As filed with the Securities and Exchange Commission on November 26, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
______________________
ATL ULTRASOUND, INC.
(Exact name of Registrant as specified in its charter)
Washington 91-1353386
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
22100 Bothell Everett Highway
P.O. Box 3003
Bothell, WA 98041-3003
(Address of principal executive offices, including zip code)
1992 NONOFFICER EMPLOYEE STOCK PLAN
(Full title of the plan)
W. BRINTON YORKS, Jr.
Vice President, General Counsel and Secretary
ATL ULTRASOUND, INC.
22100 Bothell-Everett Highway
P.O. Box 3003
Bothell, WA 98041-3003
(425) 487-7000
(Name, address and telephone number, including area code, of
agent for service)
__________________
CALCULATION OF REGISTRATION FEE
Title of Number to Proposed Proposed Amount
Securities Be Maximum Maximum of
to Be Registered Offering Aggregate Registra-
Registered Price Per Offering tion Fee
Share(1) Price(1)
Common 150,000(2) $43.375 $6,506,250 $1,971.59
Stock, par
value $.01
per Share
(1) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(h). The price per share is estimated to
be $43.375 based on the average of the high and low prices for
the Common Stock in the over-the-counter market on November 25,
1997 as reported on the Nasdaq National Market.
(2) Of this number, 150,000 are being registered for issuance
pursuant to the 1992 Nonofficer Employee Stock Plan. In addition
to this number of shares, an indeterminate number of additional
shares which may be necessary to adjust the number of shares
reserved for issuance pursuant to such plans as the result of any
future stock split, stock dividend or similar adjustment of the
outstanding Common Stock of the Registrant.
Page 1 of 18
Exhibit Index is on page 6
<PAGE>
REGISTRATION OF ADDITIONAL SECURITIES
Pursuant to General Instruction E, this registration
statement on Form S-8 is filed ATL Ultrasound, Inc. (the
"Registrant") to register additional securities under the
1992 Nonofficer Employee Stock Plan (the "Plan"), described
in Registration Statement Nos. 33-54757 (including post-
effective Amendment No.1 thereto (the "Post-Effective
Amendment")), 33-59914, 33-61807, 333-08881 and 333-29955,
to be issued pursuant to an amendment and adoption of the
Plans by the Registrant's Board of Directors on July 24,
1997 and November 18, 1997. Portions of Registration
Statement 33-54757, 33-59914, 33-61807, 333-08881 and 333-
29955 and the Post-Effective Amendment are incorporated
herein by reference.
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference
in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for
the year ended December 31, 1996 filed on March 28, 1997;
(b) All other reports filed by the Registrant pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), since the end of the fiscal year
covered by the Annual Report referred to in (a) above;
(c) The description of the Registrant's Common Stock
contained in the Current Report on Form 8-K filed on January 11,
1996; and
(d) The description of the Registrant's Common Stock
contained in the Registration Statement on Form 10 (Registration
No. 0-15160) filed with the Commission on November 12, 1986 under
Section 12(g) of the Exchange Act, and any amendment or report
filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof, and
prior to the filing of a post-effective amendment which indicates that
the securities offered hereby have been sold or which deregisters the
securities covered hereby then remaining unsold, shall also be deemed
to be incorporated by reference into this Registration Statement and
to be a part hereof commencing on the respective dates on which such
documents are filed.
Item 4. Not Applicable
Item 5. Not Applicable
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Incorporated herein by reference to the Post-Effective Amendment
on Form S-8, filed with the Commission on August 11, 1995 under
Registration Statement No. 33-54757.
Item 7. Not Applicable
2
<PAGE>
Item 8. EXHIBITS
Exhibit
Number Description
5.1 Opinion of Bogle & Gates P.L.L.C.
10.1 Amended 1992 Nonofficer Employee Stock Plan
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Bogle & Gates P.L.L.C. (included
in opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
Item 9. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to
such information in this Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii)
above do not apply if the registration statement is on Form
S-8 or Form S-3, and the information required to be included
in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
Undertakings pursuant to Regulation S-K Rule 512(b) and
(h) are incorporated by reference to Registration Statement
Nos. 33-54757, 33-59914, 33-61807, 333-08881 and 333-29955
and the Post-Effective Amendment.
3
<PAGE>
The Registrant. Pursuant to the requirements of the
---------------
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Bothell, State of Washington, on this 25th day of
November, 1997.
