<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 14D-1
AMENDMENT NO. 9
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
AMENDMENT NO. 9
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
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
172736100
(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)
----------------
COPY TO:
PAUL T. SCHNELL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, N.Y. 10022
TELEPHONE: (212) 735-3000
<PAGE>
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 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, Amendment No. 5
dated September 17, 1996, Amendment No. 6 dated September 18, 1996, Amendment
No. 7 dated October 1, 1996 and Amendment No. 8 dated December 16, 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"), together with any associated preferred
stock purchase rights (the "Rights"), at a decreased price of $17.00 per Share
(and associated Right), 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"), as amended and
supplemented by the Supplement thereto, dated December 18, 1996 (the
"Supplement"), and the revised Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"), which have been annexed to and
filed with the Schedule 14D-1 as Exhibits (a)(1), (a)(19) and (a)(20),
respectively.
Unless otherwise indicated herein, each capitalized term used but not
defined herein shall have the meaning assigned to such term in the Schedule
14D-1 or in the Offer to Purchase referred to therein.
ITEM 1. SECURITY AND SUBJECT COMPANY.
The information set forth in Items 1(b) and 1(c) of the Schedule 14D-1 is
hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 1 ("Amended
Terms of the Offer") of the Supplement is incorporated herein by reference.
(c) The information set forth in Section 3 ("Price Range of Shares;
Dividends on the Shares") of the Supplement is incorporated herein by
reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
The information set forth in Item 3(b) of the Schedule 14D-1 is hereby
amended and supplemented by the following:
The information set forth in the Introduction and Section 7 ("Background of
the Offer since August 2, 1996; Reasons for Reduction in Price") of the
Supplement is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in Items 4(a) and (b) of the Schedule 14D-1 is
hereby amended and supplemented by the following:
The information set forth Section 6 ("Source and Amount of Funds") of the
Supplement is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
The information set forth in Items 5(a)-(g) of the Schedule 14D-1 is hereby
amended and supplemented by the following:
The information set forth in the Letter to Shareholders, Introduction and
Section 7 ("Background of the Offer since August 2, 1996; Reasons for
Reduction in Price") of the Supplement is incorporated herein by reference.
1
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Item 7 of the Schedule 14D-1 is hereby amended
and supplemented by the following:
The information set forth in the Introduction, Section 7 ("Background of the
Offer since August 2, 1996; Reasons for Reduction in Price") and Section 9
("Certain Legal Matters") of the Supplement is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
The information set forth in Items 10(e) and (f) of the Schedule 14D-1 is
hereby amended and supplemented by the following:
(e) The information set forth in Section 9 ("Certain Legal Matters") of the
Supplement is incorporated herein by reference.
(f) The information set forth in the Supplement and the revised Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(19) and
(a)(20), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(19) Supplement to the Offer to Purchase, dated December 18, 1996.
(a)(20) Revised Letter of Transmittal.
(a)(21) Revised Notice of Guaranteed Delivery.
(a)(22) Revised Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(23) Revised Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
2
<PAGE>
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: December 18, 1996
USS ACQUISITION CORP.
By: /s/ Thomas R. Bremer
-------------------------------
Name: Thomas R. Bremer
Title: President
UNITED STATES SURGICAL
CORPORATION
By: /s/ Thomas R. Bremer
-------------------------------
Name: Thomas R. Bremer
Title: Senior Vice President and
General Counsel
3
<PAGE>
Exhibit 99.(A)(19)
[LOGO] USSC
UNITED STATES SURGICAL CORPORATION
December 18, 1996
Dear Circon Shareholder:
As discussed in the attached Supplement, we have taken the step of reducing
our all cash tender offer from $18 to $17 per share. We remain firmly
committed to acquiring Circon, but their management has refused to discuss
combining our businesses on any terms. Given the steps that Circon management
has taken to entrench themselves, continued lackluster performance, we can no
longer justify the higher price without Circon's management convincing us that
the business is in fact worth more--not merely unsupported promises that they
will turn the business around some day.
Our revised offer remains at a significant premium to the price of Circon
shares before we commenced the tender offer. USS believes Circon's management
would need to achieve extraordinary operating improvements in order for
Circon's stock trading price to equal USS' offer; that seems highly unlikely
given Circon's historical record. Assuming an industry average price/earnings
ratio of 16 times, Circon management would need to deliver earnings per share
(EPS) of $1.22 one year from now in order to equal the present value of
today's $17 offer. To do this, Circon would need to improve operating margins
to over 20% (vs. 6.1% today) at current sales levels, or increase sales to
$500 million (an increase of 225% over the latest twelve months) at today's
margins. Alternatively, if Circon improved both its sales and margins, Circon
would, for example, still need to increase revenues by over 50% and more than
double margins to over 13% to achieve EPS of $1.22 or achieve a combination of
what USS believes are other equally improbable improvements.
We believe that a combination of our businesses makes sense, and we
encourage you to contact Circon's directors at the addresses set forth below
and ask them to let the shareholders decide. Thank you for your continued
support.
On behalf of the United States
Surgical Corporation Board of
Directors.
Leon C. Hirsch, Chairman
- -------------------------------------------------------------------------------
Circon Board Members
Richard Auhll John Blokker Rudolf R. Schulte
Circon Chairman and CEO Luxcom, Inc. 2927 De La Vina St.
6500 Hollister Avenue 3249 Laurelview Ct. Santa Barbara, CA
Santa Barbara, CA 93117-3019 Fremont, CA 94538 805-563-0821
805-685-5100 510-770-3300
Harold R. Frank Paul W. Hartloff
Applied Magnetics Corporation Jarvis, Hartloff & Simon
75 Robin Hill Road 15 W. Carillo St.
Goleta, CA 93117-5400 Santa Barbara, CA 93101-3212
805-683-5353 805-963-9500
<PAGE>
SUPPLEMENT TO THE OFFER TO PURCHASE DATED AUGUST 2, 1996
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
HAS AMENDED ITS OFFER AND IS NOW OFFERING TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$17 NET PER SHARE IN CASH
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 PM, NEW YORK CITY
TIME, ON THURSDAY, FEBRUARY 13, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS NOW CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING
VALIDLY TENDERED PRIOR TO THE EXPIRATION OF THE OFFER AND NOT WITHDRAWN THAT
NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY
PURCHASER AND ITS AFFILIATES, WOULD REPRESENT 67% OF THE OUTSTANDING SHARES ON
A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) THE ACQUISITION OF SHARES
PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVING BEEN APPROVED PURSUANT TO
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW ("SECTION 203") OR THE
PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROVISIONS OF
SECTION 203 ARE OTHERWISE INAPPLICABLE TO THE ACQUISITION OF SHARES PURSUANT
TO THE OFFER AND THE PROPOSED MERGER AND (III) THE PURCHASER BEING SATISFIED
THAT THE RIGHTS (AS DEFINED HEREIN) HAVE BEEN REDEEMED BY THE COMPANY OR THE
RIGHTS ARE UNENFORCEABLE OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE
PROPOSED MERGER. THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS
CONTAINED IN THIS SUPPLEMENT. SEE SECTION 8 OF THIS SUPPLEMENT. THE OFFER IS
NOT CONDITIONED ON THE RECEIPT OF FINANCING.
----------------
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
----------------
December 18, 1996
<PAGE>
IMPORTANT
THE PURCHASER IS CURRENTLY REVIEWING ITS OPTIONS WITH RESPECT TO THE OFFER
AND MAY CONSIDER, AMONG OTHER THINGS, CHANGES TO THE MATERIAL TERMS OF THE
OFFER. IN ADDITION, PARENT AND THE PURCHASER INTEND TO SEEK TO NEGOTIATE WITH
THE COMPANY WITH RESPECT TO THE ACQUISITION OF THE COMPANY BY PARENT OR THE
PURCHASER. THE PURCHASER RESERVES THE RIGHT TO AMEND THE OFFER UPON ENTERING
INTO A SECOND-STEP MERGER AGREEMENT WITH THE COMPANY OR TO NEGOTIATE A MERGER
AGREEMENT WITH THE COMPANY NOT INVOLVING A TENDER OFFER PURSUANT TO WHICH THE
PURCHASER WOULD TERMINATE THE OFFER AND THE SHARES WOULD, UPON CONSUMMATION OF
SUCH MERGER, BE CONVERTED INTO CASH, PARENT COMMON STOCK, OTHER SECURITIES
AND/OR ANY COMBINATION THEREOF IN SUCH AMOUNTS AS ARE NEGOTIATED BY PARENT AND
THE COMPANY. THE PARENT AND PURCHASER ALSO MAY CONSIDER A PROXY CONTEST TO
ELECT UP TO TWO DIRECTORS TO CIRCON'S BOARD AT CIRCON'S NEXT ANNUAL MEETING OF
SHAREHOLDERS, BUT HAVE MADE NO DECISION IN THIS REGARD.
Any shareholder desiring to tender all or any portion of such shareholder's
Shares and associated Rights should either (i) complete and sign the revised
Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the revised Letter of Transmittal, have such shareholder's
signature thereon guaranteed if required by Instruction 1 to the revised
Letter of Transmittal, mail or deliver the revised Letter of Transmittal (or
such facsimile) and any other required documents to the Depositary and either
deliver the certificates for such Shares to the Depositary along with the
revised Letter of Transmittal (or facsimile) or deliver such Shares pursuant
to the procedure for book-entry transfer set forth in Section 2 of the Offer
to Purchase or (ii) request such shareholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
shareholder. A shareholder having Shares registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
shareholder desires to tender such Shares.
If a shareholder desires to tender Shares and such shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2 of the Offer to Purchase.
Questions and requests for assistance may be directed to Salomon Brothers
Inc, the Dealer Manager, or to Kissel-Blake Inc., the Information Agent, at
their respective addresses and telephone numbers set forth on the back cover
of the Offer to Purchase or this Supplement. Additional copies of the Offer to
Purchase, this Supplement, the revised Letter of Transmittal, the revised
Notice of Guaranteed Delivery and other related materials may be obtained from
the Information Agent or the Dealer Manager or from brokers, dealers,
commercial banks and trust companies.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
INTRODUCTION............................................................ 1
THE AMENDED OFFER....................................................... 4
SECTION 1. AMENDED TERMS OF THE OFFER................................. 4
SECTION 2. PROCEDURES FOR TENDERING SHARES............................ 5
SECTION 3. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES............. 6
SECTION 4. CERTAIN INFORMATION CONCERNING THE COMPANY................. 6
SECTION 5. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.... 11
SECTION 6. SOURCE AND AMOUNT OF FUNDS................................. 12
SECTION 7. BACKGROUND OF THE OFFER SINCE AUGUST 2, 1996; REASONS FOR
REDUCTION IN PRICE........................................ 13
SECTION 8. AMENDED CONDITIONS OF THE OFFER............................ 29
SECTION 9. CERTAIN LEGAL MATTERS...................................... 33
SECTION 10. MISCELLANEOUS.............................................. 33
</TABLE>
<PAGE>
To the Holders of Shares of Common Stock of CIRCON CORPORATION:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated August 2, 1996 (the "Offer to Purchase"), of USS Acquisition Corp., a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of United
States Surgical Corporation, a Delaware corporation ("Parent"). Pursuant to
this Supplement to the Offer to Purchase (the "Supplement"), the Purchaser is
now offering to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of Circon Corporation, a Delaware corporation
(the "Company"), together with the associated preferred share purchase rights
(the "Rights") issued pursuant to the Preferred Shares Rights Agreement, dated
as of August 14, 1996, between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agreement"), at a price of $17
per Share (and associated Right), net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer
to Purchase, as amended and supplemented by this Supplement, and in the
related revised Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"). ALL REFERENCES HEREIN TO RIGHTS SHALL BE
DEEMED TO INCLUDE ALL BENEFITS THAT MAY INURE TO SHAREHOLDERS OF THE COMPANY
OR TO HOLDERS OF THE RIGHTS PURSUANT TO THE RIGHTS AGREEMENT AND, UNLESS THE
CONTEXT OTHERWISE REQUIRES, ALL REFERENCES TO SHARES SHALL INCLUDE THE
ASSOCIATED RIGHTS.
The purpose of the Offer and the Proposed Merger (as defined herein) is to
acquire control of, and the entire equity interest in, the Company. Parent
currently intends to propose and seek to have the Company consummate, as soon
as practicable following the consummation of the Offer, a merger or similar
business combination with the Purchaser (the "Proposed Merger"), pursuant to
which each then outstanding Share (other than Shares owned by the Purchaser or
Parent and Shares owned by shareholders who perfect any available appraisal
rights under the Delaware General Corporation Law (the "DGCL")), would be
converted into the right to receive an amount in cash equal to the price per
Share paid pursuant to the Offer and the Company would become a wholly owned
subsidiary of Parent. See Sections 11 and 12 of the Offer to Purchase.
Parent intends to seek to negotiate with the Company with respect to the
acquisition of the Company. If such negotiations result in a definitive merger
agreement between the Company and Parent, certain material terms of the Offer
may change. Accordingly, such negotiations could result in, among other
things, termination of the Offer and submission of a different acquisition
proposal to the Company's shareholders for their approval.
Except as otherwise set forth in this Supplement and in the revised Letter
of Transmittal, the terms and conditions previously set forth in the Offer to
Purchase remain applicable in all respects to the Offer, and this Supplement
should be read in conjunction with the Offer to Purchase. Unless the context
requires otherwise, capitalized terms used herein but not otherwise defined
herein have the meanings given to such terms in the Offer to Purchase.
THIS SUPPLEMENT DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY
MEETING OF THE COMPANY'S SHAREHOLDERS. ANY SUCH SOLICITATION WILL BE MADE ONLY
PURSUANT TO PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), AND
THE RULES AND REGULATIONS THEREUNDER.
Certain Conditions to the Offer
The Offer is now subject to the fulfillment of a number of conditions
including, without limitation, the following:
MINIMUM CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN
SECTION 1 BELOW) THAT
<PAGE>
NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY
PURCHASER AND ITS AFFILIATES, WOULD REPRESENT 67% OF THE SHARES OUTSTANDING ON
A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE "MINIMUM CONDITION"). FOR
PURPOSES OF THIS OFFER, "ON A FULLY DILUTED BASIS" MEANS, AS OF ANY DATE, THE
NUMBER OF SHARES OUTSTANDING, TOGETHER WITH SHARES THAT THE COMPANY IS THEN
REQUIRED TO ISSUE PURSUANT TO OBLIGATIONS OUTSTANDING AT THAT DATE UNDER
CONVERTIBLE SECURITIES, EMPLOYEE STOCK OPTIONS, WARRANTS OR BENEFIT PLANS OR
OTHERWISE (ASSUMING ALL SUCH OPTIONS AND WARRANTS ARE THEN EXERCISABLE).
As of the date of this Supplement, Parent beneficially owns 1,000,100 Shares
(approximately 8% of the Shares outstanding). According to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1996, as of
September 30, 1996, there were 13,224,267 Shares outstanding. According to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1995 (the "Company 10-K"), options to purchase 1,669,649 Shares were
outstanding under the Company's stock option plans and warrants to purchase
228,767 Shares had been issued. Accordingly, based on this information, as of
the date of this Supplement, there were 15,122,683 Shares outstanding on a
fully diluted basis, assuming (i) that no Shares were issued (other than those
reserved on December 31, 1995, for options and warrants then outstanding) or
acquired by the Company after September 30, 1996, (ii) the exercise of all of
the options and warrants outstanding as of December 31, 1995 on the date of
this Supplement and (iii) that as of the date of this Supplement there are no
other obligations to issue Shares. Based on the foregoing information and
assumptions, the Minimum Condition would be satisfied if at least 9,132,098
Shares are validly tendered pursuant to the Offer and not withdrawn. However,
the Minimum Condition will depend on the facts as they exist on the date on
which Shares are purchased pursuant to the Offer.
If the Minimum Condition is satisfied and the Offer is consummated, the
Purchaser believes that it would beneficially own in excess of 85% of the
Shares outstanding (excluding 1,418,142 Shares owned as of May 13, 1996 by
persons who are directors and also officers of the Company as reported in the
Company's Proxy Statement, dated June 17, 1996, relating to the Company's 1996
Annual Meeting of Shareholders (the "Company Proxy Statement")) at the time
the Offer commenced (based on 12,588,677 Shares outstanding as of May 13, 1996
as reported in the Company Proxy Statement, assuming that no Shares were
issued between May 13, 1996 and August 2, 1996, and assuming no Shares were
purchased or sold between such dates by persons who are directors and also
officers of the Company), and, accordingly, based on such information and
assumptions, the Business Combination Condition would be satisfied. However,
based on the actual facts and circumstances, it is possible that even if the
Minimum Condition is satisfied the Business Combination Condition may not be
satisfied. See "Business Combination Condition" below and Section 8 of this
Supplement.
BUSINESS COMBINATION CONDITION. THE OFFER IS CONDITIONED UPON THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVING
BEEN APPROVED PURSUANT TO SECTION 203 OR THE PURCHASER BEING SATISFIED, IN ITS
SOLE DISCRETION, THAT THE PROVISIONS OF SECTION 203 ARE OTHERWISE INAPPLICABLE
TO THE ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER
(THE "BUSINESS COMBINATION CONDITION"). THE PROVISIONS OF SECTION 203 ARE
DESCRIBED MORE FULLY IN SECTION 15 OF THE OFFER TO PURCHASE.
Section 203, in general, prohibits a Delaware corporation such as the
Company from engaging in a Business Combination (as defined in Section 15 of
the Offer to Purchase) with an Interested Stockholder (as defined in Section
15 of the Offer to Purchase) for a period of three years following the date
that such person became an Interested Stockholder unless (a) prior to the date
that such person became an Interested Stockholder, the board of directors of
the corporation approved either the Business Combination or the transaction
that resulted in the Interested Stockholder becoming an Interested
Stockholder, (b) upon consummation of the transaction that resulted in the
Interested Stockholder becoming an Interested Stockholder, the Interested
Stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding stock held
2
<PAGE>
by directors who are also officers of the corporation and employee stock plans
that do not provide employees with the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer, or (c) on or subsequent to the date such person became an
Interested Stockholder, the Business Combination is approved by the board of
directors of the corporation and authorized at a meeting of shareholders and
not by written consent, by the affirmative vote of the holders of at least 66
2/3% of the outstanding voting stock of the corporation not owned by the
Interested Stockholder. See Section 15 of the Offer to Purchase.
