<PAGE>
As filed with the Securities and Exchange Commission on October 18, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM S-8
REGISTRATION STATEMENT
Under The Securities Act of 1933
_______________________________________
PROTOCOL SYSTEMS, INC.
(Exact name of registrant as specified in charter)
Oregon 93-0913130
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification Number)
_______________________________________
8500 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 526-8500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
_______________________________________
PROTOCOL SYSTEMS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT DATED AUGUST 6, 1999
_______________________________________
Robert F. Adrion
President and Chief Executive Officer
Protocol Systems, Inc.
8500 S.W. Creekside Place, Beaverton, Oregon 97008
(503) 526-8500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
_______________________________________
With copies to:
Gregory E. Struxness, Esq.
Ater Wynne LLP
222 S.W. Columbia, Suite 1800
Portland, Oregon 97201
(503) 226-1191
_______________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Securities Amount to Be Proposed Maximum Offering Proposed Maximum Amount of
to Be Registered Registered Price Per Share (1) Aggregate Offering Price (1) Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$.01 per share (2)..... 152,944 shares $6.125 $936,782 $261
====================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Including associated Preferred Stock Purchase Rights. Prior to the
occurrence of certain events, the Preferred Stock Purchase Rights will not
be evidenced or traded separately from the Common Stock.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are incorporated by reference into this
Registration Statement:
(a) Annual Report on Form 10-K for the year ended December 31, 1998
of Protocol Systems, Inc. (the "Company") filed with the Securities and Exchange
Commission (the "SEC") on March 30, 1999.
(b) Quarterly Report on Form 10-Q of the Company for the quarter
ended March 31, 1999 filed with the SEC on May 14, 1999 and Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999 filed on August 16, 1999.
(c) Registration Statement on Form 8-A of the Company filed with the
SEC on March 16, 1992.
(d) All documents filed by the Company with the SEC pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after
the date of this Registration Statement and before the date of filing of a post-
effective amendment to this Registration Statement stating that all securities
offered have been sold or deregistering all securities then remaining unsold.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
As an Oregon corporation the Company is subject to the Oregon Business
Corporation Act (the "OBCA") and the exculpation from liability and
indemnification provisions contained therein. Pursuant to Section 60.047(2) of
the OBCA, Article VI of the Company's Restated Articles of Incorporation (the
"Restated Articles") eliminates the liability of the Company's directors to the
Company or its shareholders, except for any liability related to breach of the
duty of loyalty, actions not in good faith and certain other liabilities.
-2-
<PAGE>
Section 60.387 et seq. of the OBCA allows corporations to indemnify their
directors and officers against liability where the director or officer has acted
in good faith and with a reasonable belief that actions taken were in the best
interests of the corporation or at least not adverse to the corporation's best
interests and, if in a criminal proceeding, the individual had no reasonable
cause to believe the conduct in question was unlawful. Under the OBCA,
corporations may not indemnify against liability in connection with a claim by
or in the right of the corporation but may indemnify against the reasonable
expenses associated with such claims. Corporations may not indemnify against
breaches of the duty of loyalty. The OBCA mandates indemnifications against all
reasonable expenses incurred in the successful defense of any claim made or
threatened whether or not such claim was by or in the right of the corporation.
Finally, a court may order indemnification if it determines that the director or
officer is fairly and reasonably entitled to indemnification in view of all the
relevant circumstances, whether or not the director or officer met the good
faith and reasonable belief standards of conduct set forth in the statute.
The OBCA also provides that the statutory indemnification provisions are
not deemed exclusive of any other rights to which directors or officers may be
entitled under a corporation's articles of incorporation or bylaws, any
agreement, general or specific action of the board of directors, vote of
shareholders or otherwise.
The Restated Articles require the Company to indemnify its directors and
officers to the fullest extent not prohibited by law. The Restated Bylaws of the
Company (the "Bylaws") also require the Company to indemnify its directors and
officers to the fullest extent permitted by the OBCA. In addition, the Bylaws
deem that all rights to indemnification under the Bylaws are deemed to be
contractual rights and are to be effective to the same extent as if provided for
in a contract between the Company and the director or officer who serves in such
capacity.
