<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SEAMED CORPORATION
------------------
(Name of Registrant as Specified In Its Charter)
...............................................................................
(Name of Persons(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:
......................................................................
2) Aggregate number of securities to which transaction applies:
......................................................................
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
......................................................................
4) Proposed maximum aggregate value of transaction:
......................................................................
5) Total fee paid:
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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:
......................................................................
2) Form, Schedule or Registration Statement No.:
......................................................................
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4) Date Filed:
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<PAGE> 2
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
TELEPHONE: (425) 867-1818
September 26, 1997
Dear SeaMED Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
of SeaMED Corporation, which is to be held on Thursday, October 30, 1997, at
10:00 a.m., at the Company's newest facility, 21621 30th Ave. S.E., Bothell,
Washington 98021.
At the meeting, we will report to you on current business conditions and
recent developments at SeaMED. Members of the Board of Directors and our
executive officers will be present to discuss the affairs of SeaMED with you.
The Company has enclosed with this letter a notice of annual meeting of
stockholders, a proxy statement, and a copy of its 1997 Annual Report for the
fiscal year ended June 30, 1997.
It is important that your shares be represented and voted at the Annual
Meeting, regardless of the size of your holdings. Accordingly, please complete,
sign and date the enclosed proxy card and return it promptly in the enclosed
envelope to ensure your shares will be represented. If you do attend the Annual
Meeting, you may, of course, withdraw your proxy should you wish to vote in
person.
On behalf of the Board of Directors and management of SeaMED, I would like
to thank you for choosing to invest in our Company. We are very excited about
the future opportunities of the Company and are looking forward to the Annual
Meeting after fiscal year 1997's record growth.
Sincerely,
LOGO
W. Robert Berg
President, Chief Executive Officer and
Director
<PAGE> 3
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 30, 1997
------------------------
The Annual Meeting of Shareholders of SeaMED Corporation, a Washington
corporation (the
"Company"), is to be held on Thursday, October 30, 1997, at 10:00 a.m. (the
"Annual Meeting"), at the Company's newest facility, 21621 30th Ave. S.E.,
Bothell, Washington 98021, for the purpose of:
(1) Electing seven (7) Directors to serve until the annual meeting of
Shareholders at which their terms expire and until their successors are
duly elected and qualified;
(2) Amending and restating the Company's Articles of Incorporation to
provide for a board of directors with staggered terms of three (3)
years;
(3) Approving an increase of 300,000 shares available for grant under the
Company's 1995 Stock Option and Incentive Plan;
(4) Approving an increase of 100,000 shares available for purchase under
the Company's Employee Stock Purchase Plan;
(5) Approving the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending June 30, 1998; and
(6) Transacting such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on September 18,
1997, as the record date for the determination of Shareholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors
[Beatty Signature]
Mark R. Beatty
Secretary
September 26, 1997
The Company's 1997 Annual Report for the fiscal year ended June 30, 1997 is
enclosed. The 1997 Annual Report contains financial and other information about
the Company, but is not incorporated into the Proxy Statement and is not deemed
to be a part of the proxy soliciting material.
EVEN IF YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN,
DATE AND MAIL THE ENCLOSED PROXY CARD. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND VOTE IN
PERSON IF THEY SO DESIRE.
<PAGE> 4
SEAMED CORPORATION
14500 NORTHEAST 87TH STREET
REDMOND, WASHINGTON 98052-3431
------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 30, 1997
------------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of SeaMED Corporation, a Washington corporation (the
"Company"), of proxies to be used at the annual meeting of shareholders of the
Company to be held on October 30, 1997 (the "Annual Meeting"). This Proxy
Statement and the related proxy card are being mailed to holders of the
Company's common stock, no par value (the "Common Stock"), commencing on or
about September 26, 1997.
If the enclosed proxy card is executed and returned, the shares represented
by it will be voted and will be voted as directed on all matters properly coming
before the Annual Meeting for a vote. Returning your completed proxy will not
prevent you from voting in person at the Annual Meeting should you be present
and desire to do so. In addition, the proxy may be revoked at any time prior to
its exercise either by giving written notice to the Company or by submission of
a later-dated proxy.
Shareholders of record of the Company's Common Stock at the close of
business on September 18, 1997 are entitled to vote at the Annual Meeting. On
September 18, 1997, the Company had outstanding 5,274,773 shares of Common
Stock. A list of the Company's shareholders will be open to the examination of
any shareholders, for any purpose germane to the meeting, at the Company's
headquarters for a period of ten days prior to the meeting. Each share of Common
Stock entitles the holder thereof to one vote on all matters submitted to
shareholders. At the Annual Meeting, inspectors of election shall determine the
presence of a quorum and shall tabulate the results of the shareholders' voting.
The holders of a majority of the total number of outstanding shares of Common
Stock entitled to vote must be present in person or by proxy to constitute the
necessary quorum for any business to be transacted at the Annual Meeting. In
accordance with the Washington Business Corporation Act (the "Act"), properly
executed proxies marked "abstain" as well as proxies held in street name by
brokers that are not voted on all proposals to come before the Annual Meeting
("broker non-votes"), will be considered "present" for the purposes of
determining whether a quorum has been achieved at the Annual Meeting.
The proposal to amend and restate the Company's Articles of Incorporation
requires the affirmative vote of a majority of the total outstanding shares of
Common Stock. The nominees for Director receiving the greatest number of votes
cast at the Annual Meeting in person or by proxy shall be elected. Consequently,
any shares of Common Stock present in person or by proxy at the Annual Meeting
but not voted for any reason have no impact in the election of Directors. All
other matters to be considered at the Annual Meeting, except Proposal 2, require
for approval that the votes cast favoring the action exceed the votes cast
opposing the action. Consequently, any shares of Common Stock present in person
or by proxy at the Annual Meeting but not voted for any reason have no impact on
the other matters. Shareholders have no right to cumulative voting as to any
matter, including the election of Directors. For Proposal 2 to pass, holders of
fifty percent (50%) or more of the outstanding Common Stock must vote in favor
of it. For such a proposal, abstentions are treated as present and entitled to
vote under the Act and therefore have the effect of a vote against such
proposal. Broker non-votes in respect of any proposal are not counted for
purposes of determining whether such proposal has received the requisite
approval under the Act.
The shares represented by all valid proxies received will be voted in the
manner specified on the proxies. Where specific choices are not indicated on a
valid proxy, the shares represented by such proxies received will be voted (i)
for the nominees for director named in this Proxy Statement; (ii) to amend and
restate the
<PAGE> 5
Company's Articles of Incorporation to provide for a board of directors with
staggered terms of three (3) years; (iii) for approval of an increase of 300,000
shares available for grant under the Company's 1995 Stock Option and Incentive
Plan; (iv) for approval of an increase of 100,000 shares available for purchase
under the Company's Employee Stock Purchase Plan; (v) for approval of the
appointment of Ernst & Young LLP as independent certified public accountants;
and (vi) in accordance with the best judgment of the persons named in the
enclosed proxy, or their substitutes, for any other matters which properly come
before the Annual Meeting or any adjournment or postponement thereof.
The Company's fiscal year consists of the 52/53-week period that ends on
the Thursday nearest to June 30. For convenience of presentation, all fiscal
periods in this proxy statement are shown as ending on a calendar month-end.
PROPOSAL 1.
ELECTION OF DIRECTORS
The Board of Directors is currently comprised of seven directors. The Board
of Directors has nominated and recommends for election as director the seven
nominees set forth below. Each nominee currently serves as director of the
Company. If the shareholders approve Proposal 2, the seven nominees shall be up
for election as Class I, Class II or Class III Directors as follows: Class I
Directors shall serve until the next annual shareholders meeting (1998) and
until their successors are elected and qualified; Class II Directors shall serve
until the second annual shareholders meeting (1999) after their election and
until their successors are elected and qualified; and Class III Directors shall
serve until the third annual shareholders meeting (2000) after their election
and until their successors are elected and qualified. If the shareholders do not
approve Proposal 2, the seven nominees shall be up for election as directors to
serve until the next annual meeting of shareholders and until their successors
are elected and qualified.
NOMINEES FOR DIRECTOR
The names, ages and positions with the Company of the nominees for director
are listed below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------- --- ------------------------------------------------------------
<S> <C> <C>
CLASS I DIRECTORS:
Richard E. Engebrecht 70 Director(2)
Edgar F. Rampy 58 Vice President, Treasurer, Chief Financial Officer and
Director
CLASS II DIRECTORS:
William H. Gates, Sr. 71 Director
Richard O. Martin, Ph.D. 57 Director(1)
CLASS III DIRECTORS:
R. Scott Asen 53 Chairman of the Board(1)(2)
W. Robert Berg 54 President, Chief Executive Officer and Director
Stephen J. Clearman 46 Director(1)
</TABLE>
- ---------------
(1) Member of Stock Option and Compensation Committee.
(2) Member of Audit Committee.
There are no family relationships between or among any nominees for
director of the Company.
CLASS I DIRECTOR NOMINEES (TERM EXPIRING AT THE 1998 ANNUAL MEETING).
Richard E. Engebrecht has been a director of the Company since 1992. Since
1994, Mr. Engebrecht has been the Chairman of the Board of PrimeSource
Corporation (a successor to Momentum Corporation). From 1990 to 1994, Mr.
Engebrecht was Chairman of the Board and Chief Executive Officer of Momentum
Corporation, and, from 1986 to 1990, President and Chief Executive Officer of
VWR Corporation.
2
<PAGE> 6
Mr. Engebrecht also is a director of Penwest Ltd., VWR Scientific Products
Corporation and PrimeSource Corporation.
Edgar F. Rampy has been Vice President, Treasurer and Chief Financial
Officer of the Company since 1990 and a director of the Company since 1997. In
1990, Mr. Rampy served as Chief Financial Officer of Quantum Medical Systems and
assisted in its sale to Siemens Corporation. From 1987 to 1989, Mr. Rampy was
Chief Operating Officer of Carver Corporation and, from 1979 to 1987, Chief
Financial Officer of Data I/O Corporation. He became a Certified Public
Accountant in 1967.
CLASS II DIRECTOR NOMINEES (TERM EXPIRING AT THE 1999 ANNUAL MEETING)
William H. Gates, Sr. has been a director of the Company since 1996. From
1983 to 1995, Mr. Gates was the Company's Secretary. Since 1964, Mr. Gates has
been a partner in the law firm Preston Gates & Ellis LLP and its predecessors,
counsel to the Company. Mr. Gates also is a director of Mutual of America
Capital Management Corporation.
Richard O. Martin, Ph.D. has been a director of the Company since October
1995. Since 1991, Dr. Martin has been the Chief Executive Officer and a director
of Physio-Control Corporation. Dr. Martin also is a director of Maxxim Medical,
Inc. and Encore Orthopedic, Inc.
CLASS III DIRECTOR NOMINEES (TERM EXPIRING AT THE 2000 ANNUAL MEETING)
R. Scott Asen has been a director of the Company since 1978 and its
Chairman of the Board since 1992. Since 1983, Mr. Asen has been President of
Asen & Co., Inc., an investment management firm. Mr. Asen has been
manager-member of Pioneer III-A LLC (and general partner of its predecessor) and
general partner of Pioneer IV, venture capital investment funds and significant
shareholders of the Company, since 1981 and 1984, respectively. Mr. Asen also is
a director of Biomagnetic Technologies, Inc., Davox Corporation and Barringer
Laboratories, Inc.
W. Robert Berg has been President, Chief Executive Officer and a Director
of the Company since 1988. Mr. Berg was the Company's Vice President, Operations
from 1985 to 1988. Mr. Berg has been involved in the management of
high-technology companies for the last 27 years. Mr. Berg also is a director of
the Washington State Biomedical and Biotechnology Association and the Washington
State Technology Alliance.
Stephen J. Clearman has been a director of the Company since 1984. Since
1984, Mr. Clearman has been a principal of Geocapital Partners, a venture
capital fund that he cofounded and which was a significant shareholder of the
Company, and has formed three other venture capital partnerships. Mr. Clearman
also is a director of MemberWorks Inc., Expert Software, Inc. and World Access,
Inc.
If any nominee becomes unavailable for any reason or should a vacancy occur
before the election (which events are not anticipated), the persons named on the
enclosed proxy card may substitute another person as a nominee or may add or
reduce the number of nominees to such extent as they shall deem advisable. At
present, other than reimbursement for expenses incurred in attending meetings of
the Board of Directors and committees of the Board of Directors, directors do
not receive any compensation. The Company's Bylaws permit the Board of Directors
to set compensation of directors. The Board of Directors has been considering a
director compensation policy involving grants of stock options, but has not yet
finalized it. In the past, certain directors received stock options upon joining
the Board of Directors. Directors who are employees of the Company do not
receive compensation for their service as director.
COMMITTEES AND DIRECTORS' MEETINGS
The Board of Directors has two standing committees: the Audit Committee and
the Stock Option and Compensation Committee (the "Compensation Committee").
The Audit Committee is composed of two directors, neither of whom is a
current employee of the Company, and is authorized to make recommendations to
the Board of Directors regarding the independent auditors to be nominated for
election by the shareholders and to review the independence of such auditors,
3
<PAGE> 7
approve the scope of the annual audit activities of the independent auditors,
approve the audit fee payable to the independent auditors and review such audit
results. The Audit Committee met twice in fiscal year 1997.
The Compensation Committee is composed of three directors, none of whom is
a current employee of the Company, and is authorized to provide a general review
of the Company's compensation and benefit plans to ensure that they meet
corporate objectives. In addition, the Compensation Committee reviews and
approves the Chief Executive Officer's recommendation on (i) compensation of all
officers of the Company and (ii) adopting and changing major Company
compensation policies and practices. The Compensation Committee held three
meetings in fiscal year 1997.
The Board of Directors held five meetings during the Company's preceding
fiscal year. All of the directors attended 75% or more of the aggregate of the
number of meetings of the Board of Directors during their terms and the number
of meetings held by committees of the Board of Directors on which they served.
The Company does not have a nominating committee. The entire Board of
Directors currently is responsible for filling vacancies on the Board as they
occur and recommending candidates for election as Directors at the annual
meetings of shareholders. The Board will consider individuals recommended for
nominations by shareholders of the Company.
EXECUTIVE OFFICERS
The names, ages and positions of the executive officers of the Company as
of June 30, 1997 are listed below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------ --- ----------------------------------------------------------------
<S> <C> <C>
W. Robert Berg 54 President, Chief Executive Officer and Director
Donald Rich 46 Senior Vice President, Operations
S. Erik Hagstrom 42 Vice President, Engineering, Executive Project Director
Thomas F. Mrowca 48 Vice President, Sales and Marketing
Marcia A. Page 38 Vice President, Quality Assurance and Regulatory Affairs
Edgar F. Rampy 58 Vice President, Treasurer, Chief Financial Officer and Director
</TABLE>
Officers are elected annually and serve at the discretion of the Board of
Directors. The Company has not entered into employment agreements with any of
its executive officers. There are no family relationships between or among any
directors or executive officers of the Company. Brief biographies of the
Company's executive officers who are not nominees for director are set forth
below:
Donald Rich has been Senior Vice President, Operations of the Company since
1997, and was Vice President, Operations of the Company from 1993 to 1997. From
1989 to 1993, Mr. Rich was employed by Interpoint Corporation, a
microelectronics manufacturer, serving as the Director of Quality Assurance from
1991 to 1993, and the Director of Operations from 1989 to 1991.
