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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE
ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 16)
CIRCON CORPORATION
------------------
(Name of Subject Company)
USS ACQUISITION CORP.
UNITED STATES SURGICAL CORPORATION
----------------------------------
(Bidders)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
---------------------------------------
(Title of class of securities)
172736 10 0
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(CUSIP number of class of securities)
THOMAS R. BREMER
USS ACQUISITION CORP.
C/O UNITED STATES SURGICAL CORPORATION
150 GLOVER AVENUE
NORWALK, CONNECTICUT 06856
TELEPHONE: (203) 845-1000
---------------------------------------
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidders)
with a copy to:
PAUL T. SCHNELL, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
CALCULATION OF FILING FEE
TRANSACTION VALUATION/1/ Amount of Filing Fee
--------------------- --------------------
$242,765,874 $41,010.48
- ---------
/1/ For purposes of calculating fee only. This amount assumes the purchase at a
purchase price of $16.50 per Share of an aggregate of 12,427,418 Shares.
The amount reflects the purchase of 13,243,448 outstanding Shares, and
1,143,318 Shares issuable with respect to options and warrants, less
1,959,348 Shares owned by Parent. The amount of the filing fee, calculated
in accordance with Regulation 240.0-11 of the Securities Exchange Act of
1934, as amended, equals 1/50th of one percentum of the value of Shares
purchased. Payment of the filing fee due in connection herewith has been
completely offset by a previous payment by Parent in the amount of
$48,553.17. Accordingly, a credit of $7,542.69 remains on account of
Parent.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(A)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: $48,553.17
Filing Party: USS Acquisition Corp.; United States Surgical Corporation
Form or Registration No: Schedule 14D-1
Date Filed: August 2, 1996
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CUSIP NO. 172736 10 0 PAGE 1 OF 2
14D-1
1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
UNITED STATES SURGICAL CORPORATION
- -------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- -------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,959,348 Shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
14.8%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
2
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CUSIP NO. 172736 10 0 PAGE 2 OF 2
---------------------
14D-1
1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
USS ACQUISITION CORP.
- --------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- --------------------------------------------------------------------------------
3. SEC USE ONLY
- --------------------------------------------------------------------------------
4. SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(e) or 2(f) [ ]
- --------------------------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
973,174 Shares
- --------------------------------------------------------------------------------
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
7.3%
- --------------------------------------------------------------------------------
10. TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
3
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This Schedule 14D-1 Tender Offer Statement (this "Statement")
relates to 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"), at a price of $16.50 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 5, 1997 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). This Statement also constitutes Amendment No. 16 to
the Statement on Schedule 13D of the Purchaser and Parent filed on August 2,
1996, as amended. Copies of the Offer to Purchase and the Letter of
Transmittal are annexed hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Circon Corporation, a Delaware
corporation with its principal executive offices at 6500 Hollister Avenue,
Santa Barbara, California 93117.
(b) The information set forth in the Introduction of the Offer to Purchase
is incorporated herein by reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a-d, g) This Statement is being filed on behalf of Parent and the
Purchaser for purposes of the Schedule 14D-1. The information set forth in
the Introduction, Section 9 and Schedule I of the Offer to Purchase is
incorporated herein by reference.
(e-f) During the last five years, neither Parent nor the Purchaser, nor,
to the best knowledge of Parent and the Purchaser, the persons listed in
Schedule I of the Offer to Purchase, has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree, or final order enjoining future violation of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a-b) The information set forth in the Introduction and Section 11 of
the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a-c) The information set forth in Section 10 of the Offer to Purchase
is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a-b) The information set forth in the Introduction, and Sections 11 and
12 of the Offer to Purchase is incorporated by reference.
(c) The information set forth in Sections 11 and 12 of the Offer to
Purchase is incorporated herein by reference.
(d-e) The information set forth in Sections 7, 12 and 13 of the Offer to
Purchase is incorporated herein by reference.
4
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(f-g) The information set forth in Sections 7 and 12 of the Offer to
Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Introduction, Sections 8 and 9 and
Schedule II of the Offer to Purchase is incorporated herein by reference.
(b) The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 11, 12 and 16
of the Offer to Purchase is incorporated by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
(a) The information set forth in the Introduction and Section 16 of the
Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
The incorporation by reference herein of the above-referenced financial
information does not constitute an admission that such information is material
to a decision by a shareholder of the Company whether to sell, tender or bid
Shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Sections 11 and 12 of the Offer to
Purchase is incorporated herein by reference.
(b-c, e) The information set forth in Section 15 of the Offer to
Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7 and 12 of the Offer to
Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated August 5, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
5
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(a)(7) Summary Advertisement, dated August 5, 1997.
(a)(8) Press Release, dated August 5, 1997.
(a)(9) Complaint filed by United States Surgical Corporation on September
17, 1996 in the Court of Chancery in the State of Delaware in and for New
Castle County in the action entitled United States Surgical Corporation, a
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Delaware Corporation, and USS Acquisition Corp., a Delaware Corporation, v.
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Richard A. Auhll, R. Bruce Thompson, Harold R. Frank, Rudolf R. Schulte, Paul
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W. Hartloff, Jr., John Blokker and Circon Corporation, a Delaware Corporation.
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(a)(10) Complaint filed by United States Surgical Corporation on
September 18, 1996 in the Court of Chancery in the State of Delaware in and
for New Castle County in the action entitled United States Surgical
----------------------
Corporation, a Delaware corporation and Cede & Co., v. Circon Corporation, a
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Delaware corporation.
--------------------
(a)(11) Directorship Agreement between Parent and Victor H. Krulak, dated
as of July 24, 1997.
(a)(12) Directorship Agreement between Parent and Charles M. Elson, dated
as of July 24, 1997.
(a)(13) Preliminary Proxy Statement filed with the Commission on August
4, 1997.
(a)(14) Letter to the Company providing notice of Parent's and
Purchaser's intention to nominate individuals for election as directors and to
adopt a proposed resolution at the Annual Meeting.
(b)(1) Credit Agreement dated as of December 20, 1995 among Parent,
signatory banks, Morgan Guaranty Trust Company of New York as Documentation
Agent, NationsBank, N.A., as Administrative Agent, and The Bank of New York,
as Yen Administrative Agent.
