise to be assumed or replaced in connection with
such event.
4. Eligible Individuals. Individuals who shall be eligible to have the Plan
--------------------
Administrator grant to them options, SARs or Restricted Stock under the Plan
("Eligible Individuals") shall be such employees, officers (including officers
who are directors of the Company), independent contractors, and consultants of
the Company or an Affiliate as the Plan Administrator, in its discretion, shall
designate from time to time. Notwithstanding the foregoing, only Employees
shall be eligible to receive incentive stock options. Eligible Individuals
shall not include Non-Employee Directors. Non-Employee Directors shall receive
automatic and nondiscretionary option grants pursuant to Section 5 and will not
be otherwise eligible to receive any other option grants or awards of SARs or
Restricted Stock under the Plan or any other stock plan of the Company or any
Affiliate.
5. Automatic Option Grants to Non-Employee Directors.
-------------------------------------------------
(a) All grants of options pursuant to this Section 5 shall be automatic and
nondiscretionary and shall be made strictly in accordance with the provisions of
this Section 5. No person shall have any discretion to determine which Non-
Employee Directors shall be granted options, the number of shares of Stock to be
covered by options granted to Non-Employee Directors, the timing of such option
grants or the exercise price thereof.
4
<PAGE>
(b) An option to purchase 5,000 shares of Stock shall be granted to each
Non-Employee Director continuing in office immediately following each annual
meeting of the Company's stockholders which occurs on or after the date of
approval of the Plan by the stockholders of the Company and prior to the
termination of the Plan.
(c) The term of each option granted pursuant to this Section 5 shall be ten
years from the date of grant, unless a shorter period is required to comply with
any Applicable Law, and except for the early termination provisions contained in
the written stock option agreement in the form of Exhibit A hereto, in either of
which cases such shorter period shall apply.
(d) Each option granted pursuant to this Section 5 shall vest and become
fully exercisable as to fifty percent (50%) of the shares subject to the option
on the date which is six (6) months from the date the option is granted, then
daily thereafter as to 1/365th of the total shares subject to the option so that
the option is fully exercisable no later than one year following the date the
option is granted.
(e) Each option grant to an Non-Employee Director pursuant to this Section 5
shall be evidenced by a written stock option agreement, in the form of Exhibit A
hereto, executed by the Company and the Non-Employee Director to whom such
option is automatically granted.
(f) This Section 5 shall be deemed to contain such additional conditions and
restrictions as may be required for the Plan with respect to options granted
pursuant to this Section 5 to qualify as a "formula plan" under Rule 16b-3 as
then applicable to the Company or any Affiliate.
6. Terms and Conditions of Options.
-------------------------------
(a) Each option granted pursuant to the Plan will be evidenced by a written
stock option agreement executed by the Company and the person to whom such
option is granted.
(b) Except for options granted under Section 5 above, the Plan Administrator
shall determine the term of each option granted under the Plan; provided,
however, that the term of an incentive stock option shall not be for more than
ten years and that, in the case of an incentive stock option granted to a person
possessing more than 10% of the combined voting power of the Company or an
Affiliate on the date the option is granted, the term of each incentive stock
option shall be no more than five years.
(c) In the case of incentive stock options, the aggregate fair market value
(determined as of the time such option is granted) of the Stock with respect to
which incentive stock options are exercisable for the first time by an Eligible
Individual in any calendar year (under this Plan and any other plans of the
Company or its Affiliates) shall not exceed $100,000. If the aggregate fair
market value of the Stock with respect to which incentive stock options are
exercisable by an optionee for the first time in any calendar year exceeds
$100,000, such options shall be treated, to the minimum extent required to
preserve incentive stock option treatment for as many options as possible, as
nonqualified stock options. The rule set forth in the preceding sentence shall
be applied by taking options into account in the order in which they were
granted.
(d) The exercise price of each incentive stock option shall be not less than
the per share fair market value of the Stock subject to such option on the date
the option is granted. The exercise price of each nonqualified stock option
shall be as determined by the Plan Administrator. Notwithstanding the
foregoing, (i) in the case of an incentive stock option granted to a person
possessing more than 10% of the combined voting power of the Company or an
Affiliate on the date the option is granted, the exercise price shall be not
less than 110% of the fair market value of the Stock on the date the option is
granted, and (ii) in the case of an option granted pursuant to Section 5 above,
the exercise price shall be not less than the per share fair market value of the
Stock subject to such option on the date the option is granted. The exercise
price of an option shall be subject to adjustment to the extent provided in
Section 3(c), above.