ATL ULTRASOUND, INC.
By /s/ Dennis C. Fill
------------------------------
Dennis C. Fill, Chairman
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints Dennis C. Fill and W. Brinton Yorks, Jr., and
each of them, his true and lawful attorneys-in-fact and
agents, with full power of substitution, for him and in his
name, place and stead, in any and all capacities, to sign
any amendments to the Registration Statements, and to file
the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said
attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement has been signed by the
following persons in the capacities and on the date
indicated on November 18, 1997.
Signature Title
--------- -----
/s/ Dennis C. Fill Chairman of the Board, Chief
---------------------- Executive Officer
Dennis C. Fill
/s/ Harvey N. Gillis Senior Vice President, Chief
------------------------ Financial Officer (Principal
Harvey N. Gillis Financial Officer)
/s/ Kirby L. Cramer Director
-----------------------
Kirby L. Cramer
/s/ Harvey Feigenbaum Director
-------------------------
Harvey Feigenbaum, M.D.
4
<PAGE>
/s/ Eugene A. Larson Director
-------------------------
Eugene A. Larson
/s/ Ernest Mario Director
-----------------------
Ernest Mario, Ph.D.
/s/ John R. Miller Director
-----------------------
John R. Miller
/s/ Phillip M. Nudelman Director
---------------------------
Phillip M. Nudelman, Ph.D.
/s/ Harry Woolf Director
-----------------------
Harry Woolf, Ph.D.
/s/ Richard S. Totorica Vice President and Corporate
-------------------------- Controller (Principal Accounting
Richard S. Totorica Officer)
5
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Page
------- ------------------------------------------ ------------
5.1 Opinion of Bogle & Gates P.L.L.C. 7
10.1 Amended 1992 Nonofficer Employee Stock 8 - 17
Option Plan
23.1 Consent of KPMG Peat Marwick LLP 18
23.2 Consent of Bogle & Gates P.L.L.C.(included
in opinion filed as Exhibit 5.1)
24.1 Power of Attorney (see signature page)
6
Bogle & Gates P.L.L.C. Letterhead Exhibit 5.1
November 26, 1997
ATL Ultrasound, Inc.
22100 Bothell Everett Highway
Bothell, WA 98041-3003
Gentlemen and Ladies:
We are acting as counsel to ATL Ultrasound, Inc., a
Washington corporation (the "Company"), in connection with
the filing of a registration statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933,
as amended, with the Securities and Exchange Commission,
relating to the proposed sale by the Company of an aggregate
of 150,000 shares of its common stock, par value $0.01 per
share (the "Common Stock"), issuable pursuant to the
Company's 1992 Nonofficer Employee Stock Plan.
In connection with the foregoing, we are of the opinion
that the Common Stock will, when sold, be legally issued,
fully paid and nonassessable.
We hereby authorize and consent to the use of this
opinion as Exhibit 5.1 to the Registration Statement.
Very truly yours,
Bogle & Gates P.L.L.C..
Exhibit 10.1
November 18, 1997
ATL ULTRASOUND, INC.
1992 Nonofficer Employee Stock Plan
1. Definitions
The following terms have the corresponding meanings for
purposes of the Plan:
"Change of Control" means
(a) a "Board Change." For purposes of the Plan, a Board
Change shall have occurred if a majority of the seats (other than
vacant seats) on the Corporation's Board of Directors (the
"Board") were to be occupied by individuals who were neither (i)
nominated by a majority of the Incumbent Directors nor (ii)
appointed by directors so nominated. An "Incumbent Director" is
a member of the Board who has been either (i) nominated by a
majority of the directors of the Corporation then in office or
(ii) appointed by directors so nominated, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the
Board; or
(b) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of "Beneficial Ownership" (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of (i)
20% or more of either (A) the then outstanding shares of common
stock (the "Outstanding Corporation Common Stock") or (B) the
combined voting power of the then outstanding voting securities
of the Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities"), in
the case of either (A) or (B) of this clause (i), which
acquisition is not approved in advance by a majority of the
Incumbent Directors or (ii) 33% or more of either (A) the
Outstanding Corporation Common Stock or (B) the Outstanding
Corporation Voting Securities, in the case of either (A) or (B)
of this clause (ii), which acquisition is approved in advance by
a majority of the Incumbent Directors; provided, however, that
the following acquisitions shall not constitute a Change of
Control: (x) any acquisition by the Corporation, (y) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Corporation or any corporation
controlled by the Corporation, or (z) any acquisition by any
corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and
(iii) of the following subsection (c) are satisfied; or
(c) approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless,
immediately following such reorganization, merger or
consolidation, (i) more than 60% of, respectively, the then
outstanding shares of common stock of the corporation resulting
