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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ______________)*
Quinton Cardiology Systems, Inc.
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(Name of Issuer)
Common Stock, without par value
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(Title of Class of Securities)
748773 10 8
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(CUSIP Number)
Belinda W. Chew
Philips Electronics North America Corporation
1251 Avenue of the Americas
New York, New York 10020
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 10, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box |_|.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM
ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB
CONTROL NUMBER.
SEC 1746 (03-00)
SCHEDULE 13D
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CUSIP NO. 748773 10 8 PAGE 2 of 25 PAGES
---------------------- -----------------------
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1. NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Koninklijke Philips Electronics N.V.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
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3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
The Netherlands
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 6,246,212
EACH ---------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 1,189,997
WITH ---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,246,212
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12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.2%
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14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO/HC
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SCHEDULE 13D
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CUSIP NO. 748773 10 8 PAGE 3 of 25 PAGES
---------------------- -----------------------
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1. NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Philips Holding USA Inc.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
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3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
AF
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5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 6,246,212
EACH ---------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 1,189,997
WITH ---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,246,212
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.2%
--------------------------------------------------------------------------------
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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SCHEDULE 13D
---------------------- -----------------------
CUSIP NO. 748773 10 8 PAGE 4 of 25 PAGES
---------------------- -----------------------
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1. NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Philips Electronics North America Corporation
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) [X]
(b) [ ]
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
AF
--------------------------------------------------------------------------------
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES ---------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 6,246,212
EACH ---------------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 1,189,997
WITH ---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,246,212
--------------------------------------------------------------------------------
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) [ ]
--------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.2%
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14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
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CUSIP Number: 748773 10 8 Page 5 of 25
ITEM 1. SECURITY AND ISSUER
The class of equity securities to which this statement relates is the
shares of Common Stock, without par value (the "Shares"), of Quinton Cardiology
Systems, Inc. (formerly QIC Holding Corp.), a California corporation
("Quinton"). The principal executive office of Quinton is located at 3303 Monte
Villa Parkway, Bothell, Washington 98021.
ITEM 2. IDENTITY AND BACKGROUND
(a) This statement is being filed by Koninklijke Philips Electronics
N.V.("KPENV"), Philips Holding USA Inc. ("PHUSA"), and Philips Electronics North
America Corporation, ("PENAC" and, collectively with KPENV and PHUSA, the
"Reporting Persons"). PENAC is a wholly owned subsidiary of PHUSA, which, in
turn, is a wholly owned subsidiary of KPENV.
As a result of the Shareholders Agreement, dated as of August 1, 2001
(the "Shareholders Agreement"), by and among W.R. Hambrecht/QIC, LLC, a
California limited liability company ("WRH"), W.R. Hambrecht/QIC Management,
LLC, a California limited liability company ("WRH Management"), and PENAC,
attached hereto as Exhibit 1 and incorporated herein by reference, the Reporting
Persons believe that they, WRH and certain individuals and entities related to
WRH (the "WRH Group") may be deemed to constitute a "group" for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934 and Rule 13d-5(b)(1)
promulgated thereunder. Information about the WRH Group is disclosed in
Quinton's Registration Statement on Form S-1 filed on February 22, 2002, (as
amended from time to time, the "Registration Statement") and the Form 3 filed by
WRH on May 2, 2002, relating to its beneficial interest in the Shares (as
amended from time to time and any other Securities Exchange Act of 1934 reports
filed by the WRH Group in connection with its investment in Quinton, the "WRH
Group Reports").
Based upon the WRH Group Reports and the Registration Statement, the
Reporting Persons believe that WRH is the direct beneficial owner of 5,056,215
Shares. The Reporting Persons disclaim beneficial ownership of the Shares held
by WRH, and this statement shall not be construed as an admission that any of
the Reporting Persons is, for the purposes of Section 13(d) or 13(g)
CUSIP Number: 748773 10 8 Page 6 of 25
of the Securities Exchange Act of 1934 or for any other purpose, the beneficial
owner of the Shares held by WRH.
Zymed, Inc., a California corporation ("Zymed"), a wholly owned
subsidiary of PENAC which PENAC acquired in connection with the acquisition by
KPENV of the Healthcare Solutions Group of Agilent, which was consummated on
August 1, 2001, is a non-control member of WRH. Zymed disclaims beneficial
ownership of the Shares held by WRH, and this statement shall not be construed
as an admission that Zymed is, for the purposes of Section 13(d) or 13(g) of the
Securities Exchange Act of 1934 or for any other purpose, the beneficial owner
of the Shares held by WRH.