5
<PAGE>
(e) Except for options granted under Section 5 above, the stock option
agreement may contain such other terms, provisions, and conditions consistent
with this Plan as may be determined by the Plan Administrator. If an option, or
any part thereof, is intended to qualify as an incentive stock option, the stock
option agreement shall contain those terms and conditions which are necessary to
so qualify it.
(f) The maximum number of shares of Stock with respect to which SARs or
options to acquire Stock may be granted to any individual during any calendar
year shall not exceed 1,000,000 shares (which number may be increased without
stockholder approval to reflect adjustments under Section 3(c), above, to the
extent such increase does not cause the grant to fail to qualify as remuneration
payable solely on account of one or more performance goals within the meaning of
Section 162(m) of the Code). To the extent required by Section 162(m) of the
Code or the regulations thereunder, in applying the foregoing limitation with
respect to any employee, if any option is cancelled, the cancelled option shall
continue to count against the maximum number of shares for which options may be
granted to the employee under this Section 6(f). For this purpose, the repricing
of an option shall be treated as a cancellation of the existing option and the
grant of a new option to the extent required by Section 162(m) of the Code or
the regulations thereunder.
7. Payment Upon Exercise of Options.
--------------------------------
(a) Payment of the purchase price upon exercise of any option granted under
this Plan shall be made in cash, by optionee's personal check, a certified
check, bank draft, or postal or express money order payable to the order of the
Company in lawful money of the United States (collectively, "Cash
Consideration"); provided, however, that, except for options granted under
Section 5 above, the Plan Administrator, in its sole discretion, may permit an
optionee to pay the option price in whole or in part (i) with shares of Stock
owned by the optionee or with shares of Stock withheld from the shares otherwise
deliverable to the optionee upon exercise of an option; (ii) by delivery on a
form prescribed by the Company of an irrevocable direction to a securities
broker approved by the Company to sell shares of Stock and deliver all or a
portion of the proceeds to the Company in payment for the Stock; (iii) by
delivery of the optionee's promissory note with such recourse, interest,
security, and redemption provisions as the Plan Administrator in its discretion
determines appropriate; or (iv) in any combination of the foregoing. The
exercise price of any options granted under Section 5 above, shall be paid in
Cash Consideration, the consideration specified in clauses (i) or (ii) of the
preceding sentence or in any combination thereof. Any Stock used to exercise
options shall be valued at its fair market value on the date of the exercise of
the option. In addition, the Plan Administrator, in its sole discretion, may
authorize the surrender by an optionee of all or part of an unexercised option
(excluding options granted under Section 5 above) and authorize a payment in
consideration thereof of an amount equal to the difference between the aggregate
fair market value of the Stock subject to such option and the aggregate option
price of such Stock. In the Plan Administrator's discretion, such payment may
be made in cash, shares of Stock with a fair market value on the date of
surrender equal to the payment amount, or some combination thereof.
(b) In the event that the exercise price is satisfied by shares withheld
from the shares of Stock otherwise deliverable to the optionee, the Plan
Administrator may issue the optionee an additional option, with terms identical
to the option agreement under which the option was exercised, entitling the
optionee to purchase additional shares of Stock equal to the number of shares so
withheld but at an exercise price equal to the fair market value of the Stock on
the grant date of the new option; provided, however, that no such additional
options may be granted with respect to options granted pursuant to Section 5,
above.
8. Terms and Conditions of Restricted Stock Purchases and Bonuses
--------------------------------------------------------------
(a) Each sale (other than upon exercise of options) or bonus grant of
Restricted Stock pursuant to the Plan will be evidenced by a written Restricted
Stock purchase or Restricted Stock bonus
6
<PAGE>
agreement, as applicable, executed by the Company and the person to whom such
Restricted Stock is sold or granted.
(b) The Restricted Stock purchase agreement or Restricted Stock bonus
agreement may contain such terms, provisions, and conditions consistent with
this Plan as may be determined by the Plan Administrator, including not by way
of limitation, payment terms, restrictions on transfer, forfeiture provisions,
repurchase provisions, and vesting provisions.
