SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
AMENDMENT NO. 6
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES
EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
AMENDMENT NO. 6
UNDER THE SECURITIES EXCHANGE ACT OF 1934
CIRCON CORPORATION
(NAME OF SUBJECT COMPANY)
USS ACQUISITION CORP.
UNITED STATES SURGICAL CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
172736 10 0
(CUSIP NUMBER OF CLASS OF SECURITIES)
THOMAS R. BREMER
USS ACQUISITION CORP.
C/O UNITED STATES SURGICAL CORPORATION
150 GLOVER AVENUE
NORWALK, CONNECTICUT 06856
TELEPHONE: (203) 845-1000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
with a copy to:
PAUL T. SCHNELL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
United States Surgical Corporation, a Delaware corporation
("Parent"), and USS Acquisition Corp., a Delaware corporation
(the "Purchaser"), and a wholly owned subsidiary of Parent,
hereby further amend and supplement their Statement on Schedule
14D-1 ("Schedule 14D-1"), filed with the Securities and Exchange
Commission (the "Commission") on August 2, 1996, as amended by
Amendment No.1 dated August 16, 1996, Amendment No. 2 dated
August 20, 1996, Amendment No.3 dated August 20, 1996, Amendment
No. 4 dated August 30, 1996, and Amendment No. 5 dated September
17, 1996, with respect to the Purchaser's offer to purchase all
of the outstanding shares of Common Stock, par value $0.01 per
share (the "Shares"), of Circon Corporation, a Delaware
corporation (the "Company"), at a price of $18.00 per Share, net
to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase,
dated August 2, 1996 (the "Offer to Purchase"). This Amendment
No. 6 to Schedule 14D-1 also constitutes Amendment No. 6 to the
Statement on Schedule 13D of the Purchaser and Parent. The item
numbers and responses thereto below are in accordance with the
requirements of Schedule 14D-1.
Unless otherwise indicated herein, each capitalized term
used but not defined herein shall have the meaning assigned to
such term in Schedule 14D-1 or in the Offer to Purchase referred
to therein.
ITEM 10. ADDITIONAL INFORMATION.
Item 10(e) of Schedule 14D-1 is hereby amended and
supplemented as follows:
On September 18, 1996, Parent filed a suit against the
Company in the Court of Chancery for the State of Delaware,
seeking to compel the Company to provide Parent with full
information necessary to enable Parent to communicate directly
with the Company's shareholders concerning its offer. A copy of
the complaint is attached as Exhibit (a)(14) and is incorporated
herein by reference.
Item 10(f) of Schedule 14D-1 is hereby amended and
supplemented as follows:
On September 18, 1996, Parent mailed a letter to the
shareholders of the Company. A copy of the letter is attached as
Exhibit (a)(15) and is incorporated herein by reference. On
September 18, 1996, Parent placed an advertisement in the Wall
Street Journal. A copy of the advertisement is attached as
Exhibit (a)(16) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(14) Complaint filed by United States Surgical
Corporation on September 18, 1996 in the
Court of Chancery in the State of Delaware in
and for New Castle County in the action
entitled United States Surgical Corporation,
a Delaware corporation and Cede & Co., v.
Circon Corporation, a Delaware corporation.
(a)(15) Text of letter mailed to shareholders of
Circon Corporation on September 18, 1996.
(a)(16) Text of an advertisement run in the Wall
Street Journal on September 18, 1996.
SIGNATURE
After due inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: September 18, 1996
USS ACQUISITION CORP.
By:/s/ RICHARD A. DOUVILLE
Name: Richard A. Douville
Title: Treasurer
UNITED STATES SURGICAL
CORPORATION
By:/s/ RICHARD A. DOUVILLE
Name: Richard A. Douville
Title: Vice President, Treasurer and
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT EXHIBIT NAME
(a)(14) Complaint filed by United States Surgical
Corporation on September 18, 1996 in the
Court of Chancery in the State of Delaware in
and for New Castle County in the action
entitled United States Surgical Corporation,
a Delaware corporation and Cede & Co., v.
Circon Corporation, a Delaware corporation.
(a)(15) Text of letter mailed to shareholders of
Circon Corporation on September 18, 1996.
(a)(16) Text of an advertisement run in the Wall
Street Journal on September 18, 1996.
IN THE COURT OF CHANCERY FOR THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
UNITED STATES SURGICAL CORPORATION, )
a Delaware corporation and )
CEDE & CO., )
)
Plaintiffs, )
)
v.- ) Civil Action
) No._________
CIRCON CORPORATION, )
a Delaware corporation, )
)
Defendant. )
COMPLAINT UNDER 8 DEL. C. SECTION 220
1. Plaintiff Cede & Co. ("Cede") which is the
nominee of The Depository Trust Company ("DTC"), at all
times pertinent hereto has been and is a record owner of
shares of Common Stock of the defendant Circon Corporation,
("Circon" or "the Company"), of which 1,000,100 shares (the
"Shares") were at all times pertinent, and are on the date
hereof on deposit in the DTC Account of Salomon Brothers
Inc. ("Salomon"), a Participant in DTC. Salomon has advised
DTC that the Shares were at all pertinent times, and are on
the date hereof, beneficially owned by its customer,
Plaintiff United States Surgical Corporation ("U.S.