The Purchaser is hereby requesting that the Company's Board of Directors
adopt a resolution approving the Offer and the Proposed Merger for purposes of
Section 203. However, there can be no assurance that the Board of Directors of
the Company will do so.
If the Purchaser purchases 8,494,855 Shares pursuant to the Offer (assuming
no Shares were issued between May 13, 1996 and August 2, 1996 and assuming no
Shares were purchased or sold by persons who are directors and also officers
of the Company between such dates), the Purchaser believes that it would
beneficially own at least 85% of the Shares outstanding at the time the Offer
commenced (excluding 1,418,142 shares owned as of May 13, 1996 by persons who
are directors and also officers of the Company, as reported in the Company
Proxy Statement) and the Business Combination Condition would be satisfied.
However, there can be no assurance as to whether any Shares were issued
between May 13, 1996 and August 2, 1996 or as to whether Shares were purchased
or sold by persons who are directors and also officers of the Company between
such dates and, to the extent that Shares were issued between such dates or
shares were purchased or sold by persons who are directors and also officers
of the Company between such dates, the purchase of 8,494,855 Shares by the
Purchaser pursuant to the Offer may not result in the Business Combination
Condition being satisfied. Based on the actual facts and circumstances, it is
possible that the Business Combination Condition may not be satisfied even if
the Minimum Condition is satisfied.
RIGHTS CONDITION. THE OFFER IS CONDITIONED UPON THE PURCHASER BEING
SATISFIED IN ITS SOLE JUDGMENT THAT EITHER THE RIGHTS HAVE BEEN REDEEMED BY
THE COMPANY OR THE RIGHTS ARE UNENFORCEABLE OR OTHERWISE INAPPLICABLE TO THE
OFFER AND THE PROPOSED MERGER (THE "RIGHTS CONDITION"). A COPY OF THE RIGHTS
AGREEMENT WAS FILED WITH THE COMMISSION AS AN EXHIBIT TO THE COMPANY'S
REGISTRATION STATEMENT ON FORM 8-A, DATED AUGUST 14, 1996 (THE "COMPANY 8-A"),
AND SHOULD BE AVAILABLE FOR INSPECTION, AND COPIES MAY BE OBTAINED, IN THE
MANNER SET FORTH UNDER "AVAILABLE INFORMATION" IN SECTION 8 OF THE OFFER TO
PURCHASE. THE PROVISIONS OF THE RIGHTS AGREEMENT ARE DESCRIBED IN SECTION 4 OF
THIS SUPPLEMENT AND IN THE COMPANY 8-A.
Parent has filed a suit against the Company in the Court of Chancery for the
State of Delaware, seeking, among other things, an order enjoining the
operation of the Rights and declaring that the Rights are inapplicable or
unenforceable as applied to the Offer and the Proposed Merger. See Section 9
of this Supplement.
Certain other conditions to the Offer are described in Section 8 of this
Supplement. The Purchaser expressly reserves the right, in its sole
discretion, to waive any one or more of the conditions to the Offer. See
Section 8 of this Supplement. The Offer is not conditioned on the receipt of
financing.
THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
3
<PAGE>
THE AMENDED OFFER
1. AMENDED TERMS OF THE OFFER
The terms of the Offer are set forth in Section 1 of the Offer to Purchase
as supplemented by Section 1 of this Supplement.
The price per Share to be paid pursuant to the Offer has been decreased from
$18.00 per Share to $17.00 per Share, net to the seller in cash and without
interest thereon. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of
any extension or amendment), the Purchaser will accept for payment and pay the
decreased price for all Shares validly tendered and not withdrawn prior to the
Expiration Date (including shares tendered prior to the date of this
Supplement). The term "Expiration Date" means 6:00 p.m., New York City time,
on Thursday, February 13, 1997, unless and until the Purchaser, in its sole
discretion, shall have extended the period of time during which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by the Purchaser, will expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM CONDITION, THE BUSINESS COMBINATION CONDITION, THE RIGHTS CONDITION
AND THE SATISFACTION OF THE OTHER CONDITIONS SET FORTH IN SECTION 8 OF THIS
SUPPLEMENT. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
Subject to the applicable rules and regulations of the Securities and
Exchange Commission (the "Commission"), the Purchaser reserves the right, in
its sole discretion, at any time and from time to time, and regardless of
whether or not any of the events set forth in Section 8 hereof shall have
occurred or shall have been determined by the Purchaser to have occurred, to
(a) extend the period of time during which the Offer is open, and thereby
delay acceptance for payment of and the payment for any Shares, by giving oral
or written notice of such extension and delay to the Depositary and (b) waive
any condition or amend the Offer in any other respect by giving oral or
written notice of such waiver or amendment to the Depositary. During any such
extension, all Shares previously tendered and not properly withdrawn will
remain subject to the Offer, subject to the right of a tendering shareholder
to withdraw such shareholder's Shares. See Section 3 of the Offer to Purchase.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR
TENDERED SHARES, WHETHER OR NOT THE PURCHASER EXERCISES ITS RIGHT TO EXTEND
THE OFFER.
If by the Expiration Date any or all of the conditions to the Offer have not
been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the applicable rules and regulations of the Commission,
to (a) terminate the Offer and not accept for payment or pay for any Shares
and return all tendered Shares to tendering shareholders, (b) waive all the
unsatisfied conditions and accept for payment and pay for all Shares validly
tendered prior to the Expiration Date, (c) extend the Offer and, subject to
the right of shareholders to withdraw Shares until the Expiration Date, retain
the Shares that have been tendered during the period or periods for which the
Offer is extended or (d) amend the Offer.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 8 of this Supplement.
There can be no assurance that the Purchaser will exercise its right to extend
the Offer. Any extension, amendment or termination will be followed as
promptly as practicable by public announcement. In the case of an extension,
Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the announcement be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date, in accordance with the public announcement
requirements
4
<PAGE>
of Rule 14d-4(c) under the Exchange Act. Subject to applicable law (including
Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any
material change in the information published, sent or given to shareholders in
connection with the Offer be promptly disseminated to shareholders in a manner
reasonably designed to inform shareholders of such change), and without
limiting the manner in which the Purchaser may choose to make any public
announcement, the Purchaser will not have any obligation to publish, advertise
or otherwise communicate any such public announcement other than by making a
release to the Dow Jones News Service. As used in the Offer to Purchase and
this Supplement, "business day" has the meaning set forth in Rule 14d-1 under
the Exchange Act.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment (whether before or after its acceptance
for payment of Shares) for Shares or it is unable to pay for Shares pursuant
to the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
shareholders are entitled to withdrawal rights as described in Section 3 of
the Offer to Purchase.
The Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act
requires the Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer and (ii)
the Purchaser may not delay acceptance for payment of, or payment for (except
in order to comply with applicable law), any Shares upon the occurrence of any
of the events specified in Section 8 without extending the period of time
during which the Offer is open.
If the Purchaser makes a material change in the terms of the Offer or waives
a material condition of the Offer, the Purchaser will extend the Offer and
disseminate additional tender offer materials to the extent required by Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during
which the Offer must remain open following material changes in the terms of
the Offer or information concerning the Offer, other than a change in price or
a change in the percentage of securities sought, will depend upon the facts
and circumstances then existing, including the relative materiality of the
changed terms or information. With respect to a change in price or a change in
the percentage of securities sought, a minimum period of 10 business days is
generally required to allow for adequate dissemination to shareholders and
investor response.
Pursuant to Rule 14d-5 of the Exchange Act, on or about December 20, 1996
this Supplement, the related revised Letter of Transmittal and other relevant
materials will be delivered to the Company for mailing to record holders of
Shares, and the Company will cause such materials to be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the shareholder lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. PROCEDURES FOR TENDERING SHARES
Procedures for tendering Shares are set forth in Section 2 of the Offer to
Purchase, as supplemented by this Section 2 of this Supplement.
Tendering shareholders should use the revised GOLD Letter of Transmittal or
the revised PINK Notice of Guaranteed Delivery included with this Supplement.
However, to the extent the revised GOLD Letter of Transmittal or the revised
PINK Notice of Guaranteed Delivery is not obtainable, tendering shareholders
may continue to use the BLUE Letter of Transmittal and the GREY Notice of
Guaranteed Delivery that were provided with the Offer to Purchase. Although
such BLUE Letter of Transmittal indicates that the Offer will expire at 12:00
midnight, New York City time on Thursday, August 29, 1996, shareholders will
be able to tender their shares pursuant to the Offer until 6:00 p.m., New York
City time, on Thursday, February 13, 1997 (or such later date to which the
Offer may be extended). SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED
SHARES PURSUANT TO THE OFFER
5
<PAGE>
USING THE BLUE LETTER OF TRANSMITTAL OR THE GREY NOTICE OF GUARANTEED DELIVERY
AND WHO HAVE NOT PROPERLY WITHDRAWN SUCH SHARES HAVE VALIDLY TENDERED SUCH
SHARES FOR THE PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY
FURTHER ACTION.
Unless the Rights are redeemed prior to the expiration of the Offer,
shareholders will be required to tender one Right for each Share tendered in
order to effect a valid tender of such Share. If Right Certificates (as
defined herein) have been distributed to holders of Shares prior to the date
of tender pursuant to the Offer, Right Certificates representing a number of
Rights equal to the number of Shares being tendered must be delivered to the
Depositary in order for such Shares to be validly tendered. If Right
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares without Rights constitutes an
agreement by the tendering shareholder to deliver Right Certificates
representing a number of Rights equal to the number of Shares tendered
pursuant to the Offer to the Depositary within three Nasdaq National Market
trading days after the date Right Certificates are distributed. The Purchaser
reserves the right to require that it receive such Right Certificates prior to
accepting Shares for payment. Payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of, among other things, Right Certificates, if such certificates
have been distributed to holders of Shares. The Purchaser will not pay any
additional consideration for the Rights tendered pursuant to the Offer.
See Section 3 of the Offer to Purchase for the procedures for withdrawing
Shares tendered pursuant to the Offer.
3. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
The discussion set forth in Section 6 of the Offer to Purchase is hereby
amended and supplemented as follows:
The Shares are listed and traded on The Nasdaq National Market ("Nasdaq")
under the symbol CCON. According to the Company 10-K, as of December 31, 1995,
the Shares were held by approximately 1,237 holders of record. The following
table sets forth the high and low sales prices per Share as reported on the
Dow Jones Historical Stock Quote Reporter Service. According to the Company
10-K and the Company 10-Qs (as defined herein), the Company has not paid
dividends on the Shares during the periods covered.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1996:
Third quarter............................................. 19 1/2 8 1/2
Fourth quarter (through December 17)...................... 17 5/8 15 1/4
</TABLE>
On December 13, 1996, the last full trading day prior to Parent's
announcement that it was amending the Offer upon the terms set forth in this
Supplement, the closing sale price for the Shares was $16 3/8 per share. The
Offer Price of $17 per Share represents a premium of 73% over the average
closing sale price for the Shares over the ten trading day period ended on
August 1, 1996. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES.
4. CERTAIN INFORMATION CONCERNING THE COMPANY
The discussion set forth in Section 8 of the Offer to Purchase is hereby
amended and supplemented as follows:
The Rights. The following is a summary of the material terms of the Rights
Agreement. This summary is qualified in its entirety by reference to the
Rights Agreement, a copy of which has been filed with the Commission as an
Exhibit to the Company 8-A and should be available for inspection,
6
<PAGE>
and copies may be obtained, in the manner set forth under "Available
Information" in Section 8 of the Offer to Purchase. The Company 8-A describes
the Rights as follows:
On August 14, 1996, pursuant to a [Rights Agreement] the Company's
Board of Directors declared a dividend of one right (a "Right") to
purchase one one-thousandth share of the Company's Series A
Participating Preferred Stock ("Series A Preferred") for each
outstanding share of Common Stock, $.01 par value ("Common Shares"), of
the Company. The dividend is payable on August 26, 1996 (the "Record
Date") to stockholders of record as of the close of business on that
date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Preferred at an
exercise price of $70.00 (the "Purchase Price"), subject to adjustment.
RIGHTS EVIDENCED BY COMMON SHARE CERTIFICATES
The Rights will not be exercisable until the Distribution Date
(defined below). Certificates for the Rights ("Rights Certificates")
will not be sent to shareholders and the Rights will attach to and
trade only together with the Common Shares. Accordingly, Common Share
certificates outstanding on the Record Date (together with the Summary
of Rights being distributed by the Company to shareholders of record)
will evidence the Rights related thereto, and Common Share certificates
issued after the Record Date will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender or transfer of
any certificates for Common Shares, outstanding as of the Record Date,
even without notation or a copy of the Summary of Rights, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
DISTRIBUTION DATE
The Rights will separate from the Common Shares, Rights Certificates
will be issued and the Rights will become exercisable upon the earlier
of: (i) 10 days (or such later date as may be determined by a majority
of the directors in office prior to any person becoming an Acquiring
Person, as defined below and their approved successors (the "Continuing
Directors")) following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Shares, or (ii) 10 business days (or such
later date as may be determined by a majority of the Continuing
Directors) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares, provided, however, that
under the foregoing clause (ii), with respect to the unsolicited tender
offer by USS Acquisition Corp., a wholly-owned subsidiary of United
States Surgical Corporation for all outstanding Common Shares of the
Company as set forth in the Schedule 14D-1 filed with the Securities
and Exchange Commission on or about August 2, 1996, the Rights will
separate and become exercisable only at such date as is determined by
action of a majority of the Continuing Directors then in office. The
earlier of such dates is referred to as the "Distribution Date".
ISSUANCE OF RIGHTS CERTIFICATES; EXPIRATION OF RIGHTS
As soon as practicable following the Distribution Date, separate
Rights Certificates will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date and such
separate Rights Certificates alone will evidence the Rights from and
after the Distribution Date. All Common Shares issued prior to the
Distribution Date will be issued with Rights. Common Shares issued
after the Distribution Date may be issued with Rights if such shares
are issued (i) upon the conversion of outstanding convertible
debentures or any other convertible securities issued after adoption of
the Rights Agreement or (ii)
7
<PAGE>
pursuant to the exercise of stock options or under employee benefit
plans or arrangements unless such issuance would result in (or create a
risk that) such options, plans or arrangements would not qualify for
otherwise available special tax treatment. Except as otherwise
determined by the Board of Directors, no other Common Shares issued
after the Distribution Date will be issued with Rights. The Rights will
expire on the earliest of (i) August 14, 2006 (the "Final Expiration
Date") or (ii) redemption or exchange of the Rights as described below.
INITIAL EXERCISE OF THE RIGHTS
Following the Distribution Date, and until one of the further events
described below, holders of the Rights will be entitled to receive,
upon exercise and the payment of $70.00 per Right, one one-thousandth
share of the Series A Preferred.
RIGHT TO BUY COMPANY COMMON SHARES
Unless the Rights are earlier redeemed, in the event that an
Acquiring Person becomes the beneficial owner of 15% or more of the
Company's Common Shares then outstanding, then each holder of a Right
which has not theretofore been exercised (other than Rights
beneficially owned by the Acquiring Person, which will thereafter be
void) will thereafter have the right to receive, upon exercise, Common
Shares having a value equal to two times the Purchase Price. In the
event that the Company does not have sufficient Common Shares available
for all Rights to be exercised, or the Board decides that such action
is necessary and not contrary to the interests of Rights holders, the
Company may instead substitute cash, assets or other securities for the
Common Shares for which the Rights would have been exercisable under
this provision or as described below.
RIGHT TO BUY ACQUIRING COMPANY STOCK
Similarly, unless the Rights are earlier redeemed, in the event that,
after an Acquiring Person becomes the beneficial owner of 15% or more
of the Company's Common Shares then outstanding, (i) the Company is
acquired in a merger or other business combination transaction, or (ii)
50% or more of the Company's consolidated assets or earning power are
sold, proper provision must be made so that each holder of a Right
which has not theretofore been exercised (other than Rights
beneficially owned by the Acquiring Person, which will have become
void) will thereafter have the right to receive, upon exercise, shares
of common stock of the acquiring company having a value equal to two
times the Purchase Price.
EXCHANGE PROVISION
At any time after the acquisition by an Acquiring Person of 15% or
more of the Company's outstanding Common Shares and prior to the
acquisition by such Acquiring Person of 50% or more of the Company's
outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by the Acquiring Person),
in whole or in part, at an exchange ratio of one Common Share per
Right.
REDEMPTION
At any time on or prior to the close of business on the earlier of
(i) the 10th day following first public announcement that a person has
become an Acquiring Person (the "Share Acquisition Date") or such later
date as may be determined by a majority of the Continuing Directors and
publicly announced by the Company, or (ii) the Final Expiration Date of
the Rights, the Company may redeem the Rights in whole, but not in
part, at a price of $0.01 per Right.
ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price payable, the number of Rights, and the number of
Series A Preferred or Common Shares or other securities or property
issuable upon exercise of the Rights are subject to adjustment from
time to time in connection with the dilutive issuances by the
8
<PAGE>
Company as set forth in the Rights Agreement. With certain exceptions,
no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase
Price.
CASH PAID INSTEAD OF ISSUING FRACTIONAL SHARES
No fractional portion less than integral multiples of one Common
Share will be issued upon exercise of a Right and in lieu thereof, an
adjustment in cash will be made based on the market price of the Common
Shares on the last trading date prior to the date of exercise.
NO STOCKHOLDERS' RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting
from such holder's ownership of Common Shares), including, without
limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS AGREEMENT
The provisions of the Rights Agreement may be supplemented or amended
by the Board of Directors in any manner prior to a person becoming an
Acquiring Person. After such date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any ambiguity,
defect or inconsistency, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the
Rights are not redeemable.