(c) The Plan Administrator may condition the award or the exercise of any
right under an award under this Section 8 upon the attainment of one or more
preestablished objective performance goals meeting the requirements of Section
162(m) of the Code and the regulations thereunder.
9. Terms and Conditions of SARs. The Plan Administrator may, under such terms
----------------------------
and conditions as it deems appropriate, authorize the issuance of SARs evidenced
by a written SAR agreement (which, in the case of tandem options, may be part of
the option agreement to which the SAR relates) executed by the Company and the
person to whom the SARs are granted. The SAR agreement shall specify the term
for the SARs covered thereby and contain such other terms, provisions and
conditions consistent with this Plan as may be determined by the Plan
Administrator.
10. Withholding Taxes.
-----------------
(a) No Stock shall be granted or sold under the Plan to any Eligible
Individual, and no SAR may be exercised, until the individual has made
arrangements acceptable to the Plan Administrator for the satisfaction of
federal, state, and local income and employment tax withholding obligations,
including without limitation obligations incident to the receipt of Stock under
the Plan, the lapsing of restrictions applicable to such Stock, the failure to
satisfy the conditions for treatment as incentive stock options under applicable
tax law, or the receipt of cash payments. Upon the exercise of an option or the
lapsing of a restriction on Stock issued under the Plan, the Company (or the
optionee's or stockholder's employer) may withhold from the shares otherwise
deliverable to the optionee upon such exercise, or require the stockholder to
surrender shares of Stock as to which the restriction has lapsed, such number of
shares having a fair market value sufficient to satisfy federal, state and local
income and employment tax withholding obligations.
(b) In the event that such tax withholding is satisfied by the Company or
the optionee's employer withholding shares of Stock otherwise deliverable to the
optionee, the Plan Administrator may issue the optionee an additional option,
with terms identical to the option agreement under which the option was
exercised, entitling the optionee to purchase additional shares of Stock equal
to the number of shares so withheld but at an exercise price equal to the fair
market value of the Stock on the grant date of the new option; provided,
however, that no such additional options may be granted with respect to options
granted pursuant to Section 5, above.
11. Assignability. To the extent required by Rule 16b-3, no option or SAR
-------------
granted pursuant to this Plan shall be transferable by the holder except by
operation of law or by will or the laws of descent and distribution; provided
that, if Rule 16b-3 is amended after the date of the Board's adoption of the
Plan to permit broader transferability of options or SARs under that Rule, (i)
options granted under Section 5 to Non-Employee Directors shall be transferable
to the fullest extent permitted by Rule 16b-3 as so amended, (ii) any other
option or SAR shall be transferable to the extent provided in the option
agreement or SAR agreement covering the option or SAR, and the Plan
Administrator shall have the discretion to amend any such outstanding option or
SAR to provide for broader transferability of the option or SAR as the Plan
Administrator may authorize within the limitations of Rule 16b-3. Stock subject
to a Restricted Stock purchase agreement or a Restricted Stock bonus agreement
shall be transferable only as provided in such agreement. Notwithstanding the
foregoing, if required by the Code, each incentive stock option under the Plan
shall be transferable by the optionee only by will or the laws of descent and
distribution, and, during the optionee's lifetime, be exercisable only by the
optionee. In
7
<PAGE>
the event of any Rule 16b-3 permitted transfer of an option hereunder, the
transferee shall be entitled to exercise the option in the same manner and only
to the same extent as the optionee (or his/her personal representative or the
person who would have acquired the right to exercise the option by bequest or
intestate succession) would have been entitled to exercise the option under
Sections 5, 6 and 7 had the option not been transferred.
12. Change in Control.
-----------------
(a) Notwithstanding anything to the contrary contained in the Plan, each
stock option, SAR, Restricted Stock bonus or Restricted Stock purchase agreement
(or an amendment thereto) evidencing an option, SAR, Restricted Stock bonus or
Restricted Stock purchase hereunder shall automatically and without further
action be fully vested, nonforfeitable and become exercisable, and any
Restricted Stock covered by such an agreement shall be released from
restrictions on transfer and repurchase or forfeiture rights, on the twenty-
second day after any Share Acquisition Date, unless prior to such twenty-second
day a majority of the Continuing Directors then in office has determined that
the transaction pursuant to which a Person has become an Acquiring Person is an
Approved Transaction.
