<PAGE>
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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 Section 240.14a-11(c) or Section 240.14a-12
ADVANCED TECHNOLOGY LABORATORIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF ADVANCED TECHNOLOGY LABORATORIES, INC.]
ADVANCED TECHNOLOGY LABORATORIES,INC.
22100 Bothell Everett Highway
P.O. Box 3003
Bothell, WA 98041-3003
March 31, 1997
Dear Shareholder:
You are cordially invited to attend the 1997 Annual General Meeting of
Shareholders of Advanced Technology Laboratories, Inc. at 9:00 a.m. on
Wednesday, May 7, 1997 at the Four Seasons Olympic Hotel, 411 University
Street, Seattle, Washington 98101.
At the Annual General Meeting the Shareholders will be asked to elect
directors to the Board of Directors, to consider and vote upon an employee
stock purchase plan, and to ratify the appointment of KPMG Peat Marwick LLP as
independent auditors for the Company for 1997.
The Notice of Meeting and Proxy Statement on the following pages describe in
detail the matters to be presented at the meeting.
Whether or not you plan to attend the meeting, we hope you will have your
stock represented by signing, dating and returning your proxy in the enclosed
envelope as soon as possible. Your stock will be voted in accordance with the
instructions you have given in your proxy. You may, of course, attend the
Annual General Meeting and vote in person even if you have previously returned
your proxy card.
Sincerely,
/s/ Dennis C. Fill
Dennis C. Fill
Chairman and
Chief Executive Officer
IMPORTANT
A Proxy Statement and proxy card are enclosed. All shareholders are
urged to complete and mail the proxy card promptly in the enclosed
postage-paid envelope. Any shareholder attending the meeting may
personally vote on all matters which are considered, in which event the
signed proxy is not used.
IT IS IMPORTANT THAT YOUR STOCK BE VOTED.
<PAGE>
[LOGO OF ADVANCED TECHNOLOGY LABORATORIES, INC.]
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
MAY 7, 1997
To the Shareholders:
The Annual General Meeting of Shareholders of Advanced Technology
Laboratories, Inc. will be held at 9:00 a.m. on Wednesday, May 7, 1997 at the
Four Seasons Olympic Hotel, 411 University Street, Seattle, Washington 98101,
for the following purposes:
1. To elect eight Directors to hold office until the next Annual General
Meeting of Shareholders and until their respective successors are
elected and qualified;
2. To consider and vote upon a proposal to approve the ATL Employee Stock
Purchase Plan and to reserve 300,000 shares of ATL Common Stock for
purchase under the plan;
3. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for 1997; and
4. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed March 14, 1997 as the record date for the
determination of shareholders entitled to receive notice of and to vote at the
Annual General Meeting or any adjournment thereof. Only shareholders of record
at the close of business on that date will be entitled to notice of and to
vote at the meeting.
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON, BUT EVEN IF
YOU EXPECT TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO MARK, DATE, SIGN
AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
POSTAGE-PAID ENVELOPE TO ENSURE YOUR REPRESENTATION. SHAREHOLDERS ATTENDING
THE MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE PREVIOUSLY SENT IN A PROXY
CARD.
By Order of the Board of Directors
/s/ W. Briton Yorks, Jr.
W. Brinton Yorks, Jr.
Secretary
Bothell, Washington
March 31, 1997
<PAGE>
PROXY STATEMENT
ADVANCED TECHNOLOGY LABORATORIES, INC.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, MAY 7, 1997
GENERAL
The enclosed proxy is solicited by the Board of Directors of Advanced
Technology Laboratories, Inc. ("ATL" or the "Company"), for use at the Annual
General Meeting of Shareholders (the "Annual Meeting") to be held at 9:00 a.m.
on Wednesday, May 7, 1997 at the Four Seasons Olympic Hotel, 411 University
Street, Seattle, Washington 98101 and at any adjournment thereof.
The address of the principal executive offices of ATL is 22100 Bothell
Everett Highway, P.O. Box 3003, Bothell, WA 98041-3003.
This Proxy Statement and the accompanying proxy are being mailed to the
shareholders of ATL on or about March 31, 1997.
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only holders of record of ATL's common stock (the "Common Stock") at the
close of business on March 14, 1997 will be entitled to vote at the Annual
Meeting. On that date, the Company had outstanding 14,186,893 shares of Common
Stock. Each share of Common Stock is entitled to one vote at the Annual
Meeting. The presence in person or by proxy of the holders of record of one-
third of the outstanding shares of Common Stock issued and outstanding and
entitled to vote is required to constitute a quorum for the transaction of
business at the meeting. Shareholders of record are entitled to vote either by
personal attendance at the meeting or by delivery of the enclosed proxy card.
Abstentions and broker non-votes will be considered represented at the meeting
for the purpose of determining a quorum.
Under Washington law and the Company's Articles of Incorporation, if a
quorum is present at the meeting: (i) the eight nominees for election to the
Board of Directors who receive the largest number of votes cast for the
election of Directors by the shares entitled to vote shall be elected
Directors, and (ii) each of the other matters listed in the accompanying
Notice of Annual General Meeting of Shareholders must be approved by the
affirmative vote of a majority of the shares entitled to vote at the Annual
Meeting. In the election of Directors, any action other than a vote for a
nominee will have the practical effect of voting against the nominee.
Abstention from voting will have the practical effect of voting against any of
the other matters since it is one less vote for approval. Broker nonvotes on
one or more matters will have no impact on such matters since they are not
considered "shares present" for voting purposes.
PROXY VOTING
Shares for which proxies are properly executed and returned will be voted at
the meeting in accordance with the directions noted thereon, and in the
absence of directions to the contrary, such shares will be voted: "FOR" the
election of the nominees for the Board of Directors named in the following
pages, "FOR" the approval of the Employee Stock Purchase Plan, and "FOR" the
ratification of the appointment of KPMG Peat Marwick LLP as independent
auditors for the Company for 1997. It is not expected that any matters other
than those referred to in this Proxy Statement will be brought before the
Annual Meeting. If, however, other matters are properly presented, the persons
named as proxies will vote in accordance with their judgment with respect to
such matters. The grant of a proxy will also confer discretionary authority on
the persons named in the proxy to vote on matters incident to the conduct of
the Annual Meeting.
<PAGE>
REVOCATION
Any shareholder giving a proxy may revoke it at any time before it is voted
by delivering to the Secretary of the Company a written notice of revocation
or a duly executed proxy bearing a later date, or by attending the meeting and
electing to vote in person.
PROPOSAL 1: ELECTION OF DIRECTORS
In accordance with the Bylaws of the Company, the Board of Directors has
fixed the number of directors constituting the Board at eight, each to hold
office for a term of one year and until his successor shall have been elected
and qualified. Kirby L. Cramer, Harvey Feigenbaum, Dennis C. Fill, Eugene A.
Larson, Ernest Mario, John R. Miller, Phillip M. Nudelman, and Harry Woolf
have been nominated for election to the Board of Directors for 1997. It is
intended that votes will be cast pursuant to the accompanying proxy for the
election of these nominees, each of whom is at present a Director of the
Company, unless contrary instructions are received. If any nominee should
become unavailable for any reason, it is intended that votes will be cast for
a substitute nominee designated by the Board. The Board has no reason to
believe that the nominees named will be unable to serve if elected.
Biographical information regarding each of the nominees for the Board of
Directors is set forth below:
KIRBY L. CRAMER. Mr. Cramer (age 60) has served as a Director since February
26, 1993. Mr. Cramer serves as Chairman of the Compensation Committee and is a
member of the Audit Committee. Mr. Cramer is the Chairman Emeritus of Hazleton
Laboratories Corporation, a contract biological and chemical research
laboratory, which was acquired by Corning Incorporated in 1987. He is Chairman
of the Board of Northwestern Trust Company and also President of Keystone
Capital Company, an investment company. Mr. Cramer received his Bachelor of
Arts degree from Northwestern University and Master of Business Administration
degree from the University of Washington and is a graduate of the Harvard
Business School's Advanced Management Program. In 1988, he received an
honorary Doctor of Laws degree from James Madison University. Mr. Cramer is a
member of the University of Washington Foundation and is Chairman of the
Advisory Board of the University of Washington School of Business
Administration. He is the past President and Trustee Emeritus of the Darden
School Foundation of the University of Virginia. Mr. Cramer is a member of the
boards of directors of Northwestern Trust Company, Immunex Corporation, Unilab
Corporation, The Commerce Bank of Washington, N.A., Landec Corporation,
Pharmaceutical Product Development, Inc. and Intellicoat Corporation.