(b)(2) Amendment No. 1 to Credit Agreement dated as of December 20, 1995,
dated September 16, 1996.
(b)(3) $175 million credit agreement dated September 16, 1996 among
Parent and signatory banks, related to acquisition financing.
(c) None.
(d) None.
(e) Not applicable.
(f) None.
6
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: August 5, 1997
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
7
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT EXHIBIT NAME
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<S> <C>
(a)(1) Offer to Purchase, dated August 5, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Advertisement, dated August 5, 1997.
(a)(8) Press Release, dated August 5, 1997.
(a)(9) Complaint filed by United States Surgical Corporation on
September 17, 1996 in the Court of Chancery in the State of
Delaware in and for New Castle County in the action entitled
United States Surgical Corporation, a Delaware Corporation, and
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USS Acquisition Corp., a Delaware Corporation, v. Richard A.
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Auhll, R. Bruce Thompson, Harold R. Frank, Rudolf R. Schulte,
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Paul W. Hartloff, Jr., John Blokker and Circon Corporation, a
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Delaware Corporation, incorporated herein by reference to Exhibit
--------------------
(a)(12) to Amendment No. 5 on Schedule 14D-1 of Parent, filed
with the Commission on September 17, 1996.
(a)(10) Complaint filed by United States Surgical Corporation on
September 18, 1996 in the Court of Chancery in the State of
Delaware in and for New Castle County in the action entitled
United States Surgical Corporation, a Delaware corporation and
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Cede & Co., v. Circon Corporation, a Delaware corporation,
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incorporated herein by reference to Exhibit (a)(14) to Amendment
No. 6 on Schedule 14D-1 of Parent, filed with the Commission on
September 18, 1996.
(a)(11) Directorship Agreement between Parent and Victor H. Krulak, dated
as of July 24, 1997, incorporated herein by reference to Exhibit
(a)(31) to Amendment No. 14 on Schedule 14D-1 of Parent, filed
with the Commission on July 28, 1997.
(a)(12) Directorship Agreement between Parent and Charles M. Elson, dated
as of July 24, 1997, incorporated herein by reference to Exhibit
(a)(32) to Amendment No. 14 on Schedule 14D-1 of Parent, filed
with the Commission on July 28, 1997.
(a)(13) Preliminary Proxy Statement filed with the Commission on August
4, 1997, incorporated herein by reference to Schedule 14A of
Parent, filed with the Commission on August 4, 1997.
</TABLE>
8
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<TABLE>
<CAPTION>
<S> <C>
(a)(14) Letter to the Company providing notice of Parent's and
Purchaser's intention to nominate individuals for election as
directors and to adopt a proposed resolution at the Annual
Meeting, incorporated herein by reference to Exhibit (a)(35) to
Amendment No. 15 on Schedule 14D-1 of Parent, filed with the
Commission on July 29, 1997.
(b)(1) Credit Agreement dated as of December 20, 1995 among Parent,
signatory banks, Morgan Guaranty Trust Company of New York as
Documentation Agent, NationsBank, N.A., as Administrative Agent,
and The Bank of New York, as Yen Administrative Agent,
incorporated herein by reference to Exhibit 4(a) to Parent's Form
10-K for 1995.
(b)(2) Amendment No. 1 to Credit Agreement dated as of December 20,
1995, dated September 16, 1996, incorporated herein by reference
to Exhibit (10)(b) to Parent's Form 10-Q for the period ended
September 30, 1996.
(b)(3) $175 million credit agreement dated September 16, 1996 among
Parent and signatory banks, related to acquisition financing,
incorporated herein by reference to Exhibit (10)(a) to Parent's
Form 10-Q for the period ended September 30, 1996.
</TABLE>
9
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EXHIBIT 99(A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$16.50 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, SEPTEMBER 25, 1997, UNLESS THE OFFER IS EXTENDED.
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
OFFER TO PURCHASE) 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 IN ITS SOLE JUDGMENT 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 OFFER TO PURCHASE. SEE SECTION
14. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
----------------
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
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August 5, 1997
<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. PARENT PLANS TO COMMENCE A PROXY CONTEST TO ELECT UP TO TWO
DIRECTORS AND TO PROPOSE A RESOLUTION CALLING FOR THE PROMPT SALE OF THE
COMPANY AT THE COMPANY'S 1997 ANNUAL MEETING OF SHAREHOLDERS (THE "ANNUAL
MEETING"). IN CONNECTION WITH THIS PROXY CONTEST, PARENT HAS GIVEN THE COMPANY
NOTICE OF ITS INTENT TO NOMINATE TWO PERSONS TO THE BOARD OF DIRECTORS AND TO
PROPOSE A RESOLUTION FOR CONSIDERATION BY THE COMPANY'S SHAREHOLDERS. IN
ADDITION, PARENT HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PRELIMINARY PROXY MATERIALS WITH RESPECT TO THE ANNUAL MEETING. THE COMPANY
HAS NOT PUBLICLY ANNOUNCED THE DATE OF THE 1997 ANNUAL MEETING OF
SHAREHOLDERS. SEE SECTION 11.
Any shareholder desiring to tender all or any portion of such shareholder's
Shares (and, if applicable, Rights (as defined herein)) must either (i)
complete and sign the Letter of Transmittal delivered herewith (or any
facsimiles of such Letter of Transmittal) in accordance with the instructions
in such Letter of Transmittal, have such shareholder's signature thereon
guaranteed if required by Instruction 1 to such Letter of Transmittal, mail or
deliver such Letter of Transmittal (or such facsimile thereof) and any other
required documents to the Depositary, and either deliver the certificates for
such Shares and, if separate, the certificates representing the Rights, to the
Depositary along with such Letter of Transmittal (or a facsimile thereof) or
deliver such Shares (and Rights, if applicable) pursuant to the procedure for
book-entry transfer set forth in Section 2 of the Offer to Purchase (as
defined herein) prior to the expiration of the Offer 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
(and, if applicable, Rights) 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 or retender such Shares (and, if applicable, Rights).