Certain information concerning each director and executive officer of
(i) PENAC is set forth in Schedule I hereto and incorporated herein by reference
and (ii) KPENV is set forth in Schedule II hereto and incorporated herein by
reference.
(b) The principal business address of KPENV is Breitner Center,
Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The principal business
address of PHUSA and PENAC is 1251 Avenue of the Americas, New York, New York
10020.
(c) The primary business of each of the Reporting Persons is the
manufacture and distribution of electronic and electrical products, systems and
equipment, as well as information technology services.
(d) None of the Reporting Persons, or to the best knowledge and belief
of the Reporting Persons, any of the individuals listed on Schedule I or II has,
during the past five years, been convicted in any criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the Reporting Persons, or to the best knowledge and belief
of the Reporting Persons, any of the individuals listed on Schedule I or II has,
during the past five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
CUSIP Number: 748773 10 8 Page 7 of 25
(f) KPENV is a company incorporated under the laws of the Netherlands.
PHUSA and PENAC are Delaware corporations.
This Item 2 is qualified in its entirety by reference to Schedules I
and II which are incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to the Asset Purchase Agreement, dated as of November 17,
2000, between Agilent Technologies, Inc., a Delaware corporation ("Agilent"),
and KPENV, and the Amendment and Supplemental Agreement, dated as of August 1,
2001, between Agilent and KPENV, on August 1, 2001, PENAC acquired 19 shares of
Class A Common Stock and 2,330,000 shares of Series A Preferred Stock of Quinton
for $4,000,000, the source of which funds was working capital. Each share of
Series A Preferred Stock was convertible into one share of Class A Common Stock
at the option of the holder, subject to certain adjustments.
Pursuant to Article III(d)(3)(ff) of the Certificate of Amendment of
Articles of Incorporation of Quinton, dated June 2, 1998 (the "Certificate of
Amendment"), the holders of Series A Preferred Stock were entitled to receive
certificates of adjustment regarding certain anti-dilution adjustments upon the
grant of certain shares of Class A Common Stock or certain options to purchase
shares of Class A Common Stock under Quinton's 1998 Equity Incentive Plan. In
place of these certificates of adjustment PENAC was granted 287,977 additional,
uncertificated shares of Series A Preferred Stock, recorded on the books of
Quinton as of August 1, 2001.
On April 5, 2002, pursuant to a 2.2-for-1 stock split and a
redesignation of the Class A Common Stock into Shares, the 19 shares of Class A
Common Stock held by PENAC were redesignated into 8 Shares.
Assuming a 2.2-for-1 stock split and conversion of the Series A
Preferred Stock into Shares at the closing of the initial public offering
referred to in the Registration Statement, the 2,617,977 shares of Series A
Preferred Stock held by PENAC will be converted into 1,189,989 Shares.
The Reporting Persons have not purchased or sold any securities of
Quinton in the last 60 days.
CUSIP Number: 748773 10 8 Page 8 of 25
None of the persons listed on Schedule I or II hereto has contributed
any funds or other consideration towards the purchase of the shares of Quinton
reported in this statement.
Information about the WRH Group is disclosed in the Registration
Statement and the WRH Group Reports.
ITEM 4. PURPOSE OF TRANSACTION
1,059,098 Shares were acquired by the Reporting Persons in connection
with the Agilent Transaction and 130,899 shares were acquired as a result of
anti-diluation adjustments.
Pursuant to a Letter Agreement, dated February 19, 2002 (the "Letter
Agreement"), by and among PENAC, KPENV and Agilent, attached hereto as Exhibit 2
and incorporated herein by reference, PENAC is a successor in interest to
Hewlett-Packard Company, a Delaware corporation ("HP"), in an Investors' Rights
Agreement, dated as of May 27, 1998 (the "Investors' Rights Agreement"), between
Quinton, WRH and HP (the "Investors' Rights Agreement"), attached hereto as
Exhibit 3 and incorporated herein by reference.