(b) Certain Definitions. For purposes of this Section 12, the following
-------------------
definitions shall apply:
"Acquiring Person" means any Person who or which, together with all
----------------
Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20% or more of the Common Shares then outstanding, but shall not
include the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by
the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 20% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person becomes the Beneficial
-------- -------
Owner of 20% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, becomes the Beneficial Owner
of any additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person".
"Affiliate" and "Associate" have the respective meanings ascribed to
--------- ---------
such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act.
"Approved Transaction" means any transaction that occurs at a time when
--------------------
Continuing Directors are in office and a majority of the Continuing
Directors then in office has determined that the transaction is in the
best interest of the Company and its stockholders.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed
----------------
to "beneficially own" any securities: (i) which such Person or any of
such Person's Affiliates or Associates beneficially owns, directly or
indirectly; (ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
-------- -------
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall
-------- -------
not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to
8
<PAGE>
vote such security (1) arises solely from a revocable proxy or consent
given to such person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or (iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to clause (ii)(B) of this
definition) or disposing of any securities of the Company; provided
further, however, that nothing in this Section 12 shall cause a Person
to be the Beneficial Owner of, or to beneficially own, any securities
(x) acquired through such Person's participation in the business of
underwriting securities in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition
or (y) which such Person has reported on Schedule 13G under the
Exchange Act and has not ceased to be eligible to report on Schedule
13G pursuant to Rule 13d-1 under the Exchange Act.
"Common Shares" means the shares of common stock, par value $.0001 per
-------------
share, of the Company.
"Continuing Director" means (i) any member of the Board of Directors of
-------------------
the Company, while such Person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, and who was, if applicable, a member of the Board prior to
the time that any Person becomes an Acquiring Person, or (ii) any
Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of Continuing Directors.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated thereunder.
"Person" means any individual, firm, partnership, corporation or other
------
entity, and shall include any successor (by merger or otherwise) of
such entity.
"Rights" means the rights granted to the Company's shareholders to
------
purchase additional Common Shares under certain circumstances, as
described in that certain Rights Agreement, dated as of May 5, 1988, by
and between the Company and The First National Bank of Boston, as
rights agent.
"Share Acquisition Date" means the first date of public announcement by
----------------------
the Company or an Acquiring Person that a Person has become an
Acquiring Person.
"Subsidiary" of any Person means any corporation or other entity of
----------
which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person, or
which is otherwise controlled by such Person.
13. Amendment, Suspension, or Termination of the Plan.
-------------------------------------------------
(a) The Board may at any time amend, suspend or terminate the Plan as it
deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the stockholders, and provided further that, except as provided in Section
3(c) above, the
9
<PAGE>
Board shall in no event amend the Plan in the following respects without the
consent of stockholders then sufficient to approve the Plan in the first
instance:
(1) To materially increase the benefits accruing to participants under
the Plan;
(2) To materially increase the number of shares of Stock available
under the Plan or to increase the number of shares of Stock available
for grant of incentive stock options under the Plan; or
(3) To materially modify the eligibility requirements for participation
in the Plan or the class of employees eligible to receive options under
the Plan or to change the designation or class of persons eligible to
receive incentive stock options under the Plan.
(b) No option or SAR may be granted nor may any Stock be issued (other than
upon exercise of outstanding options) under the Plan during any suspension or
after the termination of the Plan, and no amendment, suspension, or termination
of the Plan shall, without the affected individual's consent, alter or impair
any rights or obligations under any option or SAR previously granted under the
Plan.
(c) In addition to the limitations on amendments provided in Sections 13(a)
and 13(b) above, the provisions set forth in Section 5 of the Plan (and any
other sections of the Plan that affect the formula award terms of option grants
to Non-Employee Directors required to be specified in the Plan by Rule 16b-3)
shall not be amended periodically and in no event more than once every six
months, other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or any applicable rules and regulations
thereunder.
14. Term of Plan. The Plan shall terminate with respect to the grant of
------------
additional awards on the tenth anniversary of the date the Plan is approved by
the stockholders, unless previously terminated by the Board pursuant to Section
13.
15. Use of Proceeds. Cash proceeds realized from the exercise of options
---------------
granted under the Plan or from other sales of Stock under the Plan shall
constitute general funds of the Company.