The Company has entered into indemnity agreements with each of its
executive officers and directors. Each agreement provides for indemnification of
the indemnitee to the fullest extent by law.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Number Description
------ -----------
5.1 Opinion of Ater Wynne LLP as to the legality of the
securities being registered
-3-
<PAGE>
23.1 Consent of Ater Wynne LLP (included in legal opinion filed
as Exhibit 5.1)
23.2 Consent of KPMG LLP
24.0 Powers of Attorney (included in signature page in Part II of
the Registration Statement)
99.1 Nonqualified Stock Option Agreement dated August 6, 1999
Item 9. Undertakings
a. The undersigned registrant hereby undertakes 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;
ii. to reflect in the prospectus any facts or events arising
after the effective date of the 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 the registration statement;
iii. to include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that subparagraphs (i) and (ii) do not apply if the information
required to be included in a post-effective amendment by those subparagraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
b. The undersigned registrant hereby undertakes that, for the
purpose of determining liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
c. The undersigned registrant hereby undertakes to remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
d. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual
-4-
<PAGE>
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
e. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such a director, officer or controlling person in
connection with securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
-5-
<PAGE>
SIGNATURES
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 authorized,
in the City of Portland, State of Oregon, on the 17th day of October,1999.
PROTOCOL SYSTEMS, INC.
By /s/ Robert F. Adrion
-------------------------------------------
Robert F. Adrion
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert F. Adrion and Craig M. Swanson and each of
them singly, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign the registration statement filed herewith and any
or all amendments to said registration statement (including post-effective
amendments), and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission
granting unto said attorneys-in-fact and agents and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the foregoing, as fully to all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Witness our hands on the date set forth below.
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 dates indicated.
[Signatures on following page]
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<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert F. Adrion President , Chief Executive Officer and 10/17/99
- ------------------------------- Director (Principal Executive Officer)
Robert F. Adrion
/s/ Craig M. Swanson Vice President, Finance and Business 10/17/99
- ------------------------------- Development, Chief Financial Officer
Craig M. Swanson and Secretary (Principal Financial Officer)
/s/ David F. Bolender Chairman of the Board 10/17/99
- -------------------------------
David F. Bolender
/s/ Frank E. Samuel, Jr. Director 10/17/99
- -------------------------------
Frank E. Samuel, Jr.
/s/ Ronald S. Newbower Director 10/17/99
- -------------------------------
Ronald S. Newbower
Director
- -------------------------------
Steven E. Wynne
/s/ Curtis M. Stevens Director 10/17/99
- -------------------------------
Curtis M. Stevens
</TABLE>
-7-
<PAGE>
INDEX TO EXHIBITS
Exhibit Page
Number Exhibit No.
- ------- ------- ----
5.1 Opinion of Ater Wynne LLP as to the legality of
the securities being registered
23.1 Consent of Ater Wynne LLP (included in legal opinion
filed as Exhibit 5.1)
23.2 Consent of KPMG LLP
24.0 Powers of Attorney (included in signature page in
Part II of the Registration Statement)
99.1 Nonqualified Stock Option Agreement dated August 6, 1999
<PAGE>
Exhibit 5.1
ATER WYNNE LLP
222 S.W. Columbia, Suite 1800
Portland, Oregon 97201
(503)226-1191 (phone)
(503)226-0079 (fax)
October 17, 1999
Board of Directors
Protocol Systems, Inc.
8500 S.W. Creekside Place
Beaverton, OR 97008
Gentlemen:
In connection with the registration of 152,944 shares of common stock, par
value $.01 per share (the "Common Stock"), of Protocol Systems, Inc., an Oregon
corporation (the "Company"), under the Registration Statement on Form S-8 to be
filed with the Securities and Exchange Commission on October 18, 1999, and the
proposed offer and sale of the Common Stock pursuant to the terms of the
Company's Nonqualified Stock Option Agreement Dated August 6, 1999 (the
"Agreement"), we have examined such corporate records, certificates of public
officials and officers of the Company and other documents as we have considered
necessary or proper for the purpose of this opinion.