Pursuant to the Investors' Rights Agreement, subject to certain
conditions and limitations set forth therein, WRH and PENAC may require Quinton
to use its best efforts to include their Shares in any registration by Quinton
of its Shares at Quinton's expense. These registration rights are subject to
conditions and limitations including that, if the registration is in connection
with an underwritten public offering, the holder is obligated to participate in
the underwriting and the underwriters have the right to exclude all or limit the
number of the holder's shares included in the registration statement. The
Investors' Rights Agreement also imposes certain restrictions on the transfer of
shares held by WRH and PENAC, and by any successors in interest to them,
including requiring any transferee to agree to be bound by the transfer
restrictions in the Investors' Rights Agreement and requiring either that an
effective registration statement cover the disposition or that Quinton be
notified of the disposition by the transferor and that the transfer not require
registration.
Pursuant to the Shareholders Agreement, WRH has the right to designate
up to three nominees to the board of directors of Quinton and WRH and PENAC (the
"Holders") are required to vote their shares in Quinton in favor of those
nominees. PENAC and
CUSIP Number: 748773 10 8 Page 9 of 25
Zymed each have the right to designate one nominee to Quinton's board of
directors and the Holders are required to vote their shares in Quinton in favor
of those nominees. Neither PENAC nor Zymed has exercised its right to designate
a nominee for election to Quinton's board or indicated whether it intends in the
future to designate a nominee to the board. The Shareholders Agreement also
states that the board of directors of Quinton shall consist of five members and
prohibits an increase in the number of directors of Quinton above seven without
the consent of PENAC. In addition, if WRH or any of its members transfers
control of Quinton or WRH to any transferee that will own more than 50% of
Quinton's outstanding voting stock or more than 50% of the membership units of
WRH, PENAC has the right to sell the shares in Quinton that it holds on the same
terms to such transferee. Shares held by WRH and PENAC cannot be encumbered as
security for debt, and transferees of shares owned by WRH or PENAC must agree to
be bound by the Shareholders Agreement as a condition to transfer. The
Shareholders Agreement also provides that the unanimous written consent of
Quinton's board of directors is required with respect to the payment of
compensation to any of Quinton's employees, consultants or board members who is
an employee, consultant, director or manager of WRH or WRH LLC or any entity
controlled by either of them or which controls either of them, or an employee,
consultant or director of PENAC or Zymed unless such individual is one of
Quinton's full time employees. The Shareholders Agreement can only be terminated
with the consent of the parties thereto.
In March, 1999, Quinton, Inc. ("QIC"), a Washington corporation and a
wholly owned subsidiary of Quinton, formerly known as Quinton Instrument
Company, Quinton signed an Original Equipment Manufacturer and Distributor
Agreement (the "OEM Agreement") with Zymed, effective as of July 1998, providing
for the purchase of certain Holter monitoring items, and appointed QIC the
exclusive distributor of such products in the United States and Canada for a
period of five years. The OEM Agreement is attached hereto as Exhibit 4 and
incorporated herein by reference. According to the Registration Statement, the
products supplied under this agreement represented a significant portion of
Quinton's revenues, approximately 8% in 1999, 12% in 2000 and 3% in 2001. In the
third quarter of 2000, Zymed terminated the OEM Agreement because the parties
failed to agree on pricing and volume requirements as set forth in the OEM
Agreement. This notice of termination provided for a 180 day notice period that
expired in February 2001. QIC disputed this notice of termination and in
CUSIP Number: 748773 10 8 Page 10 of 25
November 2000 initiated a lawsuit in the United States District court for the
Western District of Washington against Zymed, Agilent and HP, seeking damages
against the defendants for harm to its business resulting from Zymed's
termination of the OEM Agreement. QIC is seeking monetary damages and other
remedies available under the law. On April 8, 2002, the court entered an order
dismissing all of QIC's claims other than the claims related to breach of
contract. The trial date, originally scheduled for late April 2002, has been set
for September 18, 2002.
The Reporting Persons believe that the claims QIC has made in
connection with the lawsuit are wholly without merit, and they are cooperating
in a vigorous defense of such claims. Regardless of the underlying merit of such
claims, however, the Reporting Persons and/or their respective subsidiaries may
from time to time engage in mediation, arbitration and/or negotiations with
Quinton and QIC with a view to resolving such claims. Any such mediation,
arbitration and/or negotiations may or may not include discussions concerning --
and any resolution of such claims may or may not include -- the acquisition or
disposition by the Reporting Persons of Shares or other securities of Quinton,
the sale or transfer of cash or other assets of Quinton and/or its subsidiaries,
the amendment, modification and/or termination of the Investors Rights Agreement
and/or the Shareholders Agreement, and/or extraordinary corporate transactions.