HARVEY FEIGENBAUM, M.D. Dr. Feigenbaum (age 63) has served as a Director
since January 2, 1987. He is Chairman of the Audit Committee and is a member
of ATL's Scientific Advisory Board. Dr. Feigenbaum has been a Distinguished
Professor of Medicine at the Indiana University Medical Center since 1980 and
joined its faculty in 1962. He was elected to Phi Beta Kappa and received a
Bachelor's degree summa cum laude from Indiana University in 1955, an M.D.
from the Indiana School of Medicine in 1958, and his Cardiovascular
Subspecialty, American Board of Internal Medicine in 1969. Dr. Feigenbaum is a
fellow of the American College of Physicians, the American College of
Cardiology, the Council on Clinical Cardiology of the American Heart
Association and the American Institute of Ultrasound in Medicine, as well as a
member of the Editorial Boards of the American Heart Journal, the American
Journal of Cardiology and the journal Circulation. He is the editor of the
Journal of the American Society of Echocardiography. Dr. Feigenbaum is a
director of Regentrief Foundation for Delivery of Healthcare and SpaceLabs
Medical, Inc.
DENNIS C. FILL. Mr. Fill (age 67) has served as a Director, Chairman of the
Board and Chief Executive Officer of ATL and as a member of the Executive
Committee of ATL since November 11, 1986. From 1978 through December 1986, he
served as a member of the board of directors of Squibb Corporation (the former
parent of ATL) and as its President and Chief Operating Officer. Mr. Fill was
also a member of the executive committee and the finance committee of the
Squibb Corporation board of directors. Mr. Fill attended Ealing
2
<PAGE>
College, the Institute of Export and Borough Polytechnic. He also served in
the Royal Air Force. Mr. Fill is a member of the boards of directors of
Beckman Instruments, Inc., Morton International, Inc. and SpaceLabs Medical,
Inc.
EUGENE A. LARSON. Mr. Larson (age 54) has served as a Director and a member
of ATL's Scientific Advisory Board since December 22, 1992, and as a member of
the Executive Committee since May 5, 1993. Mr. Larson previously served as a
Director and President of ATL from June 1988 to January 1990. He has served as
a consultant to ATL since January 1993. From January 1991 to December 1992, he
served as Executive Vice President of ATL. Mr. Larson also served as a
consultant to Westmark and ATL in 1987 and 1990, and as ATL's Vice President,
Technology from February 1988 to June 1988. He was Professor of
Entrepreneurship and Innovation, Department of Engineering, Pennsylvania State
University in 1986 and 1987. Mr. Larson was founder and President of Echo
Ultrasound, Inc., a manufacturer of medical ultrasound devices, which was
acquired by Johnson & Johnson in 1982. Previously he was founder and President
of Aerotech Laboratories, a manufacturer of industrial ultrasound electronics,
which was acquired by Smith Kline & French in 1970. He has served as a
director of Geisinger Medical Center and president and director of Lewistown
Hospital. In 1988, he was awarded the Pioneer in Ultrasound Award by the
American Institute of Ultrasound in Medicine. Mr. Larson is a trustee of Grove
City College.
ERNEST MARIO, PH.D. Dr. Mario (age 58) has been a Director of ATL since
December 4, 1996. He is Co-chairman and Chief Executive Officer of ALZA
Corporation. Dr. Mario joined ALZA in 1993. Prior to joining ALZA, Dr. Mario
served as CEO of Glaxo Holdings p.l.c. in London, England from 1989 and in
1992 was named to the additional position of deputy chairman. Dr. Mario earned
a bachelor of science degree in pharmacy at Rutgers University and master's
and doctorate degrees in physical sciences at the University of Rhode Island.
He is a licensed pharmacist in the states of New York and Rhode Island. Dr.
Mario is an adjunct professor of pharmacy at the University of Rhode Island
and holds honorary doctorate degrees from both the University of Rhode Island
and Rutgers. Dr. Mario is active in numerous education and health care
organizations, including service on the board of Stanford Health Services at
Stanford University, Chairman of the American Foundation for Pharmaceutical
Education and as a trustee of Duke and Rockefeller Universities. He also
serves on the boards of directors of Catalytica, Inc., Cor Therapeutics Inc.,
and Pharmaceutical Product Development, Inc..
JOHN R. MILLER. Dr. Miller (age 58) has served as a Director of ATL since
July 16, 1993 and is a member of the Compensation Committee. He is currently a
senior advisor to Chanen, Painter & Company, Ltd., an investment bank with
offices in Seattle. Mr. Miller is also a board member of the Discovery
Institute and Chairman of Discovery's Cascadia Project in Seattle. From 1985
to 1992, Mr. Miller served as a U.S. Congressman for the First District of
Washington State. While a Member of Congress, he served on the Budget
Committee and the Foreign Affairs Committee, including the Subcommittee on
International Economic Policy and Trade and the Subcommittee on International
Operations. Mr. Miller was a member of Phi Beta Kappa and received his
Bachelor of Arts degree from Bucknell University and a Doctor of Laws degree
and Master of Economics degree from Yale University Law and Graduate Schools,
respectively. He is a member of the board of directors of Sino Seattle Snack
Foods and Coach Master International.
PHILLIP M. NUDELMAN, PH.D. Dr. Nudelman (age 61) has served as a Director of
ATL since October 28, 1994 and is a member of the Audit Committee. He has
served as Chief Executive Officer and President of Group Health Cooperative of
Puget Sound since February 1991. Dr. Nudelman joined Group Health in 1973 as
Director of Professional Services and has held positions of increasing
responsibility since then. He received his Bachelor of Science degree in
microbiology, zoology and pharmacy from the University of Washington, and
holds Master of Business Administration and Doctor of Philosophy degrees in
Health Systems Management from Pacific Western University. Dr. Nudelman is a
member of the American Hospital Association House of Delegates, and chaired
the Governing Council for Health Care Systems. Dr. Nudelman is a member of the
boards of directors of Cell Therapeutics, Inc. and SpaceLabs Medical, Inc. He
also serves on the boards of directors of American Healthcare Systems, Inc.,
the Association of Washington Business, and the Foundation for Health Care
Quality.
3
<PAGE>
HARRY WOOLF, PH.D. Dr. Woolf (age 73) has served as a Director and a member
of the Compensation Committee of ATL since January 2, 1987. He has also served
as Chairman of ATL's Scientific Advisory Board since May 1, 1987. In 1987, Dr.
Woolf completed an 11-year appointment as the director of The Institute for
Advanced Study, Princeton, New Jersey, and is currently a Professor at the
Institute. Dr. Woolf received his Bachelor of Science and Master of Arts
degrees from the University of Chicago and his Doctor of Philosophy degree
from Cornell University. He has also received honorary doctorates from Whitman
College, American University, Johns Hopkins University and St. Lawrence
University. Dr. Woolf has been honored by election to the Academie
Internationale d'Histoire des Sciences, American Philosophical Society, Sigma
Xi, Phi Beta Kappa and American Academy of Arts and Sciences. He was a trustee
of the Rockefeller Foundation (1984-1994) and is a Trustee of Reed College.
Dr. Woolf was a member of the board of directors of Alex. Brown Mutual Funds
until December 31, 1996, and is a member of the boards of directors of
SpaceLabs Medical, Inc. and Research America. He is also a director of the
Johns Hopkins Program for International Education on Gynecology and Obstetrics
and Family Health International.
During 1996, there were four meetings of the ATL Board. All incumbent
directors serving for the full year of 1996 were in attendance at over 75% of
such meetings.
DIRECTOR COMPENSATION
Directors who are employees of ATL do not receive any fee for their services
as Directors. Directors who are not employees of ATL are paid an annual
retainer of $25,000 and receive an additional fee of $500 for attendance at
each meeting of the ATL Board plus $500 for attendance at each meeting of a
committee of the ATL Board. A nonemployee Director serving as a committee
chairman receives an additional $1,000 per annum.
As approved by the shareholders on May 5, 1993 and amended by shareholders
on May 10, 1995, all Directors who are not employees of ATL are also eligible
for a grant of stock options under the Amended Nonemployee Director Stock
Option ("NED") Plan . Each nonemployee Director automatically receives on the
first day of July each year an option to purchase 5,000 shares of ATL Common
Stock, at an exercise price equal to the fair market value on the date of
grant. In 1996, Messrs. Cramer, Feigenbaum, Miller, Nudelman and Woolf were
recipients of grants under the NED Plan. Dr. Feigenbaum has made arrangements
for any proceeds realized from his ATL stock options to be donated to charity.
All nonemployee Directors currently proposed to serve as Directors are
eligible for grants in 1997.
In 1996, Dr. Harvey Feigenbaum received $45,000 as a member of the
Scientific Advisory Board.
In 1996, Mr. Larson received $206,246 for consulting services to the
Company, a $100,000 one-time bonus for his assistance in the execution of
projects of strategic importance to the Company, and $40,000 for his services
as a member of the Scientific Advisory Board. In 1996, Mr. Larson also
received an option to acquire 10,000 shares of ATL Common Stock under the 1992
Option, Stock Appreciation Right, Restricted Stock, Stock Grant and
Performance Unit Plan (the "1992 Stock and Stock Option Plan").
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1996, Dr. Harry Woolf received $50,000 in his capacity as Chairman of the
Scientific Advisory Board. Dr. Woolf is a member of the Compensation Committee
of the Board.