Surgical"), a Delaware corporation. While Cede appears as a
party plaintiff in this action as the stockholder of record
of the Shares, it does so only at the request of Salomon,
and only as a nominal party for the true party in interest,
U.S. Surgical. Cede has no interest in this matter other
than to take those steps which are necessary to ensure that
U.S. Surgical is not denied the right to inspect the list of
stockholders of Circon and other materials of Circon and
Cede assumes no further responsibility in this matter.
2. Defendant Circon is a Delaware Corporation
with its principal executive offices at 6500 Hollister
Avenue, Santa Barbara, California 93117. Circon's
registered agent in Delaware is The Corporation Trust
Company, 1209 Orange Street, Wilmington, Delaware 19801.
3. On August 16, 1996, Cede, at the request of
Salomon and on behalf of U.S. Surgical, signed a written
demand under oath (the "Demand Letter"). On or about August
16, 1996, U.S. Surgical caused such Demand Letter to be
delivered to the Company at its principal place of business
and at its registered office in Delaware, demanding the
right, pursuant to 8 Del. C. 220, to inspect and copy:
(a) A complete record or list of the Company's
stockholders, certified by its transfer
agent(s) and/or registrars, showing the name
and address of each stockholder and the
number of shares registered in the name of
each such stockholder as of August 2, 1996;
(b) Magnetic computer tape lists of the Company's
stockholders showing the name and addresses
of each stockholder and number of shares
registered in the name of each such
stockholder as of August 2, 1996 and August
13, 1996, such computer processing data as is
necessary for the Customer to make use of
such magnetic computer tape, and a printout
of such magnetic computer tape for
verification purposes;
(c) A list of all holders of shares of Common
Stock of the Company arranged in descending
order by number of shares and indicating the
names and addresses of stockholders;
(d) All daily transfer sheets showing changes in
the list of the Company's stockholders
referred to in paragraph (a) above which are
in or come into the possession of the Company
or its transfer agent from the date of such
list to the termination of the conclusion of
the proxy solicitation in connection with the
next meeting of the Company's Stockholders;
(e) All information in or which comes into the
Company's possession or control or which can
reasonably be obtained from nominees of a
central certificate depositary system
concerning the number and identity of the
actual beneficial owners of the Company's
stock, including (1) a breakdown as of the
record date and omnibus proxies as of the
record date of any holders in the name of
Cede & Co., and other similar nominees; (2)
all "Weekly Security Position Listing Daily
Closing Balances" reports issued by DTC (and
authorization for Salomon Brothers, Inc., the
Company's Dealer Manager, to receive such
reports directly); and (3) all lists (and
computer tapes, processing data and printouts
as described in (b) above) containing the
name, address and number of shares of Company
Common Stock attributable to any participant
in any employee stock ownership or other
employee benefit plan of the Company in which
the decision whether to vote shares of Common
Stock held by such plan is made, directly or
indirectly, individually or collectively, by
the participants in the plan;
(f) All information in or which comes into the
Company's possession or control or which can
reasonably be obtained from brokers, dealers,
banks, clearing agencies or voting trustees
relating to the name of the non-objecting
beneficial owners of the Company's stock
("NOBO's") in the format of a magnetic
computer tape list;
(g) A stop list or stop lists relating to any
shares of Common Stock as of the date of the
list referred to in paragraph (a) above;
(h) A correct and complete copy of the By-laws of
the Company and any and all changes of any
sort to the By-laws of the Company hereafter
made, including, without limitation, any
amendment to existing By-laws, any adoption
of new By-laws or deletions of existing
Bylaws;
(i) The information and records specified in
paragraphs (a), (b) (c), (e), (f) and (g)
above as of any record date for stockholder
action set by the Board of Directors, by
operation of law or otherwise.
A copy of the Demand Letter is attached as Exhibit A.
4. The Demand Letter stated a proper purpose
reasonably related to Cede's role as the stockholder of
record of the Shares, to wit:
Cede & Co. has been advised by Participant that
the purpose of this demand is to enable the
Customer [U.S. Surgical] to communicate with the
Company's stockholders with respect to matters
relating to their mutual interests, including
communicating with such stockholders in connection
with the tender offer for shares of the Company's
Common Stock by USS Acquisition Corp. (the
"Purchaser"), a wholly-owned subsidiary of
Customer, and the Company's response thereto. The
Purchaser's offer is being made by and upon the
terms and subject to the conditions set forth in
the Offer to Purchase dated August 2, 1996, and
the related Letter of Transmittal (which
collectively constitute the tender offer),
attached as exhibits to the Tender Offer Statement
on Schedule 14D-1 of Customer and the Purchaser, a
copy of which has been delivered to the Company.