from such reorganization, merger or consolidation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or
consolidation, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be,
(ii) no Person (excluding the Corporation, any employee benefit
plan (or related trust) of the Corporation or such corporation
resulting from such reorganization, merger or consolidation and
any Person beneficially owning, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
33% or more of the Outstanding Corporation Common Stock or
Outstanding Corporation Voting Securities, as the case may be)
beneficially owns, directly or indirectly,
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33% or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors, and (iii) at least
a majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were Incumbent Directors at the time of the
execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) approval by the stockholders of the Corporation of (i)
a complete liquidation or dissolution of the Corporation or (ii)
the sale or other disposition of all or substantially all of the
assets of the Corporation, other than to a corporation, with
respect to which immediately following such sale or other
disposition, (A) more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (B) no Person (excluding the
Corporation and any employee benefit plan (or related trust) of
the Corporation or such corporation and any Person beneficially
owning, immediately prior to such sale or other disposition,
directly or indirectly, 33% or more of the Outstanding
Corporation Common Stock or Outstanding Corporation Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, 33% or more of, respectively, the then outstanding
shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of
directors, and (C) at least a majority of the members of the
board of directors of such corporation were approved by a
majority of the Incumbent Directors at the time of the execution
of the initial agreement or action of the Board providing for
such sale or other disposition of assets of the Corporation.
"Committee" means the Committee provided for in Section 4,
which shall administer the Plan.
"Common Stock" means common stock, par value $0.01 per
share, of the Corporation.
"Corporation" means ATL Ultrasound, Inc., a Washington
corporation.
"Designated Beneficiary" means any person designated in
writing by a Participant as a legal recipient of payments due
under an award in the event of the Participant's death, or in the
absence of such designation, the Participant's estate. Such
designation must be on file with the Corporation in order to be
effective but, unless the Participant has made an irrevocable
designation, may be changed from time to time by the Participant.
"Fair Market Value" of the Common Stock as of any trading
day means the average (rounded to the next highest cent in the
case of fractions of a cent) of the high and low sales prices of
the Common Stock as reported on such trading day by the Nasdaq
Stock Market. If no sales price is reported for the Common Stock
on such trading day, then "Fair Market Value" shall mean the
highest bid price reported for the Common Stock on such trading
day by the National Quotation Bureau Incorporated or any similar
nationally recognized organization. The Committee, in its sole
discretion, shall make all determinations required by this
definition.
"Participant" means an employee who has received an award
under the Plan.
"Plan" means this ATL Ultrasound, Inc. 1992 Nonofficer
Employee Stock Plan.
"Restricted Stock" means the shares of Common Stock referred
to in Section 7.
<PAGE>
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"Retirement" means the termination of the services of a
Participant because of early or normal retirement as defined in
the ATL Retirement Plan.
"Withholding Tax" means any tax, including any federal,
state or local income tax or payroll tax, required by any
governmental entity to be withheld or otherwise deducted and paid
with respect to the transfer of shares of Common Stock as a
result of the exercise of an option or the award of Restricted
Stock.
2. Stock Subject to the Plan
There are reserved for issuance upon the exercise of options
or for issuance of Restricted Stock under the Plan 520,000 shares
of Common Stock. Such shares may be authorized and unissued
shares of Common Stock or previously outstanding shares of Common
Stock then held in the Corporation's treasury. If any option
granted under the Plan shall expire or terminate for any reason
(including, without limitation, by reason of its surrender,
pursuant to the provisions of Section 6(f) or the third paragraph
of Section 6(b) or otherwise, or cancellation, in whole or in
part, pursuant to the provisions of Section 6(c) or otherwise, or
the substitution in place thereof of a new option) without having
been exercised in full, the shares subject thereto shall again be
available for the purposes of issuance under the Plan. If shares
of Restricted Stock shall be forfeited and returned to the
Corporation pursuant to the provisions of Section 8, such shares
shall again be available for the purposes of issuance under the
Plan.
3. Administration
(a) The Plan shall be administered by the Committee.