4
<PAGE>
COMMITTEES OF THE ATL BOARD
ATL has established standing committees of the ATL Board, including Audit,
Compensation and Executive Committees. In addition, Directors serving on the
Scientific Advisory Board participate in and direct the setting of ATL's
technology strategy. The Board of Directors does not have a standing
nominating committee. Each of the committees, while invested with the
authority of the full Board, is responsible to the ATL Board, and its
activities are therefore subject to approval of the ATL Board. The functions
performed by these committees can be summarized as follows:
AUDIT COMMITTEE. The Audit Committee reviews the accounting principles,
internal accounting controls, audit plan and financial results of ATL in order
to safeguard ATL's assets and to provide for the reliability of its financial
records. The members of the Audit Committee are Dr. Feigenbaum (Chairman), Mr.
Cramer and Dr. Nudelman. The Audit Committee met four times during 1996. All
members were in attendance at all meetings.
COMPENSATION COMMITTEE. The Compensation Committee establishes salaries,
incentives and other forms of compensation for directors, officers and other
executives of ATL and its subsidiaries. This Committee also administers ATL's
various incentive compensation and benefit plans and establishes policies
relating to these plans. The members of the Compensation Committee are Mr.
Cramer (Chairman), Mr. Miller and Dr. Woolf. The Compensation Committee met
four times during 1996. All members were in attendance at all meetings.
EXECUTIVE COMMITTEE. The Executive Committee has authority, subject to
limitations prescribed by the ATL Board, to exercise, during the intervals
between meetings of the ATL Board, the powers of the full ATL Board, and is
also available, on a standby basis, for use in an emergency or when scheduling
makes it impractical to bring the full ATL Board together for a meeting. The
members of this Committee are Mr. Fill, Dr. Feigenbaum, Mr. Cramer and Mr.
Larson. This Committee did not meet during 1996.
SCIENTIFIC ADVISORY BOARD. The Scientific Advisory Board meets with a group
of senior scientists of ATL known as the Senior Technical Staff ("STS") and
has the authority to control and direct ATL's technology strategy. Regular
meetings of the STS are held weekly, and members of the Scientific Advisory
Board attend these meetings as circumstances dictate. The members of the
Scientific Advisory Board are Dr. Woolf (Chairman), Dr. Feigenbaum and Mr.
Larson.
SECTION 16 REPORTING
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires ATL's officers and directors and persons who own more than 10% of a
registered class of ATL's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commissions (the "SEC").
Officers, directors and shareholders with holdings greater than 10% of the
Company's stock are required by SEC regulations to furnish ATL with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it or
written representations from certain reporting persons that no forms were
required for those persons, ATL believes that during calendar year 1996 all
filing requirements applicable to its officers, directors and greater than 10%
shareholders were in compliance, except for the following: Eugene A. Larson, a
Director of the Company, corrected his year-end Form 5 to change the number of
ATL shares gifted to each of his three children from 250 to 1,250 shares.
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STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information as of March 1, 1997 known by the
Company with respect to each shareholder to be the beneficial owner of more
than five percent of any class of voting securities of the Company, each
Director and certain Named Executive Officers as described in the Summary
Compensation Table, and all Directors and executive officers of the Company as
a group. Each of the named persons and members of the group has sole voting
and investment power with respect to the shares shown, except as stated below.
As of March 14, 1997 there were 14,186,893 shares of Common Stock issued and
outstanding.
BENEFICIAL OWNERSHIP OF SHARES
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(1) CLASS
------------------- ------------ -------
5% OWNERS
---------
<S> <C> <C>
Chancellor LGT Asset Management, Inc. .......... 1,105,200(2) 7.8%
Fifty California Street, 27th Floor
San Francisco, CA 94111
ICM Asset Management, Inc. ..................... 1,055,868(3) 7.5%
601 W. Main Avenue, Suite 917
Spokane, WA 99201
The State of Wisconsin.......................... 833,700(4) 5.9%
Investment Board
P.O. Box 7842
Madison, WI 53707
Wellington Management Company................... 731,950(5) 5.2%
75 State Street
Boston, MA 02109
<CAPTION>
DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------
<S> <C> <C>
Dennis C. Fill.................................. 390,349(7) 2.8%
Eugene A. Larson................................ 63,150 *
Harvey N. Gillis................................ 55,327(7) *
Castor F. Diaz.................................. 55,188(7) *
Jacques Souquet................................. 47,634(7) *
Donald D. Blem.................................. 14,299(7) *
Kirby L. Cramer................................. 19,000 *
Harry Woolf..................................... 13,000 *
Harvey Feigenbaum............................... 7,463(8) *
John R. Miller.................................. 7,300 *
Phillip M. Nudelman............................. 5,100 *
Ernest Mario.................................... 0
All Directors and Executive Officers as a Group
(12 Persons)................................... 677,810(1)(7) 4.8%
</TABLE>
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* Under one percent.
(1) Includes Director and executive officer stock options exercisable within
60 days of March 1, 1997.
(2) A wholly owned subsidiary of LGT Asset Management, Inc., along with its
wholly owned subsidiary Chancellor LGT Trust Company Sole power to vote
and sole power to dispose of 1,105,200 shares, based upon publicly
available information reported as of December 31, 1996.
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(3) Sole power to vote 752,978 shares and sole power to dispose of 1,055,868
shares, based upon publicly available information reported as of December
31, 1996.
(4) Sole power to vote and sole power to dispose of 833,700 shares, based upon
publicly available information reported as of December 31, 1996.
(5) Shared power to vote 48,650 and shared power to dispose of 731,950 shares,
based upon publicly available information reported as of December 31,
1996.
(6) Sole power to vote and sole power to dispose of 659,100 shares, based upon
publicly available information reported as of December 31, 1995.
(7) Includes shares held by the Trustee of ATL's Incentive Savings and Stock
Ownership Plan (the "ISSOP/401(k)") for each such executive officer and/or
Director who is a participant in the ISSOP/401(k). Does not include shares
purchased by the Trustee of the ISSOP/401(k) after December 31, 1996,
which shares have not yet been allocated by such trustee to the accounts
of participants in the ISSOP/401(k).
(8) Includes 163 shares owned by Dr. Feigenbaum's wife. Dr. Feigenbaum
disclaims beneficial ownership as to all such shares.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning compensation for the
fiscal years 1996, 1995 and 1994 for services in all capacities to the Company
and its subsidiaries by persons who at December 31, 1996 were the Chief
Executive Officer and four most highly compensated executive officers of the
Company, other than the Chief Executive Officer (collectively, the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------- ---------------------------------------
NUMBER OF
RESTRICTED SECURITIES ALL
STOCK UNDERLYING OTHER
NAME AND PRINCIPAL SALARY BONUS(1) AWARDS(2)(3) OPTIONS COMPENSATION(4)
POSITION YEAR ($) ($) ($) (#) ($)
------------------ ---- ------- -------- ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Dennis C. Fill.......... 1996 547,019 500,000 320,000 50,000 13,965
Chairman and Chief 1995 481,730 500,000 0 0 9,240
Executive Officer 1994 428,746 112,000 815,130 0 8,925
Harvey N. Gillis........ 1996 247,308 150,000 331,313 7,000 5,993
Sr. Vice President and
Chief 1995 233,800 145,000 0 0 9,000
Financial Officer 1994 215,096 36,000 18,880 20,000 4,245
Castor F. Diaz.......... 1996 250,000 140,000 331,313 7,000 6,430
Sr. Vice President, 1995 251,014 100,000 78,075 40,000 52,425(5)
Worldwide Sales and 1994 187,771 25,000 12,800 8,000 77,476(6)
Marketing
Donald D. Blem.......... 1996 207,115 140,000 331,313 7,000 4,733
Sr. Vice President, 1995 192,000 130,000 0 21,000 6,030
Operations 1994 175,739 25,000 0 7,000 0
Jacques Souquet......... 1996 207,115 140,000 395,313 13,000 5,031
Sr. Vice President,
Product 1995 185,846 130,000 0 17,000 9,240
Generation 1994 165,577 25,000 0 9,000 7,500
</TABLE>
- --------
(1) Includes bonus awards earned during the fiscal year under the Company's
Management Incentive Compensation Plan (the "MIC Plan"). See "Compensation
Committee Report on Executive Compensation."
7
<PAGE>
(2) Restricted stock awards generally have a vesting period of four years with
25% of the award amount vesting each year on the anniversary date of the
award. The rights of a restricted shareholder include the right to receive
any dividends or other distributions made or paid with respect to such
shares. The amounts reported in this table represent the market value of
the shares at the date of grant based upon the fair market value of the
Common Stock reported on the Nasdaq National Market on such date. At
December 31, 1996 Messrs. Fill, Gillis, Diaz, Blem and Souquet held
63,750, 11,750, 14,250, 10,500 and 12,500 shares of restricted stock,
respectively, having a market value of $1,967,644, $362,664, $439,826,
$324,083 and $385,813 respectively, based upon the fair market value of
the Common Stock reported on the Nasdaq National Market on December 31,
1996.