5. Cede and U.S. Surgical have complied with the
requirements of Section 220 with respect to the form and
manner of making a demand for inspection of the Company's
list of stockholders materials.
6. The Company failed to provide the information
requested in paragraphs (d), (e), (f) and (h) of the Demand
Letter.
7. By reason of the foregoing, U.S. Surgical is
entitled, pursuant to 8 Del. C SECTION 220 to inspect and make
copies of the demanded materials.
8. U.S. Surgical has no adequate remedy at law.
WHEREFORE, U.S. Surgical and Cede & Co. pray that
this Court, pursuant to 8 Del. C. SECTION 220:
A. Summarily order the Company immediately to
permit U.S. Surgical to inspect and copy all demanded
materials, or alternatively, order the Company immediately
to furnish U.S. Surgical copies of all the demanded
materials;
B. Summarily order the Company to provide U.S.
Surgical updated demanded materials as they become
available;
C. Grant to the plaintiffs such other relief,
including reasonable attorneys' fees and costs, as the Court
shall deem appropriate.
SKADDEN, ARPS, SLATE
MEAGHER & FLOM
By /s/ Edward P. Welch
Edward P. Welch
Andrew J. Turezyn
One Rodney Square
P.O. Box 636
Wilmington, Delaware 19899
(302) 651-3000
Attorneys for Plaintiffs
United States Surgical Corporation
and Cede & Co.
Of Counsel:
Barry H. Garfinkel
George A. Zimmerman
Michael H. Gruenglas
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
919 Third Avenue
New York, NY 10022
(212) 735-3000
Thomas R. Bremer
Donald F. Crane
UNITED STATES SURGICAL CORPORATION
150 Glover Avenue
Norwalk, CT 06850
(203) 845-1000
Dated: September 18, 1996
[U.S. Surgical letterhead]
September 18, 1996
Dear Circon Shareholder:
We are delighted that so many of Circon's shareholders
have recognized that our cash offer of $18 per share
presents an opportunity to maximize value that should not
be ignored. Nearly seven million shares have been
tendered as of August 29, 1996. Combined with the shares
owned by U.S. Surgical, this amounts to approximately 76%
of the stock not owned by Circon's management and Board.
We have extended the tender offer to 6:00 p.m. on
September 30, 1996. If you have not already done so, we
are hopeful that you will join your fellow shareholders
in recognizing the merits of the offer and tendering your
shares.
We urge you to weigh Circon's management's promises of
future growth against our concrete offer of $18 in cash,
an 83% premium over the average 10-trading day price of
Circon stock when it was made. Circon is advising you
not to tender. Instead, they are asking you to make yet
another leap of faith and retain your investment in an
uncertain future. We believe that trust in current
management is fraught with risks in light of Circon's
lamentable litany of broken promises since the
announcement of its agreement to acquire Cabot Medical
some seventeen months ago.
Since that announcement, Circon has conducted a publicity
campaign touting the cost-savings, synergistic
integration of sales forces, and steadily improved
financial performance that would result from the
acquisition. Circon's CFO predicted on June 6, 1996, "As
1996 unfolds, you will begin to see that things are very
positive.(1)"
The reality of Circon's performance stands in sharp
contrast.
Earnings have shown a significant decline from pre-merger
financial results. For the second quarter of 1996, the
most recent period for which results are publicly
available, Circon had a loss per share of $0.10
(disregarding a $2 million non-recurring tax benefit)(2),
down from earnings per share of $0.03 in the same period
the prior year. Sales for the quarter were $37.1 million
-- an 11% decline, and gross profit dropped approximately
8%. Most significantly, Circon reported a loss from
operations of $1.1 million for this quarter, a
1 Interview with Bruce Thompson reported by Reuters on
June 6, 1996.
2 Circon reported earnings per share of $.05 including
the non-recurring tax benefit.
precipitous decline from over $2.2 million in income from
operations in the second quarter of 1995.
Circon's initial optimistic view of potential sales force
integration has been superseded by the following
statements:
* "There can be no assurance that integration [of
product offerings and sales forces] will be
accomplished successfully or achieve the expected
synergies.(3)"
* "The productivity of the combined U.S. Direct sales
force has been below expectations.(4)"
* "There can be no assurance that current efforts to
improve the productivity of the direct sales force
will be successful.(5)"
3 Circon Corporation Form 10-Q for Quarter ended June
30, 1996.
4 Circon Corporation Form 10-Q for Quarter ended June
30, 1996.
5 Circon Corporation Form 10-Q for Quarter ended June
30, 1996.