Any shareholder who desires to tender or retender Shares (and, if
applicable, Rights) and whose certificates for such Shares (and, if
applicable, Rights) are not immediately available, or who cannot comply with
the procedures for book-entry transfer described in the Offer to Purchase on a
timely basis, may tender or retender such Shares (and, if applicable, Rights)
by following the procedures for guaranteed delivery set forth in Section 2 of
the Offer to Purchase and the Notice of Guaranteed Delivery delivered
herewith.
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 this Offer to Purchase. Additional copies of this Offer to Purchase, the
Letter of Transmittal, the 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.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<C> <S> <C>
INTRODUCTION............................................................ 1
THE TENDER OFFER........................................................ 4
SECTION 1. TERMS OF THE OFFER......................................... 4
SECTION 2. PROCEDURES FOR TENDERING SHARES............................ 5
SECTION 3. WITHDRAWAL RIGHTS.......................................... 9
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT......................... 9
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................... 10
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES............. 11
SECTION 7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS...................... 12
SECTION 8. CERTAIN INFORMATION CONCERNING THE COMPANY................. 13
SECTION 9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER.... 18
SECTION 10. SOURCE AND AMOUNT OF FUNDS................................. 21
SECTION 11. BACKGROUND OF THE OFFER.................................... 23
SECTION 12. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY................ 24
SECTION 13. DIVIDENDS AND DISTRIBUTIONS................................ 27
SECTION 14. CERTAIN CONDITIONS OF THE OFFER............................ 27
SECTION 15. CERTAIN LEGAL MATTERS...................................... 31
SECTION 16. FEES AND EXPENSES.......................................... 34
SECTION 17. MISCELLANEOUS.............................................. 35
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE
PURCHASER................................................. S-1
</TABLE>
<PAGE>
To the Holders of Shares of Common Stock of CIRCON CORPORATION:
INTRODUCTION
USS Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of United States Surgical Corporation, a Delaware corporation
("Parent"), hereby offers 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 $16.50 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 this Offer to Purchase and in the related 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.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares pursuant to the
Offer. The Purchaser will pay all charges and expenses of Salomon Brothers Inc
("Salomon Brothers"), as Dealer Manager (in such capacity, the "Dealer
Manager"), First Chicago Trust Company of New York, as Depositary (the
"Depositary"), and Kissel-Blake Inc., as Information Agent (the "Information
Agent"), incurred in connection with the Offer. See Section 16.
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.
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.
Parent and Purchaser have notified the Company of their intent to nominate
Mr. Charles M. Elson and Victor H. Krulak, Lt. Gen., U.S. Marine Corps, Ret.
to stand for election to the Company's Board of Directors at the Annual
Meeting. Parent and Purchaser have also notified the Company of their intent
to propose a resolution for adoption at the Annual Meeting calling for the
prompt sale of the Company. See Section 11.
THE OFFER 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.
<PAGE>
Certain Conditions to the Offer
The Offer is 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 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 Offer to Purchase, Parent and Purchaser beneficially
own 1,959,348 Shares (approximately 14.8% of the Shares outstanding).
According to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997 (the "Company 10-Q"), as of March 31, 1997, there were
13,243,448 Shares outstanding. According to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1996 (the "Company 10-K"),
options to purchase 1,041,318 Shares were outstanding under the Company's
stock option plans and warrants to purchase 102,000 Shares had been issued.
Accordingly, based on this information, as of the date of this Offer to
Purchase, there were 14,386,766 Shares outstanding on a fully diluted basis,
assuming (i) that no Shares were issued (other than those reserved on December
31, 1996, for options and warrants then outstanding) or acquired by the
Company after March 31, 1997, (ii) the exercise of all of the options and
warrants outstanding as of December 31, 1996 and (iii) that as of the date of
Offer to Purchase there are no other obligations to issue Shares. Based on the
foregoing information and assumption, the Minimum Condition would be satisfied
if at least 7,679,786 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 this Offer to
Purchase.
If the Minimum Condition is satisfied and the Offer is consummated, the
Purchaser believes that it would beneficially own approximately 82% of the
Shares outstanding (excluding 1,418,142 Shares owned as of March 11, 1997 by
persons who are directors and also officers of the Company as reported in the
Company 10-K) at the time the Offer commenced (based on 13,243,448 Shares
outstanding as of March 31, 1997, assuming that no Shares have been issued
since March 31, 1997, and assuming no Shares have been purchased or sold since
that date by persons who are directors and also officers of the Company), and,
accordingly, based on such information and assumptions, the Business
Combination Condition would not be satisfied. See "Business Combination
Condition" below and Section 14.
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.
Section 203, in general, prohibits a Delaware corporation such as the
Company from engaging in a Business Combination (as defined in Section 15)
with an Interested Stockholder (as defined in Section 15) 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
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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 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.
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 8,092,163 Shares pursuant to the Offer (assuming
no Shares have been issued since March 31, 1997 and assuming no Shares have
been purchased or sold by persons who are directors and also officers of the
Company since March 11, 1997), 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 March 11, 1997 by persons
who are directors and also officers of the Company, as reported in the Company
10-K) and the Business Combination Condition would be satisfied. However,
there can be no assurance as to whether any Shares have been issued since
March 31, 1997 or as to whether Shares have been purchased or sold by persons
who are directors and also officers of the Company since March 11, 1997 and,
to the extent that Shares have been issued since March 31, 1997 or shares have
been purchased or sold by persons who are directors and also officers of the
Company since March 11, 1997, the purchase of 8,092,163 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 this Offer to
Purchase. The provisions of the Rights Agreement are described in Section 8
and in the Company 8-A.
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. See Section 15.
Certain other conditions to the Offer are described in Section 14. The
Purchaser expressly re-serves the right, in its sole discretion, to waive any
one or more of the conditions to the Offer. See Sections 14 and 15. The Offer
is not conditioned on the receipt of financing.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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THE TENDER OFFER
1. TERMS OF THE OFFER
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 for all Shares
validly tendered and not withdrawn prior to the Expiration Date. The term
"Expiration Date" means 6:00 p.m., New York City time, on Thursday, September
25, 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 RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION,
THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HART-
SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE OTHER
CONDITIONS SET FORTH IN SECTION 14. THE OFFER IS NOT CONDITIONED ON THE
RECEIPT OF FINANCING.