None of the Reporting Persons, Quinton or QIC is under any obligation to agree
to any resolution or settlement of the litigation.
Information about the WRH Group is disclosed in the Registration
Statement the WRH Group Reports.
The foregoing discussion is qualified in its entirety by reference to
the Letter Agreement, the Investors' Rights Agreement, the Shareholders
Agreement and the OEM Agreement.
Other than as set forth herein, none of the Reporting Persons, or to
the best knowledge and belief of the Reporting Persons, any of the individuals
listed on Schedule I or II, has plans or proposals which relate to or would
result in any of the events described by Items 4(a) through 4(j) of Schedule
13D. Each Reporting Person expects to evaluate on an ongoing basis Quinton's
financial condition, business operations and prospects, market price of the
Shares of Quinton, conditions in securities markets generally, general economic
and industry conditions and
CUSIP Number: 748773 10 8 Page 11 of 25
other factors. Accordingly, each Reporting Person reserves the right to change
its plans and intentions at any time, as it deems appropriate. In particular,
each Reporting Person may at any time and from time to time acquire additional
Shares of Quinton or securities convertible or exchangeable for Shares of
Quinton; may dispose of Shares of Quinton; and/or may enter into privately
negotiated derivative transactions with institutional counterparties to hedge
the market risk of some or all of its positions in such Shares. Any such
transactions may be effected at any time and from time to time subject to any
applicable limitations of the Securities Act and the contractual restrictions
described herein. To the knowledge of each Reporting Person, each of the persons
listed on Schedules I and II hereto may make the same evaluation and reserves
the same rights.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The percentage interest, after giving effect to the transactions
described in the Registration Statement, held by each Reporting Person presented
below is based on the number of Shares of Quinton reported in the Registration
Statement to be outstanding as of May 10, 2002 (the "Outstanding Shares").
PENAC is the direct beneficial owner of 1,189,997 Shares of Quinton,
representing approximately 11.0% of the Outstanding Shares. By virtue of the
Shareholders Agreement, PENAC may be deemed to share voting power and beneficial
ownership in the 5,056,215 Shares beneficially owned by WRH, according to the
Registration Statement, or approximately 44.7% of the Outstanding Shares. PENAC
disclaims beneficial ownership of the Shares held by WRH, and this statement
shall not be construed as an admission that PENAC is, for the purposes of
Section 13(d) or 13(g) of the Securities Exchange Act of 1934 or for any other
purpose, the beneficial owner of the Shares held by WRH.
PHUSA may be deemed to beneficially own 1,189,997 Shares of Quinton,
representing approximately 11.0% of the Outstanding Shares. By virtue of the
Shareholders Agreement, PHUSA may be deemed to share voting power and beneficial
ownership in the 5,056,215 Shares beneficially owned by WRH, according to the
Registration Statement, or approximately 44.7% of the Outstanding Shares. PHUSA
disclaims beneficial ownership
CUSIP Number: 748773 10 8 Page 12 of 25
of the Shares held by WRH, and this statement shall not be construed as an
admission that PHUSA is, for the purposes of Section 13(d) or 13(g) of the
Securities Exchange Act of 1934 or for any other purpose, the beneficial owner
of the Shares held by WRH.
KPENV may be deemed to beneficially own 1,189,997 Shares of Quinton,
representing approximately 11.0% of the Outstanding Shares. By virtue of the
Shareholders Agreement, KPENV may be deemed to share voting power and beneficial
ownership in the 5,056,215 Shares beneficially owned by WRH, according to the
Registration Statement, or approximately 44.7% of the Outstanding Shares. KPENV
disclaims beneficial ownership of the Shares held by WRH, and this statement
shall not be construed as an admission that KPENV is, for the purposes of
Section 13(d) or 13(g) of the Securities Exchange Act of 1934 or for any other
purpose, the beneficial owner of the Shares held by WRH.
None of the Reporting Persons, and to the best knowledge and belief of
the Reporting Persons, none of the persons listed on Schedules I and II hereto,
beneficially owns any Shares of Quinton other than as set forth herein.
(b) Each Reporting Person has the power to vote or direct the vote and
dispose or direct the disposition of the Shares beneficially owned by such
Reporting Persons as indicated in pages 2 through 4.