(3) Includes awards of restricted stock on February 18, 1994, which represent
20% of the cash value of an award under the MIC Plan for the fiscal year
1993. Under these MIC Plan awards, Messrs. Fill, Gillis, Diaz, Blem and
Souquet received 3,680, 1,180, 800, 860 and 620 shares, respectively,
having a market value of $58,880, $18,880, $12,800, 13,760 and 9,920
respectively. The restricted shares granted had a two-year vesting period
with 50% of the award amount vesting each year on the anniversary date of
the award.
(4) Includes both group term life and employer-matching contributions made to
the ISSOP/401(k) Plan.
(5) Includes $18,084 in expatriate benefits, $7,755 and $17,326 in automobile
and housing allowance, respectively. In 1995 Mr. Diaz returned from
overseas assignment in Germany.
(6) Includes $32,563 in expatriate benefits and $22,323 in housing allowance.
OPTION/SAR GRANTS
The following table sets forth certain information regarding options granted
during the fiscal year ended December 31, 1996 to the Named Executive
Officers. No SARs were granted in 1996.
OPTION/SAR GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
- ---------------------------------------------------------------------------------- OF STOCK PRICE
PERCENT OF TOTAL APPRECIATION FOR
NUMBER OF SECURITIES OPTIONS GRANTED OPTION TERM(2)(3)
UNDERLYING TO EMPLOYEES IN EXERCISE ---------------------------
OPTIONS GRANTED FISCAL YEAR PRICE EXPIRATION 5% 10%
NAME (#)(1) (%)(1) ($/SH) DATE ($) ($)
- ---- -------------------- ---------------- -------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Dennis C. Fill.......... 20,000 3.8 32.00 5/8/06 402,493 1,019,995
30,000 5.6 31.75 7/25/06 599,022 1,518,040
Harvey N. Gillis........ 7,000 1.3 32.00 5/8/06 140,872 356,998
Castor F. Diaz.......... 7,000 1.3 32.00 5/8/06 140,872 356,998
Donald D. Blem.......... 7,000 1.3 32.00 5/8/06 140,872 356,998
Jacques Souquet......... 13,000 2.5 32.00 5/8/06 261,620 662.997
</TABLE>
- --------
(1) Options granted under the 1992 Stock and Stock Option Plan are granted at
the fair market value on the date of grant and generally vest over four
years with 25% of each grant exercisable on the successive anniversary
dates of grant. Certain changes in control of ATL including certain
changes in Board membership, Common Stock ownership by a single entity,
merger or liquidation, can trigger accelerated vesting of stock options
and rights to related payments.
(2) The dollar amounts under these columns are the result of calculations at
assumed rates of 5% and 10% and are not intended to forecast future
appreciation. No value will be realized if the stock price does not exceed
the exercise price of the options.
(3) The appreciation realized by all ATL shareholders on all 14,022,865 shares
of ATL Common Stock outstanding on December 31, 1996, starting from a base
value of $31.70 per share, which represents the average grant price for
stock options granted under the 1992 Stock and Stock Option Plan during
1996, would be $279,606,113 and $708,572,564 at assumed annual rates of
stock price appreciation of 5% and 10%, respectively.
8
<PAGE>
OPTION EXERCISES AND YEAR-END VALUES
The following table sets forth certain information as of December 31, 1996,
regarding options held by the Named Executive Officers.
AGGREGATED OPTION EXERCISES IN FISCAL 1996 AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dennis C. Fill.......... 5,000 $115,810 115,810 226,250 3,459,556 246,094
Harvey N. Gillis........ 12,000 247,500 41,750 23,250 598,094 235,781
Castor F. Diaz.......... 6,750 88,594 29,000 45,250 421,938 566,375
Donald D. Blem.......... 27,750 456,631 0 29,250 0 327,094
Jacques Souquet......... 8,500 82,875 20,000 34,500 291,813 317,750
</TABLE>
- --------
(1) This amount is the aggregate number of the outstanding options multiplied
by the difference between the fair market value of the ATL Common Stock as
reported on the Nasdaq National Market on December 31, 1996, minus the
exercise price of such options.
LONG-TERM INCENTIVE AWARDS
The following table sets forth certain information regarding the Company's
Long-Term Incentive Plan awards granted in fiscal year 1996 to the Named
Executive Officers.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER
PERFORMANCE NON-STOCK PRICE-BASED
OR OTHER PLANS(2)(3)
NUMBER OF SHARES, PERIOD UNTIL ---------------------------
UNITS MATURATION THRESHOLD TARGET MAXIMUM
NAME OR OTHER RIGHTS(#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ---- ------------------ ------------ --------- -------- --------
<S> <C> <C> <C> <C> <C>
Dennis C. Fill..... 1996-1998 0 $339,608 $478,642
Harvey N. Gillis... -- 1996-1998 0 $123,654 $173,116
Castor F. Diaz..... -- 1996-1998 0 $125,000 $175,000
Donald D. Blem..... -- 1996-1998 0 $103,558 $144,981
Jacques Souquet.... -- 1996-1998 0 $103,558 $144,981
</TABLE>
- --------
(1) Similar awards granted in 1993 and 1994 had no value at maturity at the
end of 1995 and 1996, respectively. The prospects for a similar award
granted in 1995 remain unknown.
(2) No payouts will be made prior to the end of the maturation period on
December 31, 1998.
(3) Awards, which are payable in cash, are determined as a percentage (0% to
70%; to 87.5% for the CEO) of a recipient's base salary. In 1996, the base
salaries of Messrs. Fill, Gillis, Diaz, Blem and Souquet were $547,019,
$247,308, $250,000, $207,115 and $207,115, respectively. See "Compensation
Committee Report on Executive Compensation."
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Policies. The five executive officers who operate the Company
on a day-to-day basis direct the Company's strategies and operations as a
management Executive Committee, chaired by the Chief Executive Officer. The
Compensation Committee has developed and directs a comprehensive program of
compensation policies that aligns the compensation of the executive officers
in accordance with goals and objectives that are consistent with ATL's
business strategies. These business strategies are designed to enhance
business financial performance and customer satisfaction and are thereby
aligned with the overall corporate objective of enhancing shareholder value.
ATL's compensation policies are designed to attract and retain key employees,
including executive officers, in competition with other high-technology
companies that endeavor to attract such employees.
The Compensation Committee is advised by an outside compensation consultant
on all aspects of compensation, including base salaries, bonus awards and
incentives, including restricted stock, stock options and long-term incentive
awards.
Compensation Programs. The Compensation Committee and ATL's shareholders
have adopted incentive programs that are directed by the Committee. Awards may
be granted to executive officers in the form of stock options, stock
appreciation rights ("SARs"), restricted stock, performance units, and cash
bonuses under the 1992 Stock and Stock Option Plan and the Management
Incentive Compensation Plan (the "MIC Plan"). Under the Long Term Incentive
Plan, designated officers of ATL may earn incentive awards over a period of
years which are premised on objective measures of company performance. All
awards to executive officers under the above plans must be reviewed and
approved by the Compensation Committee. In addition, all employees are
eligible to participate in the Incentive Savings and Stock Ownership Plan
following the initial year of employment with ATL.
Compensation of Executive Officers. The total compensation program for
executive officers in 1996, including the Chief Executive Officer, was
balanced among base salary, an annual bonus, long term incentives, restricted
stock and stock option grants vesting over multiple-year periods. The
Compensation Committee considered the advice of an outside consultant in the
area of executive compensation in determining each element of compensation and
each individual's total incentive compensation.
Salaries. The Compensation Committee utilizes an executive salary structure
recommended to the Company by an outside compensation consulting firm and
based upon several industry surveys. Salary ranges were based upon the 50th
and 75th percentile data for comparable positions in high technology companies
comparable to ATL. In 1996 the Compensation Committee adjusted the salaries of
four of the five executive officers in line with this structure.
Bonuses. Annual bonuses for all managers, including executive officers, may
be awarded by the Compensation Committee from an award pool established under
the MIC Plan. The size of the award pool is based on ATL's corporate
performance measured by quantified factors of revenue and earnings, and by
strategic factors aligned with ATL's business plan for the year. Individual
bonus awards were made by the Compensation Committee in consideration of the
executive officer's individual performance as measured by the corporate
objectives set for the recipient, and the effectiveness of the recipient in
achieving those objectives.
Bonuses awarded to executive officers for 1996 were determined in accordance
with the criteria of the MIC Plan award pool described above. In 1996 the size
of the award pool was determined by the measure of achievement of ten Company
priorities which the Board had established at the beginning of the year.
10
<PAGE>
Equity Awards. From time to time the Compensation Committee grants awards of
restricted stock and stock options under the 1992 Option Plan. The objectives
of these grants are to recognize, reward and retain individuals in key
positions who have exhibited high performance and have high potential for
advancement with ATL. In 1996 the Compensation Committee awarded restricted
stock and stock options to over 400 employees of the Company, including the
five executive officers and over 150 of the Company's scientists and
engineers. Restricted stock awards were made to the four senior vice
presidents of the management Executive Committee to establish a uniform level
of incentive compensation for these individuals.
