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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))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PROTOCOL SYSTEMS, INC.
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(Name of Registrant as Specified In Its Charter)
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(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:
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[LOGO OF PROTOCOL SYSTEMS, INC.]
8500 S.W. Creekside Place
Beaverton, OR 97008
(503) 526-8500
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NOTICE OF POSTPONEMENT OF
ANNUAL MEETING OF SHAREHOLDERS
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To the Shareholders of
Protocol Systems, Inc.:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Annual
Meeting") of Protocol Systems, Inc. (the "Company") originally scheduled to be
held on Tuesday, May 16, 2000, has been rescheduled to Thursday, May 25, 2000
at 10:30 a.m., local time. The rescheduled Annual Meeting will be held at the
Company's offices at 8500 S.W. Creekside Place, Beaverton, Oregon 97008 for
the following purposes:
1. Election of Directors. To elect three directors, two for a three-year
term and one for a one-year term;
2. Approval of Amendment to 1998 Stock Incentive Plan. To approve an
amendment to the Protocol Systems, Inc. 1998 Stock Incentive Plan to
increase the number of shares reserved for issuance thereunder from
500,000 to 900,000;
3. Ratification of Appointment of Auditors. To ratify the appointment by
the Board of Directors of KPMG LLP as independent auditors of the
Company for the fiscal year ending December 31, 2000; and
4. Other Business. To transact such other business as may properly come
before the meeting or any adjournments thereof.
A Proxy Statement describing the matters to be considered at the Annual
Meeting was mailed to shareholders on or about April 14, 2000. A Supplement to
Proxy Statement correcting certain information in the Proxy Statement that was
incorrect and providing certain information that was omitted from the Proxy
Statement is attached to this Notice of Postponement of Annual Meeting of
Shareholders. Only shareholders of record at the close of business on March
17, 2000 will be entitled to notice of and to vote at the Annual Meeting and
any adjournments or postponements thereof.
By Order of the Board,
/s/ Robert F. Adrion
Robert F. Adrion
President and Chief Executive
Officer
Beaverton, Oregon
May 3, 2000
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PROTOCOL SYSTEMS, INC.
8500 S.W. Creekside Place
Beaverton, OR 97008
(503) 526-8500
SUPPLEMENT TO PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
PREVIOUSLY SCHEDULED TO BE HELD ON MAY 16, 2000
POSTPONED TO MAY 25, 2000
Dear Shareholder:
On or about April 14, 2000, we mailed you a Notice of Annual Meeting of
Shareholders and Proxy Statement dated April 10, 2000 (the "Proxy Statement")
in connection with our Annual Meeting of Shareholders (the "Annual Meeting")
that was previously scheduled to be held on May 16, 2000. The Annual Meeting
has been rescheduled to be held on May 25, 2000.
At the Annual Meeting, shareholders will be asked to elect three members of
the Board of Directors, approve an amendment to the Company's 1998 Stock
Incentive Plan, ratify the appointment by the Board of Directors of KPMG LLP
as independent auditors of the Company for the fiscal year ending December 31,
2000, and transact such other business as may properly come before the meeting
and any adjournments or postponements thereof. As a result of the postponement
of the Annual Meeting, shareholders will have additional time to consider the
information included in this Supplement to Proxy Statement and to complete and
return proxies for voting on the matters to be considered at the Annual
Meeting.
After we mailed you the Proxy Statement, we determined that certain
information included in the Proxy Statement regarding stock option exercises
and holdings of our executive officers was incorrect and that certain
information regarding long-term incentive awards had been omitted. Set forth
below is the correct information about option exercises and holdings, which
amends and replaces the information in the table at the bottom of Page 8 of
the Proxy Statement, and certain previously omitted information regarding
long-term incentive awards to Robert F. Adrion.
Option Exercises and Holdings
The following table provides information, with respect to the named
executive officers, concerning unexercised options held as of December 31,
1999. None of the named executive officers exercised any options during the
year ended December 31, 1999.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at FY-End at FY-End(1)
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Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Robert F. Adrion........... -- 200,000 -- $100,000
David F. Bolender.......... 106,333 26,667 $ 18,000 30,000
James P. Fee, Jr. ......... 95,321 36,346 282,054 52,500
Carl P. Hollstein, Jr. .... 45,750 35,250 52,500 52,500
Allen L. Oyler............. 34,250 35,750 33,750 52,500
James P. Welch............. 48,884 38,250 112,713 52,500
</TABLE>
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(1) The value of unexercised in-the-money options is based on the difference
between $9.00, which was the closing price of the Common Stock on
December 31, 1999, and the applicable exercise price.
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Long-Term Incentive Plan Awards
The following table provides information concerning long-term incentive plan
awards during the year ended December 31, 1999.
<TABLE>
<CAPTION>
Estimated Future Payouts(1)
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Maximum
Performance or Other Threshold Target Number
Number Period Until Number of Number of
Name of Shares Maturation or Payout Shares of Shares Shares
---- --------- -------------------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
Robert F. Adrion.... 20,000 8/31/99 - 1/31/02 0 20,000 20,000
20,000 8/31/99 - 1/31/03 0 20,000 20,000
20,000 8/31/99 - 1/31/04 0 20,000 20,000
</TABLE>
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(1) Payouts of awards are conditioned upon achievement of specified levels of
appreciation in the market price of the Common Stock during the specified
performance period and Mr. Adrion's continued employment with the Company
at the end of the performance period. No payout will be made if these
conditions are not satisfied as of the end of the specified performance
period. The full amount of the award will be paid if these conditions are
satisfied as of the end of the specified performance period.
The following paragraph amends and replaces the first full paragraph on page
11 of the Proxy Statement.
Chief Executive Officer Compensation. Effective August 1, 1999 Robert F.
Adrion was hired as the Company's President and Chief Executive Officer. Mr.
Adrion's base annual salary was fixed at $300,000 with an annual cash
incentive opportunity of up to 60% of base salary based on achievement of
target goals established each year by the Compensation Committee. Mr. Adrion
was also awarded options to purchase 200,000 shares of Common Stock at an
exercise price equal to fair market value of the Common Stock on the date of
grant which vest annually over four years. Mr. Adrion was also awarded the
right to receive 20,000 shares of Common Stock on each of January 31, 2002,
2003 and 2004 conditioned upon achievement of specified levels of appreciation
in the market price of the Common Stock during the periods from August 1, 1999
to the specified dates and Mr. Adrion's continued employment with the Company
on the specified dates. Mr. Adrion's compensation package was determined by
the Compensation Committee based on Mr. Adrion's previous experience, the
results of surveys and analysis of the compensation levels of other similar
companies and negotiations with Mr. Adrion. Mr. Adrion received a cash
incentive payment of $70,000 for 1999 based on the achievement of the target
goals established by the Compensation Committee.
It is important that proxies be returned promptly. Therefore, whether or not
you plan to be present in person at the Annual Meeting, please date, sign and
complete the proxy card previously delivered to you and return it in the
envelope that was provided. If you have voted by proxy and wish to revoke your
proxy you may do so at any time prior to its exercise by filing a written
notice of revocation with, or by delivering a duly executed proxy bearing a
later date to, Corporate Secretary, Protocol Systems, Inc., 8500 S.W.
Creekside Place, Beaverton, Oregon 97008, or by attending the Annual Meeting
and voting in person. All valid, unrevoked proxies will be voted at the Annual
Meeting. If you would like a new proxy card, please call the Company at 503-
350-4725 and ask for Stock Administration.
Very truly yours,
/s/ Robert F. Adrion
Robert F. Adrion
President and Chief Executive
Officer
May 3, 2000
