<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_]Preliminary Proxy Statement [_]CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ACUSON CORPORATION
-----------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF ACUSON]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 20, 1997
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Acuson
Corporation, a Delaware corporation (the "Company"), will be held on Tuesday,
May 20, 1997 at 10:00 a.m., local time, at the Acuson Education Center, 1393
Shorebird Way, Mountain View, California, for the following purposes:
1. To elect a Board of Directors to serve for the ensuing year and
until their successors are elected.
2. To ratify the appointment of Arthur Andersen LLP as independent
public accountants of the Company.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 3, 1997 are
entitled to notice of and to vote at the meeting and at any continuation or
adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ CHARLES H. DEARBORN
Charles H. Dearborn
Secretary
Mountain View, California
April 15, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ENSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO VOTE,
SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-
PAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE>
ACUSON CORPORATION
1220 CHARLESTON ROAD
P.O. BOX 7393
MOUNTAIN VIEW, CA 94039-7393
PROXY STATEMENT
----------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 20, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Acuson Corporation, a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on Tuesday, May 20, 1997, at 10:00
a.m., local time (the "Annual Meeting"), or at any continuation or adjournment
of that meeting, for the purposes set forth in the Notice of Annual Meeting of
Stockholders dated the date hereof. The Annual Meeting will be held at the
Acuson Education Center, 1393 Shorebird Way, Mountain View, California.
SOLICITATION
The Company will bear the entire cost of solicitation, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional material furnished to stockholders. Copies of solicitation
material will be furnished to brokerage houses, fiduciaries, and custodians
holding shares in their names which are beneficially owned by others to
forward to such beneficial owners. In addition, the Company may reimburse such
persons for their cost of forwarding the solicitation material to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by one or more of telephone, telegram, facsimile, or personal
solicitation by directors, officers, or employees of the Company. No
additional compensation will be paid for any such services. Except as
described above, the Company does not intend to solicit proxies other than by
mail.
The Company intends to mail this proxy statement and accompanying proxy on
approximately April 15, 1997.
VOTING
Only holders of Common Stock of record at the close of business on April 3,
1997, will be entitled to notice of and to vote at the Annual Meeting. As of
April 3, 1997, the Company had outstanding 28,875,132 shares of Common Stock.
Each share of Common Stock is entitled to one vote. The presence, in person or
by proxy duly authorized, of the holders of a majority of the outstanding
shares of Common Stock authorized to vote will constitute a quorum for the
transaction of business at the Annual Meeting and any continuation or
adjournment thereof. Abstentions and broker non-votes will be counted in
determining whether a quorum is present at the Annual Meeting. Directors are
elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. The other proposals submitted to the stockholders in the enclosed
proxy must be approved by the vote of the holders of a majority of the shares
of the Company present in person or represented by proxy and entitled to vote
at the Annual Meeting. In determining whether such proposal has been approved,
abstentions are counted as votes against the proposal and broker non-votes are
not counted as votes for or against the proposal.
1
<PAGE>
REVOCABILITY OF PROXIES
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. It may be revoked by
filing with the Secretary of the Company at the Company's principal executive
office, 1220 Charleston Road, P.O. Box 7393, Mountain View, California, 94039-
7393, an instrument of revocation or a duly executed proxy bearing a later
date, or it may be revoked by attending the Annual Meeting and voting in
person.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1998 Annual Meeting of Stockholders (the "1998 Annual Meeting") must be
received by the Company no later than December 17, 1997 in order to be
included in the proxy statement and proxy relating to the 1998 Annual Meeting.
PROPOSAL 1
NOMINATION AND ELECTION OF DIRECTORS
One of the purposes of the Annual Meeting is the election of the Board of
Directors of the Company to hold office until the 1998 Annual Meeting or until
their successors are elected and have been qualified. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the nominees named below, unless one or more of such nominees
should become unavailable for election by reason of death or other unexpected
occurrence, in which event such shares shall be voted for the election of such
substitute nominees as the Board of Directors may propose. Each person
nominated has agreed to serve if elected, and the Company knows of no reason
why any of the listed nominees would be unavailable to serve.