S. Erik Hagstrom has been Vice President, Engineering, Executive Project
Director of the Company since 1995. Mr. Hagstrom joined the Company in 1986 as a
design engineer, was named a Project Director in 1989 and a Senior Project
Director in 1992. From 1984 to 1986, Mr. Hagstrom was an engineer at Biotronik
Cardiac Pacing Systems.
Thomas F. Mrowca has been Vice President, Sales and Marketing of the
Company since 1990. From 1976 to 1990, Mr. Mrowca was employed by Physio-Control
Corporation, where he held sales and marketing positions and was responsible for
research, new product development, new market development, product planning,
forecasting and pricing.
4
<PAGE> 8
Marcia A. Page has been Vice President, Quality Assurance and Regulatory
Affairs of the Company since 1993. From 1989 to 1993, Ms. Page was the Company's
Manager of Quality Assurance. Ms. Page is the Past-President and Chairwoman and
current co-chair of the Organization of Regulatory and Clinical Associates and
is a member of the American Society of Quality Control and the Regulatory
Affairs Professionals Society.
RELATIONSHIPS AND RELATED CERTAIN TRANSACTIONS
On October 11, 1995, W. Robert Berg, the Company's Chief Executive Officer
and President, received a $75,000 loan from the Company, the proceeds of which
he used to purchase 30,000 shares of Common Stock. The loan is evidenced by an
unsecured promissory note that bears interest at the floating minimum statutory
rate of interest set by the Internal Revenue Service from time to time. Mr. Berg
may prepay principal and interest at any time without penalty; unpaid principal
and interest are due on October 11, 2000. As of June 30, 1997, aggregate
principal and accrued interest on this loan were approximately $80,000.
William H. Gates, Sr., a director of the Company, is also a partner in the
law firm Preston Gates & Ellis LLP, the Company's counsel.
Physio-Control Corporation, a company of which Richard O. Martin, a
director of the Company, serves as Chief Executive Officer and a director, has
retained the Company to provide engineering and manufacturing services.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's officers, Directors and persons who
beneficially own more than ten percent of the Company's Common Stock to file
reports of securities ownership and changes in such ownership with the
Securities and Exchange Commission ("SEC"). Officers, directors and greater than
ten percent beneficial owners also are required by rules promulgated by the SEC
to furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on copies of such reports furnished to the
Company, all of its directors and executive officers made any required filings
on a timely basis.
5
<PAGE> 9
BENEFICIAL OWNERSHIP OF COMMON STOCK
Except as otherwise noted, the following table sets forth certain
information as of August 31, 1997 as to the security ownership of those persons
owning of record or known to the Company to be the beneficial owner of more than
five percent of the voting securities of the Company and the security ownership
of equity securities of the Company by (i) each of the directors of the Company,
(ii) the director nominees, (iii) each of the executive officers named in the
Summary Compensation Table, and (iv) all directors and executive officers as a
group. All information with respect to beneficial ownership has been furnished
by the respective director, director nominee, executive officer or five percent
beneficial owner, as the case may be. Unless otherwise indicated, the persons
named below have sole voting and investment power with respect to the number of
shares set forth opposite their names. Beneficial ownership of the Common Stock
has been determined for this purpose in accordance with the applicable rules and
regulations promulgated under the Exchange Act.
<TABLE>
<CAPTION>
COMMON STOCK
----------------------
NUMBER OF PERCENT
DIRECTORS, OFFICERS AND 5% SHAREHOLDERS SHARES OF CLASS
-------------------------------------------------------- --------- --------
<S> <C> <C>
R. Scott Asen........................................... 889,169(1) 16.9%
James G. Niven.......................................... 338,087(2) 6.4%
Zweig-DiMenna Special Opportunities, L.P................ 285,000(3) 5.4%
W. Robert Berg.......................................... 204,088(4) 3.8%
Stephen J. Clearman..................................... 35,737 *
Richard E. Engebrecht................................... 27,667 *
William H. Gates, Sr. .................................. 28,000 *
Richard O. Martin, Ph.D. ............................... 9,500(5) *
Edgar F. Rampy.......................................... 41,970(6) *
Thomas F. Mrowca........................................ 42,127(7) *
S. Erik Hagstrom........................................ 24,886(8) *
Donald Rich............................................. 17,494(9) *
All directors and executive officers as a group
(11 persons).......................................... 1,338,739(10) 24.8%
</TABLE>
- ---------------
* Less than one percent.
(1) Includes 189,881 shares owned by Pioneer IV, of which Mr. Asen is general
partner, 99,854 shares owned by Pioneer III-A LLC, of which Mr. Asen is
manager-member, and 5,000 shares held by Mr. Asen in an IRA account at Dean
Witter Reynolds. Mr. Asen disclaims beneficial ownership of the shares
owned by Pioneer IV and Pioneer III-A LLC except to the extent of those
shares in which he has a pecuniary interest. The shares in which he has a
pecuniary interest will be determined by the final performance of the
entities. The address of Mr. Asen is c/o Asen & Co., Inc., 224 East 49th
Street, New York, NY 10017.
(2) The address of Mr. Niven is c/o Sotheby's, 1334 York Avenue, New York, NY
10021.
(3) The address of Zweig-DiMenna Special Opportunities, L.P. is 900 Third
Avenue, New York, NY 10022.
(4) Includes 57,002 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(5) Includes 8,500 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(6) Includes 14,834 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(7) Includes 12,258 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(8) Includes 4,566 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(9) Includes 17,148 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
(10) Includes 123,442 shares of Common Stock issuable upon exercise of options
that are currently exercisable or will become exercisable within 60 days of
August 31, 1997.
6
<PAGE> 10
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth certain information regarding the
compensation earned by the Company's Chief Executive Officer and the Company's
four other most highly compensated executive officers (the "Named Executive
Officers") for the fiscal year ended June 30, 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
------------------
ANNUAL COMPENSATION SECURITIES ALL OTHER
-------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS/SARS(#)(1) ($)(2)
- -------------------------------------- ---- --------- -------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
W. Robert Berg........................ 1997 $ 219,135 $187,492 25,550 3,562
President and Chief Executive
Officer 1996 175,000 117,544 -- 2,731
1995 165,000 12,250 70,000 2,584
Edgar F. Rampy........................ 1997 134,538 81,596 4,887 2,337
Vice President, Treasurer and 1996 108,000 36,271 8,867 1,692
Chief Financial Officer 1995 98,000 4,550 -- 1,486
Thomas F. Mrowca...................... 1997 134,538 56,596 4,971 2,243
Vice President, Sales and Marketing 1996 105,000 35,263 9,714 1,676
1995 94,000 4,550 -- 1,456
Donald Rich........................... 1997 126,423 42,910 17,310 1,989
Senior Vice President, Operations 1996 99,000 24,936 7,095 1,520
1995 84,000 2,906 -- 1,274
S. Erik Hagstrom...................... 1997 112,115 37,731 3,411 1,857
Vice President, Engineering, 1996 92,000 23,173 14,104 1,345
Executive Project Director 1995 80,000 1,261 -- 1,144
</TABLE>
- ---------------
(1) Represents options granted pursuant to the Company's stock option plans.
(2) Represents matching contributions under the Company's 401(k) plan.
Option Grants
The following table sets forth certain information regarding stock options
granted to the Named Executive Officers during the fiscal year ended June 30,
1997.
<TABLE>
<CAPTION>
POTENTIAL
OPTION GRANTS DURING FISCAL YEAR 1997 REALIZABLE VALUE AT
----------------------------------------------------- ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------------- ------------- ------------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
W. Robert Berg................. 25,550 24.3 16.50 3/4/07 $265,126 $671,882
Edgar F. Rampy................. 4,887 4.6 16.50 3/4/07 $ 50,711 $128,512
Thomas F. Mrowca............... 4,971 4.7 16.50 3/4/07 $ 51,583 $130,721
Donald Rich.................... 17,310 16.4 16.50 3/4/07 $179,622 $455,197
S. Erik Hagstrom............... 3,411 3.2 16.50 3/4/07 $ 35,395 $ 89,698
</TABLE>
- ---------------
(1) Represents options granted pursuant to the Company's stock option plans. All
options were granted at fair market value at the date of grant. All options
vest 50% on the second anniversary of the date of grant, an additional 25%
on the third anniversary of the date of grant and an additional 25% on the
fourth anniversary of the date of grant.
(2) Represents amounts that may be realized upon exercise of the options
immediately prior to expiration of their terms assuming appreciation of 5%
and 10% over the option term. The 5% and 10% numbers are calculated based on
rules required by the SEC and do not reflect the Company's estimate of
future stock price growth. The actual value realized may be greater or less
than the potential realizable value set forth.
7
<PAGE> 11
Option Values
The following table sets forth certain information regarding the exercise
of stock options during fiscal year 1997 and unexercised stock options held as
of June 30, 1997 by the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
SHARES FISCAL YEAR-END(#) AT FISCAL YEAR-END($)(1)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------ ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Robert Berg.... 18,501 219,052 57,002 75,550 1,009,120 776,925
Edgar F. Rampy.... 4,000 46,000 13,500 14,254 260,775 163,652
Thomas F. Mrowca.. 4,000 46,000 10,500 15,185 202,275 178,769
Donald Rich....... 0 0 12,000 28,405 228,000 248,748
S. Erik
Hagstrom........ 5,403 57,342 0 17,929 0 254,521
</TABLE>
- ---------------
(1) Based on a fair market value of $20 per share as of June 30, 1997, as
reported in the Wall Street Journal.
STOCK PLANS
1988 Stock Option Plan
The SeaMED Corporation 1988 Stock Option Plan (the "1988 Plan") permits the
grant of options to purchase an aggregate of 680,000 shares of Common Stock to
regular full-time officers and key employees of the Company. The 1988 Plan is
administered by the Board of Directors, which generally has the authority to
select individuals who are to receive options and to specify the terms and
conditions of each option so granted, including the number of shares covered by
the option, the type of option (incentive or nonqualified), the exercise price
(which must be at least equal to the fair market value of the Common Stock on
the date of grant with respect to incentive stock options), the vesting
provisions and the option term. Unless otherwise provided by the Board of
Directors, any option granted under the 1988 Plan expires on the date set forth
in the optionee's option agreement or, if earlier, (i) the date specified in the
option agreement following an optionee's termination of service with the
Company, but not later than 12 months after such termination, other than
termination for cause, in which case the option terminates immediately, (ii) 12
months after the optionee's death or disability, or (iii) on various specified
dates in the event of a merger, consolidation, tender offer, takeover bid, sale
of assets or majority vote of the shareholders of the Company in favor of
dissolving, subject to reinstatement if such event does not occur.
As of June 30, 1997, options to purchase 378,789 shares of Common Stock
granted under the 1988 Plan had been exercised, options to purchase 301,158
shares were outstanding and 53 shares remained available for grant.
1995 and 1997 Employee Stock Option and Incentive Plans
The purpose of the SeaMED Corporation 1995 Employee Stock Option and
Incentive Plan (the "Incentive Plan") (discussed in more detail in Proposal 3)
is to offer incentives and awards to those employees, agents and consultants of
the Company who are key to the Company's growth, development and financial
success, thereby aligning the personal interests of such persons, through the
ownership of Common Stock and other incentives, with those of the Company's
shareholders. The Incentive Plan combines the features of an incentive and a
nonqualified stock option plan, a stock award plan and a stock appreciation
rights ("SAR") plan. The Incentive Plan is a long-term incentive compensation
plan and is designed to provide a competitive and balanced incentive and reward
program for participants. A total of 200,000 shares of Common Stock is currently
authorized under the Incentive Plan, of which, as of June 30, 1997, options to
purchase 170,461 shares had been granted and options to purchase 29,539 shares
were available for future grant; no options have been exercised.
The purpose of the 1997 SeaMED Corporation Employee Nonqualified Stock
Option Plan (the "1997 Plan") is to offer incentives and awards to those
employees of the Company who are key to the Company's
8
<PAGE> 12
growth, development and financial success, thereby aligning the personal
interests of such persons, through the ownership of Common Stock and other
incentives, with those of the Company's shareholders. The 1997 Plan allows the
award of nonqualified stock options. The 1997 Plan is a long-term incentive
compensation plan. A total of 25,000 shares of Common Stock is currently
authorized under the 1997 Plan, of which, as of June 30, 1997, options to
purchase 25,000 shares had been granted and no options had been exercised.
Terms of Stock Option Grants. The Compensation Committee has the authority
to select individuals who are to receive options under the Incentive Plan and
the 1997 Plan and to specify the terms and conditions of each option so granted
(incentive or nonqualified in the case of the Incentive Plan), the exercise
price (which must be at least equal to the fair market value of the Common Stock
on the date of grant with respect to incentive stock options and options awarded
to nonemployee directors), the vesting provisions and the option term. On
September 18, 1997, the market price of a share of the Company's Common Stock
was $18.
Stock Awards. The Compensation Committee is authorized under the Incentive
Plan to issue shares of Common Stock to eligible participants upon such terms
and conditions and subject to such limitations, if any (including, without
limitation, restrictions based upon the achievement of specific business
objectives, tenure, and other measures of individual or business performance),
and/or restrictions under applicable federal or state securities laws, and
conditions under which the same shall lapse, as the Compensation Committee may
determine. As of June 30, 1997, the Company had granted no such awards.
Stock Appreciation Rights. A SAR is an incentive award that permits the
holder to receive (per share covered thereby) the amount by which the fair
market value of a share of Common Stock on the date of exercise exceeds the fair
market value of such share on the date the SAR was granted. The Compensation
Committee may grant SARs independently or in tandem (such that the exercise of
the SAR or related stock option will result in forfeiture of the right to
exercise the related stock option or SAR for an equivalent number of shares)
with a stock option award. The Compensation Committee is authorized under the
Incentive Plan to determine the times of exercise of granted SARs and their
times of expiration, which may not exceed 10 years. As of June 30, 1997, the
Company had granted no SARs.