Subject to the applicable rules and regulations of the Securities 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 14 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. 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 14. 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 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
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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 this
Offer to Purchase, "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.
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 14 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.
As of the date of this Offer to Purchase, the Rights are evidenced by the
Share Certificates and do not trade separately. Accordingly, by tendering a
Share Certificate, a shareholder is automatically tendering the associated
Rights. If, however, pursuant to the Rights Agreement or for any other reason,
the Rights detach and separate certificates representing Rights ("Rights
Certificates") are issued, shareholders will be required to tender one Right
for each Share tendered in order to effect a valid tender of such Share.
Requests are being made to the Company pursuant to Rule 14d-5 of the
Exchange Act and Section 220 of the DGCL for the use of the Company's
shareholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will 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, by the
Purchaser following receipt of such lists or listings from the Company, or by
the Company if it so elects.
2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a shareholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message (as defined below),
and any other required documents, must be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase prior to
the Expiration Date and either certificates for tendered Shares ("Share
Certificates") must be received by the Depositary at one of such addresses or
such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each
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case prior to the Expiration Date, or (b) the tendering shareholder must
comply with the guaranteed delivery procedures set forth below.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at The Depositary Trust Company and The Philadelphia Depositary
Trust Company (the "Book-Entry Transfer Facilities") for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a Book-
Entry Transfer Facility to transfer such Shares into the Depositary's account
in accordance with such Book-Entry Transfer Facility's procedures for such
transfer. However, although delivery of Shares may be effected through book-
entry transfer into the Depositary's account at a Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message (as defined below), and any other required documents, must, in any
case, be transmitted to, and received by, the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at a Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-
ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
The term "Agent's Message" means a message transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgement from the participant in such Book-
Entry Transfer Facility tendering the Shares that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against such participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY
TRANSFER FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER.
SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
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.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered
holder (which term, for purposes of this Section, includes any participant in
any of the Book-Entry Transfer Facilities' systems whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of 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"). In all other cases, all signatures on the Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instructions
1 and 5 to the Letter of Transmittal. If Share Certificates are registered in
the name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or Share Certificates for Shares not tendered or not
accepted for payment are to be returned to a person other than the registered
holder of the Share Certificates surrendered,
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the tendered Share Certificates must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name or names of the
registered holders appear on the Share Certificates, with the signatures on
the Share Certificates or stock powers guaranteed as described above. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates 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 if all the following conditions are met:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, is received
by the Depositary, as provided below, prior to the Expiration Date; and
(iii) the Share Certificates, representing all tendered Shares, in proper
form for transfer (or a Book-Entry Confirmation with respect to all such
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message, and any other
required documents are received by the Depositary within three trading days
after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the Nasdaq is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) Share Certificates for (or a timely Book-
Entry Confirmation with respect to) such Shares, (b) a Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering shareholders may be paid at different
times depending upon when Share Certificates or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT.
The Purchaser's acceptance for payment of Shares validly tendered pursuant
to the Offer will constitute a binding agreement between the tendering
shareholder and the Purchaser upon the terms and subject to the conditions of
the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
as such shareholder's attorneys-in-fact and proxies in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Shares tendered by
such shareholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after August 5, 1997 (the "Applicable Date"). All
such proxies will be irrevocable and considered coupled with an interest in
the tendered Shares. Such appointment will be effective 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 powers of attorney, proxies
and consents given by such shareholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no
subsequent powers of attorney, proxies, consents or revocations may be given
(and, if given, will not be deemed effective). The designees of the Purchaser
will thereby be empowered to exercise all voting and other rights with
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respect to such Shares and other securities or rights in respect of any
annual, special, adjourned or postponed meeting of the Company's shareholders,
actions by written consent in lieu of any such meeting or otherwise, as they
in their sole discretion deem proper. The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser must
be able to exercise full voting, consent and other rights with respect to such
Shares and other securities or rights, including voting at any meeting of
shareholders.
Distribution of Rights. Holders of Shares will be required to tender one
Right for each Share tendered to effect a valid tender of such Share. Unless
and until the Distribution Date of the Rights occurs, the Rights are
represented by and transferred with the Shares. Accordingly, if the
Distribution Date does not occur prior to the Expiration Date of the Offer, a
tender of Shares will constitute a tender of the associated Rights. If a
Distribution Date has occurred, 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 a Distribution
Date has occurred, a tender of Shares without Rights constitutes an agreement
by the tendering shareholder to deliver 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
such Rights Certificates are distributed. The Purchaser reserves the right to
require that the Depositary receive such Rights 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, such Rights Certificates, if such Rights Certificates
have been distributed to holders of Shares. Purchaser will not pay any
additional consideration for the Rights tendered pursuant to the Offer.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by the Purchaser, in its sole discretion,
whose determination will be final and binding on all parties. The Purchaser
reserves the absolute right to reject any or all tenders determined by it not
to be in proper form or the acceptance for payment of or payment for which
may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser
also reserves the absolute right to waive any defect or irregularity in the
tender of any Shares of any particular shareholder whether or not similar
defects or irregularities are waived in the case of other shareholders. No
tender of Shares will be deemed to have been validly made until all defects or
irregularities relating thereto have been cured or waived. None of the
Purchaser, Parent, the Depositary, the Information Agent, the Dealer Manager
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any
such notification. The Purchaser's interpretation of the terms and conditions
of the Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding on all parties.
Backup Withholding. In order to avoid "backup withholding" of federal income
tax on payments of cash pursuant to the Offer or the Proposed Merger, a
shareholder surrendering Shares in the Offer must, unless an exemption
applies, provide the Depositary with such shareholder's correct taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that such shareholder is not
subject to backup withholding. If a shareholder does not provide such
shareholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
shareholder and the payment of cash to such shareholder pursuant to the Offer
or the Proposed Merger may be subject to backup withholding of 31% of the
amount of such payment. All shareholders surrendering Shares pursuant to the
Offer should complete and sign the main signature form and the Substitute Form
W-9 included as part of the Letter of Transmittal to provide the information
and certification necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Purchaser and
the Depositary). Noncorporate foreign shareholders should complete and sign
the main signature form and a Form W-8, Certificate of Foreign Status, a copy
of which may be obtained from the Depositary, in order to avoid backup
withholding. See Instruction 10 to the Letter of Transmittal.