In 1996 the Compensation Committee established an incentive program for the
Company's senior vice presidents serving on the management Executive
Committee. The program would create an award pool of restricted stock vesting
one year following the close of a fiscal year, with the size of the pool based
upon the achievement of pretax profits in excess of the Company's business
plan for the year. Any award pool created is distributed evenly among the
program participants. Vesting is contingent upon the continuous service of the
participants with the Company. No awards were made for the first year of the
program.
There are at present no awards or contracts outstanding for SARs or
performance unit awards under the 1992 Option Plan. In 1996, as in previous
years, the only stock grants awarded by the Compensation Committee were in
recognition of achievements by the Company's sales representatives and senior
scientists.
Long-Term Incentive Awards. The Compensation Committee set the terms of
performance incentives for certain officers including the executive officers
under the Long Term Incentive Plan in 1996. These incentives are to be earned
over a three-year term as determined by predetermined objective criteria of
corporate performance and will not mature until the end of 1998, at which time
they may or may not have value. The long-term incentive for each recipient is
premised on a fraction of the recipient's base salary and is limited to a
maximum percentage of salary. Similar incentives from 1993 and 1994 had no
value at maturity at the end of their respective three year award cycles.
Compensation of the Chief Executive Officer. Mr. Fill received a restricted
stock award for 10,000 shares of stock in 1996. He received no restricted
stock award in 1995. Mr. Fill also received stock option grants in the amount
of 50,000 shares, the first such award he has received since 1993. Mr. Fill's
restricted stock and stock option awards vest over four years, or upon his
retirement from the Company. In 1996 the Compensation Committee amended Mr.
Fill's employment agreement to reflect his continued service with the Company
beyond 1996. The amendment also deferred the vesting of restricted stock
awarded under the original agreement until his retirement. In July, 1996 the
Compensation Committee set Mr. Fill's salary at $575,000 in consideration of
the continued improvement of the Company's profitability. Mr. Fill received a
1996 bonus of $500,000 in consideration of the Company's record level revenue
and earnings performance for 1996, excluding one-time items, and the
completion of the strategic alliance with SIUI in China.
Compensation Committee
Mr. Kirby L. Cramer, Chairman
Harry Woolf, Ph.D.
Mr. John R. Miller
11
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The graph set forth below represents the five-year cumulative total return
on shares of ATL Common Stock, the S&P 500 Stock Index, and a Peer Group
Industry Index resulting from an initial assumed investment of $100 in each.
The Peer Group Industry Index is a representative grouping of 97 companies
from SIC Code 3845--Electromedical & Electrotherapeutic Apparatus* and
includes the reinvestment of both cash and stock dividends. The graph has been
prepared by an outside consulting firm to ATL. The ATL cumulative return is
computed as required by the rules of the SEC to comprise the cumulative total
return on Westmark common stock (including both SpaceLabs Medical, Inc. and
ATL subsidiaries) prior to June 29, 1992, and to thereafter comprise the
cumulative return of shares of ATL Common Stock with a dividend reinvestment
of the 1992 distribution of SpaceLabs stock. By reason of this computation,
the separate value of shares of ATL Common Stock on a stand-alone basis cannot
be distinguished in the graph.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
ADVANCED TECHNOLOGY LABORATORIES, INC., S&P 500 STOCK INDEX AND PEER GROUP
INDUSTRY INDEX*
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period Advanced Peer
(Fiscal Year Covered) Technology Group Ind S&P 500 Index
- ------------------- ---------- --------- ------------
<S> <C> <C> <C>
Measurement Pt-1991 $100 $100 $100
FYE 1992 $65.38 $89.49 $107.64
FYE 1993 $62.58 $77.62 $118.5
FYE 1994 $69.12 $85.94 $120.06
FYE 1995 $91.54 $151.09 $165.18
FYE 1996 $115.82 $159.48 $203.11
</TABLE>
- --------
* A list of the component companies in this Industry Index will be provided,
at no charge to shareholders, upon request.
Retirement Plan
The ATL Retirement Plan (the "Retirement Plan") was amended effective
January 1, 1995, and provides that upon retirement a participant will receive
a monthly benefit equal to 1.0% of participant's final average monthly
earnings multiplied by the participant's years of credited service, with the
Company. The executive officers participate in the same manner as other
eligible employees in the Retirement Plan, which pays to vested employees the
estimated maximum annual retirement benefits at age 65. A participant is
vested upon the completion of five years of service. Benefits are also
provided to a participant's surviving spouse in the event of the participant's
death prior to retirement.
12
<PAGE>
The following tabulation shows the estimated annual benefits of an employee,
assuming annual benefits to an employee for retirement on January 1, 1997 at
age 65 after selected periods of service under the Retirement Plan, and
including amounts to be paid pursuant to the ATL Supplemental Benefit Plan
(the "Supplemental Plan"), if applicable.
<TABLE>
<CAPTION>
ANNUAL RETIREMENT BENEFIT FOR CREDITABLE
SERVICE
-----------------------------------------------
5 15 20 25 30
AVERAGE ANNUAL EARNINGS YEARS 10 YEARS YEARS YEARS YEARS YEARS
----------------------- ----- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
$100,000........................ 5,000 10,000 15,000 20,000 25,000 30,000
200,000........................ 10,000 20,000 30,000 40,000 50,000 60,000
300,000........................ 15,000 30,000 45,000 60,000 75,000 90,000
400,000........................ 20,000 40,000 60,000 80,000 100,000 120,000
500,000........................ 25,000 50,000 75,000 100,000 125,000 150,000
600,000........................ 30,000 60,000 90,000 120,000 150,000 180,000
700,000........................ 35,000 70,000 105,000 140,000 175,000 210,000
800,000........................ 40,000 80,000 120,000 160,000 200,000 240,000
</TABLE>
Amounts shown in the above table will be reduced by the actuarial equivalent
value of amounts distributed from the Discretionary Contribution Plan, which
was terminated in 1989, but in no event will they be less than zero.
Retirement benefits are not offset for Social Security benefits. The Employee
Retirement Income Security Act of 1974, the Internal Revenue Code of 1986, as
amended (the "Code") generally limit the amount of annual pension which may be
paid from a federal income tax qualified plan to varying amounts (currently
$125,000) and the annual earnings which may be taken into account for purposes
of calculation of benefits under a federal income tax qualified plan
(currently $160,000). The actual amounts paid under the Retirement Plan will
be limited to comply with such legislation.
As of December 31, 1996 the number of years of credited service under the
Retirement Plan for Messrs. Fill, Gillis, Diaz, Souquet and Blem were
approximately 10, 4, 9, 7 and 8, respectively. The 1996 earnings for purposes
of calculation of benefits under this Retirement Plan for Messrs. Fill,
Gillis, Diaz, Souquet and Blem are $834,519, $372,308, $350,000, $312,115 and
$312,115, respectively. Subject to the limitations imposed by the Code, as
stated above, 1996 annual earnings in excess of $160,000 shall be disregarded.
The Supplemental Plan is an unfunded plan, not qualified for Federal income
tax purposes, which covers any employee whose benefit under the Retirement
Plan is limited by certain provisions of the Code. Based on earnings as
defined in the Retirement Plan, Messrs. Fill, Gillis, Diaz, Souquet and Blem
would be eligible for benefits under the Supplemental Plan.
EMPLOYMENT AGREEMENTS
Messrs. Fill and Gillis have each entered into a Change in Control
Employment Agreement with ATL that provides for continued employment terms
equivalent to those immediately prior to a Change of Control (as defined in
the 1992 Stock and Stock Option Plan) for the three years following a Change
of Control. A lump-sum payment equal to three years of salary and bonus is
immediately triggered if, following a Change of Control, employment is
terminated by (i) the employee for "good cause" or during the 30-day window
period one year after the Change of Control or (ii) the employer "without
cause." A Change of Control, with or without termination of employment, also
triggers an acceleration of vesting of restricted stock and stock options and
payment of the "spread" between the exercise price of options and the fair
market value of the underlying ATL Common Stock. Mr. Fill's Change of Control
Employment Agreement was amended in 1996 as described in the "Compensation
Committee Report On Executive Compensation--Compensation of the Chief
Executive Officer."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See also "Director Compensation" and "Compensation Committee Interlocks And
Insider Participation".
13
<PAGE>
PROPOSAL 2: ADOPTION OF EMPLOYEE STOCK PURCHASE PLAN
The following is a summary of the ATL Employee Stock Purchase Plan ("ESPP")
which is described in its entirety in Appendix A to this Proxy Statement.
General. On October 25, 1996 the Board of Directors adopted the ESPP. The
purpose of the ESPP is to enable employees of the Company to acquire a
personal interest in the Company, and to encourage employees to remain in the
employ of the Company and have a personal interest in the success of the
Company. An aggregate of 300,000 shares will be reserved for purchase under
the ESPP, subject to adjustment in the event of stock dividends, stock splits,
combinations of shares, or other similar changes in capitalization of the
Company.