16. Stockholder Approval. The Plan shall become effective, and awards may be
--------------------
granted hereunder, only upon approval by the holders of a majority of the
Company's shares voting (in person or by proxy) at a stockholders' meeting held
within 12 months of the Board's adoption of the Plan.
17. Rule 16b-3 Compliance. Transactions under the Plan are intended to comply
---------------------
with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board or
the Plan Administrator fails to so comply, it shall be deemed null and void, to
the extent permitted by law and deemed advisable by the Board or the Plan
Administrator. Moreover, in the event the Plan does not include a provision
required by Rule 16b-3 to be stated therein in order to qualify the grants under
Section 5 hereof as grants under a non-discretionary formula under Rule 16b-3
such provision (other than one relating to eligibility requirements, or the
price and amount of awards) shall be deemed automatically to be incorporated by
reference into the Plan with respect to grants of options to Non-Employee
Directors.
18. No Employment Right. Nothing in this Plan or any instrument executed or any
-------------------
award granted pursuant thereto shall confer upon any employee, independent
contractor, consultant or director any right to continue in the employ of the
Company or any Affiliate (or to continue acting as an independent contractor,
consultant or director) or shall affect the right of the Company or any
Affiliate to terminate the employment, contractual or consulting relationship or
directorship of any person, with or without cause.
10
<PAGE>
EXHIBIT A
---------
ACUSON CORPORATION
NON-EMPLOYEE DIRECTORS' NON-QUALIFIED STOCK OPTION AGREEMENT
------------------------------------------------------------
This agreement (the "Agreement") is made as of _________________, 199__
(the "Grant Date") between Acuson Corporation (the "Company") and
_________________ ("Optionee").
WITNESSETH:
WHEREAS, the Company has adopted the Acuson Corporation 1995 Stock
Incentive Plan (the "Plan"), which Plan is incorporated in this Agreement by
reference and made a part of it (capitalized terms shall have the meaning
ascribed to them in the Plan); and
WHEREAS, the Plan provides for automatic option grants to Non-Employee
Directors of the Company;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties to this Agreement hereby agree as follows:
1. Option Grant. The Company hereby grants to Optionee the right and
------------
option to purchase from the Company on the terms and conditions hereinafter set
forth, all or any part of an aggregate of Five Thousand (5,000) shares of the
Common Stock, $.0001 par value, of the Company (the "Stock"). The exercise
price of the Stock subject to this option shall be $_______ per share, which is
not less than the fair market value per share of the Stock on the Grant Date.
This grant is an automatic option grant under Section 5 of the Plan.
2. Option Period. This option shall be exercisable only during the
-------------
period (the "Option Period") commencing on the Grant Date and, except as
provided in paragraph 3, ending on the date (the "Terminal Date") which shall be
ten years from the Grant Date. During the Option Period, the exercisability of
this option shall be subject to the limitations of paragraph 3 and the vesting
provisions of paragraph 4.
3. Limits on Option Period. The Option Period may end before the
-----------------------
Terminal Date, as follows:
(a) If Optionee ceases to be a director on the Company's Board of
Directors (the "Board") for any reason other than death, disability (within the
meaning of subparagraph (c) below) or cause during the Option Period, the Option
Period shall terminate on the earlier of (i) the last day of the period,
beginning on the day next following the day on which the Optionee ceases to be a
director, which equals in length the most recent period of the Optionee's
continuous service as a director (including all portions of such period prior to
the Grant Date), (ii) three years after the date Optionee ceases to be a
director, or (iii) the Terminal Date. In each case this option shall be
exercisable only to the extent exercisable under paragraph 4 on the date
Optionee ceases to be a director.
(b) If Optionee should die while serving on the Board, the Option
Period shall terminate three years after the date of death or on the Terminal
Date, whichever shall first occur, and this option shall be exercisable only to
the extent exercisable under paragraph 4 on the date of Optionee's death. In
the event of Optionee's death, Optionee's executor or administrator or the
person or persons to
11
<PAGE>
whom Optionee's rights under this option shall pass by will or by the applicable
laws of descent and distribution may exercise the entire unexercised portion of
this option to the extent exercisable on the date of Optionee's death.