NOMINEES AND PRESENT DIRECTORS
The By-Laws of the Company provide that the number of directors of the
Company shall be fixed from time to time by the Board of Directors. At
present, the authorized size of the Board of Directors is five. The Board of
Directors has nominated five persons for election to the Board of Directors.
Proxies cannot be voted for more than five persons.
Set forth below is information regarding the nominees for election as
directors, including information furnished by them as to their principal
occupations for the last five years, certain other directorships held by them,
and their ages as of April 15, 1997. Each nominee is currently a director of
the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
- ---- --- -------- --------------
<S> <C> <C> <C>
Samuel H. Maslak........ 48 Chairman of the Board and Chief Executive Officer September 1981
Robert J. Gallagher..... 53 President, Chief Operating Officer and Director May 1994
Albert L. Greene........ 47 Director March 1995
Karl H. Johannsmeier.... 68 Director March 1995(1)
Alan C. Mendelson....... 49 Director March 1995
</TABLE>
- --------
(1) Mr. Johannsmeier also served as a director of the Company from September
1981 to May 1994.
Samuel H. Maslak co-founded the Company in September 1981 and has been Chief
Executive Officer and a director since that date. He was President of the
Company from September 1981 until May 1995. He was appointed Chairman of the
Board in May 1995.
2
<PAGE>
Robert J. Gallagher joined the Company in January 1983 as Vice President,
Finance and Chief Financial Officer. He became Executive Vice President in
March 1991, Chief Operating Officer of the Company in January 1994 and was
elected director of the Company in May 1994. He became President of the
Company in May 1995.
Albert L. Greene became a director of the Company in March 1995. Mr. Greene
served as the President and Chief Executive Officer of Alta Bates Medical
Center in Berkeley, California from May 1990 until February 1996 and has been
President of Alta Bates Health System since February 1996. He is a member of
the American College of Healthcare Executives, the American Hospital
Association, the Alta Bates Medical Center Board of Trustees, the Alta Bates
Health System Board of Directors, and other hospital associations. Mr. Greene
is also a director of Quadra Med, a healthcare information systems company.
Karl H. Johannsmeier served as a director of the Company from September 1981
to May 1994 and has also served as a director from March 1995 to the present.
He founded Optimetrix Corporation, a semiconductor processing equipment
company, where he served as President and Chief Executive Officer from 1976 to
1981 and as Chairman of the Board of Directors from 1976 to 1984. Optimetrix
Corporation was acquired by Eaton Corporation in 1982. Mr. Johannsmeier has
been a private investor over the last twenty years.
Alan C. Mendelson became a director of the Company in March 1995. Mr.
Mendelson has been a partner in the law firm of Cooley Godward LLP since
January 1980 and has been the Managing Partner of its Palo Alto office since
November 1996. Mr. Mendelson also served as Managing Partner between May 1990
and March 1995. Mr. Mendelson was Acting General Counsel of Cadence Design
Systems, Inc., an electronic design automation software company, from November
1995 until June 1996. Mr. Mendelson is also a director of Isis
Pharmaceuticals, Inc., a biopharmaceutical company, CoCensys, Inc., a
biopharmaceutical company, and Elexsys International, Inc., a manufacturer of
interconnect products used in advanced electronic equipment.
There are no family relationships between any director or executive officer
of the Company.
BOARD OF DIRECTORS COMMITTEES AND MEETINGS
The Board of Directors has three standing committees: the Compensation
Committee, the Audit Committee and the Non-Officer Stock Option Administration
Committee. The Board does not have a nominating committee.
The Compensation Committee was established in February 1993 to determine
compensation to be paid to the Company's executive officers and to administer
the Company's stock plans generally. The current members of the Compensation
Committee are Messrs. Greene, Johannsmeier and Mendelson.