The ESPP will be administered based on semi-annual purchase periods
commencing January 1 or July 1 (the "Purchase Period"). The first Purchase
Period began on January 1, 1997 and will end on June 30, 1997. Any employee of
the Company's U.S. subsidiaries ATL Ultrasound, Inc. and ATL International,
Inc., who is regularly scheduled to work a minimum of 20 hours per week may be
a participant in the ESPP ("Participant").
Payroll Deductions. The maximum rate of deduction that a Participant may
elect for any Purchase Period is 15% of the Participant's base salary plus any
commissions earned. An amount equal to the elected percentage of the
Participant's compensation shall be deducted on each regular pay day falling
within the Purchase Period. All amounts will be deducted from a Participant's
compensation on an after-tax basis. No interest will be paid on payroll
deductions accumulated under this ESPP.
At any time prior to the last three weeks of a Purchase Period, a
Participant may elect to withdraw from the ESPP. If a Participant withdraws
from the ESPP, all of the Participant's payroll deductions for that Purchase
Period will be promptly returned to the Participant, and the Participant will
not be eligible to participate in the ESPP again before the next Purchase
Period. If a Participant withdraws effective for a Purchase Period that has
not yet commenced, the Participant may elect to participate in any subsequent
Purchase Period.
Purchase of Common Stock. On the first business day following the end of a
Purchase Period (the "Purchase Date") a Participant's accumulated payroll
deductions will be applied toward the purchase of shares of Common Stock at a
purchase price equal to the lesser of:
(a) 85% of the fair market value for the Common Stock on the first day of
the Purchase Period; or
(b) 85% of the fair market value for the Common Stock on the Purchase Date,
During any Purchase Period the maximum number of shares of Common Stock that
may be purchased by a Participant may not exceed 1,000 shares. During any
calendar year, the maximum value of the Common Stock that may be purchased by
a Participant under this ESPP is $25,000.
Amendment and Termination. The ESPP may be terminated, modified or amended
by the shareholders of the Company. The Board of Directors of the Company may
also terminate this ESPP, or modify or amend the ESPP in such respects as it
shall deem advisable in order to conform to any change in any law or
applicable regulations. Shareholder approval will be required for any
amendment which will (a) increase the total number of shares which may be
issued under the ESPP, (b) change the class of persons eligible to purchase
Common Stock under the ESPP, (c) materially increase the benefits accruing to
Participants under the ESPP, or (d) otherwise require shareholder approval
under any applicable law or regulation.
Federal Tax Consequences. The following summary of United States federal
income tax consequences relating to the ESPP does not presume to be complete
and does not address other taxes that may affect an individual such as state
and local taxes, federal and state estate, or inheritance and gift taxes, and
does not address the tax consequences to Participants who are not citizens or
residents of the United States. Furthermore, the tax consequences described
below are complex and subject to change, and a taxpayer's personal situation
may be such that some variation of the described rules applies. Participants
should consult with their own tax advisors before the acquisition or
disposition of any shares under the ESPP.
14
<PAGE>
Under present law, there is no taxable income to the Participant when shares
are purchased under the ESPP. Upon the disposition of shares out of the
Participant's account, at least two years after the first day of the Purchase
Period and one year from the Purchase Date, or upon the death of a
Participant, the Participant will recognize ordinary income equal to the
lesser of (i) the excess of the fair market value of the shares on the date of
such disposition (or the Participant's death, as the case may be) over the
actual amount paid for the shares, or (ii) 15% of the fair market value of the
shares on the first day of the Purchase Period. Any further gain realized on a
disposition is characterized as long-term capital gain. If the Participant has
incurred a loss in connection with the disposition, then such participant will
realize no ordinary income, and the loss will be a long-term capital loss.
Upon a sale or other disposition of shares acquired pursuant to the ESPP
before the expiration of the one- and two-year holding periods described
above, the Participant will recognize ordinary income equal to the difference
between the fair market value of the shares on the Purchase Date and the
actual amount paid for the shares. The Participant will have capital gain or
loss to the extent of the difference, if any, between the amount received upon
disposition and the fair market value of the shares on such sale or the
Purchase Date. Such capital gain or loss will be long-term or short-term
depending on whether the shares were held for more than 12 months from the
applicable Purchase Period. Capital gain is included in gross income and net
long-term capital gain is currently taxed at a maximum rate of 28%. Other
types of income are taxed at a current maximum rate of 39.6%. Capital losses
are allowed in full against capital gains but may offset only $3,000 of
ordinary income.
The Company is not entitled to a deduction for amounts taxed as ordinary
income on the disposition of shares acquired in the ESPP. If, however, a
Participant realizes ordinary income by reason of a disposition before the
expiration of the holding period described above, the Company may be entitled
to a compensation deduction if certain other conditions are met. Additional
restrictions on Company deductibility may apply in the case of ordinary income
realized by the Named Executive Officers.
The Named Executive Officers are eligible for participation in the ESPP. As
of the date of this Proxy Statement, Messrs. Gillis and Souquet have enrolled
in the ESPP. Because the first Purchase Period has not ended, the number or
the value of the shares acquired by all employees or the Named Executive
Officers cannot be determined at this time. On January 1, 1997, the beginning
of the first Purchase Period, the closing price of ATL Common Stock as
reported most recently on the Nasdaq Stock Market was $31.
The Board of Directors has unanimously approved the ESPP and recommend a
vote "FOR" approval of Proposal 2.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF AUDITORS
Unless instructed to the contrary, it is intended that votes be cast
pursuant to the accompanying proxy for the ratification of the appointment of
KPMG Peat Marwick LLP as independent auditors of the Company for the year
1997. KPMG Peat Marwick has audited the accounts of the Company and Westmark
and its major subsidiaries from 1987 through 1996, and since 1982 for the
units of Squibb Corporation that now comprise ATL. Representatives of KPMG
Peat Marwick are expected to attend the meeting and will have an opportunity
to make a statement and/or to respond to appropriate questions from
shareholders.
In the event this ratification of the appointment of auditors is not made by
a majority of the shares present in person or by proxy and entitled to vote
thereon, the selection of other auditors will be considered and determined by
the Board of Directors.
The Board of Directors has unanimously approved the appointment of KPMG Peat
Marwick as auditors for the Company and its major subsidiaries for 1997 and
recommends a vote "FOR" approval of Proposal 3.
15
<PAGE>
EXPENSES OF SOLICITATION
The accompanying proxy is solicited by and on behalf of the Board whose
notice of meeting is attached to this Proxy Statement, and the entire cost of
such solicitation will be borne by the Company. Georgeson & Co., New York, New
York, will distribute proxy materials to beneficial owners and solicit proxies
by personal interview, mail, telephone and telegram, and will request
brokerage houses and other custodians, nominees and fiduciaries to forward
soliciting material to the beneficial owners of the Common Stock held on the
record date by such persons. The Company will pay Georgeson & Co. a fee of
$6,000 covering its services and will reimburse Georgeson & Co. for payments
made to brokers and other nominees for its expenses in forwarding soliciting
material. Solicitation by personal interview and telephone by Directors,
officers and other employees of ATL will be without special compensation.
OTHER MATTERS
The Company knows of no other matters which are likely to be brought before
the meeting. If, however, other matters not now known or determined come
before the meeting, the persons named in the enclosed proxy or their
substitutes will vote such proxy in accordance with their judgment in such
matters.
PROPOSALS OF SHAREHOLDERS
In order for proposals of shareholders to be considered for inclusion in the
Proxy Statement and proxy for the 1997 Annual General Meeting of Shareholders,
such proposals must be received by the Secretary of ATL by December 1, 1997.
ANNUAL REPORT AND FORM 10-K
A copy of the Company's 1996 Annual Report is being mailed with this Proxy
Statement to each shareholder of record. Shareholders not receiving a copy of
the Annual Report may obtain one without charge by writing or calling ATL
Corporate and Investor Relations, 22100 Bothell Everett Highway, P.O. Box
3003, Bothell, WA 98041-3003, (206) 487-7000.
A copy of the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as filed with the Securities and Exchange Commission, will
be provided without charge to each shareholder of record who submits a written
request therefor addressed to ATL Corporate and Investor Relations, 22100
Bothell Everett Highway, P.O. Box 3003, Bothell, WA 98041-3003, (206) 487-
7000.
By order of the Board of Directors
/s/ W. Brinton Yorks, Jr.
W. Brinton Yorks, Jr.
Secretary and General Counsel
16
<PAGE>
APPENDIX A
ADVANCED TECHNOLOGY LABORATORIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. DEFINITIONS
"Code" means the Internal Revenue Code of 1986, as amended or succeeded by
later legislative enactments.
"Committee" means the Committee provided for in Section 4, which shall
administer this ESPP.
"Common Stock" means common stock, par value $0.01 per share, of the
Company.
"Company" means Advanced Technology Laboratories, Inc., a Washington
corporation.
"Compensation" means a Participant's base salary plus any commissions paid.
"ESPP" means this Advanced Technology Laboratories, Inc. Employee Stock
Purchase Plan.