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3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after October 3, 1997
(or such later date as may apply in case the Offer is extended).
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If Share Certificates have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and, unless such Shares have been tendered
by an Eligible Institution, the signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been delivered pursuant
to the procedure for book-entry transfer as set forth in Section 2, any notice
of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following
one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
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 accept for payment and will pay for all
Shares (including the associated Rights) validly tendered and not withdrawn
promptly after the Expiration Date. All questions as to the satisfaction of
such terms and conditions will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. See
Sections 1 and 14. The Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order
to comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. See Section 15. Any such delays will be effected in
compliance with 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).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of
a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. The per Share consideration paid to any
shareholder pursuant to the Offer will be the highest per Share consideration
paid to any other shareholder pursuant to the Offer.
9
<PAGE>
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of
the Purchaser's acceptance for payment of such Shares. Payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
validly tendering shareholders for the purpose of receiving payment from the
Purchaser and transmitting payment to tendering shareholders. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE
PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT. Upon the deposit of funds with the Depositary for the
purpose of making payments to tendering shareholders, the Purchaser's
obligation to make such payment shall be satisfied and tendering shareholders
must thereafter look solely to the Depositary for payment of amounts owed to
them by reason of the acceptance for payment of Shares pursuant to the Offer.
The Purchaser will pay any stock transfer taxes with respect to the transfer
and sale to it or its order pursuant to the Offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal, as well as any charges
and expenses of the Dealer Manager, the Depositary and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn except to the extent
tendering shareholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, Share Certificates for any such unpurchased Shares will be returned,
without expense to the tendering shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedure set forth in
Section 2, such Shares will be credited to an account maintained at the
appropriate Book-Entry Transfer Facility), as promptly as practicable after
the expiration, termination or withdrawal of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant
to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Proposed Merger will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also be a taxable transaction
under applicable state, local or foreign income or other tax laws. Generally,
for federal income tax purposes, a tendering shareholder will recognize gain
or loss equal to the difference between the amount of cash received by the
shareholder pursuant to the Offer or the Proposed Merger and the aggregate tax
basis in the Shares tendered by the shareholder and purchased pursuant to the
Offer or converted in the Proposed Merger, as the case may be. Gain or loss
will be calculated separately for each block of Shares tendered and purchased
pursuant to the Offer or converted in the Proposed Merger, as the case may be.
If Shares are held by a shareholder as capital assets, gain or loss
recognized by the shareholder will be capital gain or loss. In the case of
individual shareholders, any such capital gain will be (i) mid-term gain if
the shareholder has held its Shares for more than one year but no more than 18
10
<PAGE>
months and (ii) long-term capital gain if the shareholder has held its Shares
for more than 18 months. Any mid-term capital gain recognized by an individual
shareholder will be taxed at a maximum marginal federal rate of 28%, while any
long-term capital gain recognized by an individual shareholder will be taxed
at a maximum federal marginal tax rate of 20%. Any capital gain recognized by
corporate shareholders upon the sale of Shares will be long-term capital gain
if the corporate shareholder has held its shares for more than one year and
will, in that case, be taxed at a maximum federal marginal tax rate of 35%.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED PURSUANT TO THE EXERCISE OF
EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION OR WITH RESPECT TO HOLDERS
OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE CODE, SUCH AS
NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS AND
FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF SHARES IN LIGHT OF
INDIVIDUAL CIRCUMSTANCES. SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS
TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE
APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS) OF THE OFFER AND THE PROPOSED MERGER.
6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
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, 1996,
the Shares were held by approximately 1,052 holders of record. The following
table sets forth the high and low sales prices per Share as reported in the
Company 10-K or 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>
1995:
First quarter............................................. 19 1/2 11 3/4
Second quarter............................................ 23 1/4 16
Third quarter............................................. 21 17
Fourth quarter............................................ 23 1/2 18
1996:
First quarter............................................. 20 1/4 10 3/4
Second quarter............................................ 15 5/8 10 3/4
Third quarter............................................. 19 1/2 8 1/2
Fourth quarter............................................ 17 5/8 15 1/4
1997:
First quarter............................................. 16 1/8 13 3/8
Second quarter............................................ 14 5/8 12 1/2
Third quarter (through August 4).......................... 16 3/8 14
</TABLE>
On August 4, 1997, the last full trading day before commencement of the
Offer, the closing sale price for the Shares was $14 7/8 per share.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
11
<PAGE>
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending upon the aggregate market value and per share price of any Shares
not purchased pursuant to the Offer, the Shares may no longer meet the
standards of the National Association of Securities Dealers, Inc. (the "NASD")
for continued inclusion in the Nasdaq Stock Market, which require that an
issuer have at least 200,000 publicly held shares with a market value of $1
million. If these standards are not met, the Shares might nevertheless
continue to be included in the NASD's Nasdaq Stock Market with quotations
published in the Nasdaq "additional list" or in one of the "local lists."
However, if the number of holders of Shares falls below 300, or if the number
of publicly held Shares falls below 100,000, or if there are not at least two
market makers for the Shares, NASD rules provide that the securities would no
longer be "qualified" for Nasdaq Stock Market reporting, and the Nasdaq Stock
Market would cease to provide any quotations. Shares held directly or
indirectly by an officer or director of the Company, or by any beneficial
owner of more than 10 percent of the Shares, ordinarily will not be considered
as being publicly held for this purpose. If, as a result of the purchase of
Shares pursuant to the Offer or otherwise, the Shares no longer meet the NASD
requirements for continued inclusion in any tier of the Nasdaq National Market
or in any other tier of the Nasdaq Stock Market, and the Shares are no longer
included in any tier of the Nasdaq Stock Market, the market for Shares could
be adversely affected.