The Audit Committee was established in October 1986 to recommend engagement
of the Company's independent public accountants, to approve services performed
by such accountants and to review, in consultation with the independent public
accountants, the Company's accounting system and system of internal controls.
The current members of the Audit Committee are Messrs. Greene, Johannsmeier
and Mendelson.
The Non-Officer Stock Option Administration Committee was established in
July 1987 to administer the Company's stock option plan only for non-officer
employees of the Company. Its member is Dr. Maslak.
During the fiscal year ended December 31, 1996, the Board of Directors held
five meetings, the Audit Committee held five meetings and the Compensation
Committee held two meetings. The Non-Officer Stock Option Administration
Committee acted solely by unanimous written consent in accordance with the
Company's By-Laws and Delaware law. Each director attended at least 75% of the
aggregate of all meetings of the Board of Directors and of the committees, if
any, upon which such director served.
3
<PAGE>
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ending December 31, 1997,
and has further directed that management submit the selection of independent
public accountants for ratification by the stockholders at the Annual Meeting.
Arthur Andersen LLP has audited the Company's financial statements annually
since the Company's inception. Its representatives are expected to be present
at the Annual Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Arthur Andersen LLP as the
Company's independent public accountants is not required by the Company's By-
Laws or otherwise. The Board of Directors is submitting the selection of
Arthur Andersen LLP to the stockholders for ratification as a matter of good
corporate practice. In the event the stockholders fail to ratify the
selection, the Board of Directors will reconsider whether or not to retain
that firm. Even if the selection is ratified, the Board of Directors in its
discretion may direct the appointment of a different independent accounting
firm at any time during the year if the Board of Directors determines that
such a change would be in the best interests of the Company and its
stockholders.
SHARE OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of January 28, 1997, by (i) all
those known by the Company to be beneficial owners of more than five percent
(5%) of its Common Stock; (ii) all directors and nominees for director; (iii)
the executive officers of the Company included in the Summary Compensation
Table set forth under the caption "Compensation of Directors and Executive
Officers" below; and (iv) all current executive officers and directors of the
Company as a group. Mr. Johannsmeier and Dr. Maslak can be contacted at the
offices of the Company. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of Common
Stock beneficially owned by them.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP
-----------------
BENEFICIAL OWNER SHARES PERCENT
---------------- --------- -------
<S> <C> <C>
Delphi Asset Management(1)
485 Madison Avenue
New York, NY 10022.................................... 1,747,700 6.2%
Karl H. Johannsmeier(2)................................ 5,188,519 18.3%
Samuel H. Maslak(3).................................... 2,167,481 7.5%
Robert J. Gallagher(4)................................. 314,197 1.1%
Stephen T. Johnson(5).................................. 170,880 *
Bradford C. Anker(6)................................... 159,836 *
Daniel R. Dugan(7)..................................... 195,618 *
Alan C. Mendelson(8)................................... 12,546 *
Albert L. Greene(9).................................... 10,596 *
All Executive Officers and Directors as a group (11
persons)(10).......................................... 8,476,864 28.1%
</TABLE>
- --------
* Less than 1%
(1) Based on information contained in a statement on Schedule 13G filed by
such stockholder with the Securities and Exchange Commission on February
13, 1997.
4
<PAGE>
(2) Includes 10,096 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997, which are deemed to be
outstanding for the purpose of computing the percentage of Common Stock
owned pursuant to Rule 13d-3(d)(1) under the Exchange Act.
(3) Includes 661,494 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997.
(4) Includes 238,576 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997.
(5) Includes 166,166 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997. Also includes 450 shares
for which Mr. Johnson disclaims beneficial ownership.
(6) Includes 154,799 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997.
(7) Includes 189,409 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997.
(8) Includes 10,096 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997. Also includes 950 shares
for which Mr. Mendelson disclaims beneficial ownership.
(9) Includes 10,096 unissued shares of Common Stock subject to options
exercisable within 60 days of January 28, 1997.
