<PAGE>
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
SCHEDULE TO
(Rule 14d-100)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
Protocol Systems, Inc.
(Name of Subject Company (Issuer))
Welch Allyn Acquisition Corporation
Welch Allyn, Inc.
(Names of Filing Persons (Offerors))
Common Stock, par value $0.01 per share
(Title of Class of Securities)
74371R106
(CUSIP Number of Class of Securities)
M. Jack Rudnick, Esq.,
Vice President and General Counsel
Welch Allyn, Inc.
4341 State Street Road
Skaneateles Falls, New York 13153
(315) 685-2500
With copy to:
Ronald C. Berger, Esq.
Bond, Schoeneck & King, LLP
One Lincoln Center
Syracuse, New York 13202-1355
(315) 422-0121
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)
June 7, 2000
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
Transaction Valuation* Amount of Filing Fee
$144,489,103(1) $28,898(1)
</TABLE>
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
(1) For purposes of calculating amount of filing fee, the transaction
valuation assumes the purchase of an aggregate of 8,193,524 shares of
common stock, par value $.01 per share, of the subject company, Protocol
Systems, Inc. ("Common Stock"), at $16.00 per share which is the purchase
price contemplated in the tender offer being reported hereby (the "Offer
Price"). Such number of shares represents all of the shares of Common
Stock issued and outstanding as of June 2, 2000. Under the Agreement and
Plan of Merger relating to the tender offer being reported, each
outstanding option to acquire shares of Common Stock outstanding
immediately prior to the effective time of the related merger will be
converted into the right to receive cash in an amount equal to the
difference between the Offer Price and the exercise price of such option
(the "Option Spread"). Accordingly, the transaction valuation includes the
aggregate Option Spread for all such options outstanding on June 2, 2000.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A Form or Registration No.: N/A
Filing Party: N/A Date Filed: N/A
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
[X]third-party tender offer subject to Rule 14d-1.
[_]issuer tender-offer subject to Rule 13e-4.
[_]going private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
<PAGE>
Item 1. Summary Term Sheet.
The information set forth under the caption "Summary Term Sheet" in the
Offer to Purchase, dated as of June 7, 2000 (the "Offer to Purchase"), is
incorporated herein by reference. The Offer to Purchase is attached hereto as
Exhibit (a)(1).
Item 2. Subject Company Information.
(a) The name of the subject company is Protocol Systems, Inc., an Oregon
corporation (the "Company"), with its principal executive offices at 8500 S.
W. Creekside Place, Beaverton, Oregon 97008-7107. The telephone number of the
Company's principal executive offices is (503) 526-8500.
(b) This Schedule TO relates to shares of common stock, par value $.01 per
share (the "Shares"), of the Company, together with associated purchase
rights. Information concerning the number of outstanding Shares is set forth
under the caption "Introduction" in the Offer to Purchase and is incorporated
herein by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of the Shares for each quarterly
period during the past two years is set forth in Section 6 ("Price Range of
the Shares; Dividends on the Shares") of the Offer to Purchase and is
incorporated herein by reference.
Item 3. Identity and Background of Filing Persons.
This Schedule TO is being filed by Welch Allyn Acquisition Corporation, an
Oregon corporation (the "Purchaser"), and Welch Allyn, Inc., a New York
corporation ("Parent"). The Purchaser is a wholly owned subsidiary of Parent.
Information concerning the principal business, the address and business
telephone of the principal executive offices of each of the Purchaser and
Parent is set forth in Section 9 ("Certain Information Concerning the
Purchaser and Parent") of the Offer to Purchase and is incorporated herein by
reference. The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") and Section 14 ("Certain Legal Matters")
of the Offer to Purchase is also incorporated herein by reference.
Information regarding the names, business addresses, present principal
occupation or employment, and material occupations, positions, offices or
employment during the last five years as well as the other information
required by Item 3 with respect to directors and executive officers of the
Purchaser and Parent is set forth in Schedule I to the Offer to Purchase and
is incorporated herein by reference. During the last five years, neither the
Purchaser nor Parent nor, based upon information furnished to the Purchaser
and Parent, any of their respective executive officers or directors, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), nor has any of them been a party to a civil proceeding of a
judicial or administrative body that resulted in a judgment, decree or final
order enjoining such person from future violations of, or prohibiting
activities subject to, federal or state securities laws or finding of any
violation of such laws.