In the event the Shares no longer meet the requirements of the NASD for
inclusion in any tier of the Nasdaq Stock Market, quotations might still be
available from other sources. The extent of the public market for the Shares
and availability of such quotations would, however, depend upon the number of
holders of Shares remaining at such time, the interest in maintaining a market
in the Shares on the part of securities firms, the possible termination of
registration under the Exchange Act, as described below, and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Shares under the
Exchange Act would substantially reduce the information required to be
furnished by the Company to its shareholders and to the Commission and would
make certain provisions of the Exchange Act no longer applicable to the
Company, such as the short-swing profit recovery provisions of Section 16(b)
of the Exchange Act, the requirement of furnishing a proxy statement pursuant
to Section 14(a) of the Exchange Act in connection with shareholders' meetings
and the related requirement of furnishing an annual report to shareholders and
the requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the Company
and persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act
of 1933, as amended, may be impaired or eliminated. The Purchaser intends to
seek to cause the Company to apply for termination of registration of the
Shares under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Shares is not terminated prior to the Proposed
Merger, then the Shares will be delisted from all stock exchanges and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Proposed Merger.
12
<PAGE>
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, it is possible that, following the Offer, the Shares would no
longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company. The Company is a Delaware corporation with its principal
offices at 6500 Hollister Avenue, Santa Barbara, California 93117. According
to the Company 10-K, the Company designs, manufactures and markets medical
endoscope and electrosurgery systems for diagnosis and minimally invasive
surgery. According to the Company 10-K, the Company's systems are used for a
growing number of medical specialties, including urology, arthroscopy,
laparoscopy, gynecology, thoracoscopy and plastic surgery. According to the
Company 10-K, the Company also designs, assembles and markets miniature color
video systems used with endoscope systems.
According to the Company 10-K, Cabot designs, manufactures and markets
medical devices, ureteral stents, urological diagnostic equipment, related
products and systems principally for use in general surgery and gynecological
diagnosis and surgery.
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,
and copies may be obtained, in the manner set forth under "Available
Information" below. 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 [was] 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
13
<PAGE>
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 [i.e.
Parent's Initial Offer], 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)
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
14
<PAGE>
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
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
15
<PAGE>
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.
UNLESS THE RIGHTS ARE REDEEMED, SHAREHOLDERS WILL BE REQUIRED TO TENDER ONE
RIGHT FOR EACH SHARE TENDERED IN ORDER TO EFFECT A VALID TENDER OF SUCH SHARES
IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN SECTION 2. IF SEPARATE
CERTIFICATES FOR THE RIGHTS ARE NOT ISSUED, A TENDER OF SHARES WILL ALSO
CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS. SEE SECTIONS 1 AND 2.
CONSUMMATION OF THE OFFER IS CONDITIONED UPON THE PURCHASER BEING SATISFIED
IN ITS SOLE JUDGMENT THAT THE RIGHTS HAVE BEEN REDEEMED BY THE COMPANY OR THE
RIGHTS ARE UNENFORCEABLE OR OTHERWISE INAPPLICABLE TO THE OFFER AND TO THE
PROPOSED MERGER. SEE SECTION 15.
16
<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 March 31, 1996 and 1997 (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 below under "Available Information."
CIRCON CORPORATION
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
CIRCON CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED FISCAL YEAR ENDED
MARCH 31, DECEMBER 31,
------------------- ---------------------------
1997 1996 1996(1) 1995(2) 1994
--------- --------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales..................... $ 38,393 $ 39,962 $153,779 $160,447 $157,041
Gross Profit.................. 21,466 22,198 85,878 83,640 88,569
Operating Income (Loss)....... 2,003 3,578 6,709 3,820 13,753
Net Income (Loss)............. 791 1,659 2,071 (5,393) 6,509
Net Income (Loss) per Share... 0.06 0.13 0.16 (0.41) 0.51
Weighted Average Shares
Outstanding.................. 13,664 13,114 13,339 13,237 12,738
BALANCE SHEET DATA:
Total Assets.................. $ 170,433 $ 168,921 $169,118 $181,339 $184,129
Total Debt.................... 52,935 59,509 50,935 72,292 73,483
Total Shareholders' Equity.... 99,251 89,502 98,901 87,172 86,965
</TABLE>
- --------
No cash dividends have been paid during the periods presented.
(1) The Company charged $3 million in 1996 for expenses related to the Offer
and certain stockholder litigation. The Company recognized a $2 million
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.
Recent Developments. On July 22, 1997, the Company announced its results for
the three month period ended on June 30, 1997. According to the Company's
announcement, for the six month period ended June 30, 1997, the Company's sales
totaled $78.8 million, compared with $77.1 million for the same period in 1996,
and the Company's gross profit was $43.2 million, compared with $42.8 million
for the same period in 1996. For the three month period ended June 30, 1997,
the Company's sales totaled $40.5 million, compared with $37.1 million for the
same period in 1996, and the Company's gross profit was $21.8 million, compared
with $20.6 million for the same period in 1996.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports relating to its business, financial condition and other matters.
Information as of particular dates concerning the Company's directors and
officers, their remuneration, stock options and other matters, the principal
holders of the Company's securities and any material interest of such persons
in transactions with the Company is required to
17
<PAGE>
be disclosed in proxy statements distributed to the Company's shareholders and
filed with the Commission. Such reports, proxy statements and other
information should be available for inspection at the public reference
facilities of the Commission at 450 Fifth Street, N.W., Washington, DC 20549,
and at the regional offices of the Commission located at Seven World Trade
Center, 13th Floor, New York, NY 10048 and Citicorp Center, 500 West Madison
Street (Suite 1400), Chicago, IL 60661. Such reports, proxy statements and
other information may also be obtained at the Web site that the Commission
maintains at http://www.sec.gov. Copies of such information should be
obtainable, by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 450 Fifth Street, N.W.,
Washington, DC 20549.
Company Information. The information concerning the Company contained in
this Offer to Purchase 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.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Parent is a Delaware corporation primarily engaged in developing,
manufacturing and marketing a proprietary line of technologically advanced
surgical wound management products to hospitals throughout the world. Parent
currently operates domestically and internationally through subsidiaries,
divisions and distributors.