RIGHTS AND PREFERENCES OF THE SERIES A PREFERRED
Series A Preferred purchasable upon exercise of the Rights will not
be redeemable. Each share of Series A Preferred will be entitled to an
aggregate dividend of 1,000 times the dividend declared per Common
Share. In the event of liquidation, the holders of the Series A
Preferred will be entitled to a minimum preferential liquidation
payment equal to $70,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment. Following the payment of such amount, no
additional distributions shall be made to the holders of shares of
Series A Preferred unless, prior thereto, the holders of Common Shares
shall have received an amount per share equal to the quotient obtained
by dividing the amount paid to holders of Series A Preferred by 1,000.
Following the payment of each of these amounts, holders of Series A
Preferred and holders of Common Shares shall receive their ratable and
proportionate share of the remaining assets to be distributed in the
ratio of 1,000 to 1 with respect to such Series A Preferred and Common
Shares, on a per share basis, respectively. In the event of a
consolidation, merger or similar transaction by the Company, the
holders of the Series A Preferred will be entitled to receive an amount
per share equal to 1,000 times the aggregate amount of cash,
securities, or other property for which each Common Share is exchanged
in such transaction. Each share of Series A Preferred will have 1,000
votes, voting together with the Common Shares. These rights are
protected by customary anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights
of the shares of Series A Preferred, the value of the one one-
thousandth interest in a share of Series A Preferred purchasable upon
exercise of each Right should approximate the value of one Common
Share.
CERTAIN ANTI-TAKEOVER EFFECTS
. . . [T]he Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the
Board of Directors. The Rights may cause substantial dilution to a
person or group that attempts to acquire the Company on terms or in a
manner not approved by the Company's Board of Directors, except
pursuant to an offer conditioned upon the negation, purchase or
redemption of the Rights.
9
<PAGE>
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted or derived from the
information contained in the Company 10-K and the Company's Quarterly Reports
on Form 10-Q for the quarters ended September 30, 1995 and 1996 (the "Company
10-Qs"). More comprehensive financial information is included in the Company
10-K, the Company 10-Qs and other documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by
reference to such information. The Company 10-K, the Company 10-Qs and such
other documents should be available for inspection and copies thereof should
be obtainable in the manner set forth under "Available Information" in Section
8 of the Offer to Purchase.
CIRCON CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CIRCON CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
----------------- ----------------------------
1996(1) 1995 1995(2) 1994 1993(3)
-------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales.................... $115,393 $121,867 $ 160,447 $157,041 $156,861
Gross Profit................. 64,133 62,268 83,640 88,569 80,972
Operating Income (Loss)...... 4,269 946 3,820 13,753 (1,454)
Net Income (Loss)............ 839 (6,408) (5,393) 6,509 (6,212)
Net Income (Loss) per Share.. 0.06 (0.49) (0.41) 0.51 (0.50)
Weighted Average Shares
Outstanding................. 13,201 13,034 13,237 12,738 12,418
BALANCE SHEET DATA:
Total Assets................. $170,851 $181,642 $ 181,399 $184,129 $177,301
Total Debt................... 55,009 72,035 72,292 73,483 74,184
Total Shareholders' Equity... 95,816 83,026 87,172 86,965 81,768
</TABLE>
- --------
No cash dividends have been paid during the periods presented.
(1) The Company reserved $3,200 in the third quarter of 1996 for expenses
related to the Offer and certain stockholder litigation. The Company
recognized a $2,000 non-recurring tax benefit in the second quarter in
connection with the liquidation of Cabot Medical.
(2) In connection with the merger of the Company and Cabot, $13,369 (pre-tax)
of merger costs and non-recurring combination expenses were incurred and
charged to expense in the third quarter of 1995. These costs include
$8,433 associated with the elimination of duplicative, excess, and
obsolete inventories and related production equipment, and reorganizing
and cross training the sales force, and $4,936 of fees and other expenses
specifically associated with the merger process.
(3) During 1993, in response to anticipated changes in the health care
industry caused by proposed health care reform legislation, both the
Company and Cabot recorded special charges. This included $6,521 charged
to cost of sales for write-down of inventory related to product
restructuring, and $4,867 charged to operating expense, consisting of 1)
$2,034 write-off of salesmen's demonstration equipment and 2) $2,833 for
organization streamlining and facility rationalization program including
severance, relocation, disposal costs and other related charges.
Company Information. The information concerning the Company contained in
this Supplement has been taken from or based upon publicly available documents
on file with the Commission and other publicly available information. Although
Parent and the Purchaser do not have any knowledge that any such information
is untrue, neither the Purchaser nor Parent takes any responsibility for the
accuracy or completeness of such information or for any failure by the Company
to disclose events that may have occurred and may affect the significance or
accuracy of any such information.
10
<PAGE>
5. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Set forth below is certain selected consolidated financial information with
respect to Parent and its subsidiaries excerpted or derived from the
information contained in Parent's Annual Report on Form 10-K for the year
ended December 31, 1995 (the "Parent 10-K") and Parent's Quarterly Reports on
Form 10-Q for the nine month periods ended September 30, 1995 and 1996 (the
"Parent 10-Qs"). More comprehensive financial information is included in the
complete financial statements of Parent contained in the Parent 10-K and the
Parent 10-Qs on file with the Commission, and such financial statements are
incorporated herein by reference.
UNITED STATES SURGICAL CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
--------------------- --------------------------------
1996 1995(1) 1995(1) 1994(2) 1993(3)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales.............. $ 829,600 $ 759,000 $1,022,300 $ 918,700 $1,037,200
Income (loss) before
income taxes.......... 100,400 64,100 89,800 32,700 (137,400)
Net income (loss)...... 77,300 59,400 79,200 19,200 (138,700)
Net income (loss) per
common share and
common share
equivalent (primary
and fully diluted).... $1.05 $.79 $1.05 $.08 $(2.48)
Average number of
common shares and
common share
equivalents
outstanding........... 59,600 56,900 57,000 56,600 56,000
Dividends declared per
common share.......... $.06 $.06 $.08 $.08 $.245
BALANCE SHEET DATA:
Total assets........... $1,440,600 $1,185,000 $1,265,500 $1,103,500 $1,170,500
Long-term debt......... 152,600 211,200 256,500 248,500 505,300
Stockholders'
equity(4)............. 1,004,200 725,800 741,100 662,000 443,900
</TABLE>
- --------
(1) In the third quarter of 1995, Parent reached an agreement with respect to
the settlement of all issues raised by the Internal Revenue Service in the
examination of the Parent's income tax returns for the years 1984 through
1990. As a result of the agreement, Parent recognized a net credit to the
tax provisions of $10 million ($.18 per common share) in the third quarter
of 1995.
(2) In the fourth quarter of 1994, Parent signed a letter of intent to
purchase certain assets of its independent distributor in Japan, which
included inventory of Parent's products purchased by the independent
distributor but not yet sold to third parties at December 31, 1994. Sales
and Net Income were reduced by $17 million and $8 million ($.14 per common
share), respectively, in anticipation of the pending reacquisition of
these products and valuing these products at the Parent's cost.
(3) Income (loss) before income taxes and net income (loss) for 1993 include
restructuring charges of $137.6 million and $129.6 million ($2.31 per
share), respectively.
(4) Included in Stockholders' equity in 1996, 1995 and 1994 is $191.5 million
of convertible preferred stock which has liquidation value of $200.0
million.
11
<PAGE>
6. SOURCE AND AMOUNT OF FUNDS
The discussion set forth in Section 10 of the Offer to Purchase is hereby
amended and restated in its entirety as follows:
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer and to pay fees and expenses related to the Offer
and the Proposed Merger is estimated to be approximately $240 million. The
Purchaser plans to obtain all funds needed for the Offer and the Proposed
Merger through a capital contribution or loan from Parent. Certain covenants
in agreements relating to outstanding debt of the Company could require
prepayment by the Company of such debt in the event the Offer is consummated.
In such event, Parent would intend to negotiate waivers of such covenants or
to refinance such debt.
Parent plans to obtain the funds for such capital contribution or loan from
its available cash and working capital and pursuant to one or more credit
facilities as described below.
Parent has entered into a definitive credit agreement (the "New Credit
Agreement"), dated September 16, 1996, among Parent, the lenders party
thereto, The Bank of New York, as Administrative Agent, and Morgan Guaranty
Trust Company of New York, as Documentation Agent, to provide Parent and the
Purchaser with financing. The New Credit Agreement provides up to $175 million
in borrowings in addition to Parent's existing $325 million credit facility
which is described below. Closing of the New Credit Agreement, which must
occur prior to any borrowings, is subject to certain conditions, including,
among other things, (i) the inapplicability of the Rights Agreement to the
Offer; (ii) the inapplicability of Section 203 to the Offer; (iii) the
acquisition by Parent or the Purchaser of sufficient shares to approve the
Proposed Merger without the approval of any other shareholders of the Company;
(iv) the satisfaction of all conditions to the Offer; and (v) the approval of
the Merger, if required, by the board of directors of the Company. Borrowings
under the New Credit Agreement are subject to certain specified conditions
including, among other things, the absence of any defaults under the New
Credit Agreement.
The final maturity date of the New Credit Agreement is January 5, 2001. The
definitive credit documentation contains pricing and other terms substantially
similar to those of the Credit Agreement (as defined herein).
Parent has entered into the New Credit Agreement in order to obtain funds to
be used to purchase shares in the Offer. In addition to the funds to be
borrowed pursuant to the New Credit Agreement, Parent will obtain the funds to
be contributed or loaned to Purchaser from its available cash and working
capital and pursuant to its primary credit agreement (the "Credit Agreement"),
dated as of December 20, 1995, among Parent, certain of Parent's subsidiaries,
NationsBank, N.A., as Administrative Agent, The Bank of New York, as Yen
Administrative Agent, Morgan Guaranty Trust Company of New York, as
Documentation Agent, and the signatory banks thereto. The Credit Agreement
provides for up to $325 million in borrowings, and as of November 30, 1996,
approximately $7 million in borrowings, representing the U.S. dollar
equivalent of yen borrowings were outstanding. The Credit Agreement provides
Parent with a choice of interest rates based upon the CD rate, the prime rate,
or the LIBOR, for U.S. dollar borrowings. Prime rate loans bear interest at
the higher of the prime rate as established by NationsBank, N.A. and the sum
of the federal funds rate plus .5%. The actual interest charges paid by the
Company for LIBOR and CD rate loans are determined by a pricing schedule which
considers the ratio of consolidated debt at each calendar quarter end to
consolidated earnings before interest, taxes, depreciation and amortization
for the trailing twelve months. Additional borrowings under the Credit
Agreement are subject to the satisfaction of certain conditions contained
therein. Parent expects that future borrowings under the Credit Agreement will
be LIBOR based. Under the Credit Agreement, the interest rate at December 1,
1996 for a three month LIBOR borrowing would be approximately 5.8%. Parent is
also subject to facility fees (ranging from 15 to 35 basis points per annum).
The Credit Agreement includes representations and warranties, covenants,
events of default and other terms customary to financings of that type.
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A copy of the New Credit Agreement was filed as Exhibit (10)(a) to Parent's
Quarterly Report on Form 10-Q for the period ended September 30, 1996 and is
incorporated herein by reference.
7. BACKGROUND OF THE OFFER SINCE AUGUST 2, 1996; REASONS FOR REDUCTION IN
PRICE
The discussion set forth in Section 11 of the Offer to Purchase is hereby
amended and supplemented as follows:
On August 2, 1996, Parent announced that it had commenced the Offer and
published a summary advertisement announcing the commencement of the Offer.
On August 15, 1996, the Company's Board of Directors recommended that
stockholders not tender their Shares to Parent. The Company's
Solicitation/Recommendation Statement on Schedule 14D-9, dated August 14, 1996
(together with all amendments thereto, the "Schedule 14D-9"), disclosed, among
other things, that the Board of Directors of the Company had determined that
. . . [T]he best means for providing value to its stockholders is for
the Company to continue to pursue its strategic plan and not to be put
up for sale at this time. The Board unanimously concluded that the
Offer is inadequate and not in the best interests of the Company and
its stockholders. In particular, the Board determined that the
Company's strategic plan offers the potential for greater long term
benefits for the Company's stockholders than the Offer, based on, among
other things, greater opportunities for business expansion, revenue and
earnings growth, as well as benefits following the full integration of
the business of [Cabot] into the Company.
On August 16, 1996, the Company announced that it had mailed the following
letter to all of its employees:
August 16, 1996
FELLOW EMPLOYEES:
You are all aware that two weeks ago, U.S. Surgical announced that it
was making an offer to acquire Circon. Specifically, they began a
tender offer for Circon shares at $18 per share. A tender offer is a
particular offer to buy Circon common stock that is governed by the
federal securities laws. Under these laws, the offer cannot close until
August 29; that is, U.S. Surgical cannot buy shares, even if
stockholders want to sell them, until that date.
This is an unsolicited offer. We have never said Circon was for sale.
We are not trying to sell the company. We did not ask U.S. Surgical to
make an offer. We did not even know it was coming. I was informed of
the offer for the first time the night before it was made.
But I and the other members of the Board of Directors have a
fiduciary duty to carefully review any offer and to decide if it is in
the best interests of the stockholders, employees, customers and other
constituencies to accept or reject the offer. The Board has now carried
out this duty. We have met on several occasions over the last ten days
to consider the offer. We retained expert financial and legal advisers
to assist the Board. We reviewed the offer and the company's situation,
including the company's strategic plan, in detail and reached a
decision based on this careful and thorough study.
Based on this review, the Board unanimously rejected U.S. Surgical's
offer. Circon was not for sale before this offer, and we are still not
trying to sell the company. We have a strategic plan in place. It is an
excellent plan, and we are confident that we can continue to put it
into effect. We believe it will produce superior value for our
stockholders. We also decided that even if we were planning to sell the
company, the price that U.S. Surgical has offered is entirely
inadequate. Additionally, U.S. Surgical's offer is highly conditional.
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Therefore, the board formally recommended that our stockholders not
tender their shares to U.S. Surgical. That recommendation is included
in documents we sent to all stockholders earlier today.
The Board took one other action that is important in this context. We
adopted a stockholders rights plan. These plans are becoming
increasingly common these days and are already in place in many of the
Fortune 500 companies. What our plan means is this: if U.S. Surgical,
or any other stockholder, acquires more than 15 percent of all our
shares without Board approval, then every other stockholder essentially
has the right to purchase additional shares at a price equal to half
their market value.
The importance of this stockholders rights plan is that it makes it
very expensive--prohibitively expensive--for someone to take over
Circon without the approval of the Board of Directors. The Board has
the opportunity to examine all alternatives and make a decision or
recommendation that is best for stockholders, and also look out for the
interests of employees and customers.
This morning, we filed a formal statement, saying these things, with
the Securities and Exchange Commission, sent a copy of this statement
to all of our stockholders, and issued a press release announcing our
decision. The question is: What happens now? And what does it mean for
you?
Unless we hear something to the contrary, we have to assume that U.S.
Surgical is going to proceed with its tender offer despite our Board's
negative recommendation. It is a definite possibility that U.S.
Surgical will take legal action challenging Board actions including the
stockholders rights plan.
The U.S. Surgical offer expires on August 29th. But is very common
for these offers to be extended once, twice, even half a dozen times.
That often happens when the company making the offer does not get
enough shares tendered, and hopes that with a little more time, it can
change a few more minds. Bruce Thompson and I will be spending a lot of
time between now and the 29th talking to our stockholders, and we
expect U.S. Surgical will be doing exactly the same.
An extension could also happen because, in the end, it will be very
difficult for U.S. Surgical to succeed without gaining the approval of
the Board. So they could keep extending their offer to try to increase
the pressure on us. The process could go on for quite a long time. Just
last week, we heard that Moore Corporation dropped its effort to take
over Wallace Computer Services after a year of trying. Earlier this
year, Hasbro turned back a hostile bid from Mattel, and Alumax turned
back one from Kaiser Aluminum.
It is also very common these days for bidders and others to file
lawsuits to try and further pressure the Board. Just looking at recent
offers, the Wallace and Hasbro Boards were sued within days after their
rejection of bids.
There are a number of other things that could happen. I am not going
to try to list them all here. The important point is that the Board's
position is this: We have got a great future ahead of us. That future
is going to create a lot of value for our stockholders. We do not need
to sell the company to create this value for our stockholders. And,
even if we did want to sell, this offer just would not cut it.
We will keep you informed of new developments as they arise. But I
understand that this is a disturbing period for all of you. It is tough
to concentrate. Believe me, I feel exactly the same way. But I know we
are taking the right course, and I am confident we can make it work.
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The Board knows that employee morale and security are essential if we
are going to keep this company growing and do all the things we need to
do in the coming months. For that reason, the Board has engaged a
consultant to advise us on an employee retention program that is
appropriate for our situation. We have asked our consultant to move
quickly, and I will report back to you on whatever decision we make.
Two more things: Now that we have said "no" to U.S. Surgical, you may
find members of the press trying to get comments they can put in their
newspapers. A remark that is taken out of context could be harmful to
us. So let me ask that you refer any press inquiries you receive to
Bruce Thompson's office. You may also get calls from stock market
speculators, although they may identify themselves otherwise. Send
these calls to Bruce's office as well. The rule should be: don't
discuss anything related to the current situation with people outside
the company.
Lastly, in a situation like this, success is often the best defense.
The better we perform, the more investors will believe in our strategic
plan, and in our ability to make it happen.
As you all know, we have had a bumpy ride in the last few months--for
a lot of reasons I do not need to rehash here. That is why our stock
price has dropped to a point where U.S. Surgical can make a low-ball
offer look like a big premium. I hope you also know, we are starting to
see light at the end of the tunnel, and we feel very good about our
chances of getting back on our growth track in the near future. I
suspect that is one reason why U.S. Surgical is so interested right now
at this moment.