(10) Includes 20,680 shares as to which beneficial ownership is disclaimed by
certain executive officers of the Company. Also includes 1,679,741
unissued shares of Common Stock subject to options exercisable within 60
days of January 28, 1997.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table discloses compensation received by the Company's Chief
Executive Officer and the four other most highly paid executive officers
serving as executive officers at the end of the fiscal year, for the three
fiscal years ended December 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
----------------- ------------
NAME AND PRINCIPAL SALARY BONUS ALL OTHER
POSITION YEAR ($) ($) OPTIONS (#) COMPENSATION ($)
------------------ ---- -------- -------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Samuel H. Maslak 1996 $725,000 $108,750 100,000 $ 500(1)
Chairman and Chief 1995 $679,000 $ 67,900 0 $ 500(1)
Executive Officer 1994 $679,000 $ 0 0 $ 500(1)
Robert J. Gallagher 1996 $450,000 $ 45,000 50,000 $ 500(1)
President and Chief 1995 $415,000 $ 41,500 100,000 $ 500(1)
Operating Officer 1994 $350,000 $ 35,000 0 $ 500(1)
Daniel R. Dugan 1996 $345,000 $ 86,250 50,000 $57,753(2)
Sr. Vice President, 1995 $300,000 $ 60,000 50,000 $57,597(2)
Worldwide Sales, 1994 $270,000 $ 54,000 100,000 $57,597(2)
Service, Marketing
Bradford C. Anker 1996 $265,000 $ 26,500 25,000 $ 500(1)
Vice President, 1995 $250,000 $ 25,000 20,000 $ 500(1)
Manufacturing 1994 $232,000 $ 18,000 0 $ 500(1)
Stephen T. Johnson 1996 $275,000 $ 0 20,000 $ 500(1)
Vice President and 1995 $250,000 $ 37,500 25,000 $ 500(1)
Chief Financial Officer 1994 $195,000 $ 11,700 50,000 $ 500(1)
</TABLE>
- --------
(1) Consisting of an employer contribution of $500 to each employee's 401(k)
plan account.
(2) Consisting of an employer contribution of $500 to Mr. Dugan's 401(k) plan
account and partial forgiveness of a loan from the Company in the amount
of $57,253 in 1996 and $57,097 in 1995 and 1994. See "Certain
Relationships and Other Transactions" for a description of such loan.
5
<PAGE>
During 1996, each non-employee director received an annual fee of $26,000 in
connection with his service on the Board of Directors of the Company and was
reimbursed for all travel expenses incurred in attending meetings of the
Board. Pursuant to the 1995 Stock Incentive Plan, each non-employee director
who was elected at the Company's 1996 Annual Meeting of Stockholders was
granted an option on July 23, 1996, to purchase 7,500 shares of the Company's
Common Stock at an exercise price equal to the then fair market value.
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following two tables set forth certain information regarding stock
options granted to, exercised by, and owned by the executive officers named in
the foregoing Summary Compensation Table during 1996.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED RATES OF
STOCK PRICE
% OF TOTAL APPRECIATION FOR
OPTIONS OPTION TERM(/2/)
GRANTED TO -------------------
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION
NAME GRANTED(#) FISCAL YEAR PRICE/SHARE DATE 5% 10%
---- ---------- ------------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Samuel H. Maslak........ 100,000(/1/) 7.09% $14.875 2/28/06 $935,481 $2,370,692
Robert J. Gallagher..... 50,000(/1/) 3.55% $14.875 2/28/06 $467,740 $1,185,346
Daniel R. Dugan......... 50,000(/1/) 3.55% $14.875 2/28/06 $467,740 $1,185,346
Bradford C. Anker....... 25,000(/1/) 1.77% $14.875 2/28/06 $233,870 $ 592,673
Stephen T. Johnson...... 20,000(/1/) 1.42% $14.875 2/28/06 $187,096 $ 474,138
</TABLE>
- --------
(1) Granted at fair market value on the date of grant; vesting over five years
with 10% of the shares vesting six months after the date of grant and the
balance vesting daily over the remaining 4 years. Vesting may be
accelerated and the options may be repriced at the discretion of the Board
of Directors. In the event of a dissolution, merger or other
reorganization of the Company in which more than 50% of the Company's
stock is exchanged, any surviving corporation shall assume the options
outstanding, substitute similar rights for outstanding options, or the
options shall continue. If the surviving corporation refuses to assume or
continue the options, vesting on such options shall be accelerated.