Based on the foregoing and having regard to legal issues which we deem
relevant, it is our opinion that the shares of Common Stock to be offered
pursuant to the Agreement when such shares have been delivered against payment
therefor as contemplated by the Agreement, will be validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the above-
mentioned registration statement.
Very truly yours,
/s/ Ater Wynne LLP
Ater Wynne LLP
<PAGE>
Exhibit 23.2
Independent Accountants' Consent
The Board of Directors
Protocol Systems, Inc.
We consent to incorporation by reference in the Registration Statement on Form
S-8 of Protocol Systems, Inc. (under the Nonqualified Stock Option Agreement
dated August 6, 1999) to register 152,944 shares of common stock of Protocol
Systems, Inc. of our report dated January 22, 1999, relating to the
consolidated balance sheets of Protocol Systems, Inc. and subsidiaries as of
December 31, 1998, and the related consolidated statements of operations and
comprehensive income, shareholders' equity, and cash flows for each of the years
in the three-year period ended December 31, 1998, and all related financial
statement schedules, which report appears in the December 31, 1998 Annual Report
on Form 10-K of Protocol Systems, Inc.
/s/ KPMG LLP
KPMG LLP
Portland, Oregon
October 15, 1999
<PAGE>
Exhibit 99.1
PROTOCOL SYSTEMS, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
To: Robert F. Adrion Date of Grant: August 6, 1999
We are pleased to inform you that you have been selected by the Board of
Directors (the "Board") of Protocol Systems, Inc. (the "Company") to receive a
nonqualified stock option for the purchase of 152,944 shares of the Company's
Common Stock at an exercise price of $8.50 per share.
1. TERM: The term of the option is ten years from date of grant, unless sooner
terminated.
2. VESTING: The option will vest and become exercisable according to the
following schedule:
Date on and After Which Exercisable Portion
Option is Exercisable of Total Option
- ----------------------- -------------------
August 6, 2000 38,236 shares
August 6, 2001 76,472 shares
August 6, 2002 114,708 shares
August 6, 2003 152,944 shares
3. EXERCISE: During your lifetime only you can exercise the option. The option
may be exercised by the personal representative of your estate, by the
beneficiary you have designated on forms prescribed by and filed with the
Company, or the beneficiary of your estate following your death. You may use the
Notice of Exercise of Nonqualified Stock Option in the form attached to this
Agreement when you exercise the option.
4. PAYMENT FOR SHARES: The option may be exercised by the delivery of:
a. Cash, personal check (unless, at the time of exercise, the Company
determines otherwise), bank certified or cashier's check;
b. Unless the Board in its sole discretion determines otherwise, shares
of the capital stock of the Company held by you for a period of at least six
months having a fair market value at the time of exercise, as determined in good
faith by the Board, equal to the exercise price; or
<PAGE>
c. A properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.
5. WITHHOLDING TAXES: As a condition to the exercise of the option, you must
make such arrangements as the Company may require for the satisfaction of any
federal, state or local withholding tax obligations that may arise in connection
with such exercise.
6. TERMINATION: If your relationship with the Company ceases because both your
employment with the Company and your membership on the Company's Board of
Directors terminates, and unless by its terms the option sooner terminates or
expires, then you may exercise, for a twelve-month period following the later of
the termination of your employment or the termination of your Board membership,
that portion of the option which is exercisable at the time of such termination,
but the option will terminate at the end of such period following such
termination as to all shares for which it has not theretofore been exercised.
7. DEATH OF OPTIONEE: If you die while having a relationship with the Company
or within the 12-month period following cessation of such relationship, and
unless by its terms the option sooner terminates or expires, this option may be
exercised within one year after your death by the personal representative of
your estate or by the person or persons to whom your rights under the option
pass (i) by will or by the applicable laws of descent and distribution or (ii)
by a designation or transfer, but the option will terminate at the end of such
period following your death as to all shares for which it has not theretofore
been exercised.