The fact that we are getting back on track is due to a lot of hard
work from all of you. I and all members of the Board, are deeply
appreciative of the effort and ingenuity you have put into Circon. But
this is not the time to let up. Now, more than ever, our performance
really matters.
Sincerely,
CIRCON CORPORATION
/s/ Richard A. Auhll
RICHARD A. AUHLL
President
Chairman of the Board
On August 16, 1996, Parent issued the following press release:
NORWALK, CONN.--United States Surgical Corporation (NYSE:USS) announced
today that it stands behind its cash tender offer, commenced on August
2, 1996, for all the outstanding common shares of Circon Corporation
(NASDAQ:CCON) at $18 per share.
Leon C. Hirsch, Chairman and Chief Executive Officer of United States
Surgical Corporation, said, "We are disappointed that Circon's Board of
Directors has shown what we believe to be a total disregard for the
best interest of its shareholders in summarily rejecting our offer.
Circon's Board made their decision without even attempting to contact
or meet with us to discuss the offer.
"Despite Circon's poor performance, missed forecasts and deteriorating
shareholder value before our tender, their directors offer shareholders
no alternative and no firm value other than a continuation of a
"strategic plan' that has not produced results. Instead, they adopt a
poison pill in an attempt to forbid their shareholders from accepting
our generous offer, which represents a premium of 83% over the average
closing price of Circon's common stock during the ten days prior to the
offer.
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"We remain confident that this is a highly attractive opportunity for
Circon shareholders and we expect that they will make their own
sentiments clearly known to Circon's Board and management.
"In our conversation on August 1st, Richard A. Auhll, Chairman,
President and Chief Executive Officer of Circon, said that he would
confer with his advisors and get back to me. Neither Mr. Auhll, nor any
of his management team, directors or advisors has contacted us.
"We believe U.S. Surgical's proposal is in the best interest of
Circon's shareholders and employees. The sales and operating synergies
between U.S. Surgical and Circon are significant, and together the
companies can better serve customers and employees." Mr. Hirsch added,
"Delaying direct discussions postpones these benefits for all. We hope
Circon's management and directors will recognize their duty and
obligations to their shareholders, and enter into meaningful
discussions to move the proposed merger forward."
United States Surgical Corporation is a diversified surgical products
company specializing in technologies that improve patient care and
lower health care costs.
On August 17, 1996, the 15-day waiting period under the HSR Act expired.
On August 19, 1996, the Company issued the following press release:
SANTA BARBARA, CALIFORNIA (AUGUST 19, 1996)--Circon Corporation
(NASDAQ-NMS:CCON) announced today that it and certain of its officers
and the individuals who serve on its board of directors were named as
defendants in three lawsuits filed last week in Delaware Chancery
Court. The three suits were brought by individuals who claim to be
stockholders of Circon. Each suit seeks to be certified as a class
action on behalf of all Circon stockholders. The suits, which are
similar in substance, allege that Circon and the named individuals
violated certain fiduciary duties to Circon's stockholders in
connection with the Company's response to an unsolicited tender offer
made by United States Surgical Corporation on August 2, 1996. The
complaints seek various forms of relief, including injunctive relief
and unspecified monetary damages. Circon has reviewed the allegations
and claims contained in the plaintiffs' complaints, and believes that
they are without merit. The Company and the named individuals intend to
vigorously defend against these claims.
Circon is the leading U.S. supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products
as endoscopes and video systems, and such disposable products as
urological stents, laproscopic suction-irrigation devices, and a wide
variety of gynecological products.
On August 20, 1996, Parent issued the following press release:
NORWALK, CONN.--United States Surgical Corporation (NYSE:USS)
announced, with respect to its $18 cash tender offer for all
outstanding shares of common stock of Circon Corporation (NASDAQ:CCON),
that the Hart-Scott-Rodino waiting period has expired. This waiting
period refers to the time during which the government could review the
proposed merger and raise anti-trust concerns. As a result, no further
governmental review is required to consummate the offer. A USS
spokesperson stated that, "The company is pleased in overcoming our
first obstacle to concluding our proposal to acquire Circon".
The tender offer is scheduled to expire at midnight, EDT on Thursday,
August 29, 1996 unless extended.
United States Surgical Corporation is a diversified surgical products
company specializing in technologies that improve patient care and
lower health care costs.
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On August 27, 1996, the Company issued the following press release announcing
that its board of directors had adopted certain employee retention plans:
SANTA BARBARA, CALIFORNIA (AUGUST 27, 1996)--Circon Corporation
(NASDAQ-NMS: CCON) announced today that its board of directors has
adopted a plan to retain certain key Circon employees by providing them
with retention benefits payable upon their remaining with the Company
for a specified period, and certain severance benefits payable upon an
involuntary termination of employment, following a change in control of
the Company.
Richard Auhll, chairman of the board, president, and chief executive
officer of Circon stated, "The key to our business is attracting and
retaining a highly skilled workforce. The board has determined that it
is in the best interests of the Company and its stockholders to assure
that the Company will have the continued dedication of our employees,
notwithstanding the possibility, threat, or occurrence of a change in
control of the Company. This Plan is designed to help the Company
retain our employees, thereby enabling Circon to pursue its strategic
plan."
Circon is the subject of a hostile tender offer by U.S. Surgical which
is scheduled to expire August 29, 1996. In a release dated August 15,
1996, Circon's board recommended that its stockholders reject U.S.
Surgical's bid and recommended that they not tender their shares. At
the same time, the Company announced a Stockholders Rights Plan.
Circon is the leading U.S. supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products
as endoscopes and video systems, and such disposable products as
urological stents, laparoscopic suction-irrigation devices, and a wide
variety of gynecological products.
On August 30, 1996, Parent issued a press release announcing an extension of
the Offer until 6:00 p.m. New York City time, on September 30, 1996, unless
further extended.
On August 30, 1996 the Company issued the following press release:
SANTA BARBARA, CALIFORNIA (AUGUST 30, 1996)--Circon Corporation
(NASDAQ-NMS:CCON) responded today to U.S. Surgical's extension of its
tender offer which was scheduled to expire August 29, but was extended
by U.S. Surgical without their purchasing any shares tendered. U.S.
Surgical continues to own only 1,000,100 shares of Circon stock.
Richard A. Auhll, chairman of the board, president, and chief executive
officer of Circon said, "We continue to strongly recommend that our
stockholders not tender their shares. We firmly believe that execution
of our strategic plan will generate superior value for our
stockholders."
U.S. Surgical made an unsolicited bid for Circon shares on August 2.
Circon announced on August 15 its board's recommendation that Circon
stockholders not tender their shares. At the same time, the Company
announced board approval of a Stockholders Rights Plan. Earlier this
week, Circon announced an Employee Retention Plan which would be
triggered in the event of any change in control of the Company. This
Plan is designed to retain key employees to strengthen the Company
during this period of uncertainty.
Circon is the leading US. supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products
as endoscopes and video systems, and such disposable products as
urological stents, laparoscopic suction-irrigation devices, and a wide
variety of gynecological products.
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<PAGE>
On September 3, 1996 the Company announced that it had mailed the following
letter to all of its employees:
Dear Fellow Employees:
I am writing to give you an update on the U.S. Surgical Corporation
(USSC) hostile tender offer, and to clear up some misconceptions you may
have encountered.
1. CURRENT SITUATION
We are not surprised that today USSC was forced to "extend" and not
consummate its August 2 hostile takeover offer because several of the
conditions of its offer could not be met.
Without the approval of our Board of Directors, this hostile offer
has very little chance of success due to our defensive positions. Our
Board has already rejected it. Current circumstances have encouraged
short term speculation in our stock. We believe in time we will attract
more shareholders interested in the strategic value of this Company.
As a practical matter, the extension of the offer extends this period
of distraction for all of us at Circon. Let me reiterate what I said to
you earlier this week: WE NEED YOU TO REMAIN FOCUSED. The best thing we
can do for ourselves and our Company is to continue to work hard to
serve our customers. We have a strategic plan in place which will
reward stockholders with greater value than they can obtain through
tendering their shares in this offer.
Now, I would like to give you important background information and
clear up any misconceptions or misinformation you may have encountered.
TENDERED vs OWNED SHARES
USSC still owns only 1.0 million shares of Circon stock. By
comparison, I own nearly 1.6 million shares. A "tendered share" is an
offer to sell a share to USSC. However, USSC has several means of not
actually buying a tendered share. One way is to unilaterally "extend"
the time when they would actually buy the tendered stock. They can also
unilaterally withdraw the offer to buy any stock at any time. Thus,
there is a big difference between a share owned by USSC and a share
tendered to USSC.
NUMBER OF SHARES TENDERED
We were not surprised, for several reasons, that 63% of the
outstanding shares were tendered to USSC. First of all, the selling
stockholders also have the right to cancel their tender at any time, so
they had nothing to lose by mailing theirs to USSC. Also, the activity
in Circon has attracted a number of short term speculators. Moreover,
in these situations it is not unusual to have a high percentage
tendered. For instance, when Moore made a hostile offer for Wallace
Computer, it obtained tenders for 73.5% of all stock just before it
FAILED in its attempt.
TIMING
The U.S. Surgical offer now expires on September 30th. But it is very
common for these offers to be extended once, twice, even half a dozen
times. That often happens when the company making the offer does not
get enough shares tendered and does not obtain the desired conditions.
An extension could also happen because, in the end, it will be very
difficult for U.S. Surgical to succeed without gaining the approval of
the Board. So they could keep extending their offer to try to increase
the pressure on us. The process could go on for quite a long
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time. Moore Corporation recently dropped its effort to take over
Wallace Computer Services after a year of trying. Earlier this year,
Hasbro turned back a hostile bid from Mattel, and Alumax turned back
one from Kaiser Aluminum.
2. BACKGROUND INFORMATION
CIRCON STOCKHOLDERS RIGHTS PLAN
On August 15, Circon announced a Stockholders Rights Plan to protect
all of its stockholders against coercive and abusive offers.
These plans are becoming increasingly common these days and are
already in place in many of the Fortune 500 companies. What our plan
means is this: if USSC or any other stockholder, acquires more than 15
percent of all our shares without Board approval, then every other
stockholder, except USSC, essentially has the right to purchase
additional Circon shares at half the market price. Also, under certain
conditions, Circon shareholders could also buy USSC stock at half the
market price.
The importance of this stockholders rights plan is that it makes it
very expensive--prohibitively expensive--for someone to take over
Circon without the approval of the Board of Directors.
EMPLOYEE RETENTION PLAN
On August 27, Circon announced an Employee Retention Plan to retain
certain key Circon employees by providing them with retention benefits
payable upon their remaining with the Company for a specified period,
and certain severance benefits payable upon an involuntary termination
of employment, following a change in control of the Company. We were
limited as to how many employees could be put onto the Plan, but all
employees benefit through our existing severance policy.
The key to our business is attracting and retaining a highly skilled
workforce. The Board determined that it is in the best interest of
Circon and its stockholders to assure that the Company will have the
continued dedication of our employees with the possibility, threat, or
occurrence of a change in control of the Company. This Plan is designed
to help Circon retain its employees, thereby enabling successful
pursuit of its strategic plan.
LAWSUITS
It is very common these days for hostile bidders and others to file
lawsuits to try and pressure the Board. Just look at recent offers. The
Wallace and Hasbro Boards were sued within days after their rejection
of bids. Lawsuits are an every day part of business. I would not be
surprised that if the Board had accepted the USSC offer, it would have
been sued by many shareholders as well.
3. CONCLUSION
This was an unsolicited offer. We have never said Circon was for
sale. We are not trying to sell the Company. We did not even know the
offer was coming. I was informed of the offer for the first time the
night before it was made.
There are a number of other things that could happen going forward. I
am not going to try to list them all here. We have retained expert
financial and legal advisors to help us prevail, no matter what USSC
does. The important point is that the Board's position is this: we have
a great future ahead of us. That future is going to create a lot of
value for our stockholders. We do not need to sell the Company to
create this value for our stockholders.
Lastly, in a situation like this, success is often the best defense.
The better we perform, the more investors will believe in our strategic
plan, and in our ability to make it happen.
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<PAGE>
As you know, we have had a bumpy ride in the last few months--for a
lot of reasons I do not need to rehash here. That is why our stock
price has dropped to a point where USSC can make a low-ball offer look
like a big premium. I hope you also know, we are making good progress
and feel very good about our chances of getting back on our growth
track in the near future. I suspect that is one reason why USSC is so
interested in Circon.
The fact that we are getting back on track is due to a lot of hard
work from all of our team. I and all members of the Board, are deeply
appreciative of the effort and ingenuity you have put into Circon. But
this is not the time to let up. Now, more than ever, our performance
really matters.
Sincerely,
CIRCON CORPORATION
/s/ Richard A. Auhll
RICHARD A. AUHLL
President
Chairman of the Board
On September 17, 1996 Parent filed a suit against the Company in the Court
of Chancery for the State of Delaware, asking the court, among other things,
to enjoin and void the Company's recently adopted "poison pill" and "golden
parachutes." See Section 9 of this Supplement.
On September 17, 1996, Parent issued the following press release:
NORWALK, Conn.--United States Surgical Corporation (NYSE:USS) announced
today that it has filed suit against Circon Corporation (NASDAQ:CCON)
in the Court of Chancery for the State of Delaware, asking the court to
enjoin and void Circon's recently adopted "poison pill" and "golden
parachutes."
The lawsuit claims that Circon's Board of Directors breached their
fiduciary duties by adopting the "poison pill" and "golden parachutes"
for the improper sole purpose of cementing President and CEO Richard A.
Auhll's continuing control over the company which he founded. The
lawsuit cites Mr. Auhll's recent statement to Circon's employees that
Circon has "retained expert financial and legal advisors to help us
prevail NO MATTER WHAT USS DOES" (emphasis added), as confirmation that
Circon's Board has determined to resist any offer threatening Mr.
Auhll's control, regardless of the price of the offer or the
consequences of such resistance to Circon's shareholders.
The lawsuit further claims that Circon's stated desire to protect the
benefits and purported synergies of its acquisition last year of Cabot
Medical Corporation does not justify the "poison pill" and "golden
parachutes." According to the lawsuit, based on Circon's public
announcements, Circon's sales and financial results since the
acquisition have been disappointingly poor; and the benefits and
synergies of the Cabot acquisition that Circon has been publicly
predicting for approximately 17 months have not been achieved. The
lawsuit states that Circon's shareholders should now be permitted to
decide for themselves whether the USS offer is a superior alternative
to Circon management's long-term strategic plan.
In addition, the lawsuit claims that Circon's recently adopted "golden
parachute" compensation plans were adopted for the same improper
purpose as the "poison pill." The suit alleges that the "golden
parachutes" do not truly incentivize employees, and that their only
function is to discourage any change in control. The lawsuit further
claims that Circon has made numerous materially false and misleading
statements in opposition to the tender offer.
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<PAGE>
U.S. Surgical also said today that it will file shortly a separate
lawsuit against Circon in Delaware Chancery Court seeking to compel
Circon to provide USS with full information necessary to enable USS to
communicate directly with Circon's shareholders concerning its offer.
USS has requested this information from Circon pursuant to its rights
under Delaware law, but to date Circon has refused to provide all such
information.
USS also said that, as a result of Circon's adoption of the "poison
pill" rights plan, USS' offer is now conditioned upon, among other
things, the redemption of the rights issued pursuant to such plan, or
USS being satisfied, in its sole discretion, that the rights have been
invalidated or are otherwise inapplicable to the offer and proposed
second-step merger.
According to a USS senior spokesperson, "We are committed to pursuing a
combination of USS and Circon. Our cash tender offer of $18 per share
resulted in nearly 7 million shares being tendered as of August 29,
1996, despite the efforts Circon's management undertook to discourage
shareholders from tendering. The shares tendered, combined with the
shares owned by USS, amount to approximately 76% of the stock not owned
by Circon's management and Board. We are delighted by the support we
have already received from Circon's shareholders, and we are hopeful
that even more shareholders will see the merits of our offer and tender
their shares prior to or on September 30th, the date to which the offer
has been extended. We hope that Circon's Board and management will
recognize the business realities and agree to meet with us. In the
meantime, we will not stand by while they illegally erect obstacles to
our tender offer."
United States Surgical Corporation is a diversified surgical products
company specializing in minimally invasive technologies that improve
patient care and lower health care costs.
On September 18, 1996, Parent filed a suit against the Company in the Court
of Chancery for the State of Delaware, seeking, among other things, 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.
See Section 9 of this Supplement.
Also on September 18, 1996, Parent mailed the following letter to the
shareholders of the Company:
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
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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 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/
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. Hirsch
-------------------------
Leon C. Hirsch, Chairman
--------
/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.
/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.
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On September 18, 1996, Parent placed the following advertisement in the Wall
Street Journal:
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. Hirsch
-------------------------
Leon C. Hirsch, Chairman
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On September 18, 1996, the Company issued the following press release:
SANTA BARBARA, CALIFORNIA (SEPTEMBER 18, 1996)--Circon Corporation
(NASDAQ-NMS:CCON) responded today to U.S. Surgical's announcement of a
lawsuit.
Richard A. Auhll, chairman of the board, president, and chief executive
officer of Circon said, "We believe this suit is without merit and we
will vigorously defend ourselves. Our shareholder rights plan was
adopted by our board in the course of exercising its fiduciary duty to
shareholders."
Mr. Auhll continued, "With respect to U.S. Surgical's tender offer, the
position of the Circon board is unchanged. We continue to believe that
the implementation of our strategic plan will provide our shareholders
with greater value than they can obtain through tendering into this
offer."
Circon is the leading U.S. supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products
as endoscopes and video systems, and such disposable products as
urological stents, laparoscopic suction-irrigation devices, and a wide
variety of gynecological products.
On September 30, 1996, Parent issued a press release announcing an extension
of the Offer until 6:00 p.m. New York City time, on December 13, 1996, unless
further extended.