1996 Employee Stock Purchase Plan
The Company currently has reserved for issuance an aggregate of 70,000
shares of Common Stock under the SeaMED Corporation 1996 Employee Stock Purchase
Plan (the "Purchase Plan") (discussed in more detail in Proposal 4), of which
41,515 have been issued. The Purchase Plan is intended to qualify under Section
423 of the Internal Revenue Code of 1986, as amended, and permits eligible
employees of the Company (unless otherwise waived by the Board of the Directors,
except employees whose customary employment is less than 20 hours per week and
employees whose customary employment is for not more than five months in any
calendar year) to purchase Common Stock through payroll deductions of up to 10%
of their compensation, provided that no employee may purchase Common Stock worth
more than $25,000 in any calendar year. The Purchase Plan will be implemented
with 10 consecutive purchase periods. The first such purchase period commenced
on November 19, 1996, the date that the Common Stock began to trade on the
Nasdaq Stock Market, and ended on June 30, 1997. The second period commenced on
July 1, 1997 and will end on December 31, 1997. The third period shall commence
on January 1, 1998 and end on May 31, 1998. Thereafter, purchase periods shall
commence on each subsequent June 1 and December 1. The price of Common Stock
purchased will be 85% of the lesser of the fair market value of the Common Stock
on the first day of the purchase period and the fair market value of the Common
Stock on the last day of the purchase period. The Purchase Plan will expire no
later than November 30, 2001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This Compensation Committee report shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or under the Exchange Act,
except to the extent that the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such Acts.
9
<PAGE> 13
The following report has been submitted by the Compensation Committee of
the Board of Directors:
The Company's executive compensation is determined by the Compensation
Committee, which is comprised of three non-employee members of the Board of
Directors. Messrs. Asen, Clearman and Martin are members of the Compensation
Committee. The philosophy of the Company's executive compensation program is
that compensation of executive officers should be directly and materially linked
to both the operating performance of the Company and to the interests of
Shareholders. In implementing this philosophy, the Company's policies integrate
annual base compensation with incentive awards based upon the Company's overall
performance. Annual cash compensation, together with incentive compensation and
grants of stock options, is designed to attract and retain qualified executives
and to ensure that such executives have a continuing stake in the long term
success of the Company.
With respect to compensation for Mr. Berg, the Company's CEO, the Board of
Directors approved in early 1995 an arrangement intended to provide Mr. Berg
with the opportunity to own approximately five percent (5%) of the Company's
outstanding shares. The arrangement included granting a series of options
totaling 70,000 shares of Common Stock that vest over seven years in which the
exercise price ranged from then fair market value to four times then fair market
value. In addition, the Compensation Committee offered to allow Mr. Berg to
purchase 30,000 shares at then fair market value using the proceeds of a loan
from the Company that matures in 2000. Mr. Berg accepted the proposal. The
Compensation Committee believes that these arrangements provide assurance that
Mr. Berg's personal financial interests and financial commitments are aligned
with the interests of all shareholders.
The compensation committee has increased Mr. Berg's annual cash
compensation in recent years in recognition of the Company's continued
improvements in overall performance, including substantial increases in
revenues, profitability, customer contracts, number of employees and related
measurements of growth. In addition, the compensation committee has authorized
cash bonuses for Mr. Berg in recognition of Mr. Berg's achievements and
leadership of the Company.
With respect to Mr. Berg and other executive officers, the compensation
committee evaluates their compensation based on total compensation, including
base salary, incentive bonus and stock option grants. The compensation committee
has not used compensation consultants but has relied on compensation surveys in
comparable industries and publicly available information for other public
companies of comparable size in the Pacific Northwest. The Compensation
Committee expects to place increasing emphasis on incentive compensation and to
base salaries near the median for comparable companies.
Members of the Compensation Committee.
R. Scott Asen, Chairman
Stephen J. Clearman
Richard O. Martin
10
<PAGE> 14
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total shareholder
return since the Common Stock became publicly traded on November 19, 1996 with
the Russell 2000 Index and an index of certain companies selected by the Company
as comparative to the Company in that each is a contract manufacturer. The graph
assumes that the value of the investment in the Company's Common Stock at its
initial public offering price of $11.00 per share was $100.00 on November 19,
1996 and that each index was $100.00 on October 31, 1996.
COMPARISON OF THE COMPANY'S COMMON STOCK,
THE RUSSELL 2000 INDEX AND A PEER GROUP INDEX(1)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD SEAMED
(FISCAL YEAR COVERED) CORPORATION PEER GROUP RUSSELL 2000
<S> <C> <C> <C>
11/19/96 100 100 100
12/96 99 99 107
3/97 145 95 101
6/97 184 138 118
</TABLE>
- ---------------
(1) The companies selected to form the Company's industry peer group index are
ACT Manufacturing, Benchmark Electronics, CMC Industries, DII Group, Inc.,
EFTC Corporation, Flextronics International, IEC Electronics, Jabil Circuit,
Plexus Corp., SCI Systems, Sigmatron International, Selectron Corporation,
XeTel Corporation, Altron Incorporated, Elexsys International and Sanmina
Corporation. Total returns are based on market capitalization.
11
<PAGE> 15
PROPOSAL 2.
APPROVAL OF AMENDMENT AND RESTATEMENT OF
ARTICLES OF INCORPORATION
TO PROVIDE FOR A BOARD OF DIRECTORS
WITH STAGGERED TERMS OF THREE (3) YEARS
The Company's current Articles of Incorporation provide for annual election
of directors to the Board of Directors. The Board of Directors has recommended
to the shareholders that the Articles of Incorporation be amended and restated
to provide for a board of directors with staggered terms of three years. The
Amended and Restated Articles of Incorporation recommended to the shareholders
by the Board of Directors are attached as Appendix A, and the relevant amendment
is Section 7.4, at page A-2 of Appendix A.
The Act permits a Washington corporation to stagger its board of directors
into three groups, with each group containing as near to one-third of the total
number of directors as possible. Under the Act, upon the initial election of a
staggered board of directors the terms of the directors in the first group
("Class I Directors") expire at the first annual shareholders meeting after
their election, the terms of the second group ("Class II Directors") expire at
the second annual shareholders meeting after their election, and the terms of
the directors in the third group ("Class III Directors") expire at the third
annual shareholders meeting after their election. The initial election of the
staggered Board of Directors will occur at this Annual Meeting if the
shareholders approve this Proposal. Beginning in 1998, and at each annual
shareholders meeting thereafter, directors shall be chosen for a term of three
(3) years to succeed those whose terms expire. The number of directors on the
Board of Directors is currently seven (7). The number of Class I Directors will
be two (2), the number of Class II Directors will be two (2), and the number of
Class III Directors will be three (3). Under the Company's Bylaws, the Board of
Directors may consist of not less than one (1) nor more than nine (9) directors.
The Board of Directors may fill any vacancy, including a vacancy resulting from
an increase in the number of directors, but the director appointed to such
vacancy must be elected at the next annual meeting to fill the balance of the
term.
The Board of Directors has recommended the adoption of a staggered board of
directors because it believes that the Company will benefit from the continuity
provided by the potential turnover of only a minority of directors each year. In
addition, the Board of Directors believes that nominees for director will be
more willing to devote time and energy to ensuring the Company's long-term
success if they know that their tenures are three (3) years rather than one (1)
year. Many other public companies maintain staggered boards of directors.
Adoption of the proposal to stagger the terms of directors will make the
removal of the Board of Directors and the Company's officers more difficult,
even if such removal would be beneficial to shareholders generally. An
additional effect of adopting the staggered Board of Directors is to afford the
Board of Directors the ability to negotiate with a potential hostile suitor to
ensure that shareholders receive fair value for their shares in the event of any
unsolicited tender offer for the Company's shares. Directors may be removed from
the Board of Directors by a vote of more than fifty percent (50%) of the
outstanding shares of the Company at a duly called special meeting of the
shareholders. Under the Company's current Articles of Incorporation, special
meetings of the shareholders may be called only by the Board of Directors (the
Board of Directors does not propose amending this provision of the Articles of
Incorporation). If the proposal to stagger the terms of directors is adopted, a
person attempting a hostile takeover would not be able to call a special meeting
of the shareholders to remove directors and would have to elect its own nominees
for director at two successive annual meetings of shareholders before it could
assume control of the Board of Directors and elect its own slate of officers. If
the proposal to stagger the terms of directors is not adopted, new directors
could be elected at the next annual meeting of shareholders.
The current Articles of Incorporation authorize the Board of Directors to
issue 5,000,000 shares of Preferred Stock, no par value (the "Undesignated
Preferred Stock"), in one or more classes or series, or both, and, without
further approval of the shareholders, to fix dividend rights and terms,
conversion rights, voting rights, redemption rights and terms, liquidation
preferences and any other rights, preferences, privileges and
12
<PAGE> 16
restrictions applicable to each class or series of Undesignated Preferred Stock.
The issuance of Undesignated Preferred Stock, pursuant to a Rights Plan
(discussed below) or otherwise, could, among other things, adversely affect the
voting power of the holders of Common Stock and, under certain circumstances,
make it more difficult for a third party to gain control of the Company,
discourage bids for Common Stock at a premium or otherwise adversely affect the
market price of the Company Stock.
The Board of Directors has authorized the development of a shareholder
rights plan (the "Rights Plan"), pending resolution of certain issues delegated
to officers of the Company. Under the contemplated Rights Plan, each record
holder (other than the suitor) would receive a right, detachable from his shares
of Common Stock, to purchase new shares of the Company's Preferred Stock with
rights specified by, and at a price determined by a formula contained in, the
Rights Plan. The effect of such purchases would be to dilute the ownership
interest of a hostile suitor and to increase the ultimate expense of any hostile
takeover of the Company.
In addition to the Undesignated Preferred Stock and the Rights Plan, other
impediments to a hostile takeover of the Company exist. The Company's Bylaws
contain certain procedural requirements that could have the effect of delaying
the ability of some shareholders to bring matters before a meeting of the
shareholders or to nominate directors. The Act contains certain provisions that
may have the effect of delaying a hostile takeover of the Company. The Board of
Directors is not aware of any specific unsolicited tender offer or other control
proposal.
The Board of Directors believes that the foregoing protective devices,
along with staggered terms of three years for directors as recommended in this
Proposal, will afford it the ability to negotiate with a potential hostile
suitor to ensure that shareholders receive fair value for their shares in the
event of any unsolicited tender offer for the Company's shares. The Board of
Directors believes that denying a hostile suitor immediate control of the
Company, along with increasing the ultimate expense of any hostile takeover of
the Company, will cause any potential suitor to bargain with the Board of
Directors so that any offer for the Company's shares will reflect the long-term
value of the Company.
Adoption of the proposal could have an adverse impact on shareholders who
may want to participate in a hostile tender offer. Adoption of the proposal
could also have the effect of limiting shareholder participation in decisions
regarding mergers or tender offers, whether or not such transactions are favored
by incumbent management. Although the Board of Directors is not aware of any
specific unsolicited tender offer or other control proposal, it recommends this
proposal to the shareholders at this time so that it will have in place the
ability to negotiate with a potential suitor in advance of any hostile offer.
The Board of Directors also recommends amending and restating the Articles
of Incorporation to delete provisions relating to the Company's Class A, Class
B, Class C and Class D Preferred Stock, which automatically converted into
Common Stock on closing of the Company's initial public offering of securities
in November 1996. As a result, the Company's Articles of Incorporation currently
contain extensive provisions authorizing Class A through Class D Preferred Stock
even though no such stock can be issued. The Board of Directors believes that
deleting all of the provisions dealing with Class A through Class D Preferred
Stock will streamline and clarify the Company's Articles of Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
THE AMENDMENT AND RESTATEMENT OF THE COMPANY'S ARTICLES OF INCORPORATION TO
PROVIDE FOR A BOARD OF DIRECTORS WITH STAGGERED TERMS OF THREE (3) YEARS AND TO
DELETE PROVISIONS RELATING TO THE COMPANY'S CLASS A THROUGH CLASS D PREFERRED
STOCK.
13
<PAGE> 17
PROPOSAL 3.
APPROVAL OF AMENDMENT OF THE 1995 SEAMED CORPORATION
EMPLOYEE STOCK OPTION AND INCENTIVE PLAN
The Board of Directors requests that the shareholders approve the amendment
of the 1995 SeaMED Corporation Employee Stock Option and Incentive Plan (the
"Incentive Plan") to increase the number of shares available for grant under the
Incentive Plan by 300,000 shares from the 200,000 shares currently available to
500,000 shares. This amendment will allow the Company to continue to offer stock
options to key employees as a part of its overall compensation package. The
Board believes that this Incentive Plan is essential to attract and retain the
best available personnel for positions of substantial responsibility, to
encourage ownership of the Common Stock by key employees, directors and
consultants of the Company and to promote the Company's success.
The Incentive Plan provides that the Committee (as defined below) of the
Board of Directors charged with administering the Incentive Plan, on behalf of
the Company, may grant stock options, stock appreciation rights or other stock
based awards (individually or collectively, an "Award") to eligible employees,
directors or consultants that are consistent with the provisions of the
Incentive Plan. Common Stock purchased under the Incentive Plan will be
purchased from the Company; therefore the Company will receive the purchase
price paid for the Common Stock, if any.
The Board, subject to approval by the shareholders of the increase of
300,000 shares available pursuant to the Incentive Plan, has reserved for
issuance under the Incentive Plan a total of 500,000 shares of the Company's
Common Stock, subject to adjustment in the event of a stock dividend, stock
split or similar change in outstanding shares of Common Stock.
The following description of certain features of the Incentive Plan is
qualified in its entirety by reference to the Incentive Plan itself, which is
included (as if this Proposal 3 passes) as Appendix B to this Proxy Statement.
GENERAL INFORMATION REGARDING THE INCENTIVE PLAN
Purpose. The purpose of the Incentive Plan is to further the growth,
development and financial success of the Company and its subsidiaries by
aligning the personal interests of key employees, through the ownership of
shares of Common Stock and through other incentives, with those of the Company's
shareholders. The Incentive Plan is further intended to provide flexibility to
the Company in its ability to compensate key employees and to motivate, attract
and retain the services of such key employees who have the ability to enhance
the value of the Company and its subsidiaries. In addition, the Incentive Plan
provides for incentive awards to key employees of affiliates in those cases
where the success of the Company or its subsidiaries may be enhanced by the
award of incentives to such persons.
Duration, Termination, and Modification of the Incentive Plan. The
Incentive Plan terminates on October 26, 2005. No award may be granted under the
Incentive Plan on or after the October 26, 2005 termination date.
With the approval of the Board of Directors of the Company (the "Board"),
the Committee may terminate the Incentive Plan or amend it from time to time.
The Company shall obtain shareholder approval of any Incentive Plan amendment in
such manner and to the extent necessary to comply with applicable SEC or stock
exchange rules and the Internal Revenue Code of 1986, as amended (the "Code").
Any amendment or termination of the Incentive Plan shall not affect options
already granted and such options shall remain in full force and effect as if the
Incentive Plan had not been amended or terminated, unless mutually agreed
otherwise between the optionee and the Board, which agreement must be in writing
and signed by the optionee and the Company.
14
<PAGE> 18
Administration of the Plan
Procedure: The Plan is administered by a committee appointed by the Board
(the "Committee") consisting of three or more members of the Board. All Board
members are elected annually by the Company's shareholders. Any director may be
removed upon the affirmative vote of a majority of the Shareholders entitled to
vote for the removal of such director at a special meeting called for that
purpose.