Subject to certain exceptions and conditions, in the event that a person
or entity acquires more than 20% of the Company's then outstanding stock
without the approval of the Board of Directors, vesting of outstanding
options is automatically accelerated.
(2) The dollar amounts under these columns are the result of calculations at
the 5% and 10% annual rates of stock appreciation prescribed by the
Securities and Exchange Commission and are not intended to forecast
possible future appreciation, if any, of the Company's stock price.
Assuming 5% and 10% compounded annual appreciation of the stock price over
the term of the option, the price of a share of Common Stock underlying an
option issued February 28, 1996 with an exercise price of $14.875 would be
$24.23 and $38.58, respectively, on February 28, 2006. The closing sale
price of Acuson stock on the New York Stock Exchange on December 31, 1996
was $24.375.
6
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END(#) AT FY-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE(1)
---- ----------- ------------ ---------------------- ---------------------
<S> <C> <C> <C> <C>
Samuel H. Maslak........ -- -- 644,828/131,947 $6,363,846/$1,368,013
Robert J. Gallagher..... -- -- 224,763/140,981 $2,360,935/$1,671,613
Daniel R. Dugan......... -- -- 172,546/157,494 $1,956,116/$1,534,179
Bradford C. Anker....... 14,000 $213,425 149,096/ 43,642 $1,969,638/$ 460,093
Stephen T. Johnson...... 11,000 $143,917 158,055/ 78,625 $1,349,084/$ 769,606
</TABLE>
- --------
(1) Value per share is defined as the market price of Acuson stock at year end
minus the per share exercise price of the option. The closing sale price
of Acuson stock on the New York Stock Exchange on December 31, 1996 was
$24.375.
REPORT OF THE COMPENSATION COMMITTEE AND BOARD OF
DIRECTORS--EXECUTIVE COMPENSATION
The Company believes that compensation of the Company's key executives
should be sufficient to attract and retain highly qualified personnel in the
competitive Silicon Valley area, and should also provide meaningful incentives
for measurably superior performance. The Company seeks to reward achievement
of long and short-term performance goals measured by successful development of
new products, sales volume, meeting or exceeding financial targets, and other
factors. In addition, the Company's performance is considered on an absolute
basis and in comparison to other ultrasound companies in the United States and
other high technology companies in the San Francisco Bay Area in determining
executive remuneration.
The Company's executive compensation generally consists of a base salary, a
cash bonus and long-term incentive compensation in the form of stock options.
When appropriate, a numerically based bonus based on sales or order
performance has been used for certain executive officers. The overall officer
cash compensation structure is designed so that, in general, a combination of
base salary and a 10% bonus is aimed to pay officers at approximately the 75th
percentile, based on the surveys described below used to obtain comparable
compensation data. The compensation for any individual may be above or below
this target, based on a number of factors, also described below.
Salaries for the Company's executive officers, other than for the Chief
Executive Officer, are recommended by the Chief Executive Officer, and
reviewed and approved by the Compensation Committee of the Board of Directors.
In determining his recommendations for salaries of executive officers, Dr.
Maslak generally does not employ a formulaic approach or assign a
predetermined weight to any specific objective or subjective criteria. Rather,
he relies on a number of factors he deems important in making his
recommendation. These factors include the performance of the executive over
the past year, his view of the value of the executive's position at the
Company and the importance of the output of the functional area managed by the
executive, both on an absolute basis and on a relative basis in comparison to
the challenges facing that functional area and the results achieved, as well
as his view of the Company's performance and the ultrasound market in general.