On October 2, 1996 the Company issued the following press release:
SANTA BARBARA, CALIFORNIA (OCTOBER 2, 1996)--Circon Corporation
(NASDAQ-NMS:CCON) responded today to U.S. Surgical's latest
announcement of a second extension of its tender offer. Richard A.
Auhll, chairman of the board, president, and chief executive officer of
Circon said, "U.S. Surgical's persistence in attempting to acquire
Circon is certainly testimony to the unique strategic position of our
Company and the potential benefits of our strategic plan. We remain
focused on conducting our business and are trying to not let these
activities by U.S. Surgical distract us. The Company is in the process
of realizing the growth and cost savings opportunities presented by the
merger with Cabot.
"Our ongoing strategic plan presents a very favorable long term growth
opportunity for our investors. This growth opportunity has obviously
not gone unnoticed by U.S. Surgical.
"Circon has the largest U.S. endoscopy sales force and a dominant share
of the U.S. urology endoscopy market. The merger with Cabot and the
additional of their Surgitek ureteral stents and other products makes
Circon the premier U.S. urology company. Our attention is focused on
growing market share in urology and gynecology, introducing new
products, expanding our international sales and implementing cost
savings initiatives.
We continue to urge our shareholders not to tender and to urge those
who have tendered to withdraw. We do not believe shareholders will
realize the true value of their Circon investment if they sell their
stock to U.S. Surgical in this tender offer."
Circon is the leading U.S. Supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products
as endoscopes and video systems, and such disposable products as
urological stents, laparoscopic suction-irrigation devices, and a wide
variety of gynecological products.
On October 25, 1996 the Company announced that it had mailed the following
letter to its shareholders.
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FELLOW CIRCON SHAREHOLDER:
I am writing to update you on recent developments at Circon and to let you
know that we are proceeding with our strategic plan to build value for Circon
shareholders.
POSITIVE FINANCIAL RESULTS
This morning we reported our financial results for the third quarter of
1996. Sales for the U.S. sales force in the third quarter were $30 million, up
5% from the second quarter 1996 and the highest of any quarter since the
merger with Cabot in August of 1995. Total sales for the third quarter were
$38.4, up 3.5% from the previous quarter but down 9% from the all time high
third quarter in 1995.
Operating income for the third quarter was $2.4 million, up 145% from the
second quarter. Earnings per share from operations, excluding certain unusual
non-recurring charges related to the hostile tender offer, were $0.07 for the
third quarter compared to break-even earnings from operations for the second
quarter.
We are very pleased with the sequential growth of our sales on a quarter to
quarter basis and believe this is indicative of an improving trend. Management
is focused on the goal of continuing this growth into the fourth quarter and
1997.
THE RE-ORIENTATION OF OUR SALES FORCE IS PROCEEDING
The merger of Circon and Cabot created the opportunity for each member of
our combined sales force to sell more products to fewer customers in a smaller
territory and thereby, over time, to become significantly more productive.
This required a substantial and time-consuming reorganization and retraining
of our sales force. Sales declined during the post-merger period, but now are
increasing. We have focused on our sales force issues and developed strategies
to get back on track. With our positive third quarter results, we are now
seeing the early signs of recovery as the sales force becomes better oriented
to its new environment.
NEW PRODUCTS AND NEW MARKETS
Research and development has always been a priority at Circon. We intend to
remain at the forefront of technological development for minimally invasive
surgery. Third quarter R&D expenditures were up 11% over 1995 and were 8% of
sales. In the next several months, we will be introducing an ultrasonic
lithotripter, a urodynamic system (0M-4), a microlaparoscopy system, a
flexible ureteroscope, a small diameter (2.4 mm) diagnostic hysteroscope, and
a number of other new or improved endoscopes, laparoscopes, light sources,
instruments and disposable products.
I am enclosing a gynecology new product leaflet, distributed at the recent
American Association of Gynecological Laparoscopy meeting in Chicago, where
our products were well received.
Many other new and innovative products are in our pipeline for introduction
in the latter part of next year. Technological leadership is central to our
future growth and profitability, and we have high hopes for our new products.
We also continue to add new customers and expand our direct sales efforts.
We recently concluded a multi-year agreement to supply endoscopic equipment to
Tenet Healthcare. Tenet is the second largest proprietary healthcare company
in the U.S. with 342 hospitals and acute care facilities. Last month we
established a subsidiary and a direct sales force in France to help grow our
international sales.
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WE ARE CONTINUING TO MANAGE OUR COSTS
Cost savings not only contribute directly to the bottom line, they help us
to be price-competitive in the very cost-conscious healthcare marketplace. We
are committed to continual re-evaluation of all aspects of our cost structure.
This month, we will complete the closure of our Langhorne, Pennsylvania,
facility, which will generate significant savings in 1997 and beyond. We also
expect to benefit in 1997 from several other cost reduction initiatives many
of which are already underway.
THE BOARD UNANIMOUSLY REJECTED THE OFFER IN FAVOR OF THE COMPANY'S PLAN
As you are aware, in August the Board of Directors of Circon unanimously
rejected U.S. Surgical's unsolicited offer and urged shareholders not to
tender their shares. The Board recognized that U.S. Surgical is trying to take
advantage of a dip in Circon's stock price to capture the value and potential
of Circon for themselves. After thoroughly studying the offer and consulting
with advisors, the Board determined that the best means for providing value to
Circon shareholders is to pursue its strategic plan and not to put the Company
up for sale.
Since that time, U.S. Surgical has twice extended its offer, and commenced
litigation in an effort to force us to sell them the Company for a price that
is clearly inadequate. We are not intimidated by their tactics and are
confident the court will side with us on these issues.
We sent you a Solicitation/Recommendation Statement (Schedule 14D-9) in
August which describes the considerations that went into the Board of
Director's decision to reject the offer. If you did not receive this, or would
like another copy, please call Nancy Leonard at (805) 685-5100.
I urge you to carefully consider the 14D-9 and the following factors:
.The major market share held by Circon in the urology and gynecology
markets and the significant growth rates that an independent market
research group is predicting for those markets in the years ahead.
.The cost savings and growth impact of the Cabot merger which the Company
expects to realize from programs already in progress and planned for the
coming year.
.The demonstrated ability of Circon's management team to generate value
through strategic acquisitions like the Cabot merger. For example, in
1986 Circon acquired ACMI, a struggling company nearly five times
Circon's size, and proceeded to achieve major synergies and stock price
appreciation for its shareholders.
.The historical trading price of the Company stock. The offer of $18.00 per
share is actually a 23% discount from the highest closing price of the
stock during the nine month period preceding the offer.
.The investment banking firm of Bear Stearns, experts in these matters,
concluded that the financial consideration offered by U.S. Surgical is
inadequate from a financial point of view to the Circon shareholders.
CIRCON'S STRATEGIC VALUE
In addition, the Board recognizes the unique strategic position of Circon.
Circon is one of the few companies in the world designing, manufacturing, and
marketing high performance endoscopic systems to multiple medical specialties
on a global basis. Through an unrelenting dedication to building the best
quality products available, Circon, according to independent market reports,
has captured the largest share of the U.S. urology endoscope market and
established itself as a leading supplier of advanced gynecology products in
the U.S. and abroad.
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<PAGE>
The addition of the Cabot product line allows us immediate penetration of the
urological stent, laparoscopic suction-irrigation and related markets. Circon
has the largest urology/gynecology sales force in the U.S. and a sizable
installed base that provide a solid platform for us to expand existing product
lines and enter new markets.
DO NOT BE MISLED BY U.S. SURGICAL
U.S. Surgical still only owns 1,000,100 shares or roughly 7.9% of Circon. By
comparison, I am the largest Circon shareholder owning roughly 11% of the
Company. U.S. Surgical has not actually purchased the "tendered shares' and can
withdraw its offer prior to acceptance and payment of the shares at any time.
In addition, we never said that we would reap the benefits of the Cabot
merger overnight as U.S. Surgical has suggested. Mergers take time. The good
news is that the hardest part is behind us and we are now poised to capitalize
on the synergies and other opportunities available to us as a result of the
merger and the implementation of our strategic plan. If the Board accepted this
offer, Circon shareholders would be "cashed-out' and deprived of this value.
IN CONCLUSION
Circon has a strategic plan that is working. Our prospects remain excellent
as we evolve into a more powerful and efficient organization. Our Board has
concluded that our shareholders will benefit far more from the realization of
our plan than if we accept U.S. Surgical's opportunistic offer. Judge for
yourself. Review the fundamentals underlying our strategic plan that appear on
the first four pages of our 1995 Annual Report and keep a close eye on our
quarterly financial reports.
I appreciate the support we have received from our shareholders and urge
those others of you who have tendered shares to U.S. Surgical to consider
withdrawing the shares. By rejecting the opportunistic offer of U.S. Surgical,
we have the best chance of truly maximizing the value of an investment in
Circon. Give the Circon team time to finish the job it began last year. I think
you will be glad that you did.
Sincerely,
CIRCON CORPORATION
RICHARD A. AUHLL
President
Chairman of the Board
On December 16, 1996, Parent issued the following press release, announcing
an extension of the Offer and a lowering of the Offer price:
NORWALK, Conn.--United States Surgical Corporation (NYSE:USS)
announced today that it is extending through 6:00 p.m., New York City
time, February 13, 1997, its cash tender offer for all the outstanding
common shares of Circon Corporation (NASDAQ:CCON) at a reduced price of
$17 per share. On August 2, 1996, USS commenced an offer to Circon
shareholders of $18 per share, representing a premium of 83% over the
average closing price of Circon's common stock during the previous ten
trading days.
Leon C. Hirsch, chairman and CEO of USS, said, "With the passage of
time, not only has Circon's management been unable to achieve better
operating results, but Circon's performance continues to be below even
historical levels. After adjusting for non recurring
27
<PAGE>
items, Circon's third quarter 1996 performance was well below that of
third quarter 1995, based on its SEC filings, with revenues down 8.9%,
gross profit down 9.1% and operating income down 53.4%. This
performance demonstrates that Circon's management has been unable to
deliver to their shareholders the turnaround it has been promising.
Moreover, management has strapped its shareholders with an even greater
burden through the heavy expenditure of $3.2 million for a defense-
related charge."
USS believes Circon's management would need to achieve extraordinary
operating improvements in order for Circon's stock trading price to
equal USS' offer; that seems highly unlikely given Circon's historical
record. Assuming an industry average price/earnings ratio of 16 times,
Circon management would need to deliver earnings per share (EPS) of
$1.22 one year from now in order to equal the present value of today's
$17 offer. To do this, Circon would need to improve operating margins
to over 20% (vs. 6.1% today) at current sales levels, or increase sales
to $500 million (an increase of 225% over the latest twelve months) at
today's margins. Alternatively, if Circon improved both its sales and
margins, Circon would, for example, still need to increase revenues by
over 50% and more than double margins to over 13% to achieve EPS of
$1.22 or achieve a combination of what USS believes are other equally
improbable improvements.
Shareholders rallied behind USS' $18 per share offer by tendering 80%
of the shares of Circon's common stock not owned by Circon's management
and Board, based on their 1996 June 10-Q and proxy statement. In
response to the offer, Circon management decided it was paramount to
protect its own interests and installed anti-takeover provisions,
including a poison pill and potentially costly golden parachutes, and
stated that USS' $18 per share offer did not reflect Circon's long term
value and that management needed additional time to implement its
operating plan.
Mr. Hirsch stated further, "We still firmly believe this merger is in
the best interest of both companies and their respective shareholders;
however, recent results suggest that Circon's management has been
unable to deliver to its shareholders improved financial performance.
USS can no longer justify to its shareholders--absent the ability to
review and discuss with Circon's management its operating plan--an
offer of $18 per share and, therefore, is compelled to reduce its offer
to $17 per share, a price which represents a 73% premium over Circon's
average trading price for the ten trading days preceding our original
offer. At $17 per share, Circon has a price/earnings ratio of over 100
times trailing twelve months' earnings. USS' tender offer is the major
reason for this huge multiple. USS continues to be interested in
meeting with Circon's management to give them an opportunity to
demonstrate any additional value which should be considered in our
offer."
Within the past ten days, USS again offered to meet with Circon's
management to discuss in detail proposals for the merger and USS'
valuation of Circon. They refused such a meeting, stating that Circon
was not for sale.
As of 6:00 p.m., New York City time on December 13, 1996, 7,726,701
shares of Circon's outstanding common stock had been tendered to USS
under the terms of the offer. The 7,726,701 shares tendered, plus the
1,000,100 shares previously purchased by USS, represent 79% of the
shares of Circon's common stock not owned by Circon's management and
Board, based on their 1996 September 10-Q and June proxy statement.
United States Surgical Corporation is a diversified surgical products
company specializing in minimally invasive technologies that improve
patient care and lower health care costs.
28
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On December 17, 1996, the Company issued the following press release:
SANTA BARBARA, CALIFORNIA--DECEMBER 17, 1996--Circon Corporation
(NASDAQ-NMS:CCON) announced today that its Board has reviewed U.S.
Surgical's revised bid of $17 per share for all of Circon's outstanding
shares, a bid $1 lower than its previous $18 offer. The Board has
determined that the $17 bid is also inadequate and has recommended that
Circon shareholders not tender their shares and that they withdraw
their shares if they have already been tendered. Richard A. Auhll,
Chairman of the Board and President of Circon said, "We are surprised
at U.S. Surgical's latest maneuver. Circon's third quarter performance
was an improvement over the second quarter and the year is shaping up
the way we expected. The $18 per share offer was inadequate. This
latest proposal, like its predecessor, is entirely inadequate."
"Our strategic plan is on track. The closure of our Langhorne,
Pennsylvania, facility has been completed and we will begin to see
those savings in the first quarter of next year. Moreover, in the last
few months, we have introduced numerous products which have been well
received. These include new Urodynamic Systems and Double Pittail
Stents for urology, a high performance Micro Laparoscopy System for
general surgery, and new Hysteroscope Systems for gynecology."
Circon is the leading U.S. supplier of products for minimally
invasive urological and gynecological surgery, including such hardware
products as endoscopes and video systems, and such disposable products
as urological stents, laparoscopic suction-irrigation devices, and a
wide variety of gynecological products.