Any grants of options to officers who are subject to Section 16 of the
Exchange Act shall be made pursuant to the exemption provisions set forth in
Rule 16b-3 promulgated under the Exchange Act.
Powers of the Committee: Subject to the provisions of the Incentive Plan,
the Committee has the authority, in its discretion: (i) to determine whether and
to what extent options are granted under the Incentive Plan; (ii) to select
employees to whom options may be granted under the Incentive Plan and to
determine the terms and conditions of those options; (iii) to approve forms of
Award Agreement for use under the Incentive Plan; and (iv) to make all other
determinations deemed necessary or advisable for the administration of the
Incentive Plan.
Effect of Committee's Decision: All determinations and decisions made by
the Committee pursuant to the provisions of the Incentive Plan and all related
orders or resolutions of the Board of Directors shall be final, conclusive and
binding on all persons, including the Company, its subsidiaries and affiliates,
its shareholders, optionees, and their estates and beneficiaries.
EMPLOYEES WHO MAY PARTICIPATE IN THE PLAN
Options may be granted under the Incentive Plan only to employees,
directors and consultants of the Company or a subsidiary of the Company. Subject
to the foregoing limitations, the Committee shall determine the specific
employees, directors and consultants to whom options will be granted. The
granting of options under the Incentive Plan is entirely at the discretion of
the Committee and no employee, director or consultant has the right to receive
an option under the Incentive Plan.
VESTING, OPTION PRICES, OTHER GENERAL INFORMATION
Types of Stock Options. Each option shall be designated as either a
nonqualified stock option or an incentive stock option.
Size of Option Grants. There is no minimum number of nonqualified stock
options or incentive stock options that may be granted to an employee, but
grants must be made in whole shares. The size of incentive stock option grants
are subject to the vesting limit of $100,000 per year imposed by the Code.
Vesting. An option holder's right to exercise his or her stock option
generally vests in increments over time. Vesting schedules are set by the
Committee, and may vary among option holders.
Option Prices. Nonqualified options may be granted for less than, equal to,
or greater than market price, if the Committee so desires. Incentive stock
options granted under the Incentive Plan must be at a price not less than the
fair market value of the stock on the date of grant.
Nonassignability of Options. An option holder may not assign his or her
rights under his or her option, other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined by
the Code, or Title I of the Employee Retirement Income Security Act, as amended,
or the rules thereunder.
EXERCISING STOCK OPTIONS
Shares to be Issued. Common Stock will be issued upon exercise of options
granted under the Incentive Plan, as determined in each Award Agreement granted
under the Incentive Plan. The number of shares of Common Stock that currently
may be issued under the Incentive Plan shall not exceed 200,000 shares. The
actual number of shares to be issued under the Incentive Plan shall be
determined in the discretion of the Committee. A maximum of fifteen percent
(15%) of the shares authorized under the Incentive Plan may be
15
<PAGE> 19
issued pursuant to awards that are not options or stock appreciation rights. The
shares may consist, in whole or in part, of authorized and unissued shares, or
of treasury shares. No fractional shares shall be issued under the Incentive
Plan. The number of shares is subject to adjustment in the event of stock
dividends, stock splits, combination of shares, recapitalizations, or other
changes in the outstanding Common Stock.
Manner of Exercising. An option holder desiring to exercise an option must
notify the Company in writing of his or her intention to exercise an option for
the number of shares specified in the notice and pay to the Company the full
purchase price provided in the option. Payment of the purchase price may be by
any method provided for in an optionee's Award Agreement, which may provide that
payments may be made in cash, by check, by delivering a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds necessary to pay the exercise
price, or under the cashless exercise procedures set forth in the Incentive
Plan.
Payment in shares is deemed to be the equivalent of payment in cash of the
fair market value of the shares traded in. "Fair market value" is deemed to
equal the closing sales price for the Common Stock (or the closing bid if no
sales were reported) as reported on the Nasdaq National Market System for the
day prior to the day of exercise.
As provided in the Incentive Plan, for tax purposes, the Company is
required to withhold from the optionee's compensation or collect from the
optionee an amount for federal, state and local taxes resulting from the
optionee's compensation income, if any, at the time of exercise. See "Tax
Effects of Participating in the Incentive Plan" below. The Committee, in its
discretion and subject to any limitations and rules that it may adopt, may
permit an optionee to satisfy such withholding obligation by delivering shares
of Common Stock already held by the optionee or by making an irrevocable
election that a portion of the total value of the shares of Common Stock subject
to the option be paid in the form of cash in lieu of issuance of Common Stock
and that such cash payment be applied to the satisfaction of the withholding
obligations.
No Fees or Commissions. The Common Stock issuable under the Incentive Plan
is issued by the Company and the Company imposes no fees, commissions, or other
charges on the exercise of a stock option.
Sale of Stock Acquired Through Option Exercise. Shares acquired through the
exercise of stock options are not subject to any restrictions on resale.
However, "affiliates" of the Company (generally, directors and corporate
executive officers) are subject to the selling restrictions of SEC Rule 144.
TERMINATION OR EXPIRATION OF OPTIONS
Under the Incentive Plan, unexercised options expire at the date specified
in the Award Agreement. The Committee has broad discretion to determine the
provisions of any Award Agreement to be used under the Incentive Plan, and
different Award Agreements may have provisions which provide for longer or
different exercise periods upon the happening of the relevant events. In any
event, the term of each option shall be no more than ten (10) years from the
date of grant. The Committee in its sole discretion shall have the authority to
extend the expiration date of any outstanding option in circumstances in which
it deems such action to be appropriate.
TAX EFFECTS OF PARTICIPATION IN THE PLAN
The federal income tax consequences of an employee's participation in the
Incentive Plan are complex and subject to change. The following discussion is
only a summary of the general rules applicable to options. A taxpayer's
particular situation may be such that some variation of the general rules would
apply.
Incentive Stock Options. If an option granted under the Incentive Plan is
treated as an incentive stock option, the optionee will not recognize any income
upon either the grant or the exercise of the option, and the Company will not be
allowed a deduction for federal tax purposes. Upon a sale of the shares, the tax
treatment to the optionee and the Company will depend primarily upon whether the
optionee has met certain holding period requirements at the time he or she sells
their shares. In addition, as discussed below, the exercise of an incentive
stock option may subject the optionee to alternative minimum tax liability.
If an optionee exercises an incentive stock option and does not dispose of
the shares received within two years after the date of the grant of such option
or within one year after transfer of the shares to him or her, any
16
<PAGE> 20
gain realized upon disposition will be characterized as long-term capital gain
and, in such case, the Company will not be entitled to a federal tax deduction.
If the optionee disposes of the shares either within two years after the
date that the option is granted or within one year after the transfer of the
shares to him or her, such disposition will be treated as a disqualifying
disposition and an amount equal to the lesser of (1) the fair market value of
the Shares on the date of exercise minus the purchase price, or (2) the amount
realized on the disposition minus the purchase price will be taxed as ordinary
income to the optionee in the taxable year in which the disposition occurs. The
excess, if any, of the amount realized upon disposition over the fair market
value at the time of the exercise of the option will be treated as long-term
capital gain if the shares have been held for more than one year following the
exercise of the option. In the event of a disqualifying disposition, the Company
may withhold income taxes from the optionee's compensation with respect to the
ordinary income realized by the optionee as a result of the disqualifying
disposition.
The exercise of an incentive stock option may subject an optionee to
alternative minimum tax liability because the excess of the fair market value of
the shares at the time an incentive stock option is exercised over the purchase
price of the shares is included in income for purposes of the alternative
minimum tax. Consequently, an optionee may be obligated to pay alternative
minimum tax in the year he or she exercises an incentive stock option.
In general, there will be no federal tax consequences to the Company upon
the grant, exercise, or termination of an incentive stock option. However, in
the event an optionee sells or disposes of stock received upon the exercise of
an incentive stock option in a disqualifying disposition, the Company will be
entitled to a deduction for federal income tax purposes in an amount equal to
the ordinary income, if any, recognized by the optionee upon disposition of the
shares.
Nonqualified Stock Options. Nonqualified stock options granted under the
Incentive Plan do not qualify as "incentive stock options" and will not qualify
for any special tax benefits to the optionee. An optionee will not recognize any
taxable income at the time he or she is granted a nonqualified option. However,
upon its exercise, the optionee will recognize ordinary income for federal tax
purposes measured by the excess of the then fair market value of the shares over
the option price. The income realized by the optionee will be subject to income
tax withholding by the Company out of the current earnings paid to the optionee.
If such earnings are insufficient to pay the tax, the optionee will be required
to make a direct payment to the Company for the tax liability.
Upon a disposition of any shares acquired pursuant to the exercise of a
nonqualified stock option, the difference between the sale price and the
optionee's basis in the shares will be treated as a capital gain or loss and
will be characterized as long-term capital gain or loss if the shares have been
held for more than one year at the date of their disposition. The optionee's
basis for determination of gain or loss upon the subsequent disposition of
shares acquired upon the exercise of a nonqualified stock option will be the
amount paid for such shares plus any ordinary income recognized as a result of
the exercise of such option.
In general, there will be no federal tax consequences to the Company upon
the grant or termination of a nonqualified stock option or a sale or disposition
of the shares acquired upon the exercise of a nonqualified stock option.
However, upon the exercise of a nonqualified stock option, the Company will be
entitled to a deduction for federal income tax purposes equal to the amount of
ordinary income that an optionee is required to recognize as a result of the
exercise.
Incentive Stock Options Deemed to be Nonqualified Stock Options. Options
designated as incentive stock options may be deemed to be nonqualified stock
options if the aggregate market value of shares (determined as of the date of
grant of the incentive stock option) covered by incentive stock options that
become exercisable in a particular calendar year exceeds $100,000 (taking into
account all plans of the Company). For purposes of determining which options are
deemed to be nonqualified stock options, such options shall be taken into
account in the order in which they were granted.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
AMENDMENT OF THE INCENTIVE PLAN TO INCREASE THE NUMBER OF
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SHARES AVAILABLE FOR GRANT UNDER THE INCENTIVE PLAN BY 300,000 SHARES FROM THE
200,000 CURRENTLY AVAILABLE TO 500,000 SHARES.
PROPOSAL 4.
APPROVAL OF AMENDMENT OF
THE SEAMED CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors requests that the shareholders approve the amendment
of the 1996 SeaMED Corporation Employee Stock Purchase Plan (the "Purchase
Plan") to increase the number of shares available for purchase under the
Purchase Plan by 100,000 shares from the 70,000 shares currently available to
170,000 shares. This amendment will allow the Company to continue to offer
tax-favorable discounted Common Stock to key employees as a part of its overall
compensation package. The Board believes that this Purchase Plan is essential to
attract and retain the best available personnel for positions of substantial
responsibility, to encourage ownership of the Common Stock by key employees,
directors and consultants of the Company and to promote the Company's success.
The Purchase Plan provides that the Board of Directors administer the
Purchase Plan on behalf of the Company to permit eligible employees to purchase
tax-favorable discounted Common Stock consistent with the provisions of the
Purchase Plan. Common Stock purchased under the Purchase Plan will be purchased
from the Company; therefore the Company will receive the purchase price paid for
the Common Stock.
The Board, subject to approval by the shareholders of the increase of
100,000 shares available pursuant to the Purchase Plan, has reserved for
issuance under the Purchase Plan a total of 170,000 shares of the Company's
Common Stock, subject to adjustment in the event of a stock dividend, stock
split or similar change in outstanding shares of Common Stock.
The following description of certain features of the Purchase Plan is
qualified in its entirety by reference to the Purchase Plan itself, which is
included (as if this Proposal 4 passes) as Appendix C to this Proxy Statement.
GENERAL INFORMATION REGARDING THE PURCHASE PLAN
Purpose. The purpose of the Purchase Plan is to provide eligible employees
who wish to become shareholders in the Company a convenient method of doing so.
The Company believes that employee participation in the ownership of the Company
is of benefit to both the employees and the Company. It is the intention of the
Company to have the Purchase Plan qualify as an "employee stock purchase plan"
under Section 423 of the Code.
Duration, Termination, and Modification of the Purchase Plan. The Purchase
Plan expires at the earliest of the following:
(1) November 30, 2001;
(2) the Company's filing of a Statement of Intent to Dissolve or upon
a merger or consolidation wherein the Company is not the surviving
corporation, which merger or consolidation is not between or among
corporations related to the Company;
(3) the purchase of all shares reserved under this Purchase Plan; or
(4) the decision of the Board of Directors of the Company to terminate
the Purchase Plan.
The Board of Directors may modify, amend, or terminate the Purchase Plan at
any time without notice, provided that no employee's existing rights under any
offering that is in progress may be adversely affected thereby. However, no such
amendment or modification may increase the number of common shares to be
optioned under the Purchase Plan, unless the shareholders of the Company approve
such amendment.
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Purchase Plan Administration. The Purchase Plan is administered by the
Board of Directors in conjunction with the performance of their duties in
overseeing the management of the Company's affairs. The Board of Directors may
engage a qualified brokerage firm to assist in the administration of the
Purchase Plan and may delegate its administrative duties to a committee of the
Board of Directors. The Board of Directors shall make, administer, and interpret
such rules and regulations as it deems necessary to administer the Purchase
Plan, and any determination, decision or action of the Board of Directors in
connection with the construction, interpretation, administration or application
of the Purchase Plan shall be final and binding. Any or all of the
administrative duties of the Board of Directors may be delegated to a committee
of the Board of Directors. Any director may be removed upon the affirmative vote
of a majority of the shareholders entitled to vote for the removal of such
director at a special meeting called for that purpose.
EMPLOYEES WHO MAY PARTICIPATE IN THE PURCHASE PLAN
Any employee of the Company or any of its subsidiaries is eligible to
participate in the Purchase Plan if he or she is employed by the Company as of
the commencement date of an offering, except: (a) employees whose customary
employment is less than 20 hours per week; (b) employees whose customary
employment is for not more than five months in any calendar year, and (c)
independent contractors, individuals employed through contract employment
agencies or companies, interns, or any other temporary type worker. With respect
to any employee subject to Section 16(b) of the Exchange Act, the Company may
impose such conditions on the grant or exercise of any rights hereunder
necessary to satisfy the requirements of such statute or applicable regulations.
PURCHASE OF SECURITIES PURSUANT TO THE PURCHASE PLAN AND PAYMENT FOR SECURITIES
OFFERED
There will be one initial offering of more than six months, a second
offering of six (6) months, a third offering of five (5) months and seven (7)
subsequent separate consecutive six-month offerings pursuant to the Purchase
Plan. The first offering commenced on November 19, 1996 and ended on June 30,
1997. The second offering commenced on July 1, 1997 and will end on December 31,
1997. The third offering shall commence on January 1, 1998 and end on May 31,
1998. Thereafter, offerings shall commence on each subsequent June 1 and
December 1, and the final offering under this Purchase Plan shall commence on
June 1, 2001 and terminate on November 30, 2001. In order to become eligible to
purchase shares, an employee must sign an Enrollment Agreement (the "Enrollment
Agreement"), and any other necessary papers on or before the commencement date
(June 1 or December 1) of the particular offering in which he wishes to
participate. Participation in one offering under the Purchase Plan shall neither
limit, nor require, participation in any other offering.