"Fair Market Value" of the Common Stock as of any day means the closing
price (rounded to the next highest cent in the case of fractions of a cent) of
the Common Stock as reported on such day or, if such day is not a trading day
of the Nasdaq Stock Market, the immediately preceding trading day as reported
by the Nasdaq Stock Market. The Committee, in its sole discretion, shall make
all determinations required by this definition.
"Participant" means an employee of ATL Ultrasound, Inc., a wholly owned
subsidiary of the Company, and its wholly owned subsidiary, ATL International,
Inc., without reference to any other subsidiary or affiliate organization of
either corporation, who is regularly scheduled to work a minimum of 20 hours
per week.
"Purchase Period" means a six month period commencing on January 1 or July
1.
2. PURPOSE
The purpose of this ESPP is to enable Participants to acquire a larger
personal proprietary interest in the Company, and to encourage Participants to
remain in the employ of the Company and have a personal interest in the
success of the Company. This ESPP is intended to constitute an "employee stock
purchase plan" as defined in the Code, and shall be interpreted and
administered to further that intent.
This ESPP is intended to provide Common Stock for investment and not for
resale. The Company does not, however, intend to restrict or influence the
conduct of any Participant's affairs. A Participant, therefore, may sell
Common Stock that is purchased under this ESPP at any time, subject to
compliance with any applicable federal or state tax and securities laws. THE
EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE PRICE OF THE
SHARES.
3. GOVERNMENTAL REGULATIONS
The Company's obligation to sell and deliver shares of Common Stock under
this ESPP is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares, including
the Securities and Exchange Commission, the securities administrators of the
states in which Participants reside, and the Internal Revenue Service.
4. ADMINISTRATION
This ESPP shall be administered by the Compensation Committee of the Board
of Directors of the Company. The Compensation Committee shall have plenary
authority, in its discretion, to interpret the ESPP, to
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prescribe, amend and rescind rules and regulations relating to it, and to make
all other determinations necessary or advisable for the administration of the
ESPP. The Committee's determinations of the matters referred to in this
Section 4 shall be conclusive. It is the intention of the Company and the
Committee that this ESPP and the administration hereof comply in all respects
with Section 16(b) of the Securities Exchange Act of 1934 and Section 423(b)
of the Code.
5. STOCK SUBJECT TO THE ESPP
There are reserved for issuance under this ESPP 300,000 shares of Common
Stock which may be purchased by Participants pursuant to this ESPP, subject to
adjustment as provided in Section 15.
6. PURCHASE PERIODS
This ESPP will be administered based on semi-annual Purchase Periods
commencing January 1 or July 1. The first Purchase Period will begin on
January 1, 1997 and end on June 30, 1997.
7. PAYROLL DEDUCTIONS.
Any person who is properly enrolled as a Participant at the beginning of a
Purchase Period may elect, in accordance with procedures prescribed by the
Committee, to have the Company deduct a specified integer number percentage of
the Participant's Compensation for the purchase of shares of Common Stock
pursuant to the ESPP.
The maximum rate of deduction that a Participant may elect for any Purchase
Period is 15%. An amount equal to the elected percentage of the Participant's
Compensation shall be deducted on each regular pay day falling within the
Purchase Period. All amounts will be deducted from a Participant's
Compensation on an after-tax basis. No interest will be paid on payroll
deductions accumulated under this ESPP.
A Participant who is enrolled in this ESPP at the end of a Purchase Period
will, unless the Participant gives notice of his or her intent to withdraw
from the ESPP, automatically be enrolled as a Participant in the subsequent
Purchase Period.
8. PURCHASE OF COMMON STOCK
On the first business day following the end of a Purchase Period (the
"Purchase Date"), a Participant's accumulated payroll deductions will, subject
to the limitations of Section 9 and the termination provisions of Section 14,
be applied toward the purchase of shares of Common Stock at a purchase price
equal to the lesser of:
(a) 85% of the Fair Market Value for the Common Stock on the first day of
the Purchase Period; or
(b) 85% of the Fair Market Value for the Common Stock on the Purchase
Date,
in either event rounded to the nearest whole cent.
Shares of Common Stock may be purchased under the ESPP only with a
Participant's accumulated payroll deductions. Fractional shares cannot be
purchased. At the conclusion of each Purchase Period, the Company shall
automatically re-enroll each Participant in the next Purchase Period, and any
portion of a Participant's accumulated payroll deductions not used for the
purchase of Common Stock at the end of a Purchase Period shall be applied to
the purchase of Common Stock in the next Purchase Period if the Participant is
participating in the ESPP during that Purchase Period, or returned to the
Participant.
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9. LIMITATIONS ON SHARE PURCHASES
During any Purchase Period the maximum number of shares of Common Stock that
may be purchased by a Participant may not exceed 1,000 shares. During any
calendar year, the maximum value of the Common Stock that may be purchased by
a Participant under this ESPP is $25,000, said value to be determined on the
basis of the Fair Market Value of the Common Stock on the first day of the
Purchase Period and in accordance with the requirements of Code Section
423(b)(8). The foregoing limitation is intended to and shall be interpreted in
such a manner as will comply with Section 423(b)(8) of the Code. In addition,
no Participant shall be permitted to subscribe for any shares under this ESPP
if such Participant, immediately after such subscription, owns shares that
account for (including all shares that may be purchased under outstanding
subscriptions under the ESPP and any other outstanding options to purchase
shares of Common Stock) five percent or more of the total combined voting
power or value of all classes of shares of the Company or its subsidiaries.
For the foregoing purposes the rules of Section 424(d) of the Code shall apply
in determining share ownership.
10. WITHDRAWAL FROM THE ESPP
At any time prior to the last three weeks of a Purchase Period, a
Participant may elect, in accordance with procedures prescribed by the
Committee, to withdraw from the ESPP. If a Participant withdraws from the
ESPP, all of the Participant's payroll deductions for that Purchase Period
will be promptly returned to the Participant, and the Participant will not be
eligible to participate in the ESPP again before the next Purchase Period. If
a Participant withdraws effective for a Purchase Period that has not yet
commenced, the Participant may elect to participate in any subsequent Purchase
Period. If a Participant's payroll deductions are interrupted by any legal
process, the Participant will be deemed to have elected to withdraw from the
ESPP for the Purchase Period in which the interruption occurs.
A Participant's participation and payroll deductions continue during a leave
of absence unless the Participant elects to stop his or her payroll
deductions. Such participation will end automatically at the end of the
current Purchase Period. A Participant may re-enroll to participate in
subsequent Purchase Periods which commence following the employee's return
from the leave of absence.
11. ISSUANCE OF COMMON STOCK TO CUSTODIAL ACCOUNTS
The shares of Common Stock purchased by Participants will be issued
electronically by the Company's transfer agent to a Participant's custodial
account as soon as practicable after each Purchase Date. Common Stock
purchased under the ESPP will be issued only in the name of the Participant
(or, if his or her authorization so designates, in the name of the Participant
and another person of legal age as joint tenants with rights of survivorship).
The custodial account of Participants shall be maintained by a bank, broker-
dealer or similar custodian that has agreed to hold such shares for the
accounts of the respective Participants. Fees and expenses of the bank,
broker-dealer or similar custodian shall be paid by the Company or allocated
among the respective Participants in such manner as the Committee determines.
A Participant or his or her legal representative may withdraw Common Stock
from his or her custodial account at any time; however any withdrawal within 2
years of the first day of the Purchase Period and one year of the Purchase
Date will be treated by the Company as a disqualifying disposition under the
Code and be reported on the Participant's tax Form W-2.
12. WITHHOLDING TAXES
In connection with the purchase of shares of Common Stock under this ESPP,
the Company (a) shall not issue a certificate for such shares until it has
received payment from the Participant of any required withholding tax in cash
or by the retention or acceptance upon delivery thereof by the Participant of
shares of Common Stock sufficient in Fair Market Value to cover the amount of
such withholding tax and (b) shall have the right to retain or sell without
notice, or to demand surrender of, shares of Common Stock in value sufficient
to cover any withholding tax. The Company shall have the right to withhold
from any payroll deductions made by the Participant under this ESPP an amount
equal to any required withholding tax. In either case, the Company shall
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make payment (or reimburse itself for payment made) to the appropriate taxing
authority of an amount in cash equal to the amount of such withholding tax,
remitting any balance to the Participant. For purposes of this Section 12, the
value of shares of Common Stock so retained or surrendered shall be equal to
the Fair Market Value of such shares on the date that the amount of the
withholding tax is to be determined (the "Tax Date"), and the value of shares
of Common Stock so sold shall be the actual net sale price per share (after
deduction of commissions) received by the Company.
Notwithstanding the foregoing, the Participant may elect, subject to
approval by the Committee, to satisfy the obligation to pay any withholding
tax, in whole or in part, by providing the Company with funds sufficient to
enable the Company to pay such withholding tax or by having the Company retain
or accept upon delivery thereof by the Participant shares of Common Stock
sufficient in Fair Market Value to cover the amount of such withholding tax.
Each election by a Participant to have shares retained or to deliver shares
for this purpose must be in writing and made on or prior to the Tax Date.