(c) If Optionee ceases to be a director by reason of disability, as
defined below, the Option Period shall terminate three years after the date
Optionee ceases to be a director or on the Terminal Date, whichever shall first
occur, and this option shall be exercisable only to the extent exercisable under
paragraph 4 on the date Optionee ceases to be a director. For purposes of this
subparagraph (c), an individual is disabled if he or she is unable to engage in
any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
12 months. An individual shall not be considered to be disabled unless he or
she furnishes proof of the existence thereof in such form and manner, and at
such times, as the Board may require.
(d) If Optionee is removed from the Board for cause during the Option
Period, the Option Period shall terminate on the date of such Optionee's removal
as a director and shall not thereafter be exercisable to any extent.
4. Vesting of Right to Exercise Options.
------------------------------------
(a) This option shall vest as to fifty percent (50%) of the number of
shares originally covered by this option on the date which is six months from
the Grant Date, then daily thereafter in installments of 1/365th of the total
shares subject to this option so that this option will become fully vested and
exercisable no later than one (1) year following the Grant Date.
(b) Vesting of this option will cease prior to this option becoming
fully vested at such time that Optionee ceases to be a director of the Company,
including by reason of death or disability.
(c) Fractional shares shall not vest until such time as additional
fractional shares included in other installments allocated to this option can be
combined with the existing fractional shares to constitute one or more whole
shares.
(d) Notwithstanding the foregoing, this option shall be fully vested
and nonforfeitable and shall become fully exercisable under the circumstances
specified in Section 12 of the Plan.
5. Method of Exercise.
------------------
(a) Optionee may exercise this option with respect to all or any part
of the shares of Stock then subject to such exercise by giving the Company
written notice of such exercise, specifying the number of such shares as to
which this option is exercised. Such notice shall be accompanied by an amount
equal to the exercise price of such shares, in any of the forms permitted under
Section 7 of the Plan.
(b) If required by the Company, Optionee shall give the Company
satisfactory assurance in writing, signed by Optionee or Optionee's legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof, provided that such
assurance shall be deemed inapplicable to (i) any sale of such shares by such
Optionee made in accordance with the terms of a registration statement covering
such sale, which has heretofore been (or may hereafter be) filed and become
effective under the Securities Act of 1933, as amended, and with respect to
which no stop order suspending the effectiveness thereof has been issued, and
(ii) any other sale of such shares with respect to which, in the opinion of
counsel for the Company, such assurance is
12
<PAGE>
not required to be given in order to comply with the provisions of the
Securities Act of 1933, as amended.
(c) As soon as practicable after receipt of the notice required in
paragraph 5(a) and satisfaction of the conditions set forth in paragraph 5(b),
the Company shall, without transfer or issue tax and without other incidental
expense to Optionee, deliver to Optionee at the office of the Company at 1220
Charleston Road, Mountain View, CA 94043, attention of the Corporate Secretary,
or such other place as may be mutually acceptable to the Company and Optionee, a
certificate or certificates for such shares of Stock; provided, however, that
the time of such delivery may be postponed by the Company for such period as may
be required for it with reasonable diligence to comply with applicable
registration requirements under the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, any applicable listing requirements
of any national securities exchange, and requirements under any other law or
regulation applicable to the issuance or transfer of such shares. If Optionee
fails to accept delivery of and pay for all or any part of the number of shares
specified in such notice upon tender or delivery thereof, Optionee's right to
purchase such shares may be terminated by the Company at its election. In no
event shall the Company be required to issue fractional shares upon the exercise
of this option.
6. Withholding. Optionee agrees to make appropriate arrangements
-----------
with the Company for satisfaction of any applicable federal, state or local
income tax withholding requirements or social security requirements.
7. Changes in Capitalization. If there should be any change in a
-------------------------
class of Stock subject to this option, through merger, consolidation,
reorganization, recapitalization, reincorporation, stock split, stock dividend
(in excess of two percent) or other change in the capital structure of the
Company, appropriate adjustments shall be made in order to preserve, but not to
increase, the benefits to Optionee, including adjustments of the number and kind
of shares of such Stock subject to this option and of the price per share. Any
adjustment made pursuant to this paragraph 7 as a consequence of a change in the
capital structure of the Company shall not entitle Optionee to acquire a number
of shares of such Stock of the Company or shares of stock of any successor
company greater than the number of shares Optionee would receive if, prior to
such change, Optionee had actually held a number of shares of such Stock equal
to the number of shares subject to this option.