Item 4. Terms of the Transaction.
(1)(i)-(ii) The information set forth under the caption "Introduction" in
the Offer to Purchase is incorporated herein by reference.
(1)(iii)-(v) The information set forth in Section 1 ("Terms of the Offer")
of the Offer to Purchase is incorporated herein by reference.
(1)(vi) The information set forth in Section 3 ("Withdrawal Rights") of the
Offer to Purchase is incorporated herein by reference.
(1)(vii) The information set forth in Section 2 ("Procedures for Tendering
Shares") and Section 3 ("Withdrawal Rights") of the Offer to Purchase is
incorporated herein by reference.
2
<PAGE>
(1)(viii) The information set forth in Section 4 ("Acceptance for Payment
and Payment") of the Offer to Purchase is incorporated herein by reference.
(1)(ix) Not applicable.
(1)(x) Not applicable.
(1)(xi) Not applicable.
(1)(xii) The information set forth in Section 5 ("Certain U.S. Federal
Income Tax Consequences") of the Offer to Purchase is incorporated herein by
reference.
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(a) The information set forth in Section 11 ("Contacts and Transactions
with the Company; Background of the Offer") and Section 12 ("Purpose of the
Offer; the Merger Agreement; Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
(b) The information set forth in Section 11 ("Contacts and Transactions
with the Company; Background of the Offer") and Section 12 ("Purpose of the
Offer; the Merger Agreement; Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) and (c)(1)-(5) The information set forth in Section 12 ("Purpose of the
Offer; the Merger Agreement; Other Agreements") of the Offer to Purchase is
incorporated herein by reference.
(c)(6)-(7) The information set forth in Section 7 ("Effect of the Offer on
the Market for the Shares; Share Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
Item 7. Source and Amount of Funds or Other Consideration.
(a) and (d) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 8. Interest in Securities of the Subject Company.
(a) and (b) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
Item 9. Persons/Assets Retained, Employed, Compensated or Used.
The information set forth under the caption "Introduction" and in Section
15 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by
reference.
Item 10. Financial Statements.
Pursuant to Instruction 2 to Item 10, the financial statements of the
Purchaser and Parent are not considered material because (i) the consideration
to be paid in the Offer consists solely of cash, (ii) the Offer is not subject
to any financing condition and (iii) the Offer is for all outstanding Shares.
Accordingly, such financial statements are not included herein.
3
<PAGE>
Item 11. Additional Information.
(a)(1) The information set forth in Section 12 ("Purpose of the Offer; the
Merger Agreement; Other Agreements") of the Offer to Purchase is incorporated
herein by reference.
(a)(2)-(3) The information set forth in Section 14 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(a)(4) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; Share Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
(a)(5) None.
(b) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Agreement and Plan of Merger dated as of May 24, 2000, by
and among the Purchaser, Parent and the Company, copies of which are attached
hereto as Exhibits (a)(1), (a)(2) and (d)(1), respectively, is incorporated
herein by reference.
Item 12. Exhibits.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(5) Letter to Clients for Use by Brokers, Dealers, Banks, Trust Companies
and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Summary Advertisement dated June 7, 2000.
(a)(8) Joint Press Release dated May 25, 2000, issued by the Company and
Parent (incorporated herein by reference to the Tender Offer Statement
on Schedule TO filed with the Securities and Exchange Commission on May
25, 2000 by the Purchaser and Parent).
(b)(1) Agreement, dated as of May 18, 2000, by and between Parent and Bank
One, NA concerning a $40 million bridge loan.
(b)(2) $40 million Master Note (Fixed and Floating Rates), dated May 18, 2000,
made by Parent.
(d)(1) Agreement and Plan of Merger, dated as of May 24, 2000, by and among
the Purchaser, Parent and the Company (incorporated herein by reference
to Exhibit 2.1 to the Current Report on Form 8-K filed with the
Securities and Exchange Commission on May 25, 2000 by the Company
(Commission File No. 0-19943)).