13. TRANSFERABILITY
A Participant's rights under this ESPP, including rights to accumulated
payroll deductions, may not be pledged, assigned, encumbered or otherwise
transferred for any reason other than by will or the laws of descent and
distribution. Any such attempt will be treated as an election by the
Participant to withdraw from this ESPP.
14. TERMINATING EVENTS
Upon (a) the dissolution or liquidation of the Company, (b) a merger or
other reorganization of the Company with one or more corporations as a result
of which the Company will not be a surviving corporation, (c) the sale of all
or substantially all of the assets of the Company or a material division of
the Company, (d) a sale or other transfer, pursuant to a tender offer or
otherwise, of more than fifty percent (50%) of the then outstanding shares of
Common Stock of the Company, (e) an acquisition by the Company resulting in an
extraordinary expansion of the Company's business or the addition of a
material new line of business, or (f) any exchange that is subject to this
Section 14 in accordance with the provisions of Article 15 (any of such events
is herein referred to as a "Terminating Event"), the Committee may but shall
not be required to:
(a) make provision for the continuation of the Participants' rights under
this ESPP on such terms and conditions as the Committee determines to be
appropriate and equitable, including where applicable, but not limited to,
an arrangement for the substitution on an equitable basis, for each share
of Common Stock that could otherwise be purchased at the end of the
Purchase Period in progress at the time of the Terminating Event, of any
consideration payable with respect to each then outstanding share of Common
Stock in connection with the Terminating Event; or
(b) terminate all rights of Participants under the ESPP for such Payment
Period and --
(i) return to the Participants all of their payroll deductions for
such Payment Period; and
(ii) for each share of Common Stock, if any, that could otherwise be
purchased under the ESPP by a Participant at the end of such Purchase
Period (determined by assuming that payroll deductions at the rate
elected by the Participant were continued to the end of the Purchase
Period and used to purchase shares based on the Fair Market Value of
the Common Stock on the first day of the Purchase Period) and with
respect to which (A) the purchase price at which such share could be
purchased (determined with reference only to the Fair Market Value of
the Common Stock on the first day of the Purchase Period) is exceeded
by (B) the Fair Market Value on the date of the Terminating Event of a
share of Common Stock, as determined by the Committee, pay to the
Participant an amount equal to such excess.
The Committee shall make all determinations necessary or advisable in
connection with Terminating Events, and its determinations shall, in the
absence of fraud or patent mistake, be conclusive and binding on all persons
with any interest in the ESPP.
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15. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any changes in the outstanding stock of the Company by
reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of shares, split-ups, split-offs,
spin-offs, liquidations or other similar changes in capitalization, or any
distribution to stockholders other than cash dividends, the Committee shall
make such adjustments, if any, in light of the change or distribution as the
Committee in its sole discretion shall determine to be appropriate in the
number and class of shares and the purchase prices of the Common Stock which
may be purchased by Participants during the current Purchase Period. In the
event of any such change in the outstanding Common Stock of the Company, the
aggregate number and class of shares available under this ESPP and the maximum
number of shares which may be purchased and their purchase price shall be
appropriately adjusted by the Committee.
Upon the happening of an event specified in this Section 15, the class and
aggregate number of shares available under this ESPP, as set forth in Section
5 shall be appropriately adjusted to reflect the event. Notwithstanding the
foregoing, such adjustments shall be made only to the extent that the
Committee, based on advice of counsel for the Company, determines that such
adjustments will not constitute a change requiring shareholder approval under
423(b)(2) of the Code.
16. TERMINATION OF EMPLOYEE'S RIGHTS
Subject to the provisions of the next paragraph, a Participant's rights
under this ESPP will terminate if he or she for any reason (including death,
disability or voluntary or involuntary termination of employment) ceases to be
an employee of the Company or one of its subsidiaries. To the extent that the
rights of a Participant terminate in accordance with this Section 16, any of
the Participant's accrued payroll deductions will be promptly returned to the
Participant or his or her personal representative.
This ESPP does not, directly or indirectly, create any right for the benefit
of any employee or class of employees to preferentially purchase any Common
Stock under the ESPP, 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.
17. TERMINATION AND AMENDMENTS TO ESPP
This ESPP may be terminated at any time by the Committee but, except as
provided in Section 14, such termination shall not affect the rights of
Participants under the ESPP for the Purchase Period in progress at the time of
termination. This ESPP will terminate in any case when all or substantially
all of the unissued shares of Common Stock reserved for the purposes of the
ESPP have been purchased. If at any time shares of Common Stock reserved for
the purpose of the ESPP remain available for purchase but not in sufficient
number to satisfy all then unfilled purchase requirements, the available
shares shall be apportioned among Participants in proportion to the respective
amounts of their accumulated payroll deductions, and the ESPP shall terminate.
Upon such termination or any other termination of the ESPP, all payroll
deductions not used to purchase shares of Common Stock will be refunded to the
Participants entitled thereto.
This ESPP may be terminated, modified or amended by the shareholders of the
Company. The Board of Directors of the Company may also terminate this ESPP,
or modify or amend the ESPP in such respects as it shall deem advisable in
order to conform to any change in any law or regulation applicable thereto, or
in other respects; however, to the extent required by applicable law or
regulation, shareholder approval will be required for any amendment which will
(a) increase the total number of shares which may be issued under the ESPP,
(b) change the class of persons eligible to purchase Common Stock under the
ESPP, (c) materially increase the benefits accruing to Participants under the
ESPP, or (d) otherwise require shareholder approval under any applicable law
or regulation.
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18. INFORMATION TO PARTICIPANTS
A Participant in this ESPP shall not have any rights as a shareholder of the
Company on account of shares of Common Stock that may be purchased under the
ESPP prior to the time such shares are actually purchased by and issued to the
Participant. Notwithstanding the foregoing, the Company shall deliver to each
Participant under this ESPP who does not otherwise receive such materials (a)
a copy of the Company's annual financial statements, together with
management's discussion and analysis of financial condition and results of
operations for the fiscal year, and (b) a copy of all reports, proxy
statements and other communications distributed to the Company's security
holders generally.
19. APPROVAL OF SHAREHOLDERS
This ESPP shall be effective January 1, 1997, subject to approval by the
holders of a majority of the shares of the Company present or represented by
proxy at the first annual meeting of the shareholders of the Company held
after the date on which the ESPP is adopted by the Board of the Company. This
ESPP shall also be subject to approval by the shareholders of the Company in a
manner that complies with Section 423(b)(2) of the Code. If such approvals do
not occur prior to the end of the first Purchase Period under the ESPP, this
ESPP and all rights of Participants under the ESPP shall terminate, and all
payroll deductions of Participants accumulated under the ESPP will be promptly
returned to the Participants.
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P R O X Y
ADVANCED TECHNOLOGY LABORATORIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints DENNIS C. FILL, KIRBY L. CRAMER and HARRY WOOLF,
Ph.D., or any one of them, Proxies with full power of substitution, to vote the
shares of Advanced Technology Laboratories, Inc. which the undersigned is enti-
tled to vote at the Annual General Meeting of Shareholders of Advanced Technol-
ogy Laboratories, Inc., to be held on Wednesday, May 7, 1997, at 9:00 a.m. at
the Four Seasons Olympic Hotel, 411 University Street, Seattle Washington, and
at any adjournment thereof, on the matters set forth on the reverse side.
THE MATTERS TO BE VOTED UPON, THE INSTRUCTIONS AND A SPACE FOR YOUR VOTE AND
SIGNATURE ARE SET FORTH ON THE REVERSE SIDE.
If this Proxy relates to shares held for the undersigned in the Advanced Tech-
nology Laboratories, Inc. Incentive Savings and Stock Ownership Plan or the
SpaceLabs Medical, Inc. Incentive Savings and Stock Ownership Plan, then when
properly executed, it shall constitute instructions to the plan's trustees to
vote in the manner directed herein.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES
(SEE REVERSE SIDE), BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
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Please mark your votes as in this example. [X]
9868
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THIS PROXY WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S); IF NOT OTHERWISE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1, 2 AND 3, AND IN THE
DISCRETION OF THE PROXIES UPON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE
THE MEETING.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3:
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1. Election of Directors
FOR WITHHELD
[_] [_]
For, except vote withheld from the following nominee(s):
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Nominees: Kirby L. Cramer, Harvey Feigenbaum, Dennis C. Fill, Eugene A. Larson,
Ernest Mario, John R. Miller, Phillip M. Nudelman and Harry Woolf.
2. ADOPTION OF ESPP. Approve the adoption of the Employee Stock Purchase Plan
and reserve for purchase 300,000 shares.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. RATIFICATION OF AUDITORS. Ratification of the appointment of KPMG Peat
Marwick LLP as independent auditors for the year ending December 31, 1997.
FOR AGAINST ABSTAIN
[_] [_] [_]
SIGNATURE(S) _____________________________________ DATE ______________________
Please date and sign your name(s) exactly as it appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as it appears hereon.
Second signature is required if stock jointly held.
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