8. AMENDED CONDITIONS OF THE OFFER
The conditions to the Offer as set forth in Section 14 of the Offer to
Purchase are hereby amended and restated in its entirety as follows:
Notwithstanding any other term or provision of the Offer, the Purchaser will
not be required to accept for payment or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to a bidder's obligation to pay for or return tendered securities
promptly after the termination or withdrawal of such bidder's offer), to pay
for any Shares not theretofore accepted for payment or paid for, and may
terminate the Offer, unless (1) the Minimum Condition shall have been
satisfied, (2) the Business Combination Condition shall have been satisfied and
(3) the Rights Condition shall have been satisfied. Furthermore,
notwithstanding any other term or provision of the Offer, the Purchaser will
not be required to accept for payment or, subject as aforesaid, to pay for any
Shares not theretofore accepted for payment or paid for, and may terminate or
amend the Offer if, at any time on or after the Applicable Date (August 2,
1996), and before the acceptance of such Shares for payment or, subject to any
applicable rules and regulations of the Commission, the payment therefor, any
of the following events or facts shall have occurred:
(a) there shall be threatened, instituted or pending any action,
proceeding, application or counterclaim by any government or governmental,
regulatory or administrative authority or agency, domestic, foreign or
supranational (each, a "Governmental Entity"), or by any other person,
before any court or Governmental Entity, (i)(A) challenging or seeking to,
or which is reasonably likely to, make illegal, delay or otherwise directly
or indirectly restrain or prohibit, or seeking to, or which is reasonably
likely to, impose voting, procedural, price or other requirements, in
addition to those required by Federal securities laws and the DGCL, in
connection with, the making of the Offer, the acceptance for payment of, or
payment for, some of or all the Shares by the Purchaser, Parent or any
other affiliate of Parent or the consummation by the Purchaser, Parent or
any other affiliate of Parent of a merger or other similar business
combination with the
29
<PAGE>
Company, (B) seeking to obtain, or which is reasonably likely to result in,
material damages or (C) otherwise directly or indirectly relating to the
transactions contemplated by the Offer or any such merger or business
combination, (ii) seeking to, or which is reasonably likely to, prohibit
the ownership or operation by the Purchaser, Parent or any other affiliate
of Parent of all or any portion of the business or assets of the Company
and its subsidiaries or of the Purchaser, Parent or any other affiliate of
Parent or to compel the Purchaser, Parent or any other affiliate of Parent
to dispose of or hold separate all or any portion of the business or assets
of the Company or any of its subsidiaries or of the Purchaser, Parent or
any other affiliate of Parent or seeking to impose, or which is reasonably
likely to result in, any limitation on the ability of the Purchaser, Parent
or any other affiliate of Parent to conduct such business or own such
assets, (iii) seeking to, or which is reasonably likely to, impose
limitations on the ability of the Purchaser, Parent or any other affiliate
of Parent effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or
owned by the Purchaser, Parent or any other affiliate of Parent on all
matters properly presented to the Company's shareholders, (iv) seeking to,
or which is reasonably likely to, require divestiture by the Purchaser,
Parent or any other affiliate of Parent of any Shares, (v) seeking, or
which is reasonably likely to result in, any material diminution in the
benefits expected to be derived by the Purchaser, Parent or any other
affiliate of Parent as a result of the transactions contemplated by the
Offer or any merger or other similar business combination with the Company,
(vi) otherwise directly or indirectly relating to the Offer or which
otherwise, in the sole judgment of the Purchaser, might materially
adversely affect the Company or any of its subsidiaries or the Purchaser,
Parent or any other affiliate of Parent or the value of the Shares or (vii)
in the sole judgment of the Purchaser, materially adversely affecting the
business, properties, assets, liabilities, capitalization, shareholders'
equity, condition (financial or otherwise), operations, licenses or
franchises, results of operations or prospects of the Company or any of its
subsidiaries;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction proposed,
enacted, enforced, promulgated, amended, issued or deemed applicable to (i)
the Purchaser, Parent or any other affiliate of Parent or the Company or
any of its subsidiaries or (ii) the Offer or any merger or other similar
business combination by the Purchaser, Parent or any other affiliate of
Parent with the Company, by any government, legislative body or court,
domestic, foreign or supranational, or Governmental Entity that, in the
sole judgment of the Purchaser, might, directly or indirectly, result in
any of the consequences referred to in clauses (i) through (vii) of
paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or otherwise), operations, licenses or franchises,
results of operations or prospects of the Company or any of its
subsidiaries that, in the sole judgment of the Purchaser, is or may be
materially adverse to the Company or any of its subsidiaries, or the
Purchaser shall have become aware of any facts that, in the sole judgment
of the Purchaser, have or may have material adverse significance with
respect to either the value of the Company or any of its subsidiaries or
the value of the Shares to the Purchaser, Parent or any other affiliate of
Parent;
(d) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the
United States, (ii) any extraordinary or material adverse change in the
financial markets or major stock exchange indices in the United States or
abroad or in the market price of Shares, (iii) any change in the general
political, market, economic or financial conditions in the United States or
abroad that could, in the sole judgment of the Purchaser, have a material
adverse effect upon the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, licenses or franchises, results of operations or
30
<PAGE>
prospects of the Company or any of its subsidiaries or the trading in, or
value of, the Shares, (iv) any material change in United States currency
exchange rates or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (v) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (vi) any limitation (whether or not mandatory) by any government,
domestic, foreign or supranational, or Governmental Entity on, or other
event that, in the sole judgment of the Purchaser, might affect, the
extension of credit by banks or other lending institutions, (vii) a
commencement of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States
or (viii) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(e) the Company or any of its subsidiaries shall have (i) split, combined
or otherwise changed, or authorized or proposed a split, combination or
other change of, the Shares or its capitalization, (ii) acquired or
otherwise caused a reduction in the number of, or authorized or proposed
the acquisition or other reduction in the number of, outstanding Shares or
other securities, (iii) issued or sold, or authorized or proposed the
issuance, distribution or sale of, additional Shares (other than the
issuance of Shares under options or subject to warrants prior to the
Applicable Date in accordance with the terms of such options or warrants as
publicly disclosed prior to the Applicable Date), shares of any other class
of capital stock, other voting securities or any securities convertible
into, or rights, warrants or options, conditional or otherwise, to acquire,
any of the foregoing, (iv) declared or paid, or proposed to declare or pay,
any dividend or other distribution, whether payable in cash, securities or
other property, on or with respect to any shares of capital stock of the
Company, (v) altered or proposed to alter any material term of any
outstanding security, (vi) incurred any debt other than in the ordinary
course of business or any debt containing burdensome covenants, (vii)
authorized, recommended, proposed or entered into an agreement with respect
to any merger, consolidation, liquidation, dissolution, business
combination, acquisition of assets, disposition of assets, release or
relinquishment of any material contractual or other right of the Company or
any of its subsidiaries or any comparable event not in the ordinary course
of business, (viii) authorized, recommended, proposed or entered into, or
announced its intention to authorize, recommend, propose or enter into, any
agreement or arrangement with any person or group that in the sole judgment
of the Purchaser could adversely affect either the value of the Company or
any of its subsidiaries or the value of the Shares to the Purchaser, Parent
or any other affiliate of Parent, (ix) entered into any employment,
severance or similar agreement, arrangement or plan with or for the benefit
of any of its employees other than in the ordinary course of business or
entered into or amended any agreements, arrangements or plans so as to
provide for increased or accelerated benefits to the employees as a result
of or in connection with the transactions contemplated by the Offer, (x)
except as may be required by law, taken any action to terminate or amend
any employee benefit plan (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended) of the Company or any
of its subsidiaries, or the Purchaser shall have become aware of any such
action that was not disclosed in publicly available filings prior to the
Applicable Date, (xi) amended, or authorized or proposed any amendment to,
its Certificate of Incorporation or its By-laws, or the Purchaser shall
become aware that the Company or any of its subsidiaries shall have
proposed or adopted any such amendment that was not disclosed in publicly
available filings prior to the Applicable Date or (xii) otherwise acted out
of the ordinary course of business, consistent with past practice;
(f) a tender or exchange offer for any Shares shall have been made or
publicly proposed to be made by any other person (including the Company or
any of its subsidiaries or affiliates), or it shall have been publicly
disclosed or the Purchaser shall have otherwise learned that (i) any
person, entity (including the Company or any of its subsidiaries) or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) shall
have acquired or proposed to acquire beneficial ownership of more than 5%
of any class or series of capital stock of the Company (including the
Shares), through the acquisition of stock, the formation of a group or
otherwise, or shall have been
31
<PAGE>
granted any right, option or warrant, conditional or otherwise, to acquire
beneficial ownership of more than 5% of any class or series of capital
stock of the Company (including the Shares), other than acquisitions for
bona fide arbitrage purposes only and other than as disclosed in a Schedule
13D or 13G on file with the Commission prior to the Applicable Date, (ii)
any such person, entity or group that prior to the Applicable Date, had
filed such a Schedule with the Commission has acquired or proposes to
acquire, through the acquisition of stock, the formation of a group or
otherwise, beneficial ownership of 1% or more of any class or series of
capital stock of the Company (including the Shares), or shall have been
granted any right, option or warrant, conditional or otherwise, to acquire
beneficial ownership of 1% or more of any class or series of capital stock
of the Company (including the Shares), (iii) any person or group shall have
entered into a definitive agreement or an agreement in principle or made a
proposal with respect to a tender offer or exchange offer or a merger,
consolidation or other business combination with or involving the Company
or (iv) any person shall have filed a Notification and Report Form under
the HSR Act (or amended a prior filing to increase the applicable filing
threshold set forth therein) or made a public announcement reflecting an
intent to acquire the Company or any assets or subsidiaries of the Company;
(g) the Purchaser shall become aware (i) that any contractual right of
the Company or any of its subsidiaries shall be impaired or otherwise
adversely affected or that any amount of indebtedness of the Company or any
of its subsidiaries shall become accelerated or otherwise become due or
become subject to acceleration prior to its stated due date, in any case
with or without notice or the lapse of time or both as a result of or in
connection with the transactions contemplated by the Offer or the Proposed
Merger or any other business combination involving the Company, which, in
the aggregate, would be material, (ii) of any covenant, term or condition
in any of the Company's or any of its subsidiaries' instruments or
agreements that has or may have, in the aggregate, a material adverse
effect on (x) the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or otherwise),
operations, management, key personnel, licenses, franchises, results of
operations or prospects of the Company or any of its subsidiaries
(including, but not limited to, any event of default that may result from
the consummation of the Offer, the acquisition of control of the Company or
any of its subsidiaries or the Proposed Merger or any other business
combination involving the Company) or (y) the value of the Shares in the
hands of Parent, the Purchaser or any of their respective affiliates or (z)
the consummation by Parent, the Purchaser or any of their respective
affiliates of the Offer and the Proposed Merger or any other business
combination involving the Company or (iii) that any report, document or
instrument of the Company or any of its subsidiaries filed with the
Commission contained, when filed, an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading or that the Company or any of
its subsidiaries shall have failed to file any such report, document or
instrument;
(h) any approval, permit, authorization, favorable review or consent of
any Governmental Entity (including those described or referred to in
Section 15) shall not have been obtained on terms satisfactory to the
Purchaser in its sole discretion; or
(i) the Purchaser shall have reached an agreement or understanding with
the Company providing for termination of the Offer, or the Purchaser,
Parent or any other affiliate of Parent shall have entered into a
definitive agreement or announced an agreement in principle with the
Company providing for a merger or other business combination with the
Company or the purchase of stock or assets of the Company; which, in the
sole judgment of the Purchaser in any such case, and regardless of the
circumstances (including any action or inaction by the Purchaser, Parent or
any other affiliate of Parent) giving rise to any such condition, makes it
inadvisable to proceed with the Offer or with such acceptance for payment
or payment.
32
<PAGE>
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be asserted by the Purchaser regardless of the circumstances
giving rise to any such condition or may be waived by the Purchaser in whole
or in part at any time and from time to time in its sole discretion. The
failure by the Purchaser at any time to exercise any of the foregoing rights
will not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances will not be deemed a waiver
with respect to any other facts and circumstances and each such right will be
deemed an ongoing right that may be asserted at any time and from time to
time. Any determination by the Purchaser concerning the events described in
this Section 8 will be final and binding upon all parties.
9. CERTAIN LEGAL MATTERS
The discussion set forth in Section 15 of the Offer to Purchase is hereby
amended and supplemented as follows:
Antitrust. The 15-calendar day waiting period under the HSR Act with respect
to the Offer expired on August 17, 1996.
Certain Litigation. On September 17, 1996, Parent commenced a lawsuit by
filing a complaint in the Court of Chancery in the State of Delaware against
the Company seeking, among other things, an order enjoining the operation of
the Rights and declaring that the Rights are inapplicable or unenforceable as
applied to the Offer and the Proposed Merger. In addition, the complaint seeks
an order terminating three lucrative employee "incentive" compensation plans
adopted by the Company in connection with the Offer.
On September 18, 1996, Parent filed suit in the Court of Chancery in the
State of Delaware against the Company seeking to compel the Company to provide
Parent with full information necessary to enable Parent to communicate
directly with the Company's shareholders concerning the Offer.
10. MISCELLANEOUS
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THE OFFER
TO PURCHASE AND HEREIN OR IN THE RELATED LETTERS OF TRANSMITTAL AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED.
THE PURCHASER AND PARENT HAVE FILED WITH THE COMMISSION A TENDER OFFER
STATEMENT ON SCHEDULE 14D-1 AND AMENDMENTS THERETO PURSUANT TO RULE 14D-3 OF
THE GENERAL RULES AND REGULATIONS UNDER THE EXCHANGE ACT, TOGETHER WITH
EXHIBITS, FURNISHING CERTAIN ADDITIONAL INFORMATION WITH RESPECT TO THE OFFER,
AND MAY FILE ADDITIONAL AMENDMENTS THERETO. THE SCHEDULE 14D-1 AND ANY
AMENDMENTS THERETO, INCLUDING EXHIBITS, MAY BE INSPECTED AND COPIES MAY BE
OBTAINED IN THE MANNER SET FORTH IN SECTION 8 OF THE OFFER TO PURCHASE WITH
RESPECT TO THE COMPANY (EXCEPT THAT SUCH MATERIAL WILL NOT BE AVAILABLE AT THE
REGIONAL OFFICES OF THE COMMISSION).
EXCEPT AS OTHERWISE SET FORTH IN THIS SUPPLEMENT, THE TERMS AND CONDITIONS
PREVIOUSLY SET FORTH IN THE OFFER TO PURCHASE REMAIN APPLICABLE IN ALL
RESPECTS TO THE OFFER, AND THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH
THE OFFER TO PURCHASE. UNLESS THE CONTEXT REQUIRES OTHERWISE, TERMS NOT
DEFINED HEREIN HAVE THE MEANINGS ASCRIBED TO THEM IN THE OFFER TO PURCHASE.
USS ACQUISITION CORP.
DECEMBER 18, 1996
33
<PAGE>
Manually signed facsimile copies of the revised GOLD Letter of Transmittal
will be accepted. The revised Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each
shareholder of the Company or such shareholder's broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its addresses
set forth below.
THE DEPOSITARY FOR THE OFFER IS:
First Chicago Trust Company of New York
By Mail: By Hand: By Overnight Courier:
Tenders & Exchanges First Chicago Trust Company Tenders & Exchanges
P.O. Box 2569--Suite of New York 14 Wall Street
4660 Tenders & Exchanges Suite 4680--8th Floor--CIR
Jersey City, New c/o The Depository Trust Company New York, New York 10005
Jersey 55 Water Street, DTC TAD
07303-2569 Vietnam Veterans Memorial Plaza
New York, New York 10041
Facsimile Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm Receipt of Notice of
Guaranteed Delivery by
Telephone
(201) 222-4707
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses or telephone numbers
set forth below. Additional copies of this Supplement, the Offer to Purchase,
the revised Letter of Transmittal and all other tender offer materials may be
obtained from the Information Agent or the Dealer Manager as set forth below,
and will be furnished promptly at the Purchaser's expense. You may also
contact your broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
KISSEL BLAKE INC.
110 Wall Street
New York, New York 10005
Call Toll-Free (800) 554-7733
Brokers and Banks, please call (212) 344-6733
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-7292 (Call Collect)
<PAGE>
EXHIBIT 99.(A)(20)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED AUGUST 2, 1996
AND THE SUPPLEMENT DATED DECEMBER 18, 1996
BY
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 13, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Depositary
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Tenders & Exchanges Tenders and Exchanges Tenders & Exchanges
Suite 4660 c/o The Depository Trust Company Suite 4680
P.O. Box 2569 55 Water Street, DTC TAD 14 Wall Street 8th Floor--CIR
Jersey City, New Jersey 07303-2569 Vietnam Veterans Memorial Plaza New York, New York 10005
New York, NY 10041
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF
BLANK, EXACTLY AS
NAME(S) APPEARS SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------
SHARES EVIDENCED
SHARE CERTIFICATE BY SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
<S> <C> <C> <C>
TOTAL SHARES
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
<PAGE>
DESCRIPTION OF RIGHTS TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS
NAME(S) RIGHT CERTIFICATE(S) TENDERED*
APPEAR(S) ON RIGHT CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- -----------------------------------------------------------------------------------------
RIGHTS
EVIDENCED
RIGHT CERTIFICATE BY RIGHT SHARES
NUMBER(S)** CERTIFICATE(S)** TENDERED***
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
<S> <C> <C> <C>
TOTAL RIGHTS
</TABLE>
- -------------------------------------------------------------------------------
* If the tendered Rights are represented by separate Rights
Certificates, complete the certificate numbers of such Right
Certificates. Shareholders tendering Rights which are not represented
by separate certificates will need to submit an additional letter of
transmittal if Rights Certificates are received.
** Need not be completed by shareholders delivering Rights by book-entry
transfer.
*** Unless otherwise indicated, it will be assumed that all Rights
evidenced by each Right Certificate delivered to the Depositary are
being tendered hereby. See instruction 4.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This revised Letter of Transmittal or the previously circulated BLUE Letter
of Transmittal is to be completed by shareholders either if certificates
evidencing Shares and/or Rights (each as defined below) are to be forwarded
herewith or if delivery of Shares and/or Rights is to be made by book-entry
transfer to the Depositary's account at The Depository Trust Company ("DTC")
or the Philadelphia Depositary Trust Company ("PDTC") (each a "Book-Entry
Transfer Facility" and collectively, the "Book-Entry Transfer Facilities")
pursuant to the book-entry transfer procedure described in Section 2 of the
Offer to Purchase (as defined below) and Section 2 of the Supplement (as
defined below). Delivery of documents to a Book-Entry Transfer Facility does
not constitute delivery to the Depositary.
SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED SHARES PURSUANT TO THE
OFFER USING THE BLUE LETTER OF TRANSMITTAL OR THE GREY NOTICE OF GUARANTEED
DELIVERY AND WHO HAVE NOT PROPERLY WITHDRAWN SUCH SHARES HAVE VALIDLY TENDERED
SUCH SHARES FOR THE PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY
FURTHER ACTION.
UNLESS THE RIGHTS ARE REDEEMED PRIOR TO THE EXPIRATION OF THE OFFER, HOLDERS
OF SHARES WILL BE REQUIRED TO TENDER ONE RIGHT FOR EACH SHARE TENDERED TO
EFFECT A VALID TENDER OF SUCH SHARE. If Right Certificates (as defined in the
Supplement) have been distributed to holders of Shares prior to the date of
tender pursuant to the Offer, Right Certificates representing a number of
Rights equal to the number of Shares being tendered must be delivered to the
Depositary in order for such Shares to be validly tendered. If Right
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares without Rights
2
<PAGE>
constitutes an agreement by the tendering shareholder to deliver Right
Certificates representing a number of Rights equal to the number of Shares
tendered pursuant to the Offer to the Depositary within three Nasdaq National
Market trading days after the date Right Certificates are distributed. The
Purchaser reserves the right to require that it receive such Right Certificates
prior to accepting Shares for payment. Payment for Shares tendered and
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of, among other things, Right Certificates, if such certificates
have been distributed to holders of Shares. The Purchaser will not pay any
additional consideration for the Rights tendered pursuant to the Offer.
Shareholders whose certificates evidencing Shares ("Share Certificates") and,
if applicable, Rights Certificates, are not immediately available (including if
the Distribution Date has occurred, but Right Certificates have not yet been
distributed by the Company) or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Supplement) or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis and who wish to
tender their Shares and Rights must do so pursuant to the guaranteed delivery
procedure described in Section 2 of the Offer to Purchase, as supplemented by
Section 2 of the Supplement. See Instruction 2.