He also relies on publicly available executive compensation surveys chosen for
their reputability and relevance to the Company in terms of geographic area
and size of companies surveyed and on a study of executive compensation in
publicly-held high technology companies, including competitors and neighboring
companies in the San Francisco Bay area. The publicly available survey data
may be adjusted by the Company's Human Resources Department to make the data
more consistent with positions and responsibilities at the Company. Neither
the surveys nor the study specifically use data for the companies included in
the groups listed in the performance graph in this proxy statement.
7
<PAGE>
The salary for the Chief Executive Officer is determined in much the same
manner by the Compensation Committee. The Committee uses its judgment and
discretion in considering the survey data, an assessment of the Company's
performance and Dr. Maslak's performance and contributions to the Company.
There is no strict formulaic tie between the Company's stated goals and
performance and Dr. Maslak's salary.
When the Compensation Committee met in February 1996 to determine executive
officer salaries for 1996, Dr. Maslak noted that during 1995, the Company had
made significant progress toward meeting its strategic objectives;
successfully controlled expenses and maintained profitability each quarter;
increased its service revenue and profit; released an important upgrade to the
Company's existing 128XP ultrasound system; and was now ready to launch a
significant new product, culminating years of research and development. Dr.
Maslak noted that in order to retain and motivate officers, the Company's goal
was to maintain officer cash compensation, based on salary and a 10% bonus, at
or near the 75th percentile, with some variation based on individual
performance. Based on the performance of the Company and in order to maintain
this goal, he recommended specific raises for the officers, other than
himself. The Committee accepted these recommendations.
The Company's Officer Bonus Plan is designed to pay a bonus of up to 25% of
an officer's base salary. The target amount is not established on an annual
basis. The amount of any particular annual bonus awarded under the Bonus Plan,
other than for the Chief Executive Officer, is recommended by the Chief
Executive Officer based on his assessment of a number of factors. These
factors include financial results, including orders, shipments and profit
margins, relative market share, meeting in a timely manner product development
milestones and expense controls, as a well as qualitative factors such as
achievement vs. difficulty of corporate objectives and positioning the Company
for the future, and Dr. Maslak's view of the officer's performance during the
past year. These Bonus Plan goals are not formally established at any point in
time and no specific target amounts are included in these goals, but they are
discussed on a subjective basis with the Committee at the time the Committee
considers the bonuses. The Chief Executive Officer reviews the Company's
performance in these areas in light of his assessment of overall market
conditions, as well as his assessment of the officer's performance during the
prior year. The bonus for the Chief Executive Officer is determined in the
same way by the Compensation Committee.
Officer bonuses for 1996 were determined in February 1997. The Chief
Executive Officer reported to the Compensation Committee that during 1996 the
Company had successfully launched two major products; achieved record revenues
for the last two quarters of the year; and successfully controlled expenses
despite the very significant cost of launching the new products. Based on
these factors as well as the factors described in the previous paragraph, Dr.
Maslak recommended specific bonuses for all executive officers other than
himself. The Compensation Committee accepted these recommendations.
The Company also has a merit bonus program that applies to employees
(including officers) to recognize special accomplishments or significant
efforts. The Chief Executive Officer has the discretion to grant a bonus to
any officer consistent with the principles of this program. No bonuses were
awarded to executive officers under this program in 1996.
Stock options are awarded to encourage a long-term commitment to the Company
and to direct officers' focus on long-term appreciation of stockholder value,
as opposed to short-term results or functional area goals. In general, options
align rewards with long-term increased value for shareholders. Options also
serve as reward and recognition for past work and as an incentive to perform
well in the future. The Chief Executive Officer recommends a pool of shares
available for option grants to officers as a whole and he compares the
recommended pool with survey data drawn from high technology companies in the
San Francisco Bay area and other ultrasound companies. According to this data,
the overall pool of shares allocated for officer grants was comparable to
officer option grants among the companies in the survey data. Dr. Maslak's
recommendation of which individual officers should receive grants of options
and the size of those grants are based primarily on his view of individual
performance, the potential of the individual to influence positively the long-
term growth and value of the Company, on his evaluation of the relative
importance of that individual in meeting the Company's objectives, and on
advice from the Company's Human Resources department on compensation necessary
to hire and retain senior executives in the Silicon Valley area. The Chief
Executive Officer recommended option grants for executive officers in
February, 1996. The Compensation Committee accepted all of his
recommendations.