Participation Election Period. In order to become eligible to purchase
shares, an employee must sign a payroll deduction authorization and any other
necessary papers on or before the commencement date (June 1 or December 1) of
the particular offering in which the employee wishes to participate.
Participation in one offering under the Purchase Plan shall neither limit, nor
require, participation in any other offering.
Shares to be Issued. The shares to be sold to participants under the
Purchase Plan will be common stock of the Company with no par value. The number
of shares that currently may be issued under the Purchase Plan shall not exceed
70,000. Out of the approved shares, the actual number of shares to be issued
under the Purchase Plan shall be determined in the discretion of the Board of
Directors.
Payment Method. At the time a participant files his or her authorization
for a payroll deduction, the participant shall elect to have deductions made
from his or her pay on each payday during the time the participant is a
participant in an offering at a percentage of the participant's base pay as may
be set from time to time by the Board of Directors; provided such percentage
shall not exceed 10%.
An employee may pay for shares to be purchased pursuant to the Purchase
Plan only with money that has been deducted from such employee's paycheck
pursuant to a payroll deduction authorization signed by the employee. Funds so
deducted constitute that employee's "account," and while the funds allocated to
an employee's account shall remain the property of the employee at all times,
they may be commingled with the general funds of the Company.
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On the offering date (i.e., the commencement date of an offering if such
date is a regular business day, or the first regular business day following such
commencement date), this Purchase Plan shall be deemed to have granted to the
participant an option for as many full shares as he will be able to purchase
with the payroll deductions credited to his account during his participation in
that offering. Notwithstanding the foregoing, no participant may purchase stock
the fair market value of which exceeds $25,000 during any calendar year.
If it appears on the date an offering commences that the number of shares
remaining reserved under the Purchase Plan is less than the number of options
granted, then the Company shall allocate the remaining shares pro rata to
participating employees. Payroll deductions will be reduced accordingly, and
participating employees will be notified in writing of such reduction.
Purchase Price. The purchase price per share shall be the lesser of (1) 85%
of the fair market value of the shares on the offering date; or (2) 85% of the
fair market value of the shares on the last business day of the offering. Fair
market value shall mean the closing bid price as reported on the Nasdaq Stock
Market or, if the Common Stock is traded on a stock exchange, the closing price
for the stock on the principal such exchange.
Purchase Date. Each employee who continues to be a participant in an
offering on the last business day of that offering shall be deemed to have
exercised such employee's option on such date and shall be deemed to have
purchased from the Company such number of full shares as the employee's
accumulated payroll deductions on such date will pay for at the option price.
An employee's option to purchase shares may also become exercisable in the
event of the filing of a Statement of Intent to Dissolve by the Company or a
merger or consolidation wherein the Company is not to be the surviving
corporation. Prior to the occurrence of either of the above events, on such date
as the Company may determine, the Company may permit a participating employee to
exercise the option to purchase shares for as many full shares as the balance in
such employee's account will allow at the option price. Any amount in the
employee's account that is not used to purchase shares will be refunded to the
employee.
At the termination of each offering the Company shall automatically
re-enroll a participating employee in the next offering, and any balance in the
employee's account will be used for option exercises in the new offering, unless
the employee has advised the Company otherwise. No interest will be paid or
allowed on any money in the participant's account.
Termination of Employment. Upon termination of employment for any reason
whatsoever, including but not limited to death or retirement, the balance in
each employee's account shall be paid to the employee or such employee's estate.
Limitations on Purchases. No employee shall be permitted to subscribe for
any shares under the Purchase Plan if such employee, immediately after such
subscription, owns shares (including all shares which may be purchased under
outstanding subscriptions under the Purchase Plan) that account for 5% or more
of the total combined voting power or value of all classes of stock of the
Company or of its subsidiary corporations. In addition, each employee's
purchases under the Purchase Plan in any calendar year are limited to shares
having an aggregate fair market value of $25,000.
Rights to purchase securities under any offering of the Purchase Plan shall
expire as of the earliest of the following dates: (1) an employee's termination
of employment; (2) the last day of the particular offering; (3) the date of
filing of a Statement of Intent to Dissolve by the Company or the effective date
of a merger or consolidation wherein the Company is not to be the surviving
corporation; (4) the date as of which all shares reserved under the Purchase
Plan have been purchased; or (5) the date an employee rescinds the employee's
payroll deduction authorization.
Fees, Commissions, or Charges. Shares of Common Stock are to be purchased
from the Company and no additional fees, commissions or other charges will be
incurred by the employee.
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RESALE RESTRICTIONS
The Purchase Plan is intended to provide shares for investment and not for
resale. The Company does not, however, intend to restrict or influence any
employee in the conduct of his own affairs. An employee, therefore, may sell
their shares purchased under the Purchase Plan at any time he or she chooses,
subject to compliance with any applicable federal or state securities laws.
WITHDRAWAL FROM THE PURCHASE PLAN -- ASSIGNMENT OF INTEREST
An employee may withdraw from an offering, in whole but not in part, at any
time prior to the last business day of that offering by delivering a Withdrawal
Notice to the Company, in which event the Company will refund the entire balance
of the employee's account as soon as practicable thereafter. An employee who has
withdrawn from an offering may not participate again in the offering from which
the employee withdrew; however, the employee may participate in subsequent
offerings by completing a new payroll deduction authorization and any other
necessary papers.
No employee shall be permitted to sell, assign, hypothecate, transfer,
pledge, or otherwise dispose of or encumber either the payroll deductions
credited to such employee's account or any rights with regard to the exercise of
an option or to receive shares under the Purchase Plan, other than by will or
the laws of descent and distribution. Any attempted sale, assignment,
hypothecation, transfer, pledge or other disposition or encumbrance by an
employee will be treated as a withdrawal from the offering.
TAX CONSEQUENCES OF PARTICIPATION IN THE PURCHASE PLAN
The Purchase Plan is not qualified under Section 401(a) of the Code. The
Purchase Plan is intended to qualify as an "employee stock purchase plan" under
Section 423 of the Code. The tax consequences to employees and to the Company of
the Purchase Plan are discussed below.
In order to qualify for favorable tax treatment an employee eligible under
the Purchase Plan must, at all times during the period beginning with the date
of grant and ending on the day three (3) months before the option is exercised,
be an employee of the Company or its subsidiaries. If the employment condition
is met, no tax liability results on the grant or exercise of an option under the
Purchase Plan. The employee becomes liable for the tax on disposition of the
stock.
The required holding period for favorable tax treatment upon disposition of
the stock is the later of (i) two years after the option is granted, or (ii) one
year after the stock is acquired. When stock is disposed of after this period,
the employee realizes ordinary income to the extent of the lesser of (1) the
amount by which the fair market value of the stock at the time the option was
granted exceeded the option price (i.e., 15% of the fair market value) or (2)
the amount by which the fair market value of the stock at the time of
disposition exceeded the option price. Any further gain is taxed at capital gain
rates. If the sale price is less than the option price, there is no ordinary
income and the employee has a long-term capital loss for the difference.
When an employee sells the stock before the expiration of the required
holding period, the employee recognizes ordinary income to the extent of the
difference between the option price and the fair market value of the stock at
the date the option was exercised regardless of the price at which the stock is
sold. Thus, if the stock is sold for a price greater than the fair market value
of the stock at the date the option was exercised, the tax effect is the same as
described in the preceding paragraph. However, if the sale price is less than
the fair market value of the stock at the date of exercise, the employee will
also have a capital loss equal to such difference.
Should an employee die while owning stock acquired under the Purchase Plan,
ordinary income must be reported on the employee's final return. This amount
will be the same as if the stock had been held for the requisite period as above
discussed; that is, it will be the lesser of (1) the amount by which the fair
market value of the stock at the time the option was granted exceeded the price
paid (i.e., 15% of the fair market value), or (2) the amount by which the fair
market value of the stock at the time of the employee's death exceeded the
option price.
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Even though an employee who waits the required holding period treats part
of his or her gain on the disposition of stock as ordinary income, the Company
may not take a business deduction for such amount. However, where an employee
disposes of stock before the end of the required holding period, the amount of
income which the employee must report as ordinary income qualifies as a Company
business deduction for the year of early disposition.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL OF
AMENDMENT OF THE PURCHASE PLAN TO INCREASE THE NUMBER OF SHARES AVAILABLE FOR
PURCHASE UNDER THE PURCHASE PLAN BY 100,000 SHARES FROM THE 70,000 CURRENTLY
AVAILABLE TO 170,000 SHARES.
PROPOSAL 5.
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors recommends a vote for approval of the appointment of
Ernst & Young LLP as the independent auditors of the Company to audit the books
and accounts for the Company for fiscal year 1998. During fiscal year 1997,
Ernst & Young LLP examined the financial statements of the Company. It is
expected that representatives of Ernst & Young LLP will attend the Annual
Meeting, with the opportunity to make a statement if they so desire, and will be
available to answer appropriate questions.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters
that are to be presented at the Annual Meeting, and it has not been advised that
any other person will present any other matters for consideration of the
meeting. Nevertheless, if other matters should properly come before the Annual
Meeting, the shareholders present, or the persons, if any, authorized by a valid
proxy to vote on their behalf, shall vote on such matters in accordance with
their judgment.
VOTING PROCEDURES
Votes at the Annual Meeting of Shareholders are counted by Inspectors of
Election appointed by the Board of Directors. If a quorum is present, the
nominees for director receiving the greatest number of votes cast at the Annual
Meeting in person or by proxy shall be elected. All other matters proposed to be
considered at the Annual Meeting, except Proposal 2, require for approval that
the votes cast favoring the action exceed the votes cast opposing the action.
For Proposal 2 to pass, holders of fifty percent (50%) or more of the
outstanding Common Stock must vote in favor of it. Abstentions by those present
at the meeting are tabulated separately from affirmative and negative votes and
do not constitute votes either in favor of or opposed to an action. If a
shareholder returns his proxy card and withholds authority to vote for any or
all of the nominees, the votes represented by the proxy card will be deemed to
be present at the meeting for purposes of determining the presence of a quorum
but will not be counted as affirmative votes in favor of such nominee or
nominees. Shares in the name of brokers that are not voted are treated as not
present.
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SUBMISSION OF SHAREHOLDERS' PROPOSALS AND ADDITIONAL INFORMATION
Proposals of shareholders intended to be eligible for inclusion in the
Company's proxy statement and proxy card relating to the 1998 annual meeting of
shareholders of the Company must be received by the Company on or before the
close of business May 29, 1998. Such proposals should be submitted by certified
mail, return receipt requested.
The Company's Bylaws provide that a shareholder wishing to present a
nomination for election of a director or to bring any other matter before an
annual meeting of shareholders must give written notice to the Company's
Secretary not less than 120 calendar days in advance of the one-year anniversary
of the release date of the Company's annual meeting proxy statement for the
previous year, unless the upcoming annual meeting date will be more than 30
calendar days different from the previous year's annual meeting date (in which
case the shareholder must notify the Company of the nomination or matter within
a reasonable time before release of the proxy statement). Any shareholder
interested in making such a nomination or proposal should request a copy of the
Bylaws provisions from the Chief Financial Officer of the Company.
AVAILABILITY OF REPORTS ON FORM 10-K
The Company will furnish without charge to each person whose proxy is being
solicited, upon written request of any such person, a copy of the Annual Report
on Form 10-K of the Company for the fiscal year ended June 30, 1997, as filed
with the SEC, including the financial statements and schedules thereto. Requests
for copies of such Annual Report on Form 10-K should be directed to the Chief
Financial Officer, SeaMED Corporation, 14500 Northeast 87th Street, Redmond,
Washington 98052.
OTHER MATTERS
The Company will bear the costs of soliciting proxies from its
shareholders. In addition to the use of the mails, proxies will be solicited by
ChaseMellon Shareholder Services LLC (the "Proxy Agent") pursuant to an
agreement with the Company. The Proxy Agent will provide consultation pertaining
to the planning and organization of the solicitation, identification of and
coordination with important intermediaries in the solicitation process,
dissemination of all proxy materials, and solicitation and collection of proxies
using pre-established calling and reporting procedures. The anticipated cost of
the proxy solicitation service is $4500 plus expenses. Depending on the progress
of the solicitation, the Company may request additional services from the Proxy
Agent based on a per service rate schedule. In addition, proxies may be
solicited by the directors, officers and employees of the Company by personal
interview, telephone or telegram. Such directors, officers and employees will
not be additionally compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation materials to the beneficial owners of Common
Stock held of record by such persons, and the Company will reimburse such
brokerage houses, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred in connection therewith.
The directors know of no other matters which are likely to be brought
before the Annual Meeting, but if any such matters property come before the
meeting the persons named in the enclosed proxy, or their substitutes, will vote
the proxy in accordance with their best judgment.
By Order of the Board of Directors
LOGO
Mark R. Beatty
Secretary
September 26, 1997
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. EVEN IF YOU EXPECT
TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE, SIGN, DATE AND MAIL THE
ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
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APPENDIX A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
SEAMED CORPORATION
ARTICLE 1.
NAME
The name of the corporation is SeaMED Corporation.
ARTICLE 2.
DURATION
This corporation has perpetual existence.
ARTICLE 3.
PURPOSE
This corporation is organized for the purposes of transacting any and all
lawful business for which a corporation may be incorporated under Title 23B of
the Revised Code of Washington, as amended.
ARTICLE 4.
REGISTERED OFFICE AND AGENT
The address of the registered office of the corporation is 5000 Columbia
Center, 701 Fifth Avenue, Seattle, Washington 98104-7078, and the name of the
registered agent at such address is PTSGE Corp.
ARTICLE 5.
CAPITAL STOCK
The total number of shares of stock that the corporation shall have the
authority to issue is Fifteen Million (15,000,000) as follows:
5.1 Ten Million (10,000,000) shares, which shares shall be of one class
and shall be designated Common Stock, no par value per share. All rights
accruing to the outstanding shares of the corporation not expressly provided for
to the contrary herein shall be vested in the Common Stock.
5.2 Five Million (5,000,000) shares of Preferred Stock, no par value per
share.