Parent is a leading multinational developer, manufacturer and marketer of
innovative surgical wound closure products. In this category, principal
products consist of a series of surgical stapling instruments (both disposable
and reusable), disposable surgical clip appliers and disposable loading units
(DLUs) for use with stapling instruments. The instruments are an alternative
to manual suturing techniques utilizing needle/suture combinations and enable
surgeons to reduce blood loss, tissue trauma and operating time while joining
internal tissue, reconstructing or sealing off organs, removing diseased
tissue, occluding blood vessels and closing skin, either with titanium,
stainless steel, or proprietary absorbable copolymer staples or with titanium,
stainless steel, or proprietary absorbable copolymer clips. Surgical stapling
also makes possible several surgical procedures which cannot be achieved with
surgical needles and suturing materials. The disposable instruments and DLUs
are expended after a single use or, in the case of reloadable disposable
instruments, after a single surgical procedure.
Parent is a leading manufacturer and marketer of specialized wound
management products designed for use in the field of minimally invasive
surgery. This surgical technique (also referred to as laparoscopic or
endoscopic surgery) requires incisions of up to one half inch through which
various procedures are performed using laparoscopic instruments and optical
devices, known as laparoscope or endoscopes, for viewing inside the body
cavity. Laparoscopy generally provides patients with significant reductions in
post-operative hospital stay, pain, recuperative time and hospital costs, with
improved cosmetic results, and with the ability to return to work and normal
life in a shorter time frame. Parent has developed and markets disposable
surgical clip appliers and stapling instruments designed for laparoscopic uses
in a variety of sizes and configurations. Parent's products in this area also
include trocars, which provide entry ports to the body in laparoscopic
surgery, and a line of instruments which allows the surgeon to see, cut,
clamp, retract, suction, irrigate or otherwise manipulate tissue during a
laparoscopic procedure. Parent also designs and markets laparoscopes.
Application for minimally invasive surgery currently include cholecystectomy
(gall bladder removal), hysterectomy, hernia repair, bladder suspension for
urinary stress incontinence, anti-reflux procedures for correction of
heartburn, and various forms of bowel, stomach, gynecologic, urologic, and
thoracic (chest) surgery. Parent believes that laparoscopy can also be used
effectively in many other surgical procedures.
18
<PAGE>
Parent offers certain of its products in both disposable and reusable
versions. Disposable instruments reduce the user's capital investment,
eliminate the risks and costs associated with maintenance, sterilizing and
repair of reusable instruments, and provide the surgeon with a new sterile
instrument for each procedure, offering more efficacious and safer practice
for both patients and operating room personnel. Reusable instruments provide
an alternative for surgeons and hospitals preferring this approach.
Parent also manufactures and markets a line of sutures products, which was
introduced in 1991. Parent believes that sutures, which represent a major
portion of the wound closure market, are a natural complement to its other
wound management products.
Parent has taken steps to diversify beyond the general surgery market and
explore new growth areas in surgery where it can utilize its manufacturing
expertise, research and development experience and the skills of its sales
force. To this end, Parent is building a line of surgical specialty
instrumentation and technology for cardiovascular, oncological, urological and
orthopedic procedures. Parent believes that minimally invasive instrumentation
and more advanced techniques can be applied to these specialty practices.
Parent plans to obtain such technologies through internal research and
development and by acquiring, investing in, or creating alliances with, other
firms or persons who have developed such technology.
The Purchaser is a recently incorporated Delaware corporation and a wholly
owned subsidiary of Parent which to date has not conducted any business other
than in connection with the Offer and the Proposed Merger. The principal
executive offices of Parent and the Purchaser are located at 150 Glover
Avenue, Norwalk, Connecticut 06856.
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<PAGE>
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, 1996 (the "Parent 10-K") and Parent's Quarterly Reports on
Form 10-Q for the six month periods ended June 30, 1996 and 1997 (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>
SIX MONTHS ENDED FISCAL YEAR ENDED
JUNE 30, DECEMBER 31,
------------------- --------------------------------
1997(1) 1996 1996 1995(2) 1994(3)
--------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales................ $ 574,600 $ 549,600 $1,112,700 $1,022,300 $ 918,700
Income before income
taxes................... 56,400 62,400 141,700 89,800 32,700
Net income............... 47,600 48,100 109,100 79,200 19,200
Net income per common
share and common share
equivalent (primary and
fully diluted).......... .62 .66 1.48 1.05 0.08
Average number of common
shares and common share
equivalents
outstanding............. 69,100 58,100 60,500 57,000 56,600
Dividends declared per
common share............ .08 .04 0.08 0.08 0.08
BALANCE SHEET DATA:
Total assets............. 1,573,100 1,373,700 $1,514,800 $1,265,500 $1,103,500
Long-term debt........... 143,900 150,700 142,400 256,500 248,500
Stockholders' equity(4).. 1,117,200 942,500 1,053,800 741,100 662,00
</TABLE>
- --------
(1) In the second quarter of 1997, Parent recorded litigation costs of $24
million ($.24 per common share), restructuring charges of $6 million ($.06
per common share) and a benefit resulting from an IRS examination of $7
million ($.10 per common share).
(2) 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.
(3) 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.
(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.
20
<PAGE>
Available Information. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, files reports relating to
its business, financial condition and other matters.
Information, as of particular dates, concerning Parent's directors and
officers, their remuneration, stock options and other matters, the principal
holders of Parent's securities and any material interest of such persons in
transactions with Parent is required to be disclosed in proxy statements
distributed to Parent's shareholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the Commission and copies thereof should be obtainable from the
Commission and on-line through EDGAR in the same manner as is set forth with
respect to the Company in Section 8.
Contacts, etc. with the Company. The only acquisition of Shares effected
during the past 60 days by Parent and its affiliates was the acquisition of
973,174 Shares at a purchase price of $14.50 per Share pursuant to the Initial
Offer. Parent subsequently transferred 6,963 Shares to each of Mr. Charles M.
Elson and Lt. Gen. Victor H. Krulak in exchange for their agreement to stand
for election as a director of the Company at the Annual Meeting. Except as set
forth in this Offer to Purchase, none of Parent or the Purchaser, or, to the
best knowledge of Parent or the Purchaser, any of the persons listed in
Schedule I hereto, or any associate or majority-owned subsidiary of such
persons, beneficially owns any equity security of the Company, and none of
Parent, the Purchaser, or, to the best knowledge of Parent or the Purchaser,
any of the other persons referred to above, or any of the respective
directors, executive officers or subsidiaries of any of the foregoing, has
effected any transaction in any equity security of the Company during the past
60 days.