(c) Assuming a 2.2-for-1 stock split and conversion of the Series A
Preferred Stock at the closing of the initial public offering referred to in the
Registration Statement, the 2,617,977 shares of Series A Preferred Stock held by
PENAC will be converted into 1,189,989 Shares.
(d) No other person has the right to receive or the power to direct the
receipt of dividends from or proceeds from the sale of Shares.
(e) Not Applicable.
Information about the WRH Group is disclosed in the Registration
Statement the WRH Group Reports.
CUSIP Number: 748773 10 8 Page 13 of 25
The foregoing discussion is qualified in its entirety by reference to
the Letter Agreement, the Investors' Rights Agreement and the Shareholders
Agreement, each of which is included as an exhibit to this Schedule 13D.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER
There are no contracts, arrangements, understandings or relationships
between the Reporting Persons (or their wholly owned subsidiaries), and to the
best knowledge and belief of the Reporting Persons, none of the persons listed
on Schedules I and II hereto, and other persons with respect to the Shares of
Quinton aside from:
Pursuant to the Letter Agreement, PENAC is a successor in interest to
HP in an Investors' Rights Agreement. Pursuant to the Investors' Rights
Agreement, and subject to conditions and limitations, WRH and PENAC may require
Quinton to use its best efforts to include their Shares in any registration by
Quinton of its Shares at Quinton's expense. These registration rights are
subject to conditions and limitations including, if the registration is in
connection with an underwritten public offering, the holder's obligation to
participate in the underwriting and the right of the underwriters to exclude all
or limit the number of shares included in the registration statement. The
Investors' Rights Agreement also imposes restrictions on the transfer of shares
held by WRH and PENAC, and by any successors in interest to them, including
requiring any transferee to agree to be bound by Section 2 of the Investors'
Rights Agreement (which section contains the restrictions on transfer) and
requiring either that an effective registration statement cover the disposition
or that Quinton be notified of the disposition by the transferor and that the
transfer not require registration.
PENAC is party to the Shareholders Agreement which provides that WRH
has the right to designate up to three nominees to the board of directors of
Quinton and PENAC is required to vote its shares in Quinton in favor of those
nominees. PENAC and Zymed each have the right to designate one nominee to
Quinton's board of directors and WRH is required to vote its shares in Quinton
in favor of those nominees. PENAC has not exercised its right to designate these
nominees for election to Quinton's board
CUSIP Number: 748773 10 8 Page 14 of 25
or indicated whether it intends in the future to designate any nominees to the
board. The Shareholders Agreement also prohibits an increase in the number of
directors of Quinton above seven without the consent of PENAC. In addition, if
WRH or any of its members transfers control of Quinton or WRH to any transferee
that will own more than 50% of Quinton's outstanding voting stock or more than
50% of the membership units of WRH, PENAC has the right to sell the shares in
Quinton that it holds on the same terms to such transferee. Shares held by WRH
and PENAC cannot be encumbered as security for debt, and transferees of shares
owned by WRH or PENAC must agree to be bound by the Shareholders Agreement as a
condition to transfer. The Shareholders Agreement also provides that the
unanimous written consent of Quinton's board of directors is required with
respect to the payment of compensation to any of Quinton's employees,
consultants or board members who is an employee, consultant, director or manager
of WRH or WRH LLC or any entity controlled by either of them or which controls
either of them, or an employee, consultant or director of PENAC or Zymed unless
such individual is one of Quinton's full time employees. The Shareholders
Agreement can only be terminated with the consent of the parties to the
Shareholders Agreement.
Information about the WRH Group is disclosed in the Registration
Statement the WRH Group Reports.
The foregoing discussion is qualified in its entirety by reference to
the Letter Agreement, the Investors' Rights Agreement, the Shareholders
Agreement and the OEM Agreement, each of which is incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit No. Exhibit Description
----------- -----------------------
1. Shareholders Agreement, dated as of August 1, 2001, by and among
WRH, WRH Management and PENAC
2. Letter Agreement, dated February 19, 2002, by and among PENAC,
KPENV and Agilent
3. Investors' Rights Agreement, dated as of May 27, 1998, between
Quinton, WRH and HP
CUSIP Number: 748773 10 8 Page 15 of 25
4. Original Equipment Manufacturer and Distributor Agreement,
effective as of July 1, 1998, between QIC and Zymed
5. Joint Filing Agreement
CUSIP Number: 748773 10 8 Page 16 of 25
SIGNATURES
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Dated: May 13, 2002
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ A. Westerlaken
--------------------------------
Name: A. Westerlaken
Title: Senior Vice President and
General Secretary
PHILIPS HOLDING USA INC.