Subject to the express provisions of the Plan, the Committee
shall have plenary authority, in its discretion, to determine the
individuals to whom, and the time or times at which Restricted
Stock shall be awarded and options shall be granted and the
number of shares to be covered by each such award or grant. In
making such determinations, the Committee may take into account
the nature of the services rendered by the respective
Participants, their present and potential contributions to the
Corporation's success and such other factors as the Committee in
its discretion may deem relevant. Subject to the express
provisions of the Plan, the Committee shall have plenary
authority to interpret the Plan, to prescribe, amend and rescind
rules and regulations relating to it, to determine the terms and
provisions of Restricted Stock and option agreements (which need
not be identical) and to make all other determinations necessary
or advisable for the administration of the Plan. The Committee's
determinations of the matters referred to in this Section 3 shall
be conclusive. It is the intention of the Corporation that the
Plan and the administration hereof comply in all respects with
Section 16(b) of the Exchange Act, and the rules and regulations
promulgated thereunder, and if any Plan provision is later found
not to be in compliance with Section 16(b), the provision shall
be deemed null and void, and in all events the Plan shall be
construed in favor of its meeting the requirements of Rule 16b-3.
(b) The Committee may in its discretion delegate to a
committee appointed by the Board consisting of one or more
officers of the Corporation (the "Grant Committee") the authority
to grant, pursuant to this Plan, Restricted Stock awards and
options for a total number of shares of Common Stock determined
by the Committee, and under terms, conditions and criteria which
are approved by the Committee. Such authorization may include
the ability to determine the Participants to whom, the number of
shares in respect of which, and the time or times at which, such
options and awards shall be granted. In the event the Committee
shall grant such authority to the Grant Committee, the Grant
Committee shall report to the Committee in writing, at times
determined by the Committee, (i) the names of Participants who
have received any such grants and awards, (ii) the number of
shares covered by each award or option so granted, (iii) the date
upon which each such award or option was granted and (iv) such
other information as the Committee may request. Any action of
the Grant Committee pursuant to
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authority granted by the Committee under this Section 3(b) in
accordance with the Committee resolution granting such authority
shall be deemed to be the action of the Committee.
4. The Committee
(a) The Board shall designate a Committee of members of the
Board which shall meet the requirements of Section 16(b) of the
Exchange Act. Currently, the Committee shall consist solely of
two or more members of the Board who are disinterested. If at
any time an insufficient number of disinterested directors is
available to serve on such Committee, interested directors may
serve on the Committee; however, during such time, no options
shall be granted under the Plan to any person if the granting of
such options would not meet the requirements of Section 16(b) of
the Exchange Act.
(b) For purposes of this Section 4, a "disinterested
director" is a person who meets the definition of "disinterested
person" as set forth in the rules and regulations promulgated
under Section 16(b) of the Exchange Act. Currently, a
disinterested director is a member of the Board who is not (and,
during the 12-month period preceding his appointment as a member
of the Committee has not been) granted or awarded stock, stock
appreciation rights or other equity securities of the Corporation
or any affiliated corporation pursuant to the Plan or any other
plan of the Corporation or any affiliated corporation except for
formula plans (as such term is defined in Rule 16b-3(c)(2)(ii)
issued under the Exchange Act) or ongoing securities acquisition
plans (as described in Rule 16b-3(d)(2)(i) issued under the
Exchange Act). The Committee shall be appointed by the Board,
which may from time to time appoint members of the Committee in
substitution for members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee shall
select one of its members as its Chairman and shall hold its
meetings at such times and places as it may determine. A
majority of its members shall constitute a quorum. All
determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced
to writing and signed by all the members shall be fully as
effective as if it had been made by a majority vote at a meeting
duly called and held. The Committee may appoint a secretary,
shall keep minutes of its meetings and shall make such rules and
regulations for the conduct of its business as it shall deem
advisable.
5. Eligibility
The Committee may grant Restricted Stock awards and
options only to employees of the Corporation and of its present
and future subsidiary corporations ("subsidiaries") who, at the
time of the grant, are not officers or directors (within the
meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder) of the Corporation or any of
its present and future subsidiary corporations. Any person
eligible under the Plan may receive one or more grants of
Restricted Stock or options as the Committee shall from time to
time determine, and such determinations may be different as to
different Participants.
6. Option Grants
(a) The Committee is authorized under the Plan, in its
discretion, to issue only options which do not qualify as
"incentive stock options" as defined in Section 422 of the United
States Internal Revenue Code of 1986, as amended ("Nonqualified
Stock Options") and the options shall be designated as
Nonqualified Stock Options in the applicable option agreement.