The Board of Directors shall have the full authority permitted by law to
divide the authorized and unissued shares of Preferred Stock into classes or
series, or both, and to provide for the issuance of such shares in an aggregate
amount not exceeding in the aggregate the number of shares of Preferred Stock
authorized by these Articles of Incorporation, as amended from time to time; and
to determine with respect to each such class and/or series the voting powers, if
any (which voting powers, if granted, may be full or limited), designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions relating thereto, including
without limiting the generality of the foregoing, the voting rights relating to
shares of Preferred Stock of any class and/or series (which may be one or more
votes per share or a fraction of a vote per share, which may vary over time and
which may be applicable generally or only upon the happening and continuance of
stated events or conditions), the rate of dividend to which holders of Preferred
Stock of any class and/or series may be entitled (which may be cumulative or
noncumulative), the rights of holders of Preferred Stock of any class and/or
series in the event of liquidation, dissolution or winding up of the affairs of
the corporation, the rights, if any, of holders of Preferred Stock of any class
and/or
A-1
<PAGE> 28
series to convert or exchange such shares of Preferred Stock of such class
and/or series for shares of any other class or series of capital stock or for
any other securities, property or assets of the corporation or any subsidiary
(including the determination of the price or prices or the rate or rates
applicable to such rights to convert or exchange and the adjustment thereof, the
time or times during which the right to convert or exchange shall be applicable
and the time or times during which a particular price or rate shall be
applicable), whether or not the shares of that class and/or series shall be
redeemable, and if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates, and whether any shares of that
class and/or series shall be redeemed pursuant to a retirement or sinking fund
or otherwise and the terms and conditions of such obligation.
Before the corporation shall issue any shares of Preferred Stock of any
class and/or series, articles of amendment in a form meeting the requirements of
the Washington Business Corporation Act, as amended from time to time (the
"Act"), setting forth the terms of the class and/or series and fixing the voting
powers, designations, preferences, the relative, participating, optional or
other special rights, if any, and the qualifications, limitations and
restrictions, if any, relating to the shares of Preferred Stock of such class
and/or series, and the number of shares of Preferred Stock of such class and/or
series authorized by the Board of Directors to be issued shall be filed with the
Secretary of State of the State of Washington in the manner prescribed by the
Act, and shall become effective without any shareholder action. The Board of
Directors is further authorized to increase or decrease (but not below the
number of such shares of such series then outstanding) the number of shares of
any class or series subsequent to the issuance of shares of that class or
series.
ARTICLE 6.
PREEMPTIVE RIGHTS
Shareholders of this corporation have no preemptive rights to acquire
additional shares of stock or securities convertible into shares of stock issued
by the corporation.
ARTICLE 7.
DIRECTORS
7.1 Number of Directors. The number of directors of this corporation shall
be fixed in the manner specified by the bylaws of this corporation. The first
director of the corporation is one (1) in number and his name and address is:
W. Robert Berg
14500 Northwest 87th Street
Redmond, Washington 98052
The first director shall serve until the first annual meeting of the
shareholders and until his successors are elected and qualified.
7.2 Removal. Any director or the entire Board of Directors may be removed
from office at any time, at a duly called special meeting of shareholders, by
the affirmative vote of shareholders which satisfies the requirements of Article
11 applicable to amendment, modification, or repeal of these Articles.
7.3 Vacancies. Vacancies in the Board of Directors, including vacancies
resulting from an increase in the number of directors, shall be filled by a
majority of the directors then in office, though less than a quorum, by the sole
remaining director or by action of the shareholders. All directors elected to
fill vacancies shall hold office for a term expiring at the next annual meeting
of shareholders, but shall continue to serve despite the expiration of the
director's term until his or her successor shall have been elected and qualified
or until there is a decrease in the number of directors. No decrease in the
number of directors constituting the Board of Directors shall shorten or
eliminate the term of any incumbent director.
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7.4 Classification of Directors. The directors shall be divided into three
classes, with each class to be as nearly equal in number as possible. The term
of office of directors of the first class shall expire at the first annual
meeting of shareholders after their election. The term of office of the
directors of the second class shall expire at the second annual meeting after
their election. The term of office of directors of the third class shall expire
at the third annual meeting after their election. At each annual meeting after
such classification, a number of directors equal to the number of the class
whose term expires at the time of such meeting shall be elected to hold office
until the third succeeding annual meeting.
ARTICLE 8.
CUMULATIVE VOTING
Shareholders of this corporation shall not have the right to cumulate votes
in the election of directors.
ARTICLE 9.
LIMITATION OF DIRECTOR LIABILITY
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for conduct as a director,
except for:
(a) Acts or omissions involving intentional misconduct by the director
or a knowing violation of law by the director;
(b) Conduct violating RCW 23B.08.310 (which involves certain
distributions by the corporation);
(c) Any transaction from which the director will personally receive a
benefit in money, property, or services to which the director is not
legally entitled.
If the Washington Business Corporation Act is amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Washington Business
Corporation Act, as so amended. Any repeal or modification of the foregoing
paragraph by the shareholders of the corporation shall not adversely affect any
right or protection of a director of the corporation with respect to any acts or
omissions of such director occurring prior to such repeal or modification.
ARTICLE 10.
INDEMNIFICATION OF DIRECTORS
10.1 Indemnification. The corporation shall indemnify its directors to the
full extent permitted by the Washington Business Corporation Act now or
hereafter in force. However, such indemnity shall not apply on account of:
(a) Acts or omissions of the director finally adjudged to be
intentional misconduct or a knowing violation of law;
(b) Conduct of the director finally adjudged to be in violation of RCW
23B.08.310; or
(c) Any transaction with respect to which it was finally adjudged that
such director personally received a benefit in money, property, or services
to which the director was not legally entitled.
The corporation shall advance expenses for such persons pursuant to the terms
set forth in the Bylaws, or in a separate directors' resolution or contract.
10.2 Authorization. The Board of Directors may take such action as is
necessary to carry out these indemnification and expense advancement provisions.
It is expressly empowered to adopt, approve, and amend from time to time such
Bylaws, resolutions, contracts, or further indemnification and expense
advancement arrangements as may be permitted by law, implementing these
provisions. Such Bylaws, resolutions, contracts
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or further arrangements shall include but not be limited to implementing the
manner in which determinations as to any indemnity or advancement of expenses
shall be made.
10.3 Amendment. No amendment or repeal of this Article shall apply to or
have any effect on any right to indemnification provided hereunder with respect
to acts or omissions occurring prior to such amendment or repeal.
ARTICLE 11.
MISCELLANEOUS
11.1 Repeal of and Amendment to Articles of Incorporation. Unless
otherwise provided herein, the provisions of these Articles of Incorporation may
be repealed or amended upon the affirmative vote of the holders of not less than
a majority of the outstanding shares of capital stock of the corporation. The
provisions set forth in Section 7.1 of Article 7, Article 9, Article 10 and this
sentence of Section 11.1 of Article 11 herein may not be repealed or amended in
any respect unless such action is approved by the affirmative vote of the
holders of not less than 66 2/3% of the outstanding shares of capital stock of
the corporation.
11.2 Repeal of and Amendment to Bylaws. In furtherance and not in
limitation of the powers conferred by the Washington Business Corporation Act,
the Board of Directors is expressly authorized to make, adopt, repeal, alter,
amend, and rescind the Bylaws of the corporation by a resolution adopted by a
majority of the directors. The shareholders shall also have the power to adopt,
amend or repeal the Bylaws of the corporation as set forth therein.
11.3 Special Meetings of Shareholders. Special meetings of the
shareholders of the corporation for any purpose may be called at any time by the
Board of Directors or an authorized committee of the Board of Directors, but
such special meetings may not be called by any other person or persons.
ARTICLE 12.
INCORPORATOR
The name and address of the incorporator is:
Robert Vallelunga 5000 Columbia Center
701 Fifth Avenue
Seattle, WA 98104-7078
The undersigned incorporator has signed these Articles of Incorporation as
duplicate signed originals on October 1, 1996.
/s/ ROBERT VALLELUNGA
--------------------------------------
Robert Vallelunga
Incorporator
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APPENDIX B
1995 SEAMED CORPORATION
EMPLOYEE STOCK OPTION AND INCENTIVE PLAN
ARTICLE 1.
PURPOSE AND DURATION
1.1 Purpose. The purpose of the 1995 SeaMED Corporation Employee Stock
Option and Incentive Plan (the "Plan") is to further the growth, development and
financial success of SeaMED Corporation (the "Company") and its Subsidiaries by
aligning the personal interests of key employees, through the ownership of
shares of the Company's Common Stock and through other incentives, to those of
the Company's shareholders. The Plan is further intended to provide flexibility
to the Company in its ability to compensate key employees and to motivate,
attract and retain the services of such key employees who have the ability to
enhance the value of the Company and its Subsidiaries. In addition, the Plan
provides for incentive awards to key employees of Affiliates in those cases
where the success of the Company or its Subsidiaries may be enhanced by the
award of incentives to such persons.
The Plan permits the granting of Stock Options, Stock Appreciation Rights
and Other Stock Based Awards.
1.2 Duration. Subject to ratification by an affirmative vote of a majority
of the Shares present and entitled to vote at any meeting of shareholders of the
Company, the Plan, if so approved, shall be deemed effective with the approval
of the Board of Directors of the Company on October 26, 1995 (the "Effective
Date"), and shall remain in effect, subject to the right of the Board of
Directors to terminate the Plan at any time pursuant to Article 9 herein and the
availability of Shares subject to the Plan, until October 26, 2005 (the
"Termination Date"). No Award may be granted under the Plan on or after the
Termination Date, but Awards made prior to the Termination Date may be
exercised, vested or otherwise effectuated beyond that date unless otherwise
limited.
ARTICLE 2.
DEFINITIONS
2.1 Definitions. Whenever used in the Plan, the following terms shall have
the meanings set forth below and, when the meaning is intended, the initial
letter of the word is capitalized:
"Affiliate" means any corporation (other than a Subsidiary), partnership,
association, joint venture or other entity in which the Company or any
Subsidiary participates directly or indirectly in the decisions regarding the
management thereof or the production or marketing of products or services.
"Award" means, individually or collectively, a grant under this Plan of
Stock Options, Stock Appreciation Rights or Other Stock Based Awards.
"Award Agreement" means the document which evidences an Award and which
sets forth the terms, conditions and limitations relating to such Award.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
"Change in Control" means (a) a merger or consolidation wherein the Company
is not the surviving corporation, which merger or consolidation is not between
or among the Company and any Affiliates or Subsidiaries, (b) a tender offer or
takeover bid for the Shares (other than a tender offer by the Company) subject
to the Exchange Act and the rules promulgated thereunder, (c) a sale of
substantially all the assets of the Company, and (d) the dissolution of the
Company.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor Code thereto.
"Committee" means the group of three or more individuals administering the
Plan, which shall be the Compensation Committee of the Board (or such members of
the Compensation Committee, including at least two (2) Directors, who qualify as
both "disinterested persons" within the meaning of Rule 16b-3 under the Exchange
Act, or any successor rule thereto and "outside directors" under Section 162 of
the Code) or any other committee of the Board, consisting of at least two (2)
Directors and others, all of whom are "disinterested persons," and "outside
directors" and performing similar functions as appointed from time to time by
the Board and constituted so as to permit the Plan to comply with Rule 16b-3
under the Exchange Act, or any successor rule thereto and Section 162 of the
Code.
"Company" means SeaMED Corporation, a Delaware corporation.
"Consultant" means an individual who performs services for the Company, a
Subsidiary or any Affiliate as an independent contractor.
"Director" means a member of the Board of Directors of Company.
"Director Option" means a Nonqualified Stock Option granted to a Director,
as further described at Section 6.4.
"Effective Date" means October 26, 1995.
"Eligible Employee" means any executive, managerial, professional,
technical or administrative employee of the Company, any Subsidiary or any
Affiliate who is expected to contribute to its success.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor Act thereto.
"Fair Market Value" means the fair market value of the Company's Shares,
which shall be determined by the Board or, in the event that the Shares are
listed on any national exchange, over-the-counter, or other stock trading
market, then, as of any time, based upon the prevailing bid price of the Shares
as of such time.
"Incentive Stock Options" or "ISO" means a Stock Option granted pursuant to
Article 6 herein, which is designated as an Incentive Stock Option and is
intended to meet the requirements of Section 422 of the Code.
"Nonqualified Stock Option" or "NQSO" means a Stock Option granted pursuant
to Article 6 herein, which is not intended to be an Incentive Stock Option.
"Other Stock Based Award" means an Award, granted pursuant to Article 6
herein, other than a Stock Option or SAR, that is paid with, valued in whole or
in part by reference to, or is otherwise based on Shares.
"Participant" means an Eligible Employee or Consultant selected by the
Committee to receive an Award under the Plan, or a Director who receives
Director Options under the Plan.
"Plan" means the 1995 SeaMED Corporation Employee Stock Option and
Incentive Plan.
"Shares" means the issued or unissued shares of the common stock, no par
value, of the Company, and, as to the number of Shares reserved hereunder,
following amendment in 1997 refers to shares of common stock after taking into
account the one-for-five reverse stock split of July 1996.
"Stock Appreciation Right" or "SAR" means the grant, pursuant to Article 6
herein, of a right to receive a payment from the Company, in the form of stock,
cash or a combination of both, equal to the difference between the Fair Market
Value of one or more Shares and the exercise price of such Shares under the
terms of such Stock Appreciation Right.
"Stock Option" means the grant, pursuant to Article 6 herein, of a right to
purchase a specified number of Shares during a specified period at a designated
price, which may be either an Incentive Stock Option or a Nonqualified Stock
Option.
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"Subsidiary" means a corporation as defined in Section 424(f) of the Code
with the Company being treated as the employer corporation for purposes of this
definition.
"Termination Date" means the earlier of the date on which all Shares
subject to the Plan have been purchased or acquired according to the Plan's
provisions, the date the Plan is terminated pursuant to Article 9, or October
26, 2005.
"Withholding Event" means an event related to an Award which results in the
Participant being subject to taxation at the federal, state, local or foreign
level.
ARTICLE 3.
ADMINISTRATION
3.1 Authority. The Plan shall be administered by the Committee which shall
have full and exclusive power, except as limited by law or by the Articles of
Incorporation or Bylaws of the Company, as amended, and subject to the
provisions herein, to:
(a) select Eligible Employees and Consultants to whom Awards are
granted;
(b) determine the size and types of Awards;
(c) determine the terms and conditions of such Awards in a manner
consistent with the Plan;
(d) determine whether, to what extent and under what circumstances,
Awards may be settled, paid or exercised in cash, shares, or other Awards,
or other property or canceled, forfeited or suspended;
(e) construe and interpret the Plan and any agreement or instrument
entered into under the Plan;
(f) establish, amend or waive rules and regulations for the Plan's
administration;
(g) amend (subject to the provisions of Section 4.4 and Article 9
herein) the terms and conditions, other than price (which amendment may be
made only by the Board of Directors of the Company pursuant to Article 9),
of any outstanding Award to the extent such terms and conditions are within
its discretion;
(h) provide in the terms of the Award Agreements for acceleration of
exercise or removal of restrictions on exercise in the event of a Change in
Control of the Company; and
(i) make all other determinations which may be necessary or advisable
for the administration of the Plan.
All Awards hereunder shall be made by the Committee.
3.2 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders or
resolutions of the Board of Directors shall be final, conclusive and binding on
all persons, including the Company, its Subsidiaries and Affiliates, its
shareholders, Participants, and their estates and beneficiaries.