By: /s/ Belinda W. Chew
--------------------------------
Name: Belinda W. Chew
Title: Senior Vice President
PHILIPS ELECTRONICS NORTH AMERICA
CORPORATION
By: /s/ Belinda W. Chew
--------------------------------
Name: Belinda W. Chew
Title: Senior Vice President
CUSIP Number: 748773 10 8 Page 17 of 25
SCHEDULE I
Name, Business Address, Principal Occupation or Employment and
Citizenship of all Directors and Executive Officers of Philips Electronics North
America Corporation. Each person listed below is not employed, other than by
Philips Electronics North America Corporation, and thus no employer, employer's
address or principal place of business of employer is listed.
Name: William E. Curran
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Director, President and Chief
Executive Officer.
Citizenship: United States
Name: Martha Lee
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Senior Vice President and Chief
Financial Officer.
Citizenship: United States
Name: Kevin W. Doran
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Senior Vice President.
Citizenship: United States
Name: Belinda W. Chew
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
CUSIP Number: 748773 10 8 Page 18 of 25
Principal Occupation: Director, Senior Vice President,
General Counsel and Secretary.
Citizenship: United States
Name: Thomas B. Patton
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Vice President.
Citizenship: United States
Name: Robert N. Smith
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Vice President.
Citizenship: United States
Name: Raymond C. Fleming
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Treasurer and Controller.
Citizenship: United States
Name: Warren T. Oates, Jr.
Business Address: Philips Electronics North America
Corporation
1251 Avenue of the Americas
New York, New York 10020
Principal Occupation: Assistant Secretary.
Citizenship: United States
Name: Thomas M. Hafner
Business Address: Philips Electronics North America
Corporation
64 Perimeter Center East
Atlanta, Georgia 30346
CUSIP Number: 748773 10 8 Page 19 of 25
Principal Occupation: Attesting Secretary (Appointed).
Citizenship: United States
Name: Jack E. Haken
Business Address: Philips Electronics North America
Corporation
580 White Plains Road
Tarrytown, New York 10591
Principal Occupation: Attesting Secretary (Appointed).
Citizenship: United States
Name: Michael E. Marion
Business Address: Philips Electronics North America
Corporation
580 White Plains Road
Tarrytown, New York 10591
Principal Occupation: Attesting Secretary (Appointed).
Citizenship: United States
CUSIP Number: 748773 10 8 Page 20 of 25
SCHEDULE II
Name, Business Address, Principal Occupation or Employment and
Citizenship of:
A. All Members of the Supervisory Board of Koninklijke Philips Electronics N.V.
Unless otherwise indicated each person listed below is not employed,
other than as a member of the Supervisory Board, and thus no employer,
employer's address or principal place of business of employer is listed.
Name: Prof. K.A.L.M. van Miert
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: President of Nyenrode University.
Member of the Supervisory Boards of
Wolters Kluwer, RWE, DHV, Agfa Gevaert
and De Persgroep. Member of the
advisory boards of Goldman Sachs,
Rabobank, Guidant Europe and Eli Lily.
Employer: Nyenrode University
Employer's Address: Straatweg 25
3621 BG Breukelen
The Netherlands
Citizenship: Belgium
Name: L.C. van Wachem
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Retired. Chairman of the Supervisory
Board of Royal Dutch Petroleum
Company. Member of the Supervisory
Boards of Akzo Nobel, BMW and Bayer.
Member of the Board of Directors of
IBM, ATC and Zurich Financial
Services.
Citizenship: The Netherlands
CUSIP Number: 748773 10 8 Page 21 of 25
Name: L. Schweitzer
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Chairman and Chief Executive Officer
of Renault. Member of the Boards of
Banque Nationale de Paris,
Electricite de France and Volvo.
Employer: La regie nationale des usines Renault
Employer's Address: 34 Quai du Point du Jour
BP 103 92109
Boulogne Bilancourt
Cedex, France
Principal Business
of Employer: Design, manufacture and sale of
automobiles and related businesses
Citizenship: France
Name: Sir Richard Greenbury
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Retired. Member of the Board of
Electronics Boutique Plc.