The purchase price of the Common Stock under each option granted
under the Plan shall be determined by the Committee but shall be
not less than the average Fair Market Value of the Common Stock
over any continuous period of trading days beginning and ending
no more than 30 business days before or after the date such
option is granted.
(b) The Committee shall be authorized in its discretion to
prescribe in the option grant the installments, if any, in which
an option granted under the Plan shall become exercisable,
provided that no option shall be exercisable prior to the first
anniversary of the date of grant thereof except as provided in
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Section 6(c), (d), (g), and (h) or except as the Committee
otherwise determines. In no case may an option be exercised as
to less than 100 shares at any one time (or the remaining shares
covered by the option if less than 100) during the term of the
option. The Committee shall also be authorized to establish the
manner of the exercise of an option. The term of each option
shall be not more than 10 years from the date of grant thereof.
In general, upon exercise, the option price is to be paid in full
in cash; however, the Committee can determine at any time prior
to exercise that additional forms of payment will be permitted.
To the extent permitted by the Committee and applicable laws and
regulations (including, but not limited to, federal tax and
securities laws and regulations and state corporate law), an
option may be exercised (i) in Common Stock owned by the option
holder having a Fair Market Value on the date of exercise equal
to the aggregate option price, or in a combination of cash and
stock; provided, however, that payment in stock shall not be made
unless such stock shall have been owned by the option holder for
a period of at least three months prior thereto; or (ii) by
delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker designated by the
Corporation, all in accordance with the regulations of the
Federal Reserve Board, to deliver promptly to the Corporation the
amount of sale or loan proceeds to pay the exercise price and any
Withholding Tax obligations that may arise in connection with the
exercise.
In lieu of requiring an option holder to pay cash or stock
and to receive in turn certificates for shares of Common Stock
upon the exercise of an option, if the option agreement so
provides, the Committee may elect to require the option holder to
surrender the option to the Corporation for cancellation as to
all or any portion of the number of shares covered by the
intended exercise and receive in exchange for such surrender a
payment, at the election of the Committee, in cash, in shares of
Common Stock or in a combination of cash and shares of Common
Stock, equivalent to the appreciated value of the shares covered
by the option surrendered for cancellation. Such appreciated
value shall be the difference between the option price of such
shares (as adjusted pursuant to Section 15) and the Fair Market
Value of such shares, which shall for this purpose be determined
by the Committee taking into consideration all relevant factors,
but which shall not be less than the Fair Market Value of such
shares on the date on which the option holder's notice of
exercise is received by the Corporation. Upon delivery to the
Corporation of a notice of exercise of option, the Committee may
avail itself of its right to require the option holder to
surrender the option to the Corporation for cancellation as to
shares covered by such intended exercise. The Committee's right
of election shall expire, if not exercised, at the close of
business on the fifth business day following the delivery to the
Corporation of such notice. Should the Committee not exercise
such right of election, the delivery of the aforesaid notice of
exercise shall constitute an exercise by the option holder of the
option to the extent therein set forth, and payment for the
shares covered by such exercise shall become due immediately.
(c) In the event that a Participant's services for the
Corporation or one of its subsidiaries shall cease and the
termination of such individual's service is for cause, the option
shall automatically terminate upon first notification to the
option holder of such termination of services, unless the
Committee determines otherwise, and such option shall
automatically terminate upon the date of such termination of
services for all shares which were not purchasable upon such
date. For purposes of this Section 6(c), "cause" is defined as a
determination by the Committee that the option holder (i) has
committed a felony, (ii) has engaged in an act or acts of
deliberate and intentional dishonesty resulting or intended to
result directly or indirectly in improper material gain to or
personal enrichment of the individual at the Corporation's
expense, or (iii) has willfully disobeyed the Corporation's
appropriate rules, instructions or orders, and such willful
disobedience has continued for a period of 10 days following
notice thereof from the Corporation.
In the event of the termination of the services of the
holder of an option because of Retirement or disability, he or
she may (unless such option shall have been previously terminated
pursuant to the provisions of the preceding paragraph or unless
otherwise provided in the option grant) exercise such option at
any time prior to the expiration of the option, (i) in the event
of disability or normal Retirement, to the extent of the number
of shares covered by such option, whether or not such shares had
become
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purchasable by him or her at the date of the termination
of his or her services and (ii) in the event of early Retirement,
to the extent of the number of shares covered by such option at
such time or times as such option becomes purchasable by him or
her in accordance with its terms.