ARTICLE 4.
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.4
herein, no more than 500,000 Shares may be issued under the Plan, of which a
maximum of fifteen percent (15%) of such Shares may be issued pursuant to Other
Stock Based Awards. These Shares may consist, in whole or in part, of authorized
and unissued Shares, or of treasury Shares. No fractional Shares shall be issued
under the Plan; provided, however, that cash may be paid in lieu of any
fractional Shares in settlements of Awards under the Plan.
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For purposes of determining the number of Shares available for issuance
under the Plan:
(a) The grant of an Award shall reduce the authorized pool of Shares
by the number of Shares subject to such Award while such Award is
outstanding, except to the extent that such an Award is in tandem with
another Award covering the same or fewer Shares.
(b) Any Shares tendered by a Participant in payment of the price of a
Stock Option or stock option exercised under any other Company plan shall
be credited to the authorized pool of Shares.
(c) To the extent that any Shares covered by SARs are not issued upon
the exercise of such SAR, the authorized pool of Shares shall be credited
for such number of Shares.
(d) To the extent that an Award is settled in cash or any form other
than in Shares, the authorized pool of Shares shall be credited with the
appropriate number of Shares represented by such settlement of the Award,
as determined at the sole discretion of the Committee (subject to the
limitation set forth in Section 4.2 herein).
(e) If Shares are used to pay dividends and dividend equivalents in
conjunction with outstanding Awards, an equivalent number of Shares shall
be deducted from the Shares available for issuance.
4.2 Lapsed Awards. If any Award granted under the Plan is canceled,
terminates, expires or lapses for any reason, any Shares subject to such Award
shall again be available for the grant of an Award under the Plan; except,
however, to the extent that such Award was granted in tandem with another Award,
any Shares issued pursuant to the exercise or settlement of such other Award
shall not be credited back. In the event that prior to the Award's cancellation,
termination, expiration, or lapse, the holder of the Award at any time received
one or more "benefits of ownership" pursuant to such Award (as defined by the
Securities and Exchange Commission, pursuant to any rule or interpretation
promulgated under Section 16 of the Exchange Act), the Shares subject to such
Award shall not be made available for regrant under the Plan.
4.3 Effect of Acquisition. Any Awards granted by the Company in
substitution for awards or rights issued by a company whose shares or assets are
acquired by the Company or a Subsidiary shall not reduce the number of Shares
available for grant under the Plan.
4.4 Adjustments in Authorized Shares. Subject to specific provisions in
any Award Agreement, in the event of any merger, reorganization, consolidation,
recapitalization, separation, spin-off, liquidation, stock dividend, split-up,
Share combination or other change in the corporate or capital structure of the
Company affecting the Shares, such adjustment shall be made in the number and
class of Shares which may be delivered under the Plan, and in the number and
class of and/or price of Shares subject to outstanding Awards granted under the
Plan, as may be determined to be appropriate and equitable by the Committee, in
its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number of Shares subject to any Award shall always be a whole
number; and provided further that, with respect to Incentive Stock Options,
except with Board approval and in compliance with Article 9, no adjustment shall
be authorized by the Committee to the extent such adjustment would (i) cause the
Plan to violate Section 422 of the Code, or (ii) constitute a "modification"
within the meaning of Section 424(h)(3) of the Code, or any successor provision
thereto, with the effect that such modification, if applied, would be considered
the granting of a new option under Section 424(h)(1) of the Code, or any
successor provision thereto.
4.5 Committee Determination. In determining the number of Shares available
for issuance under the Plan as contemplated by this Article 4, the Committee
shall interpret and apply the provisions of this Article so as to permit the
Plan to comply with Rule 16b-3 under the Exchange Act, or any successor rule
thereto.
ARTICLE 5.
PARTICIPATION
5.1 Selection of Participants. Subject to the provisions of the Plan, the
Committee, from time to time, may select from all Eligible Employees and
Consultants, those to whom Awards shall be granted and shall
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determine the nature and amount of each Award. No Eligible Employee or
Consultant shall have the right to receive an Award under the Plan, or, if
selected to receive an Award, the right to continue to receive same. Further, no
Participant shall have any rights, by reason of the grant of any award under the
Plan to continued employment by the Company or any Subsidiary or Affiliate.
There is no obligation for uniformity of treatment of Participants under the
Plan.
5.2 Award Agreement. All Awards granted under the Plan shall be evidenced
by an Award Agreement that shall specify the terms, conditions, limitations and
such other provisions applicable to the Award as the Committee shall determine.
ARTICLE 6.
AWARDS
Except as otherwise provided for in Section 3.1 herein, Awards may be
granted by the Committee to Eligible Employees, and Consultants in the case of
Awards other than Incentive Stock Options, at any time, and from time to time as
the Committee shall determine. The Committee shall have complete discretion in
determining the number of Awards to grant (subject to the Share limitations set
forth in Section 4.1 herein) and, consistent with the provisions of the Plan,
the terms, conditions and limitations pertaining to such Awards.
The Committee may provide that the Participant shall have the right to
utilize Shares to pay all or any part of the purchase price of the exercise of
any Stock Option or option to acquire Shares under any other incentive
compensation plan of the Company, if permitted under such plan; provided,
however, that the number of Shares, bearing restrictive legends, if any, which
are used for such exercise, shall be subject to the same restrictions following
such exercise.
6.1 Stock Options. Stock Options may be granted at an exercise price
established by the Compensation Committee, which, in the case of Incentive Stock
Options, shall not be less than one hundred percent (100%) of the Fair Market
Value of a Share on the date that the Stock Option is granted. In the case of
Director Options granted pursuant to Section 6.4 herein, the exercise price
shall be 100% of the Fair Market Value of a Share on the date the Director
Option is granted.
In the case of an Incentive Stock Option granted to an Eligible Employee
who, at the time of grant, owns stock possessing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company and its
Subsidiaries, the exercise price shall be not less than one hundred ten percent
(110%) of the Fair Market Value of a Share on the date the Incentive Stock
Option is granted, and the Incentive Stock Option by its terms shall not be
exercisable after the expiration of five (5) years from the date of grant.
Except as provided in the preceding paragraph, a Stock Option may be
exercised at such times as may be specified in an Award Agreement, in whole or
in installments, which may be cumulative and shall expire at such time as the
Committee shall determine at the time of grant; provided, however, that no Stock
Option shall be exercisable later than ten (10) years after the date granted.
Prior to the exercise of a Stock Option, the holder thereof shall not have any
rights of a shareholder with respect to any of the Shares covered by the Stock
Option.
Stock Options shall be exercised by the delivery of a written notice of
exercise to the Chief Financial Officer of the Company, or such other person as
may be specified by the Committee, that sets forth the number of Shares with
respect to which the Stock Option is to be exercised, accompanied by full
payment of the total Stock Option price and any required withholding taxes.
Payment shall be made either (a) in cash or its equivalent, (b) by tendering
previously acquired Shares having a Fair Market Value at the time of exercise
equal to the total price of the Stock Option, or (c) by a combination of (a) and
(b). The Committee also may allow exercises to be made with the delivery of
payment as permitted under Federal Reserve Board Regulation T, subject to
applicable securities law restrictions, or by any other means which the
Committee determines to be consistent with the Plan's purpose and applicable
law. The Committee may provide that the exercise of a Stock Option, by tendering
previously acquired shares, will entitle the exercising Participant to
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receive another Stock Option covering the same number of shares tendered and
with a price of no less than the Fair Market Value on the date of grant of such
replacement Stock Option.
6.2 Stock Appreciation Rights. SARs may be granted, at a price which shall
not be less than one hundred percent (100%) of the Fair Market Value of a Share
on the date the SAR is granted, either in tandem with a Stock Option, such that
the exercise of the SAR or related Stock Option will result in a forfeiture of
the right to exercise the related Stock Option for an equivalent number of
shares, or independently of any Stock Option.
An SAR may be exercised at such times as may be specified in an Award
Agreement, in whole or in installments, which may be cumulative and shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that no SAR shall be exercisable later than ten (10) years after the
date granted.
SARs shall be exercised by the delivery of a written notice of exercise to
the Chief Financial Officer of the Company, or such other person as may be
specified by the Committee, that sets forth the number of Shares with respect to
which the SAR is to be exercised.
6.3 Other Stock Based Awards. Other Stock Based Awards may be granted to
such Eligible Employees, or Consultants where permitted by law, as the Committee
may select, at any time and from time to time as the Committee shall determine.
The Committee shall have complete discretion in determining the number of Shares
subject to such Awards (subject to the Share limitations set forth in Section
4.1 herein), the consideration for such Awards and the terms, conditions and
limitations pertaining to same including, without limitation, restrictions based
upon the achievement of specific business objectives, tenure, and other
measurements of individual or business performance, and/or restrictions under
applicable federal or state securities laws, and conditions under which same
will lapse. Such Awards may include the issuance of Shares in payment of amounts
earned under other incentive compensation plans of the Company. The terms,
restrictions and conditions of the Award need not be the same with respect to
each Participant.
The Committee, at its sole discretion, may direct the Company to issue
Shares subject to such restrictive legends and/or stop transfer instructions as
the Committee deems appropriate.
6.4 Director Options. Nonqualified Stock Options may be granted at the
discretion of the Board from time to time to each Director of the Company who is
not an Eligible Employee or Consultant (a "Director Option"), subject to the
following terms and conditions:
(a) Each Director Option may be exercised any time after six (6)
months from the date of its grant to ten (10) years from such date, at
which time the Director Option shall lapse and be of no force and effect.
(b) The exercise price of Director Options shall be one hundred
percent (100%) of the Fair Market Value of a Share on the date of grant.
(c) Director Options may be exercised only in whole.
ARTICLE 7.
DIVIDENDS AND DIVIDEND EQUIVALENTS
The Committee may provide that Awards earn dividends or dividend
equivalents. Such dividend equivalents may be paid currently or may be credited
to an account established by the Committee under the Plan in the name of the
Participant. In addition, dividends or dividend equivalents paid on outstanding
Awards or issued Shares may be credited to such account rather than paid
currently. Any crediting of dividends or dividend equivalents may be subject to
such restrictions and conditions as the Committee may establish, including
reinvestment in additional Shares or Share equivalents.
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ARTICLE 8.
DEFERRALS AND SETTLEMENTS
Payment of Awards may be in the form of cash, Shares, other Awards, or in
such combinations thereof as the Committee shall determine at the time of grant,
and with such restrictions as it may impose. Payment may be made in a lump sum
or in installments as prescribed by the Committee. The Committee may also
require or permit Participants to elect to defer the issuance of Shares or the
settlement of awards in cash under such rules and procedures as it may establish
under the Plan. It may also provide that deferred settlements include the
payment or crediting of interest on the deferral amounts or the payment or
crediting of dividend equivalents on deferred settlements denominated in Shares.
ARTICLE 9.
AMENDMENT, MODIFICATION AND TERMINATION
9.1 Amendment, Modification and Termination. The Committee may terminate,
amend or modify the Plan at any time and from time to time, with the approval of
the Board of Directors. The termination, amendment or modification of the Plan
may be in response to changes in the Code, the Exchange Act, national securities
exchange regulations or for other reasons deemed appropriate by the Committee.
However, without the approval of the shareholders of the Company, no amendment
or modification may:
(a) Materially increase the total amount of Shares which may be issued
under the Plan, except as provided in Sections 4.3 and 4.4 herein; or
(b) Cause the Plan not to comply with Rule 16b-3 under the Exchange
Act, or any successor rule thereto.
9.2 Awards Previously Granted. No termination, amendment or modification
of the Plan shall in any manner adversely affect any Award previously granted
under the Plan, without the written consent of the Participant. Any amendment
which would change the exercise price of any outstanding Awards (other than
pursuant to Section 4.4) must be approved by the Board of Directors.
ARTICLE 10.
WITHHOLDING
10.1 Tax Withholding. The Company stall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
in cash or Shares having a Fair Market Value sufficient to satisfy federal,
state and local taxes (including the Participant's FICA obligation) required by
law to be withheld with respect to any Withholding Event which occurs because of
a grant, exercise or payment made under or as a result of the Plan.
10.2 Share Withholding. Upon a Withholding Event, the Committee may
require one or more classes of Participants to satisfy the withholding
requirement, in whole or in part, by having the Company withhold Shares having a
Fair Market Value, on the date the tax is to be determined, equal to the amount
of withholding (federal, FICA, state or local) which is required by law. Absent
such a mandate, the Committee may allow a Participant to elect Share withholding
for tax purposes subject to such terms and conditions as the Committee shall
establish.
ARTICLE 11.
TRANSFERABILITY
No Award granted under the Plan may be sold, transferred, pledged, assigned
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code, or Title I of the Employee Retirement Income Security Act,
as
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amended, or the rules thereunder. Further, all Awards granted to a Participant
under the Plan shall be exercisable during the Participant's lifetime only by
the Participant. Notwithstanding the foregoing, the designation of a beneficiary
by a Participant does not constitute a transfer.
ARTICLE 12.
INDEMNIFICATION
Each person who is or shall have been a member of the Committee, or of the
Board of Directors, shall be indemnified and held harmless by the Company
against and from any loss, cost, liability or expense that may be imposed upon
or reasonably incurred by such person in connection with or resulting from any
claim, action, suit or proceeding to which such person may be a party or in
which such person may be involved by reason of any action taken or failure to
act under the Plan and against and from any and all amounts paid by such person
in settlement thereof, with the Company's approval, or paid by such person in
satisfaction of any judgment in any such action, suit or proceeding against such
person, provided such person shall give the Company an opportunity, at its own
expense, to handle and defend the same before such person undertakes to handle
and defend it on such person's own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Articles of Incorporation
or Bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
ARTICLE 13.
UNFUNDED PLAN
The Plan shall be unfunded and the Company shall not be required to
segregate any assets that may at any time be represented by Awards under the
Plan. Any liability of the Company to any person with respect to any Award under
the Plan shall be based solely upon any contractual obligations that may be
effected pursuant to the Plan. No such obligation of the Company shall be deemed
to be secured by any pledge of, or other encumbrance on, any property or assets
of the Company.
ARTICLE 14.
SUCCESSORS
All obligations of the Company under the Plan, with respect to Awards
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation or otherwise, of all or substantially all of the business
and/or assets of the Company.
ARTICLE 15.
SECURITIES LAW COMPLIANCE
The Plan is intended to comply with all applicable conditions of Rule 16b-3
or any successor rule thereto under the Exchange Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the
Committee. Further, each Award shall be subject to the requirement that, if at
any time the Committee shall determine, in its sole discretion, that the
listing, registration or qualification of any Award under the Plan upon any
securities exchange or under any state or federal law, or the consent or
approval of any government regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Award or the grant or
settlement thereof, such Award may not be exercised or settled in whole or in
part unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee.
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ARTICLE 16.
REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be require.