8. TRANSFERABILITY OF OPTION: This option and the rights and privileges
conferred hereby may not be transferred, assigned, pledged or hypothecated in
any manner (whether by operation of law or otherwise) other than by will or by
the applicable laws of descent and distribution and shall not be subject to
execution, attachment or similar process. This option is personal to you and is
exercisable solely by you. Any attempt to transfer, assign, pledge, hypothecate
or otherwise dispose of this option or of any right or privilege conferred
hereby, contrary to the provisions hereof, or the sale or levy or any attachment
or similar process upon the rights and privileges conferred hereby will be null
and void. Notwithstanding the foregoing, to the extent permitted by applicable
law and regulation, the Company, in its sole discretion, may permit you to (i)
during your lifetime, designate a person who may exercise the option after your
death by giving written notice of such designation to the Company (such
designation may be changed from time to time by you by giving written notice to
the Company revoking any earlier designation and making a new designation) or
(ii) transfer the option and the rights and privileges conferred hereby.
9. NO STATUS AS SHAREHOLDER: Neither you nor any party to whom your rights and
privileges under the option pass will be, or have any of the rights or
privileges of, a shareholder of the Company with respect to any of the shares
issuable upon the exercise of this option unless and until this option has been
exercised.
<PAGE>
10. CONTINUATION OF RELATIONSHIP: Nothing in this option will confer upon you
any right to continue in the employ or other relationship of the Company, or to
interfere in any way with the right of the Company to terminate your employment
or other relationship with the Company at any time.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION: The aggregate number and class
of shares covered by this option and the exercise price per share thereof (but
not the total price), will all be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock of the Company resulting
from a split-up or consolidation of shares or any like capital adjustment, or
the payment of any stock dividend.
12. EFFECT OF LIQUIDATION OR REORGANIZATION
(1) Cash, Stock or Other Property for Stock. Except as provided in
subsection (2), upon a merger (other than a merger of the Company in which the
holders of shares of Common Stock immediately prior to the merger have the same
proportionate ownership of shares of Common Stock in the surviving corporation
immediately after the merger), consolidation, acquisition of property or stock,
separation, reorganization (other than a mere reincorporation or the creation of
a holding company) or liquidation of the Company, as a result of which the
shareholders of the Company receive cash, stock or other property in exchange
for or in connection with their shares of Common Stock, this option will
terminate, but you will have the right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to exercise your option in whole or in part whether or not the
vesting requirements set forth in this agreement have been satisfied.
(2) Conversion of Options on Stock for Stock Exchange. If the
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger (other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), this option will be converted into an option to purchase
shares of Exchange Stock. The amount and price of converted options will be
determined by adjusting the amount and price of this option in the same
proportion as used for determining the number of shares of Exchange Stock the
holders of the shares of Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The converted
option will be fully vested whether or not the vesting requirements set forth in
this agreement have been satisfied; provided that such acceleration will not
occur if, in the opinion of the Company's outside accountants, such acceleration
would render unavailable "pooling of interests" accounting treatment for any
reorganization, merger or consolidation of the Company for which pooling of
interests accounting treatment is sought by the Company.
<PAGE>
13. FRACTIONAL SHARES: In the event of any adjustment in the number of shares
covered by this option, any fractional shares resulting from such adjustment
will be disregarded and the option will cover only the number of full shares
resulting from such adjustment.
14. DETERMINATION OF BOARD TO BE FINAL: All adjustments referred to herein will
be made by the Board, and its determination as to what adjustments will be made,
and the extent thereof, will be final, binding and conclusive.
15. SECURITIES REGULATION: Shares will not be issued with respect to this
option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto complies with all relevant provisions of law, including,
without limitation, any applicable state securities laws, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may
then be listed.
As a condition to the exercise of this option, the Company may require you
to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any relevant provision of the aforementioned laws.
At the option of the Company, a stop-transfer order against any shares of stock
may be placed on the official stock books and records of the Company, and a
legend indicating that the stock may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel
for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Company may also require such other
action or agreement by you as may from time to time be necessary to comply with
the federal and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE
COMPANY TO UNDERTAKE REGISTRATION OF THIS OPTION OR THE SHARES ISSUABLE
HEREUNDER.
Please execute the enclosed copy of this
Agreement and return it to the undersigned.
Very truly yours,
PROTOCOL SYSTEMS, INC.
By:
-------------------------------------
AGREED AND ACCEPTED:
- ----------------------------------
Robert F. Adrion