In the event of the death of an individual to whom an option
has been granted under the Plan, while he or she is performing
services for the Corporation or a subsidiary, the option
theretofore granted to him or her (unless the option shall have
been previously terminated pursuant to the provisions of this
Section 6(c) or unless otherwise provided in the option grant)
may, subject to the limitations described in Section 6(g), be
exercised by his or her Designated Beneficiary, by his or her
legatee or legatees of the option under his last will, or by his
or her personal representatives or distributees, at any time
within a period of one year after his or her death, but not after
the expiration of the option, to the extent of the remaining
shares covered by the option whether or not such shares had
become purchasable by such an individual at the date of death.
In the event of the death of an individual (i) during the one-
year period following termination of his or her services or (ii)
following termination of his or her services by reason of
Retirement or disability, then the option (if not previously
terminated pursuant to the provisions of this Section 6(c)) may
be exercised during the remainder of such one-year period or
during the remaining term of the option, respectively, by his or
her Designated Beneficiary, by his or her legatee under his or
her last will, or by his or her personal representative or
distributee, but only to the extent of the number of shares
purchasable by such Participant pursuant to the provisions of
Section 6(d) at the date of termination of services.
In the event of the termination of the services of the
holder of an option, other than by reason of Retirement,
disability or death, he or she may (unless the option shall have
been previously terminated pursuant to the provisions of this
Section 6(c) or unless otherwise provided in the option grant)
exercise the option at any time within one year after such
termination but not after the expiration of the option, to the
extent of the number of shares covered by the option which were
purchasable by him or her at the date of the termination of
services, and such option shall automatically terminate upon the
date of such termination of services for all shares which were
not purchasable upon such date.
(d) Notwithstanding the foregoing provisions, the Committee
may determine, in its sole discretion, in the case of any
termination of services, that the holder of an option may
exercise such option to the extent of some or all of the
remaining shares covered thereby whether or not such shares had
become purchasable by such an individual at the date of the
termination of his services and may exercise such option at any
time prior to the expiration of the original term of the option.
Options granted under the Plan shall not be affected by any
change of relationship with the Corporation so long as the holder
continues to be an employee of the Corporation or of a
subsidiary; however, a change in a Participant's status from an
employee to a nonemployee shall result in the termination of an
outstanding option held by such Participant in accordance with
Section 6(c). The Committee, in its absolute discretion, may
determine all questions of whether particular leaves of absence
constitute a termination of service. Nothing in the Plan or in
any option granted pursuant to the Plan shall confer on any
individual any right to continue in the employ or other service
of the Corporation or any other person or interfere in any way
with the right of the Corporation or any other person to
terminate his or her employment or other services at any time.
(e) The date of grant of an option pursuant to the Plan
shall be the date specified by the Committee, or the Grant
Committee acting pursuant to authority granted under Section
3(b), at the time it grants such option, provided that such date
shall not be prior to the date of such action by the Committee or
the grant Committee, and that the price shall be determined in
accordance with Section 6(a) on such date. The Committee or
Grant Committee shall promptly notify a grantee of an award and a
written option grant shall promptly be duly executed and
delivered by or on behalf of the Corporation.
(f) The Committee shall be authorized, in its absolute
discretion, to permit option holders to surrender outstanding
options in exchange for the grant of new options or to require
option holders
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to surrender outstanding options as a condition precedent to the
grant of new options. The number of shares covered by the new
options, the option price (subject to the provisions of Section
6(a)), the option period and other terms and conditions of the new
options shall all be determined in accordance with the Plan and
may be different from the provisions of the surrendered options.
(g) Notwithstanding any contrary waiting period,
installment period or other limitation or restriction in any
option agreement or in the Plan, in the event of a Change of
Control, each option outstanding under the Plan shall thereupon
become exercisable at any time during the remaining term of the
option, but not after the term of the option, to the extent of
the number of shares covered by the option, whether or not such
shares had become purchasable by the Participant thereunder
immediately prior to such Change of Control.