(d)(2) Confidentiality Agreement, dated as of March 9, 2000, between Parent
and the Company (incorporated herein by reference to Exhibit (e)(2) to
the Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission on June 7, 2000 by the Company
("Schedule 14D-9")).
(d)(3) Amended and Restated Executive Employment Agreement between the Company
and Edward M. Kolasinski dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(3) to Schedule 14D-9).
(d)(4) Amended and Restated Executive Employment Agreement between the Company
and Robert F. Adrion dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(4) to Schedule 14D-9).
(d)(5) Executive Employment Agreement between the Company and Ann P. Demaree
dated May 23, 2000 (incorporated herein by reference to Exhibit (e)(5)
to Schedule 14D-9).
(d)(6) Amended and Restated Executive Employment Agreement between the Company
and James P. Fee dated May 23, 2000 (incorporated herein by reference
to Exhibit (e)(6) to Schedule 14D-9).
(d)(7) Amended and Restated Executive Employment Agreement between the Company
and Donald M. Abbey dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(7) to Schedule 14D-9).
</TABLE>
4
<PAGE>
<TABLE>
<C> <S>
(d)(8) Amended and Restated Executive Employment Agreement between the
Company and James P. Welch dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(8) to Schedule 14D-9)
(d)(9) Amended and Restated Executive Employment Agreement between the
Company and Richard L. Roa dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(9) to Schedule 14D-9).
(d)(10) Amended and Restated Executive Employment Agreement between the
Company and Chris E. Tew dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(10) to Schedule 14D-9)
(d)(11) Amended and Restated Executive Employment Agreement between the
Company and Allen L. Oyler dated May 23, 2000 (incorporated herein by
reference to Exhibit (e)(11) to Schedule 14D-9).
(d)(12) Retention Bonus Agreement between the Company and James P. Welch dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(12) to
Schedule 14D-9).
(d)(13) Retention Bonus Agreement between the Company and Robert F. Adrion
dated May 23, 2000 (incorporated herein by reference to Exhibit
(e)(13) to Schedule 14D-9).
(d)(14) Retention Bonus Agreement between the Company and Ann P. Demaree dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(14) to
Schedule 14D-9).
(d)(15) Retention Bonus Agreement between the Company and James P. Fee dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(15) to
Schedule 14D-9).
(d)(16) Retention Bonus Agreement between the Company and Edward M. Kolasinski
dated May 23, 2000 (incorporated herein by reference to Exhibit
(e)(16) to Schedule 14D-9).
(d)(17) Retention Bonus Agreement between the Company and Allen L. Oyler dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(17) to
Schedule 14D-9).
(d)(18) Retention Bonus Agreement between the Company and Richard L. Roa dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(18) to
Schedule 14D-9).
(d)(19) Retention Bonus Agreement between the Company and Chris E. Tew dated
May 23, 2000 (incorporated herein by reference to Exhibit (e)(19) to
Schedule 14D-9).
(d)(20) Retention Bonus Agreement between the Company and Donald M. Abbey
dated May 23, 2000 (incorporated herein by reference to Exhibit
(e)(20) to Schedule 14D-9).
(d)(21) Supplement to Amended and Restated Executive Employment Agreement
between the Company and Robert F. Adrion dated May 24, 2000
(incorporated herein by reference to Exhibit (e)(21) to Schedule 14D-
9).
(d)(22) First Amendment to Rights Agreement, dated as of May 24, 2000, between
the Company and ChaseMellon Shareholder Services, L.L.C., as the
Rights Agent (incorporated herein by reference to Exhibit (e)(22) to
Schedule 14D-9).
</TABLE>
5
<PAGE>
SIGNATURE
After due inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and
correct.
Dated: June 7, 2000
Welch Allyn Acquisition Corporation
/s/ M. Jack Rudnick
By: _____________________________________
Name: M. Jack Rudnick
Title: Vice President
Welch Allyn, Inc.
/s/ Peter H. Soderberg
By: _____________________________________
Name: Peter H. Soderberg
Title: President and Chief Executive
Officer
6