8
<PAGE>
Dr. Maslak's salary, bonus and options were reviewed by the Compensation
Committee without Dr. Maslak being present. The Committee considered the
factors outlined by Dr. Maslak above, as well as the survey data covering
total cash compensation for chief executive officers. In light of the
Company's achievements during 1995, Dr. Maslak's individual performance, and
Dr. Maslak's request not to receive a salary increase for 1995, the
Compensation Committee determined that a 6.8% salary raise for 1996 would be
appropriate. The Compensation Committee also determined in February 1996 that
an option grant would be appropriate as an incentive to Dr. Maslak to lead the
Company through what would be a challenging year, involving the launch of two
major products while controlling expenses. The Committee also noted that Dr.
Maslak had not received an option grant since 1993. In February 1997 the
Compensation Committee considered Dr. Maslak's bonus for 1996. The Committee
reviewed the Company's achievements during 1996, including launch of two major
new products, record revenues for the last two quarters of the year, and
successfully controlling expenses, and concluded that a 15% bonus would be
appropriate. Dr. Maslak's 1996 total cash compensation is in approximately the
75th percentile of the total cash compensation, including bonuses, of chief
executive officers in the survey data.
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation
exceeding $1 million paid to certain of the corporation's executive officers.
The limitation applies only to compensation which is not considered to be
performance-based. The non-performance based compensation paid to the
Company's executive officers in 1996 did not exceed the $1 million limit per
officer. The Company's 1995 Stock Incentive Plan is structured so that any
compensation deemed paid to an executive officer in connection with the
exercise of option grants made under that plan will qualify as performance-
based compensation which will not be subject to the $1 million limitation. The
Compensation Committee is aware of the limitations imposed by Section 162(m),
and the exemptions available therefrom, and will address the issue of
deductibility when and if circumstances warrant and may use such exemptions in
addition to the exemption contemplated under the Company's 1995 Stock
Incentive Plan.
The Compensation Committee
Karl H. Johannsmeier
Albert L. Greene
Alan C. Mendelson
9
<PAGE>
PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN(1)
AMONG S&P 500 INDEX, S&P MEDICAL PRODUCTS & SUPPLIES INDEX(2)
AND ACUSON CORPORATION
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION> MEDICAL
Measurement Period ACUSON S&P PRODUCTS &
(Fiscal Year Covered) CORP. 500 INDEX SUPPLIES
- ------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt-12/91 $100 $100 $100
FYE 12/92 $ 49.03 $107.62 $ 85.68
FYE 12/93 $ 37.74 $118.46 $ 65.34
FYE 12/94 $ 50.58 $120.03 $ 77.48
FYE 12/95 $ 38.52 $165.13 $130.96
FYE 12/96 $ 75.88 $203.05 $150.30
</TABLE>
Assumes $100 invested on December 31, 1991 in S&P 500 Index, S&P Medical
Products & Supplies Index and Acuson Corporation
Notes:
(1) Total Return assumes reinvestment of dividends.
(2) Medical Products & Supplies Index includes C.R. Bard Inc., Baxter
International Inc., Becton Dickinson & Co., Bausch & Lomb, Medtronic Inc.,
St. Jude Medical, Biomet, Inc., U.S. Surgical, Boston Scientific and
Guidant Corp.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
On December 30, 1996, a trust for the benefit of the children of Stephen T.
Johnson, the Vice President and Chief Financial Officer of the Company, sold
450 shares of the Company's Common Stock. The transaction was not reported on
a Form 4, but was reported on a Form 5 on February 19, 1997. Mr. Johnson
disclaims beneficial ownership of the shares that were sold.
COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Compensation Committee consisted of Messrs. Johannsmeier,
Greene and Mendelson, none of whom has ever been an officer or employee of the
Company. However, during the year ended December 31, 1996, the Company paid
approximately $75,598.07 for legal services to the law firm of Cooley Godward
LLP, of which Mr. Mendelson is a partner. The Company believes that the fees
paid to Cooley Godward LLP are comparable to those that would be paid to an
unaffiliated party for similar services.
10
<PAGE>
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
In connection with Mr. Dugan's relocation to the San Francisco Bay Area in
August 1991, the Company loaned Mr. Dugan $400,000 to assist him in the
purchase of a home in the San Francisco Bay Area. The loan is secured by Mr.
Dugan's residence.
The loan to Mr. Dugan is interest-free and will be fully forgiven on a daily
basis over a seven year period which commenced on August 8, 1991. The loan
will be automatically forgiven upon termination of Mr. Dugan's employment by
the Company without "cause" as defined in the promissory note, Mr. Dugan's
death, reduction of Mr. Dugan's salary below $200,000, or a "change in
control" of the Company, as defined in the note. If Mr. Dugan voluntarily
terminates his employment with the Company or if he is terminated by the
Company for "cause," he must repay the outstanding balance of the loan plus
any tax savings to him resulting from any repayment of the loan, no later than
the second anniversary of the date of termination.
As of December 31, 1996, approximately $91,364 of the loan to Mr. Dugan was
outstanding and the largest aggregate amount outstanding during the year was
approximately $148,461. See also "Compensation Committee Interlocks and
Insider Participation" above.
ANNUAL REPORT AND FORM 10-K
The Company's 1996 Annual Report, including financial statements and
financial statement schedules is being mailed with this proxy statement to
stockholders entitled to notice of the meeting. A COPY OF THE COMPANY'S REPORT
ON FORM 10-K FOR THE YEAR 1996 WILL BE PROVIDED UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO EACH SUCH STOCKHOLDER. Requests should be sent to
Stockholder Relations, Acuson Corporation, P.O. Box 7393, Mountain View,
California 94039-7393.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented for
consideration at the Annual Meeting. If other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ CHARLES H. DEARBORN
Charles H. Dearborn
Secretary
11
<PAGE>
DETACH HERE
ACUSON CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 20, 1997
P
R The undersigned hereby appoints Samuel H. Maslak and Robert J.
Gallagher, and each of them, with full power of substitution, as proxies
O and attorneys-in-fact to vote the shares of Common Stock of Acuson
Corporation (the "Company") which the undersigned is entitled to vote at
X the Annual Meeting of Stockholders of the Company to be held May 20, 1997
and at any adjournment(s) thereof, on the following matters as set forth
Y in the Notice of said meeting and Proxy Statement related thereto, and,
in their discretion, upon such other matters which may properly come
before the meeting or any adjournment(s) thereof.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE ------------
|SEE REVERSE|
| SIDE |
-----------
<PAGE>
DETACH HERE
[ X ] Please mark
votes as in
this example.
This proxy will be voted as specified, or if no choice is specified, FOR
items 1 and 2.
<TABLE>
<CAPTION>
<S> <C> <C>
For Against Abstain
1. ELECTION OF DIRECTORS: 2. To ratify the appointment of Arthur [_] [_] [_]
Nominees: Robert J. Gallagher, Andersen LLP as independent public
Albert L. Greene, Karl H. Johannsmeier, accountants of the Company.
Samuel H. Maslak, Alan C. Mendelson
FOR WITHHELD
[_] [_]
[_] ________________________________
For all nominees as noted above
MARK HERE
FOR ADDRESS [_]
CHANGE AND
NOTE AT LEFT
Please sign below exactly as your name or names appear hereon. If more than one name
appears, all persons so designated should sign. When signing in a representative
capacity, please give your full title.
Signature: _____________________________________ Date: ______________ Signature: ________________________________ Date:_____________
</TABLE>