(h) Anything in the Plan to the contrary notwithstanding,
during the 90 calendar days from and after a Change of Control
(x) an optionee (other than an optionee who initiated a Change of
Control in a capacity other than as an officer or a Director of
the Corporation) who is an officer or a Director of the
Corporation (within the meaning of Section 16 of the Exchange Act
and the rules and regulations promulgated thereunder) with
respect to an option that was granted at least six months prior
to the date of exercise pursuant to this sentence and (y) any
other optionee who is not an officer or a Director with respect
to an option shall, unless the Committee shall determine
otherwise at the time of grant, have the right, in lieu of the
payment of the full purchase price of the shares of Common Stock
being purchased under the option and by giving written notice to
the Corporation, to elect (within such 90-day period) to
surrender all or part of the option to the Corporation and to
receive in cash an amount equal to the amount by which the Fair
Market Value of the Common Stock on the date of exercise shall
exceed the purchase price per share under the option multiplied
by the number of shares of Common Stock granted under the stock
option as to which the right granted by this sentence shall have
been exercised. Such written notice shall specify the optionee's
election to purchase shares granted under the option or to
receive the cash payment referred to in the immediately preceding
sentence.
(i) Anything in this paragraph 6 to the contrary
notwithstanding, if a stock option of a recipient under an ATL
stock option plan expires, and the expired option at the time of
its expiration had value and was for the purchase of shares of
the same class as shares available for grant under this Plan, and
the recipient is eligible for awards under this Plan as specified
in paragraph 5 hereof, and the Committee feels in its discretion
that it is appropriate or equitable to do so, the Committee may
award such recipient a new stock option under this Plan, for up
to the number of shares of the expired option, such new stock
option to vest immediately upon grant and to expire within a
period of time no greater than 90 days from the date of the
grant.
7. Restricted Stock Awards
(a) The consideration to be received for shares of Restricted
Stock issued hereunder out of authorized but unissued shares or
out of treasury shares shall be equal to cash in an amount equal
to the par value thereof and past services for the Corporation.
The recipient of Restricted Stock shall be recorded as a
shareholder of the Corporation, at which time the Corporation, at
its discretion, may either issue a Restricted Stock Certificate
or make a book entry credit in the Corporation's stock ledger to
evidence the award of such Restricted Stock, and the Participant
shall have, subject to the provisions hereof, all the rights of a
stockholder with respect to such shares and receive all dividends
or other distributions made or paid with respect to such shares;
provided, that the shares themselves, and any new, additional or
different shares or securities which the recipient may be
entitled to receive with respect to such shares by virtue of a
stock split or stock dividend or any other change in the
corporate or capital structure of the Corporation, shall be
subject to the restrictions hereinafter described.
(b) During a period of months following the date of grant, as
determined by the Committee, which shall in no event be less than
six months (the "Restricted Period"), the Restricted Stock or any
rights
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thereto may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of by the
recipient, except in the event of death or the transfer thereof
to the Corporation under the provisions of the next succeeding
paragraph. In the event of the death or normal Retirement of the
recipient during the Restricted Period, such restrictions shall
immediately lapse, and the recipient or, in the case of the
recipient's death, his Designated Beneficiary, the legatee under
his last will or his personal representative or distributee shall
be free to transfer, encumber or otherwise dispose of the
Restricted Stock. In the event of the early Retirement of the
recipient during the Restricted Period, such restrictions shall
continue until they lapse in accordance with the terms of the
grant.
Except as provided in Section 7(c), in the event that, during
the Restricted Period, the service of the recipient by the
Corporation or one of its subsidiaries is terminated for any
reason (including termination with or without cause by the
Corporation or such subsidiary or resignation by the recipient),
other than termination of service due to the Retirement or death
of the recipient, then the shares of Restricted Stock held by him
shall be forfeited to the Corporation and the recipient shall
immediately transfer and return to the Corporation the
certificates, if any have been issued to him, representing all
the Restricted Stock and the recipient's rights as a shareholder
with respect to the Restricted Stock shall cease, effective with
such termination of service. Notwithstanding the foregoing, the
recipient's service contract with the Corporation may provide
that upon termination of his service for other than cause or for
good reason, all Restricted Stock shall cease to be subject to
such restrictions.
A recipient's rights to Restricted Stock may not be assigned or
transferred except upon death by will, descent or distribution.
In the event of any attempt by the recipient to sell, exchange,
transfer, pledge or otherwise dispose of shares of Restricted
Stock in violation of the provisions hereof, such shares shall be
forfeited to the Corporation.
(c) Notwithstanding the Restricted Period contained in the
grant of Restricted Stock, in the event of a Change of Control
(as defined in Section 1), all restrictions on shares of
Restricted Stock shall immediately lapse and such Restricted
Shares shall become immediately transferable and nonforfeitable.