Citizenship: United Kingdom
Name: W. de Kleuver
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Retired. Member of the Supervisory Board of HBG.
Citizenship: The Netherlands
Name: J-M. Hessels
Business Address: Royal Philips Electronics
Rembrandt Tower
CUSIP Number: 748773 10 8 Page 22 of 25
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Chairman of the Supervisory Board of
Euronext. Member of the Supervisory
Boards of Laurus, Schiphol Group,
Royal Vopak, Heineken and Fortis.
Citizenship: The Netherlands
B. Board of Management and Group Management Committee of Royal Philips
Electronics
Unless otherwise indicated, all of the members of the Board of
Management and Group Management Committee are employed by Royal Philips
Electronics at Rembrandt Tower, Amstelplein 1, 1096 HA Amsterdam, The
Netherlands, whose principal business is the manufacture and distribution of
electronic and electrical products, systems and equipment.
Name: Gerard J. Kleisterlee
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: President and Chief Executive
Officer of Royal Philips
Electronics.
Citizenship: The Netherlands
Name: Jan H.M. Hommen
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Executive Vice-President and Chief
Financial Officer of Royal Philips
Electronics. Member of the
Supervisory Board of Atos Origin
S.A.
Citizenship: The Netherlands
Name: Arthur van der Poel
Business Address: Royal Philips Electronics
Rembrandt Tower
CUSIP Number: 748773 10 8 Page 23 of 25
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Executive Vice-President of Royal
Philips Electronics. Member of the
Board of Directors of Taiwan
Semiconductor Manufacturing Company
Ltd.
Citizenship: The Netherlands
Name: Ad Huijser
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Executive Vice-President and Chief
Technology Officer of Royal Philips
Electronics.
Citizenship: The Netherlands
Name: Gottfried H. Dutine
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Executive Vice-President of
Royal Philips Electronics.
Citizenship: Germany
Name: Ad H.A. Veenhof
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and
President/CEO of the Domestic
Appliances and Personal Care
division, of Royal Philips
Electronics.
Citizenship: The Netherlands
Name: Hans M. Barella
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and
President/CEO of the Medical Systems
division, of Royal Philips
Electronics.
Citizenship: The Netherlands
Name: Jan Oosterveld
Business Address: Royal Philips Electronics
Rembrandt Tower
CUSIP Number: 748773 10 8 Page 24 of 25
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President of Royal
Philips Electronics. Member of the
Board of Directors of Tivo Inc.
Citizenship: The Netherlands
Name: Arie Westerlaken
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, General
Secretary, Chief Legal Officer and
Secretary to the Board of
Management, of Royal Philips
Electronics. Member of the
Supervisory Board of Atos
Origin S.A.
Citizenship: The Netherlands
Name: David Hamill
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and
President/CEO of the Lighting
division, of Royal Philips
Electronics.
Citizenship: United Kingdom
Name: Guy J.M. Demuynck
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and CEO of
the Consumer Electronics Mainstream
division, of Royal Philips
Electronics.
Citizenship: Belgium
Name: Tjerk Hooghiemstra
Business Address: Royal Philips Electronics
CUSIP Number: 748773 10 8 Page 25 of 25
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President of Royal
Philips Electronics.
Citizenship: The Netherlands
Name: Matt T. Medeiros
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and
President/CEO of the Components
division, of Royal Philips
Electronics.
Citizenship: United States
Name: Scott McGregor
Business Address: Royal Philips Electronics
Rembrandt Tower
Amstelplein 1
1096 HA Amsterdam, The Netherlands
Principal Occupation: Senior Vice-President, and
President/CEO of the Semiconductors
division, of Royal Philips
Electronics.
Citizenship: United States
LIST OF EXHIBITS
Exhibit No. Exhibit Description
----------- -------------------
10.1 Shareholders Agreement, dated as of August 1, 2001, by and
among WRH, WRH Management and PENAC
10.2 Letter Agreement, dated February 19, 2002, by and among
PENAC, KPNV and Agilent
10.3 Investors' Rights Agreement, dated as of May 27, 1998, by
and between Quinton, WRH and HP
10.4 Original Equipment Manufacturer and Distributor Agreement,
effective as of July 1, 1998, by and between Zymed and QIC
99.1 Joint Filing Agreement