AND YET THEY STILL SAY DON'T TENDER YOUR SHARES.
Circon continues to refuse to meet with us to discuss a
business combination with clear benefits for Circon's
shareholders and customers.
We are still hopeful that Circon's Board and management
will acknowledge the benefits of our offer to Circon
shareholders and meet to discuss our offer. Until then,
we are committed to pursuing every avenue to complete
this deal.
We are seeking legal recourse; yesterday we filed a
lawsuit in Delaware Chancery Court to have Circon's
recently adopted "poison pill" and "golden parachutes"
enjoined and voided by the Court. Since Circon has
said that it has no intention of negotiating with us
or any other potential purchasers, the "pill" and
"parachutes" can have only one objective: to entrench
management by preventing the sale of Circon.
If you have not already tendered your shares, we hope you
will do so before September 30th. Ask yourself: Can you
realize value by trusting the promises of Circon's
management given their past track record? We think
Circon's poor performance since the Cabot Medical merger
and the Board's actions to protect only itself and
entrench management, speak for themselves. We urge you
to add your voice to your fellow shareholders and support
our offer.
On behalf of the United States Surgical Corporation Board
of Directors
/s/ Leon C. Hirsh
Leon C. Hirsch, Chairman
If you need assistance or information please call the
Information Agent for the tender offer: Kissel-Blake Inc.
at (800) 554-7733
AN OPEN LETTER TO CIRCON SHAREHOLDERS:
THANKS FOR YOUR SUPPORT
September 18, 1996
Dear Circon Shareholder:
We are writing to thank you for your strong support for a
combination of U.S. Surgical and Circon. Our cash tender
offer for all Circon shares at $18 per share resulted in
nearly seven million shares being tendered as of August
29, 1996, despite the efforts Circon's management
undertook to discourage the tender. The shares tendered,
combined with the shares owned by U.S. Surgical, amount
to approximately 76% of the stock not owned by Circon's
management and Board.
We are delighted so many of you recognize that our offer,
which represented an 83% premium over the average 10-
trading day price of Circon stock prior to commencement,
should not be ignored. We have extended our offer to
September 30, and we are hopeful that even more
shareholders will see the merits of our offer and tender
their shares.
We are committed to this deal and have repeatedly asked
that Circon meet with us to discuss our offer. We are
also seeking legal recourse; yesterday we filed a lawsuit
in the Delaware Chancery Court to have Circon's recently
adopted "poison pill" and "golden parachutes" enjoined
and voided by the Court. Since Circon has made clear
that it has no intention of negotiating with us or any
other potential purchaser, the "pill" and "parachutes"
can have only one objective: to entrench management by
preventing a sale of Circon.
To those Circon shareholders who have already tendered,
we thank you and ask that you tell Circon's Board and
management that you want the right, now, to sell your
shares to the highest bidder.
To those Circon shareholders who are weighing their
investment, ask yourself: Can you trust the promises of
Circon's management about the company's future
performance? We believe Circon's record of deteriorating
stock price, deteriorating sales and deteriorating
earnings since announcement of the Cabot Medical
acquisition some seventeen months ago speaks for itself.
We hope you agree and will tender your shares.
We believe that a Circon-U.S. Surgical merger benefits
all stockholders and thank you again for your support.
On behalf of the United States Surgical Corporation Board
of Directors,
/s/ Leon C. Hirsh
Leon C. Hirsch, Chairman
IMPORTANT
If you need assistance or information please call the
Information Agent for the tender offer: Kissel-Blake Inc.
at (800) 554-7733
U.S. Surgical's tender offer is conditioned on, among
other things, the acquisition of at least 67% of Circon's
Common Stock on a fully diluted basis, the
inapplicability of Section 203 of the Delaware General
Corporation Law to the Offer and the redemption of rights
issued pursuant to Circon's Preferred Shares Rights
Agreement, or U.S. Surgical being satisfied, in its sole
discretion, that the rights have been invalidated or are
otherwise inapplicable to the tender offer and proposed
second-step merger. The tender offer and withdrawal
rights expire at 6:00 p.m., New York City time, on
September 30, 1996, unless extended. The tender offer is
not contingent on the receipt of financing.
This advertisement is neither an offer to purchase nor a
solicitation of an offer to sell shares of Circon Common
Stock. The tender offer is made solely by the Offer to
Purchase dated August 2, 1996 and the related Letter of
Transmittal. The tender offer is not being made to (nor
will tenders be accepted from or on behalf of) holders of
shares in any jurisdiction in which the making of the
tender offer or the acceptance thereof would not be in
compliance with the securities, blue sky or other laws of
such jurisdiction. In those jurisdictions where
securities, blue sky or other laws require the tender
offer to be made by a licensed broker or dealer, the
tender offer shall be deemed to be made by Salomon
Brothers Inc or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