(d) Notwithstanding anything contained in the Plan to the
contrary, the Committee may determine, in its sole discretion, in
the case of any termination of a recipient's service, that the
restrictions on some or all of the shares of Restricted Stock
awarded to a recipient shall immediately lapse and such
Restricted Shares shall become immediately transferable and
nonforfeitable.
8. Withholding Taxes
In connection with the transfer of shares of Common Stock as
a result of the award of Restricted Stock or the exercise of an
option the Corporation (a) shall not issue a certificate for such
shares until it has received payment from the Participant of any
Withholding Tax in cash or by the retention by the Corporation or
acceptance by the Corporation 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 Corporation shall have the right to
withhold from any cash amounts due from the Corporation to the
Participant pursuant to the Plan an amount equal to the
Withholding Tax. In either case, the Corporation shall 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 8, 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 Corporation.
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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
Corporation with funds sufficient to enable the Corporation to
pay such Withholding Tax or by having the Corporation 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 shall be subject
to the following restrictions: (i) the election must be in
writing and made on or prior to the Tax Date and (ii) if the
Participant is subject to Section 16 of the Exchange Act, an
election to have shares retained to satisfy the Withholding Tax
must be an irrevocable election made at least six months prior to
the Tax Date or the withholding election must become effective
during the 10-business-day period beginning on the third business
day following the date on which the Corporation releases for
publication its annual or quarterly summary statements of sales
and earnings and ending on the twelfth business day following the
date of release thereof.
9. Transferability and Ownership Rights of Options
No option awarded under the Plan shall be transferable
otherwise than pursuant to the designation of a Designated
Beneficiary or by will, descent or distribution, and an option
may be exercised, during the lifetime of the holder thereof, only
by him or her. The holder of an option shall have none of the
rights of a stockholder until the shares subject thereto shall
have been registered in the name of such holder on the transfer
books of the Corporation.
10. Section 16(b) Compliance and Bifurcation of Plan
It is the intention of the Corporation that, if any of the
Corporation's equity securities are registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, the Plan shall comply
in all respects with Rule 16b-3 under the Exchange Act and, if
any Plan provision is later found not to be in compliance with
such Section, the provision shall be deemed null and void, and in
all events the plan shall be construed in favor of its meeting
the requirements of Rule 16b-3. Notwithstanding anything in the
Plan to the contrary, the Board, in its absolute discretion, may
bifurcate the Plan so as to restrict, limit or condition the use
of any provision of the Plan to participants who are officers and
directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to
other participants.
11. Adjustments Upon Changes in Capitalization
Except as otherwise provided in Section 6(h) and Section
6(i), in the event of any changes in the outstanding stock of the
Corporation 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 shareholders 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 or rights subject to options and the exercise prices of
the options covered thereby. In the event of any such change in
the outstanding Common Stock of the Corporation, the aggregate
number and class of shares available under the Plan and the
maximum number of shares as to which options may be granted and
the maximum number of shares of Restricted Stock which may be
awarded shall be appropriately adjusted by the Committee.
12. Amendment and Termination
Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on, and no awards
of options or Restricted Stock shall be made after, October 31,
2002; provided, however, that such termination shall have no
effect on awards of options or Restricted Stock made prior
thereto. The Plan may be terminated, modified or amended by the
stockholders of the
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Corporation. The Board of Directors of the Corporation may also
terminate the Plan, or modify or amend the Plan 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. The
amendment or termination of the Plan shall not, without the consent of
the recipient of any award under the Plan, alter or impair any rights
or obligations under any award theretofore granted under the Plan.
13. Effectiveness of the Plan
The Plan shall become effective on November 1, 1992. The
Committee may in its discretion authorize the awarding of
Restricted Stock and the granting of options, the issuance or
exercise of which shall be expressly subject to the conditions
that (a) the shares of Common Stock reserved for issuance under
the Plan shall have been duly listed, upon official notice of
issuance, upon each stock exchange in the United States upon
which the Common Stock is traded and (b) a registration statement
under the Securities Act of 1933, as amended, with respect to
such shares shall have become effective.
Exhibit 23.1
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
ATL Ultrasound, Inc.:
We consent to the use of our reports incorporated herein by
reference in the registration
statement.
KPMG Peat Marwick LLP
Seattle, Washington
November 26, 1997