8. Limitations on Transfer. To the extent required by Rule 16b-3
-----------------------
under the Securities Exchange Act of 1934, as amended, this option shall not be
transferable by Optionee other than by operation of law or by will or by the
laws of descent or distribution; provided that, if Rule 16b-3 is amended after
the Board's adoption of the Plan to permit greater transferability, this option
shall be transferable to the fullest extent provided by Rule 16b-3 as so
amended. In the event of any Rule 16b-3 permitted transfer of this option, the
transferee shall be entitled to exercise this option in the same manner and only
to the same extent as the Optionee (or his or her personal representative or the
person who would have acquired the right to exercise this option by bequest or
intestate succession) would have been entitled to exercise this option had this
option not been transferred.
9. No Stockholder Rights. Neither Optionee nor any person to whom
---------------------
this option is transferred pursuant to paragraph 8 nor any person entitled to
exercise Optionee's rights in the event of Optionee's death shall have any of
the rights of a stockholder with respect to the shares of Stock subject to this
option except to the extent the certificates for such shares shall have been
issued upon the exercise of this option.
10. No Employment Right. Nothing in the Plan or this Agreement shall
-------------------
confer upon the Optionee any right to continue service as a director of the
Company or any Affiliate or shall affect the right of the Company or any
Affiliate or the shareholders of the Company or any Affiliate, as the case may
be, to terminate the directorship of Optionee, with or without cause.
13
<PAGE>
11. Notice. Any notice required to be given to the Company under the
------
terms of this Agreement shall be given in writing and addressed to the Company
in care of its Corporate Secretary at the office of the Company at 1220
Charleston Road, Mountain View, CA 94043, and any notice to be given to Optionee
shall be given in writing and addressed to Optionee at the address given by
Optionee beneath Optionee's signature to this Agreement, or such other address
as either party to this Agreement may hereafter designate in writing to the
other. Any such notice shall be deemed to have been duly given when enclosed in
a properly sealed envelope addressed as aforesaid, registered or certified and
deposited (postage and registration or certification fee prepaid) in a post
office or branch post office regularly maintained by the United States.
12. Successors. This Agreement shall be binding upon and inure to the
----------
benefit of any successor or successors of the Company. Where the context
permits, "Optionee" as used in this Agreement shall include Optionee's executor,
administrator or other legal representative or the person or persons to whom
Optionee's rights pass by will or the applicable laws of descent and
distribution.
13. Applicable Law. The interpretation, performance, and enforcement
--------------
of this Agreement shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and
year first written above.
Acuson Corporation
a Delaware corporation
By:
------------------------------------------------
Title:
---------------------------------------------
Optionee
Signature:
-----------------------------------------
Address:
-----------------------------------------
-----------------------------------------
-----------------------------------------
14
<PAGE>
ATTACHMENT A
------------
CONSENT OF SPOUSE
I, _________________________, spouse of _____________________________,
have read and approved the foregoing Agreement. In consideration of granting to
my spouse the right to purchase shares of Acuson Corporation as set forth in the
Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the
exercise of any rights of the Agreement insofar as I may have any rights under
such community property laws or similar laws relating to marital property in
effect in the state of our residence as of the date of the signing of the
foregoing Agreement.
Dated: By:
--------------------------- -----------------------------------------
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AND CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUL-01-1995
<CASH> 30,024
<SECURITIES> 31,296
<RECEIVABLES> 78,214
<ALLOWANCES> (3,548)
<INVENTORY> 51,754
<CURRENT-ASSETS> 226,982
<PP&E> 151,926
<DEPRECIATION> 100,349
<TOTAL-ASSETS> 302,794
<CURRENT-LIABILITIES> 102,627
<BONDS> 0
<COMMON> 79,118
0
0
<OTHER-SE> 121,049
<TOTAL-LIABILITY-AND-EQUITY> 302,794
<SALES> 130,504
<TOTAL-REVENUES> 169,905
<CGS> 60,363
<TOTAL-COSTS> 77,745
<OTHER-EXPENSES> 89,524
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,945)
<INCOME-PRETAX> 4,581
<INCOME-TAX> 1,328
<INCOME-CONTINUING> 3,253
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,253
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