[_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
- --------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [_] DTC [_] PDTC
Account Number _______________________ Transaction Code Number ______________
[_]CHECK HERE IF RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution
- --------------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE) [_] DTC [_] PDTC
Account Number _______________________ Transaction Code Number ______________
3
<PAGE>
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s)
- -------------------------------------------------------------------------------
Window Ticket No. (if any)
- -------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- -------------------------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- -------------------------------------------------------------------------------
[_]CHECK HERE IF RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY:
Name(s) of Registered Holder(s)
- -------------------------------------------------------------------------------
Window Ticket No. (if any)
- -------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- -------------------------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- -------------------------------------------------------------------------------
4
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to USS Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of United States
Surgical Corporation, a Delaware corporation ("Parent"), the above-described
shares of Common Stock, par value $0.01 per share (the "Shares"), of Circon
Corporation, a Delaware corporation (the "Company"), including (unless and
until the Purchaser declares that the Rights Condition (as defined in the
Supplement) is satisfied) the associated preferred share purchase rights (the
"Rights") issued pursuant to the Preferred Shares Rights Agreement, dated as
of August 14, 1996, between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agreement"), pursuant to the Purchaser's
offer to purchase all outstanding Shares and associated Rights, at $17 per
Share, net to the seller in cash, without interest thereon (the "Offer
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated August 2, 1996 (the "Offer to Purchase") as amended and
supplemented by the Supplement dated December 18, 1996 (the "Supplement"),
receipt of each of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context requires otherwise, all references to Shares
herein shall include the Rights, and all references to the Rights shall
include all benefits that may inure to shareholders of the Company or the
holders of the Rights pursuant to the Rights Agreement. The undersigned
understands that the Purchaser reserves the right to transfer or assign, in
whole or from time to time in part, to one or more of its affiliates, the
right to purchase all or any portion of the Shares and Rights tendered
pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if
the Offer is extended or amended, the terms and conditions of such extension
or amendment), the undersigned hereby sells, assigns and transfers to, or upon
the order of, Purchaser all right, title and interest in and to all the Shares
and/or Rights that are being tendered hereby and all dividends, distributions
(including, without limitation, distributions of additional Shares) and rights
declared, paid or distributed in respect of such Shares on or after August 2,
1996 (except that if the Rights are redeemed by the Company's Board of
Directors in accordance with the terms of the Rights Agreement, tendering
shareholders who are holders of record as of the applicable record date will
be entitled to receive and retain the redemption price of $.01 per Right in
accordance with the Rights Agreement) (collectively, "Distributions"), and
irrevocably appoints the Depositary the true and lawful agent and attorney-in-
fact of the undersigned with respect to such Shares and/or Rights and all
Distributions, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (i) deliver
Share Certificates evidencing such Shares and/or Rights Certificates
evidencing such Rights and all Distributions, or transfer ownership of such
Shares and/or Rights and all Distributions on the account books maintained by
a Book-Entry Transfer Facility, together, in either case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
Purchaser, (ii) present such Shares and/or Rights and all Distributions for
transfer on the books of the Company and (iii) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares and/or
Rights and all Distributions, all in accordance with the terms of the Offer.
The undersigned understands that unless the Rights are redeemed prior to the
expiration of the Offer, shareholders will be required to tender one Right for
each Share tendered in order to effect a valid tender of such Share. The
undersigned understands that if Right Certificates have been distributed to
holders of Shares prior to the date of tender pursuant to the Offer, Right
Certificates representing a number of Rights equal to the number of Shares
being tendered herewith must be delivered to the Depositary or, if available,
a Book-Entry Confirmation (as defined in Instruction 2) must be received by
the Depositary with respect thereto. If Right Certificates have not been
distributed prior to the time Shares are tendered herewith, the undersigned
agrees hereby to deliver Right Certificates representing a number of Rights
equal to the number of Shares tendered herewith to the Depositary within three
Nasdaq National Market trading days after the date such Right Certificates are
distributed.
5
<PAGE>
The Purchaser reserves the right to require that the Depositary receive such
Right Certificates, or a Book-Entry Confirmation, with respect to such Rights,
prior to accepting Shares for payment. Payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of, among other things, Right Certificates if such
Certificates have been distributed to holders of Shares. The Purchaser will
not pay any additional consideration for the Rights tendered pursuant to the
Offer.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints Thomas R. Bremer and Pamela Komenda of the Purchaser as proxies of
the undersigned, each with full power of substitution, to the full
extent of the undersigned's rights with respect to the Shares and Rights
tendered by the undersigned and accepted for payment by the Purchaser (and any
and all Distributions). All such proxies shall be considered coupled with an
interest in the tendered Shares and Rights. This appointment will be effective
if, when, and only to the extent that the Purchaser accepts such Shares for
payment pursuant to the Offer. Upon such acceptance for payment, all prior
proxies given by the undersigned with respect to such Shares and Rights (and
such other securities) will, without further action, be revoked, and no
subsequent proxies may be given nor any subsequent written consent executed by
the undersigned (and, if given or executed, will not be deemed to be
effective) with respect thereto. The designees of the Purchaser named above
will, with respect to the Shares and Rights and other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
of the undersigned as they in their sole discretion may deem proper at any
annual or special meeting of the shareholders of the Company or any
adjournment or postponement thereof, by written consent in lieu of any such
meeting or otherwise, and the Purchaser reserves the right to require that, in
order for Shares and Rights or other securities to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares and
Rights, the Purchaser must be able to exercise full voting rights with respect
to such Shares and Rights.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares and Rights
tendered hereby and all Distributions, and that when such Shares and Rights
are accepted for payment by Purchaser, Purchaser will acquire good, marketable
and unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares,
Rights and Distributions will be subject to any adverse claim. The
undersigned, upon request, shall execute and deliver all additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares and Rights tendered hereby and
all Distributions. In addition, the undersigned shall remit and transfer
promptly to the Depositary for the account of Purchaser all Distributions in
respect of the Shares and Rights tendered hereby, accompanied by appropriate
documentation of transfer, and, pending such remittance and transfer or
appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares and Rights tendered hereby or deduct from such
purchase price, the amount or value of such Distribution as determined by
Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as otherwise stated in the Offer to Purchase and the
Supplement, this tender is irrevocable.
The undersigned understands that tenders of Shares and/or Rights pursuant to
any one of the procedures described in Section 2 of the Offer to Purchase,
Section 2 of the Supplement and in the instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer. Purchaser's
acceptance of such Shares for payment will constitute a binding agreement
between the undersigned and Purchaser upon the terms and subject to the
conditions of the Offer, including, without limitation, the undersigned's
representation and warranty that the undersigned owns the Shares and/or Rights
being tendered.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares and Right
Certificates evidencing Rights not purchased or not tendered, in the name(s)
of the registered holder(s) appearing
6
<PAGE>
above under "Description of Shares Tendered" or "Description of Rights
Tendered," as appropriate. Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares and Right Certificates evidencing Rights not tendered or not purchased
(and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing above under "Description of Shares Tendered" or
"Description of Rights Tendered," as appropriate. In the event that the boxes
entitled "Special Payment Instructions" and "Special Delivery Instructions"
are both completed, please issue the check for the purchase price of all
Shares purchased and return all Share Certificates evidencing Shares and Right
Certificates evidencing Rights not purchased or not tendered in the name(s)
of, and mail such check, Share Certificates and Rights Certificates to, the
person(s) so indicated. The undersigned recognizes that Purchaser has no
obligation, pursuant to the Special Payment Instructions, to transfer any
Shares and Rights from the name of the registered holder(s) thereof if
Purchaser does not purchase any of the Shares and Rights tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5 AND 7)
To be completed ONLY if the To be completed ONLY if the
check for the purchase price of check for the purchase price of
Shares purchased or Share Certif- Shares purchased or Share Certif-
icates evidencing Shares and icates evidencing Shares and
Right Certificates evidencing Right Certificates evidencing
Rights not tendered or not pur- Rights not tendered or not pur-
chased are to be issued in the chased are to be mailed to some-
name of someone other than the one other than the undersigned,
undersigned. or to the undersigned at an ad-
dress other than that shown under
"Description of Shares Tendered"
or "Description of Rights Ten-
dered."
Issue [_] check [_] Share Cer-
tificate(s)
[_] Right Certifi-
cate(s) to:
Mail [_] check [_] Share Certif-
Name: ____________________________ icate(s) [_] Right
(PRINT) Certificate(s) to:
Address: _________________________ Name: ____________________________
__________________________________ (PRINT)
__________________________________ Address: _________________________
(ZIP CODE) __________________________________
__________________________________ __________________________________
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
(ZIP CODE)
(See Substitute Form W-9 on re-
verse side)
7
<PAGE>
IMPORTANT
SHAREHOLDERS: SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X______________________________________________________________X
X______________________________________________________________X
(SIGNATURE(S) OF HOLDER(S))
Dated: ___________________________
Must be signed by registered holder(s) exactly as name(s)
appear(s) on Share Certificates and Rights Certificates or
on a security position listing or by a person(s) authorized
to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the
following information. See Instruction 5.
Name(s):________________________________________________________
_________________________________________________________
(PLEASE PRINT)
Capacity (full title): _________________________________________
Address:________________________________________________________
_________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: ___________________________________
Taxpayer Identification or Social Security No.: ________________
(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
GUARANTEE OF SIGNATURE(S) (IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
8
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal must
be guaranteed by a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or by a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
"Eligible Institution"), unless (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares and/or Rights (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares or
Rights) tendered hereby and such holder(s) has (have) completed neither the box
entitled "Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof or (ii) such Shares and/or Rights are
tendered for the account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 2 of the Offer to Purchase. Certificates
evidencing all physically tendered Shares and/or Rights, or a confirmation of a
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility of all Shares and/or Rights delivered by book-entry transfer as well
as a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the reverse
hereof prior to the Expiration Date (as defined in Section 1 of the
Supplement), and, unless and until the Purchaser declares that the Rights
Condition is satisfied, Right Certificates, or a confirmation of a book-entry
transfer of Rights into the Depositary's account at a Book-Entry Transfer
Facility, if available (together with, if Rights are forwarded separately from
Shares, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) with any required signature guarantee, and any other
documents required by the Letter of Transmittal), must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration
Date or, if later, within three Nasdaq National Market trading days after the
date on which such Right Certificates are distributed. If certificates are
forwarded to the Depositary in multiple deliveries, a properly completed and
duly executed Letter of Transmittal must accompany each such delivery.
Shareholders whose Share Certificates and, if applicable Rights Certificates
are not immediately available (including if Right Certificates have not yet
been distributed), who cannot deliver their Share Certificates or, if
applicable, Right Certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot complete the procedure
for delivery by book-entry transfer on a timely basis may tender their Shares
and/or Rights pursuant to the guaranteed delivery procedure described in
Section 2 of the Offer to Purchase. Pursuant to such procedure: (i) such tender
must be made by or through an Eligible Institution; (ii) a properly completed
and duly executed Notice of Guaranteed Delivery, substantially in the form made
available by Purchaser, must be received by the Depositary prior to the
Expiration Date; and (iii) the Share Certificates evidencing all physically
delivered Shares or, if applicable, Right Certificates evidencing all
physically delivered Rights in proper form for transfer by delivery, or a
confirmation of a book-entry transfer into the Depositary's account at a Book-
Entry Transfer Facility of all Shares and/or Rights delivered by book-entry
transfer, in each case together with a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of Transmittal,
must be received by the Depositary (a) in the case of Shares, within three
Nasdaq National Market trading days after the date of execution of such Notice
of Guaranteed Delivery, or (b) in the case of Rights, within a period ending on
the later of (i) three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery or (ii) three Nasdaq National
Market trading days after Right Certificates are distributed to shareholders by
the Company, all as described in Section 2 of the Supplement.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND,
IF APPLICABLE, RIGHT CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF
THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN
ACTUALLY RECEIVED BY
9
<PAGE>
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any
right to receive any notice of the acceptance of their Shares or Rights for
payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" or "Description of Rights Tendered" is inadequate, the Share
Certificate numbers and the Right Certificate numbers, the number of Shares
evidenced by such Share Certificates and the number of Rights evidenced by
such Right Certificates and the number of Shares or Rights tendered should be
listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares or Rights evidenced by any certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares or Rights which are to be tendered in the box entitled
"Number of Shares Tendered" and "Number of Rights Tendered", respectively. In
such cases, new certificate(s) evidencing the remainder of the Shares or
Rights that were evidenced by the certificates delivered to the Depositary
herewith will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the box entitled "Special Delivery Instructions"
on the reverse hereof, as soon as practicable after the expiration or
termination of the Offer. All Shares and Rights evidenced by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
and Rights tendered hereby, the signature(s) must correspond with the name(s)
as written on the face of the certificates evidencing such Shares and Rights
without alteration, enlargement or any other change whatsoever.
If any Share or Right tendered hereby is owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares or Rights tendered hereby are registered in the names
of different holders, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
such Shares or Rights.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares or Rights tendered hereby, no endorsements of certificates or separate
stock powers are required, unless payment is to be made to, or certificates
evidencing Shares or Rights not tendered or not purchased are to be issued in
the name of, a person other than the registered holder(s), in which case the
certificate(s) evidencing the Shares or Rights tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificate(s). Signatures on such certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares or Rights tendered hereby, the
certificate(s) evidencing the Shares or Rights tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such
certificate(s). Signatures on such certificate(s) and stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is signed by
a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory
to the Purchaser of such person's authority so to act must be submitted.
10
<PAGE>
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares and Rights to it or its order pursuant to the Offer. If,
however, payment of the purchase price of any Shares and Rights purchased is to
be made to, or certificate(s) evidencing Shares and/or Rights not tendered or
not purchased are to be issued in the name of, a person other than the
registered holder(s), the amount of any stock transfer taxes (whether imposed
on the registered holder(s), such other person or otherwise) payable on account
of the transfer to such other person will be deducted from the purchase price
of such Shares and/or Rights purchased, unless evidence satisfactory to the
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for transfer
tax stamps to be affixed to the certificates evidencing the Shares and Rights
tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares and/or Rights tendered hereby is to be issued, or
certificate(s) evidencing Shares and/or Rights not tendered or not purchased
are to be issued, in the name of a person other than the person(s) signing this
Letter of Transmittal or if such check or any such certificate is to be sent to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal but at an address other than that
shown in the box entitled "Description of Shares Tendered" or "Description of
Rights Tendered" on the reverse hereof, the appropriate boxes on the reverse of
this Letter of Transmittal must be completed.
8. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, the Supplement, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent or the Dealer Manager or from brokers, dealers, commercial
banks or trust companies.
10. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and
that such shareholder is not subject to backup withholding of federal income
tax. If a tendering shareholder has been notified by the Internal Revenue
Service that such shareholder is subject to backup withholding, such
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9, unless such shareholder has since been notified by the Internal
Revenue Service that such shareholder is no longer subject to backup
withholding. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% federal income tax withholding on the
payment of the purchase price of all Shares purchased from such shareholder. If
the tendering shareholder has not been issued a TIN and has applied for one or
intends to apply for one in the near future, such shareholder should write
"Applied For" in the space provided for the TIN in Part I of the Substitute
Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part l and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% on all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE SUPPLEMENT).
11
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such shareholder with respect
to Shares purchased pursuant to the Offer may be subject to backup withholding
of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a Form W-8, Certificate of Foreign
Status, signed under penalties of perjury, attesting to such individual's
exempt status. Forms of such statements can be obtained from the Depositary.
See the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained from the Internal Revenue
Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service
that such shareholder is subject to backup withholding as a result of a
failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified such shareholder that such shareholder is no longer
subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the
name of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance
on which number to report. If the tendering shareholder has not been issued a
TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for
the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For"
is written in Part I and the Depositary is not provided with a TIN within 60
days, the Depositary will withhold 31% of all payments of the purchase price
to such shareholder until a TIN is provided to the Depositary.
12
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
PART I--Taxpayer
Identification Number--
SUBSTITUTE
FOR ALL Enter taxpayer ----------------------
ACCOUNTS identification number in Social Security
the box at right. (For most Number
individuals, this is your
social security number. If
you do not have a number,
see Obtaining a Number in
the enclosed Guidelines.)
Certify by signing and
dating below. Note: If the
account is in more than one
name, see the chart in the
enclosed Guidelines to
determine which number to
give the payer.
FORM W-9
----------------------
DEPARTMENT OF Employer
THE TREASURY Identification Number
INTERNAL
REVENUE PART II--For Payees Exempt From Backup Withholding,
see the enclosed Guidelines and complete as
instructed therein.
--------------------------------------------------------
OR CERTIFICATION--Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
NUMBER
PAYER'S REQUEST (2) I am not subject to backup withholding either
FOR TAXPAYER because I have not been notified by the Internal
IDENTIFICATION NUMBER Revenue Service (the "IRS") that I am subject to
backup withholding as a result of failure to
report all interest or dividends, or the IRS has
notified me that I am no longer subject to backup
withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2)
above if you have been notified by the IRS that you
are subject to backup withholding because of
underreporting interest or dividends on your tax
return. However, if after being notified by the IRS
that you were subject to backup withholding you
received another notification from the IRS that you
are no longer subject to backup withholding, do not
cross out item (2). (Also see instructions in the
enclosed Guidelines.)
--------------------------------------------------------
SIGNATURE: ________________________ DATE: ______, 199
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO] KISSEL BLAKE INC.
110 Wall Street
New York, New York 10005
Call Toll-Free (800) 554-7733
Brokers and Banks, please call (212) 344-6733
THE DEALER MANAGER FOR THE OFFER IS:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-7292 (Call Collect)
December 18, 1996
13
<PAGE>
EXHIBIT 99.(A)(21)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
TO
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This revised Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if (i)
certificates ("Share Certificates") evidencing shares of common stock, par
value $0.01 per share (the "Shares") of Circon Corporation, a Delaware
corporation (the "Company"), and/or, if applicable, certificates (the "Rights
Certificates") for the associated preferred share purchase rights (the
"Rights") issued pursuant to the Preferred Shares Rights Agreement, dated as
of August 14, 1996, between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agreement"), are not immediately
available (including, if a Distribution Date (as defined in the Supplement
dated December 18, 1996 (the "Supplement")) has occurred, because certificates
for Rights have not been distributed by the Company), (ii) time will not
permit all required documents to reach First Chicago Trust Company of New
York, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in Section 1 of the Supplement) or (iii) the procedure for book-entry
transfer cannot be completed on a timely basis. This Notice of Guaranteed
Delivery may be delivered by hand or transmitted by telegram, facsimile
transmission or mail to the Depositary. See Section 2 of the Offer to Purchase
(as defined below) and Section 2 of the Supplement.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Hand: By Overnight
First Chicago Trust Company of New York Courier:
Tenders & Exchanges
Tenders & Exchanges Tenders and Exchanges 14 Wall Street
P.O. Box 2569--Suite c/o The Depository Trust Company Suite 4680--8th
4660 55 Water Street, DTC TAD Floor-CIR
Jersey City, New Vietnam Veterans Memorial Plaza New York, New York
Jersey New York, NY 10041 10005
07303-2569
Facsimile Transmission:
(201) 222-4720
or
(201) 222-4721
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(201) 222-4707
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to USS Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of United States
Surgical Corporation, a Delaware corporation ("Parent"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated August 2,
1996 (the "Offer to Purchase"), as amended and supplemented by the Supplement,
and the revised Letter of Transmittal (which, as amended from time to time,
together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares and Rights specified below pursuant to the
guaranteed delivery procedures described in Section 2 of the Offer to Purchase
and Section 2 of the Supplement.