16.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
16.3 Governing Law. To the extent not preempted by federal law, the Plan
and all Award Agreements, shall be construed in accordance with and governed by
the laws of the State of Washington.
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APPENDIX C
SEAMED CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
SeaMED Corporation (the "Company") does hereby establish its 1996 Employee
Stock Purchase Plan as follows:
1. Purpose of the Plan; Effective Date. The purpose of this Plan is to
provide eligible employees of the Company who wish to become shareholders in the
Company a convenient method of doing so. It is believed that employee
participation in the ownership of the business will be to the mutual benefit of
both the employees and the Company. It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall, accordingly, be construed so as to extend and limit participation in
a manner consistent with the requirements of that section of the Code. This Plan
shall not be effective until the later of (i) approval by the holders of a
majority of the Company's voting securities, which approval must occur (if at
all) within 12 months of the adoption of this Plan by the Board of Directors and
(ii) the date that the Company's common stock begins to trade on the Nasdaq
Stock Market. If not so approved, the Plan and any rights granted hereunder
shall be void and of no effect.
2. Definitions.
2.1 "Base pay" means regular straight time earnings, plus review
cycle bonuses and overtime payments, payments for incentive compensation,
and other special payments except to the extent that any such item is
specifically excluded by the Board of Directors of the Company (the
"Board").
2.2 "Account" shall mean the funds accumulated with respect to an
individual employee as a result of deductions from his paycheck for the
purpose of purchasing stock under this Plan. The funds allocated to an
employee's account shall remain the property of the respective employee at
all times but may be commingled with the general funds of the Company.
2.3 "Shares" means the issued or unissued shares of the common stock,
no par value, of the Company, and, as to the number of Shares reserved
hereunder, following amendment in 1997 refers to shares of common stock
after taking into account the one-for-five reverse stock split of July
1996.
3. Employees Eligible to Participate. An employee of the Company or any of
its subsidiaries who is in the employ of the Company on one or more offering
dates is eligible to participate in the Plan, provided that they have been
employed by the Company as of the commencement date of an offering, except: (a)
employees whose customary employment is less than 20 hours per week; (b)
employees whose customary employment is for not more than five months in any
calendar year, and (c) independent contractors, individuals employed through
contract employment agencies or companies, interns, or any other temporary type
worker. With respect to any employee subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended, the Company may impose such conditions on the
grant or exercise of any rights hereunder necessary to satisfy the requirements
of such statute or applicable regulations.
4. Offerings. Generally, there will be ten separate consecutive six-month
offerings pursuant to the Plan. The first offering shall commence on the date
that the Company's common stock begins to trade on the Nasdaq Stock Market and
extend through June 30, 1997. The second offering shall be for six (6) months,
commencing on July 1, 1997 and extending through December 31, 1997. The third
offering shall be for five (5) months, commencing on January 1, 1998 and
extending through May 31, 1998. Thereafter, offerings shall commence on each
subsequent June 1 and December 1, and the final offering under this Plan shall
commence on June 1, 2001 and terminate on November 30, 2001. In order to become
eligible to purchase shares, an employee must sign an Enrollment Agreement, and
any other necessary papers on or before the commencement date (except for the
three initial offerings, June 1 or December 1) of the particular offering in
which he wishes to participate. Participation in one offering under the Plan
shall neither limit, nor require, participation in any other offering.
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5. Price. The purchase price per share shall be the lesser of (1) 85% of
the fair market value of the stock on the offering date; or (2) 85% of the fair
market value of the stock on the last business day of the offering. Fair market
value shall mean the price at which the Company sells stock in a public offering
or, if no such sales occur within any offering period, the closing bid price as
reported on the Nasdaq Stock Market or, if the stock is traded on a stock
exchange, the closing price for the stock on the principal such exchange.
6. Offering Date. The "offering date" as used in this Plan shall be the
commencement date of the offering, if such date is a regular business day, or
the first regular business day following such commencement date. A different
date may be set by resolution of the Board.
7. Number of Shares to be Offered. Subject to adjustment as provided
herein, the number of Shares that may be issued under the Plan shall not exceed
170,000 Shares (as such number may be adjusted by any stock split approved by
the Board of Directors). The actual number of Shares to be issued under this
Plan shall be determined in the discretion of the Board of Directors. The shares
to be sold to participants under the Plan will be common stock of the Company.
If the total number of shares for which options are to be granted on any date in
accordance with Section 10 exceeds the number of Shares then available under the
Plan (after deduction of all Shares for which options have been exercised or are
then outstanding), the Company shall make a pro rata allocation of the Shares
remaining available in as nearly a uniform manner as shall be practicable and as
it shall determine to be equitable. In such event, the payroll deductions to be
made pursuant to the authorizations therefor shall be reduced accordingly and
the Company shall give written notice of such reduction to each employee
affected thereby.
8. Participation.
8.1 An eligible employee may become a participant by completing an
Enrollment Agreement provided by the Company and filing it with the Human
Resources Department prior to the commencement of the offering to which it
relates.
8.2 Payroll deductions for a participant shall commence on the
offering date, and shall end on the termination date of such offering
unless earlier terminated by the employee as provided in Paragraph 14.
9. Payroll Deductions.
9.1 At the time a participant files his authorization for a payroll
deduction, he shall elect to have deductions made from his pay on each
payday during the time he is a participant in an offering at a percentage
of his base pay as may be from time to time set by the Board; provided such
percentage shall not exceed 10%.
9.2 All payroll deductions made for a participant shall be credited
to his account under the Plan. A participant may not make any separate cash
payment into such account nor may payment for Shares be made other than by
payroll deduction.
9.3 A participant may discontinue his participation in the Plan as
provided in Section 14, but no other change can be made during an offering
and, specifically, a participant may not alter the rate of his payroll
deductions for that offering.
10. Granting of Option. On the offering date, this Plan shall be deemed to
have granted to the participant an option for as many full and/or fractional
shares as he will be able to purchase with the payroll deductions credited to
his account during his participation in that offering. Notwithstanding the
foregoing, no participant may purchase stock the fair market value of which
exceeds $25,000 during any calendar year.
11. Exercise of Option. Each employee who continues to be a participant in
an offering on the last business day of that offering shall be deemed to have
exercised his option on such date and shall be deemed to have purchased from the
Company such number of full and/or fractional shares of common stock reserved
for the purpose of the Plan as his accumulated payroll deductions on such date
will pay for at the option price.
12. Employee's Rights. No participating employee shall have any right as a
shareholder with respect to any shares until the shares have been purchased in
accordance with Section 11 above and the stock has been issued by the Company.
Neither the adoption of this Plan nor the granting of rights pursuant to it
shall be
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deemed to create any right in any employee to be retained or continued in the
employment of the Company or any subsidiary.
13. Evidence of Stock Ownership.
13.1 Promptly following the end of each offering, the number of
shares of common stock purchased by each participant shall be deposited
into an account established in the participant's name at a stock brokerage
or other financial services firm designated by the Company (the "ESPP
Broker").
13.2 The participant may direct, by written notice to the Company at
the time of his enrollment in the Plan, that his ESPP Broker account be
established in the names of the participant and one other person designated
by the participant, as joint tenants with right of survivorship, tenants in
common, or community property, to the extent and in the manner permitted by
applicable law.
13.3 A participant shall be free to undertake a disposition (as that
term is defined in Section 424(c) of the US Internal Revenue Code of 1986,
as amended (the "Code")) of the shares in his account at any time, whether
by sale, exchange, gift, or other transfer of legal title, but in the
absence of such a disposition of the shares, the shares must remain in the
participant's account at the ESPP Broker until the holding period set forth
in Section 423(a) of the Code has been satisfied. With respect to shares
for which the Section 423(a) holding period has been satisfied, the
participant may move those shares to another brokerage account of
participant's choosing or request that a stock certificate be issued and
delivered to him.
13.4 A participant who is not subject to payment of U.S. income taxes
may move his shares to another brokerage account of his choosing or request
that a stock certificate be issued and delivered to him at any time,
without regard to the satisfaction of the Section 423(a) holding period.
14. Withdrawal.
14.1 An employee may withdraw from an offering, in whole but not in
part, at any time prior to the last business day of such offering by
delivering a Withdrawal Notice to the Company, in which event the Company
will refund the entire balance of his deductions as soon as practicable
thereafter.
14.2 To re-enter the Plan, an employee who has previously withdrawn
must file a new Enrollment Agreement in accordance with Section 8.1. The
employee's re-entry into the Plan will not become effective before the
beginning of the next offering following his withdrawal, and if the
withdrawing employee is an officer of the Company within the meaning of
Section 16 of the Securities Exchange Act of 1934 he may not re-enter the
Plan before the beginning of the second offering following his withdrawal.
15. Carryover of Account. At the termination of each offering the Company
shall automatically re-enroll the employee in the next offering, and the balance
in the employee's account shall be used for option exercises in the new
offering, unless the employee has advised the Company otherwise. Upon
termination of the Plan, the balance of each employee's account shall be
refunded to him.
16. Interest. No interest will be paid or allowed on any money in the
accounts of participating employees.
17. Rights Not Transferable. No employee shall be permitted to sell,
assign, transfer, pledge, or otherwise dispose of or encumber either the payroll
deductions credited to his account or any rights with regard to the exercise of
an option or to receive shares under the Plan other than by will or the laws of
descent and distribution, and such right and interest shall not be liable for,
or subject to, the debts, contracts, or liabilities of the employee. If any such
action is taken by the employee, or any claim is asserted by any other party in
respect of such right and interest whether by garnishment, levy, attachment or
otherwise, such action or claim will be treated as an election to withdraw funds
in accordance with Section 14.
18. Termination of Employment. Upon termination of employment for any
reason whatsoever, including but not limited to death or retirement, the balance
in the account of a participating employee shall be paid to the employee or his
estate.
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<PAGE> 43
19. Amendment or Discontinuance of the Plan. The Board shall have the right
to amend, modify, or terminate the Plan at any time without notice, provided
that no employee's existing rights under any offering already made under Section
4 hereof may be adversely affected thereby, and provided further that no such
amendment of the Plan shall, except as provided in Section 20, increase above
170,000 the total number of Shares to be offered unless shareholder approval is
obtained therefor.
20. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings of rights, or any other change in the structure of the
common shares of the Company, the Board may make such adjustment, if any, as it
may deem appropriate in the number, kind, and the price of Shares available for
purchase under the Plan, and in the number of Shares which an employee is
entitled to purchase.
21. Share Ownership. Notwithstanding anything herein to the contrary, no
employee shall be permitted to subscribe for any Shares under the Plan if such
employee, immediately after such subscription, owns shares (including all Shares
which may be purchased under outstanding subscriptions under the Plan)
possessing 5% or more of the total combined voting power or value of all classes
of shares of the Company or of its parent or subsidiary corporations.
22. Administration. The Plan shall be administered by the Board. The Board
shall be vested with full authority to make, administer, and interpret such
rules and regulations as it deems necessary to administer the Plan, and any
determination, decision, or action of the Board in connection with the
construction, interpretation, administration, or application of the Plan shall
be final, conclusive, and binding upon all participants and any and all persons
claiming under or through any participant.
The Board may delegate any or all of its authority hereunder to such
committee as it may designate.
23. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received by the Human Resources Department of the Company or when
received in the form specified by the Company at the location, or by the person,
designated by the Company for the receipt thereof.
24. Termination of the Plan. This Plan shall terminate at the earliest of
the following:
24.1 November 30, 2001;
24.2 The date of the filing of a Statement of Intent to Dissolve by
the Company or the effective date of a merger or consolidation wherein the
Company is not to be the surviving corporation, which merger or
consolidation is not between or among corporations related to the Company.
Prior to the occurrence of either of such events, on such date as the
Company may determine, the Company may permit a participating employee to
exercise the option to purchase shares for as many full and/or fractional
shares as the balance of his account will allow at the price set forth in
accordance with Section 5. If the employee elects to purchase shares, the
remaining balance of his account will be refunded to him after such
purchase.
24.3 The date the Board acts to terminate the Plan in accordance with
Section 19 above.
24.4 The date when all shares reserved under the Plan have been
purchased.
25. Limitations on Sale of Stock Purchased Under the Plan. The Plan is
intended to provide common stock for investment and not for resale. The Company
does not, however, intend to restrict or influence any employee in the conduct
of his own affairs. An employee, therefore, may sell stock purchased under the
Plan at any time he chooses, subject to compliance with any applicable federal
or state securities laws. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET
FLUCTUATIONS IN THE PRICE OF THE STOCK.
26. Governmental Regulation and Registration of Shares. The Company's
obligation to sell and deliver shares of the Company's common stock under this
Plan is subject to the approval of, or registration of shares of common stock
with, applicable governmental authorities required in connection with the
authorization, issuance, or sale of such shares.
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<PAGE> 44
APPENDIX D
FORM OF PROXY
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. Scott Asen and W. Robert Berg, and each
of them, as proxies, each with full power of substitution, to represent and vote
for and on behalf of the undersigned the number of shares of common stock of
SeaMED Corporation (the "Company") that the undersigned would be entitled to
vote if personally present at the annual meeting of shareholders to be held on
October 30, 1997, and at any adjournment or postponement thereof. The
undersigned directs that this Proxy be voted as directed on the reverse side.
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting and at any adjournment or
postponement thereof. This Proxy, when properly executed, will be voted in the
manner directed herein by the undersigned. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" ALL NOMINEES IN ITEM 1 AND "FOR" ITEMS 2, 3, 4 AND 5.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
PLEASE MARK YOUR VOTE
AS INDICATED IN THIS EXAMPLE [X]
<TABLE>
<S> <C> <C>
1. Election of Directors: [ ] FOR all Nominees (except as indicated to the contrary below)
[ ] WITHHOLD AUTHORITY (to vote for all nominees listed below)
CLASS I DIRECTORS: CLASS II DIRECTORS: CLASS III DIRECTORS:
Richard E. Engebrecht William H. Gates, Sr. R. Scott Asen
Edgar F. Rampy Richard O. Martin, Ph.D. W. Robert Berg
Stephen J. Clearman
</TABLE>
INSTRUCTIONS: To withhold authority to vote for one or more individual nominees,
print that nominee's name in the following space:
------------------------------------------------------------
<TABLE>
<C> <S>
2. Amend and restate the Company's Articles of Incorporation to provide for a board of directors with staggered terms of
three (3) years.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. Approve an increase of 300,000 shares available under the Company's 1995 Stock Option and Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. Approve an increase of 100,000 shares available for purchase under the Company's Employee Stock Purchase Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. Approve the appointment of Ernst & Young LLP as Independent certified public accountants.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THIS PROXY CARD PROMPTLY.
</TABLE>
Signature
- --------------------------------- Signature, if held jointly
- --------------------------------- Dated:
- ---------, 1997
(Signature(s) must be exactly as name(s) appear on this proxy.) (If signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such, and, if signing for a corporation, please give your title. When shares
are in the names of more than one person, each should sign this Proxy.)
D-1