Number of Shares:
- ------------------------------------------
Number of Rights:
- ------------------------------------------
Certificate Nos. (if available):
- ------------------------------------------
Share Certificates
- ------------------------------------------
Right Certificates
Check ONE box if Shares or Rights will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depositary Trust
Company
Account Number:
- ------------------------------------------
Dated:
_________________________________________,
Name(s) of Record Holder(s):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PLEASE PRINT
Address(es):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ZIP CODE
Company Area Code and Tel. No.:
- ------------------------------------------
Area Code and Tel. No.:
- ------------------------------------------
Signature(s):
- -------------------------------------------------------------------------------
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing
of the Securities Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program hereby (a) represents that the tender of Shares and/or Rights effected
hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as
amended, and (b) guarantees delivery to the Depositary, at one of its
addresses set forth above, of certificates evidencing the Shares and/or Rights
tendered hereby in proper form for transfer, or confirmation of book-entry
transfer of such Shares and/or Rights into the Depositary's accounts at The
Depository Trust Company or the Philadelphia Depositary Trust Company, in each
case with delivery of a properly completed and duly executed revised Letter of
Transmittal (or a facsimile thereof) with any required signature guarantees,
or an Agent's Message (as defined in Section 2 of the Offer to Purchase), and
any other documents required by the revised Letter of Transmittal, within (a)
in the case of Shares, three Nasdaq National Market trading days after the
date of execution of this Notice of Guaranteed Delivery and (b) in the case of
Rights, within a period ending on the later of (i) three Nasdaq National
Market trading days after the date of execution of this Notice of Guaranteed
Delivery or (ii) three Nasdaq National Market trading days after the date on
which the certificates for the Rights are distributed to holders of Shares by
the Company.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and the
certificates for Shares and/or Rights to the Depositary within the time period
shown herein. Failure to do so could result in financial loss to such Eligible
Institution.
- -------------------------------------------------------------------------------
NAME OF FIRM
- -------------------------------------------------------------------------------
ADDRESS
- -------------------------------------------------------------------------------
ZIP CODE
Area Code and Tel. No.:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
- -------------------------------------------------------------------------------
TITLE
Name:
- -------------------------------------------------------------------------------
PLEASE PRINT
Date:
____________________________________, 199
NOTE: DO NOT SEND CERTIFICATES FOR SHARES OR RIGHTS WITH THIS NOTICE OF
GUARANTEED DELIVERY. CERTIFICATES FOR SHARES OR RIGHTS SHOULD BE SENT WITH
YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
EXHIBIT 99.(A)(22)
SALOMON BROTHERS INC
-----------------
SALOMON BROTHERS
-----------------
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$17 NET PER SHARE
BY
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 13, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
December 18, 1996
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by USS Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of United States Surgical
Corporation, a Delaware corporation ("Parent"), to act as Dealer Manager in
connection with the Purchaser's offer to purchase all outstanding shares of
common stock, par value $0.01 per share (the "Shares") of Circon Corporation,
a Delaware corporation (the "Company"), including (unless and until the
Purchaser declares that the Rights Condition (as defined in the Supplement
dated December 18, 1996 (the "Supplement")) is satisfied) the associated
preferred share purchase rights (the "Rights") issued pursuant to the
Preferred Shares Rights Agreement, dated as of August 14, 1996, between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agreement"), at a price of $17 per Share and associated Right, net to
the seller in cash, without interest thereon (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
August 2, 1996 (the "Offer to Purchase"), as amended and supplemented by the
Supplement, and in the revised Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer") enclosed herewith. Unless the
context requires otherwise, all references to Shares herein shall include the
Rights, and all references to the Rights shall include all benefits that may
inure to shareholders of the Company or to the holders of the Rights pursuant
to the Rights Agreement.
If the Purchaser declares that the Rights Condition (as defined in the
Supplement) is satisfied, the Purchaser will not require delivery of the
Rights. Unless and until the Purchaser declares that the Rights Condition is
satisfied, holders of Shares will be required to tender one Right for each
Share tendered in order to effect a valid tender of such Shares. If Right
Certificates (as defined in the Supplement) have been distributed to holders
of Shares prior to the date of tender pursuant to the Offer, Right
Certificates representing a number of Rights equal to the number of Shares
being tendered must be delivered to the Depositary in order for such Shares to
be validly tendered. If Right
<PAGE>
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares without Rights constitutes an
agreement by the tendering shareholder to deliver Right Certificates
representing a number of Rights equal to the number of Shares tendered pursuant
to the Offer to the Depositary within three Nasdaq National Market trading days
after the date Right Certificates are distributed. The Purchaser reserves the
right to require that the Depositary receive such Right Certificates prior to
accepting Shares for payment. Payment for Shares tendered and purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of, among other things, Right Certificates, if such certificates have been
distributed to holders of Shares. The Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer.
Holders of Shares and Rights whose certificates evidencing Shares and, if
applicable, Right Certificates, are not immediately available (including if
Right Certificates have not yet been distributed) or who cannot deliver
confirmation of the book-entry transfer of their Shares and, if applicable,
Rights into the Depositary's account at a Book-Entry Transfer Facility ("Book-
Entry Confirmation") and all other documents required hereby to the Depositary
on or prior to the Expiration Date (as defined in Section 1 of the Supplement)
must tender their Shares and Rights according to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase, as supplemented by
Section 2 of the Supplement. See Instruction 2 of the revised Letter of
Transmittal. Delivery of documents to a Book-Entry Transfer Facility does not
constitute delivery to the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE
SUPPLEMENT) THAT NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY
OWNED BY THE PURCHASER AND ITS AFFILIATES, WOULD REPRESENT 67% OF THE
OUTSTANDING SHARES ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, (II) THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVING BEEN
APPROVED PURSUANT TO SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
("SECTION 203") OR THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT
THE PROVISIONS OF SECTION 203 ARE OTHERWISE INAPPLICABLE TO THE ACQUISITION OF
SHARES PURSUANT TO THE OFFER AND THE PROPOSED MERGER AND (III) THE PURCHASER
BEING SATISFIED THAT THE RIGHTS HAVE BEEN REDEEMED BY THE COMPANY OR THE RIGHTS
ARE UNENFORCEABLE OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER. SEE SECTION 8 OF THE SUPPLEMENT. THE OFFER IS NOT CONDITIONED ON THE
RECEIPT OF FINANCING.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Supplement, dated December 18, 1996;
2. A revised Letter of Transmittal to be used by holders of Shares in
accepting the Offer and tendering Shares and/or Rights;
3. A revised Notice of Guaranteed Delivery to be used to accept the Offer
if the certificates evidencing such Shares and/or Rights are not
immediately available (including if certificates for Rights have not yet
been distributed) or time will not permit all required documents to reach
the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in the Supplement) or the procedure for book-
entry transfer cannot be completed on a timely basis;
4. A revised letter which may be sent to your clients for whose accounts
you hold Shares registered in your name or in the name of your nominees,
with space provided for obtaining such clients' instructions with regard to
the Offer;
2
<PAGE>
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. A return envelope addressed to the Depositary.
In order to take advantage of the Offer, a duly executed and properly
completed revised Letter of Transmittal and any other required documents should
be sent to the Depositary and certificates representing the tendered Shares
and, if applicable, Rights should be delivered, or such Shares and, if
applicable, Rights should be tendered by book-entry transfer, all in accordance
with the instructions set forth in the revised Letter of Transmittal, the Offer
to Purchase and the Supplement. Upon the terms and subject to the conditions of
the Offer (including, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), the Purchaser will purchase, by
accepting for payment, and will pay for the Shares (and, if applicable, the
Rights) validly tendered and not withdrawn prior to the Expiration Date
promptly after the Expiration Date. For purposes of the Offer, the Purchaser
will be deemed to have accepted for payment, and thereby purchased, tendered
Shares (and, if applicable, Rights) as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance of such Shares
and Rights for payment pursuant to the Offer. In all cases, payment for Shares
and Rights purchased pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) the certificates or timely confirmation of a
book-entry transfer of such Shares and, if applicable, the associated Rights,
if such procedure is available, into the Depositary's account at The Depository
Trust Company or the Philadelphia Depositary Trust Company pursuant to the
procedures set forth in Section 2 of the Offer to Purchase and Section 2 of the
Supplement, (ii) the revised Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message (as defined in Section 2 of the Offer to Purchase) and
(iii) any other documents required by the revised Letter of Transmittal.
The Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Manager, the Information Agent and the
Depositary as described in Section 16 of the Offer to Purchase) in connection
with the solicitation of tenders of Shares pursuant to the Offer. The Purchaser
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding the enclosed materials to your clients.
The Purchaser will pay any stock transfer taxes incident to the transfer to
it of validly tendered Shares and Rights, except as otherwise provided in
Instruction 6 of the revised Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 13, 1997, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed revised Letter of Transmittal (or a facsimile thereof), with any
required signature guarantees and any other required documents, should be sent
to the Depositary, and certificates evidencing the tendered Shares and, if
applicable, Rights should be delivered or such Shares and, if applicable,
Rights should be tendered by book-entry transfer, all in accordance with the
Instructions set forth in the revised Letter of Transmittal, the Offer to
Purchase and the Supplement.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents to the Depositary prior
to the Expiration Date or to comply with the procedures for book-entry transfer
on a timely basis, a tender may be effected by following the guaranteed
delivery procedures specified under Section 2 of the Offer to Purchase and
Section 2 of the Supplement.
Any inquiries you may have with respect to the Offer should be addressed to
Salomon Brothers Inc, the Dealer Manager, or Kissel-Blake Inc., the Information
Agent, at their respective addresses and telephone numbers set forth on the
back cover page of the Offer to Purchase and the Supplement.
3
<PAGE>
Additional copies of the enclosed materials and the Offer to Purchase may be
obtained by calling Kissel-Blake Inc., the Information Agent, collect at (212)
344-6733 or toll-free at (800) 554-7733, from the undersigned, Salomon
Brothers Inc, telephone (212) 783-7292, or from brokers, dealers, commercial
banks or trust companies.
Very truly yours,
SALOMON BROTHERS INC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE
DEPOSITARY, THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF
ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT
OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER
OTHER THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
4
<PAGE>
EXHIBIT 99.(A)(23)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$17 NET PER SHARE
BY
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M.,
NEW YORK CITY TIME, ON THURSDAY, FEBRUARY 13, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
December 18, 1996
To Our Clients:
Enclosed for your consideration is the Supplement dated December 18, 1996
(the "Supplement") to the Offer to Purchase, dated August 2, 1996 (the "Offer
to Purchase"), and the revised Letter of Transmittal (which, together with the
Offer to Purchase and the Supplement as amended from time to time, constitute
the "Offer") in connection with the Offer by USS Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of United States
Surgical Corporation, a Delaware corporation ("Parent"), to purchase all
outstanding shares of common stock, par value $0.01 per share (the "Shares")
of Circon Corporation, a Delaware corporation (the "Company") including
(unless and until the Purchaser declares that the Rights Condition (as defined
in the Supplement) is satisfied) the associated preferred share purchase
rights (the "Rights") issued pursuant to the Preferred Shares Rights
Agreement, dated as of August 14, 1996, between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agreement"), at a
price of $17 per Share (and associated Right), net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, the Supplement and the
Revised Letter of Transmittal.
If the Purchaser declares that the Rights Condition is satisfied, the
Purchaser will not require delivery of the Rights. Unless and until the
Purchaser declares that the Rights Condition is satisfied, holders of Shares
will be required to tender one Right for each Share tendered in order to
effect a valid tender of such Share. If Right Certificates (as defined in the
Supplement) have been distributed to holders of Shares prior to the date of
tender pursuant to the Offer, Right Certificates representing a number of
Rights equal to the number of Shares being tendered must be delivered to the
Depositary in order for such Shares to be validly tendered. If Right
Certificates have not been distributed prior to the time Shares are tendered
pursuant to the Offer, a tender of Shares without Rights constitutes an
agreement by the tendering stockholder to deliver Right Certificates
representing a number of Rights equal to the number of Shares tendered
pursuant to the Offer to the Depositary within three Nasdaq National Market
trading days after the date Right Certificates are distributed. The Purchaser
reserves
<PAGE>
the right to require that the Depositary receive such Right Certificates prior
to accepting Shares for payment. Payment for Shares tendered and purchased
pursuant to the Offer will be made only after timely receipt by the Depositary
of, among other things, Right Certificates, if such certificates have been
distributed to holders of Shares. The Purchaser will not pay any additional
consideration for the Rights tendered pursuant to the Offer. Unless the
context requires otherwise, all references to Shares herein shall include the
Rights, and all references to the Rights shall include all benefits that may
inure to shareholders of the Company or to the holders of the Rights pursuant
to the Rights Agreement.
Holders whose certificates for Shares and, if applicable, Right
Certificates, are not immediately available (including, if Right Certificates
have not yet been distributed) or who cannot deliver confirmation of the book-
entry transfer of their Shares and, if applicable, Rights into the
Depositary's account at a Book-Entry Transfer Facility ("Book-Entry
Confirmation") and all other documents required hereby to the Depositary on or
prior to the Expiration Date (as defined in Section 1 of the Supplement) must
tender their Shares and, if applicable, Rights according to the guaranteed
delivery procedures set forth in Section 2 of the Offer to Purchase, as
supplemented by Section 2 of the Supplement. See Instruction 2 of the revised
Letter of Transmittal. Delivery of documents to a Book-Entry Transfer Facility
does not constitute delivery to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD BY
US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE HOLDER OF
RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE
MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
REVISED LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY
AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares and Rights held by us for your account, upon
the terms and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price has been decreased to $17 per Share, including the
associated Right, net to the seller in cash, without interest thereon.
2. The Offer and withdrawal rights will expire at 6:00 p.m., New York
City time, on Thursday, February 13, 1997, unless the Offer is extended.
3. The Offer is being made for all outstanding Shares.
4. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED
IN THE SUPPLEMENT) THAT NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES
BENEFICIALLY OWNED BY THE PURCHASER AND ITS AFFILIATES, WOULD REPRESENT 67%
OF THE OUTSTANDING SHARES ON A FULLY DILUTED BASIS (AS DEFINED IN THE
SUPPLEMENT) ON THE DATE OF PURCHASE, (II) THE ACQUISITION OF SHARES
PURSUANT TO THE OFFER AND THE PROPOSED MERGER HAVING BEEN APPROVED PURSUANT
TO SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW ("SECTION 203") OR
THE PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PROVISIONS
OF SECTION 203 ARE OTHERWISE INAPPLICABLE TO THE ACQUISITION OF SHARES
PURSUANT TO THE OFFER AND THE PROPOSED MERGER AND (III) THE PURCHASER BEING
SATISFIED THAT THE RIGHTS HAVE BEEN REDEEMED BY THE COMPANY OR THE RIGHTS
ARE UNENFORCEABLE OR OTHERWISE INAPPLICABLE TO THE OFFER AND THE PROPOSED
MERGER. SEE SECTION 8 OF THE SUPPLEMENT.
5. The Offer is not conditioned on the receipt of financing.
6. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the revised Letter
of Transmittal, stock transfer taxes on the purchase of Shares and/or
Rights by the Purchaser pursuant to the Offer.
2
<PAGE>
The Offer is made solely by the Offer to Purchase, the Supplement and the
revised Letter of Transmittal. The 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 Offer or the acceptance thereof would
not be in compliance with the securities, blue sky or other laws of such
jurisdiction. Neither the Purchaser nor Parent is aware of any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. To the extent the Purchaser or
Parent becomes aware of any state law that would limit the class of offerees
in the Offer, the Purchaser will amend the Offer and, depending on the timing
of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to such holders of shares prior to the
expiration of the Offer. In any jurisdiction the securities, blue sky or other
laws of which require the Offer to be made by a licensed broker or dealer, the
Offer is being made on behalf of the Purchaser by the Dealer Manager or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares (and
associated Rights) will be tendered unless otherwise specified on the
instruction form contained in this letter. Your instructions should be
forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
3
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Supplement dated December 18, 1996 to the Offer to Purchase, dated August 2,
1996, and the revised Letter of Transmittal (which, as amended from time to
time, together constitute the "Offer"), in connection with the Offer by USS
Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of United States Surgical Corporation, a Delaware corporation
("Parent"), to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Shares"), of Circon Corporation, a Delaware corporation
(the "Company"), including (unless and until the Purchaser declares that the
Rights Condition (as defined in the Supplement) is satisfied) the associated
preferred share purchase rights (the "Rights") issued pursuant to the
Preferred Shares Rights Agreement, dated as of August 14, 1996, between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agreement"), at a price equal to $17 per Share and associated Right,
net to the seller in cash, without interest thereon.
This will instruct you to tender to the Purchaser the number of Shares and
Rights indicated below (or, if no number is indicated below, all Shares and
Rights) held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer.
Number of Shares to be Tendered*
___________________________________ Shares
___________________________________ Rights
Account Number: __________________________
Dated: __________________________________,
SIGN HERE
- -------------------------------------------------------------------------------
Signature(s)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please type or print name(s)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please type or print address(es) here
- ------------------------------------------
Area Code and Telephone Number
- ------------------------------------------
Taxpayer Identification or
Social Security Number(s)
- --------
* Unless otherwise indicated, it will be assumed that all Shares and Rights
held by us for your account are to be tendered.
4