Except as set forth in this Offer to Purchase, none of Parent or the
Purchaser, or, to the best knowledge of Parent and the Purchaser, any of the
persons listed in Schedule I hereto has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the
voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or
the giving or withholding of proxies. Except as set forth in this Offer to
Purchase, none of Parent or the Purchaser, or, to the best knowledge of Parent
and the Purchaser, any of the persons listed in Schedule I hereto has had any
transactions with the Company, or any of its executive officers, directors or
affiliates that would require reporting under the rules of the Commission.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between Parent or the Purchaser, or their
respective subsidiaries, or, to the best knowledge of Parent and the
Purchaser, any of the persons listed in Schedule I hereto, on the one hand,
and the Company or its executive officers, directors or affiliates, on the
other hand, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, election of directors, or a sale or other
transfer of a material amount of assets that would require reporting under the
rules of the Commission.
10. SOURCE AND AMOUNT OF FUNDS
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 $210 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, the Purchaser 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.
21
<PAGE>
Parent 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 this 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 August 1, 1997,
approximately $6.8 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 and Tokyo Interbank Offered Rate
("TIBOR") for yen 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
London Interbank Offered Rate ("LIBOR") and CD rate loans are determined by a
pricing schedule which considers the ratio of consolidated debt at each
calender 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 August 1, 1997 for a three month LIBOR borrowing would be
approximately 6.04%. 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.
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.
22
<PAGE>
It is anticipated that the indebtedness incurred by Parent under such loans
will be repaid from funds generated internally by Parent and its subsidiaries
(including, after the Proposed Merger, if consummated, dividends paid by the
Company and its subsidiaries), through additional borrowings, through
application of proceeds of dispositions or through a combination of two or
more such sources. No final decisions have been made concerning the method
Parent will employ to repay such indebtedness. Such decisions when made will
be based on Parent's review from time to time of the advisability of
particular actions, as well as on prevailing interest rates and financial and
other economic conditions.
11. BACKGROUND OF THE OFFER
During the winter of 1994-1995, Leon C. Hirsch, Chairman, President and
Chief Executive Officer of Parent met with Richard A. Auhll, Chairman,
President and Chief Executive Officer of the Company. Mr. Hirsch expressed an
interest in exploring a possible acquisition of the Company by Parent. Mr.
Auhll indicated that he was not interested in exploring such a transaction.
During the spring of 1995, Parent held preliminary discussions concerning
the possible acquisition of a company which was later acquired by the Company.
During July and August 1996, Parent acquired 1,000,100 Shares (approximately
8% of the Shares outstanding) in open market transactions.
On August 1, 1996, Mr. Hirsch telephoned Mr. Auhll to advise him, among
other things of the commencement of an offer (the "Initial Offer") to purchase
all outstanding Shares for a purchase price of $18.00 per Share.
On August 2, 1996, Parent announced that it had commenced the Initial Offer
and published a summary advertisement announcing the commencement of the
Initial Offer. On August 15, 1996, the Company's Board of Directors
recommended that stockholders not tender their Shares to Parent.
On August 30, 1996, Parent issued a press release announcing the extension
of the Initial Offer until 6:00 p.m., New York City time, on September 30,
1996.
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 15.
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. The Company has agreed to provide
such information. Accordingly, this lawsuit is in suspense.
On September 30, 1996, Parent issued a press release announcing the
extension of the Initial Offer until 6:00 p.m. New York City time, on December
13, 1996, unless further extended.
On December 16, 1996, Parent and Purchaser extended the Initial Offer and
amended the Initial Offer by decreasing the price offered to $17 in cash per
share. Parent took this action because it believed that, as a result of the
steps taken by the Company's management to entrench themselves and the
Company's performance to that date, Parent could no longer justify the higher
price.
On June 11, 1997, Mr. Hirsch sent a letter to Mr. Auhll requesting a meeting
to discuss a possible negotiated transaction between Parent and the Company.
On June 12, 1997, Mr. Auhll responded that "We appreciate your interest in
Circon. However we remain committed to our strategic plan and wish to pursue
our corporate goals independently."
23
<PAGE>
On June 16, 1997, Parent and Purchaser further amended the Initial Offer by
decreasing the number of Shares subject to the offer to up to an aggregate of
973,174 Shares and decreasing the price offered to $14.50 in cash per Share
(and associated Right). The reduced price offered reflected both Parent's view
of the Company's results over the previous three quarters and the fact that
Parent would not acquire control of the Company as a result of the offer. The
number of shares which Parent and Purchaser tendered for was the approximate
maximum number of Shares which Parent could acquire without triggering the
Company's "poison pill". On July 15, 1997, Parent accepted for payment 973,174
Shares.
On July 17, 1997, Mr. Hirsch sent a letter to Mr. Auhll requesting a meeting
to discuss a possible negotiated transaction between Parent and the Company.
On July 23, 1997, Mr. Auhll responded that he would discuss the letter "with
the Board" at the Board's meeting during the week of July 28th. As of August
4, 1997, Parent had not received any further communication from the Company
with respect to this letter.
On July 25, 1997, Parent entered into agreements with Mr. Charles M. Elson
and Lt. Gen. Victor H. Krulak pursuant to which, among other things, each has
agreed to stand for election as a director of the Company. In connection
therewith, each such designee has received a fee of $100,000, payable in 6,963
Shares, from Parent.
On July 28, 1997, Parent issued a press release announcing that it had filed
preliminary proxy materials relating to the Annual Meeting. On the same date
Parent sent a letter to the Company providing notice of Parent's and
Purchaser's intention to nominate Mr. Elson and Lt. Gen. Krulak for election
as directors and to propose the following resolution at the Annual Meeting:
"RESOLVED, that the shareholders of Circon Corporation urge the Circon Board
of Directors to arrange for the prompt sale of Circon to the highest bidder."
On August 5, 1997, Parent and Purchaser commenced the Offer.
12.PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Proposed Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
The Offer, as the first step in the acquisition of the Company, is intended to
facilitate the acquisition of all the Shares. Parent currently intends to
propose and seek to consummate, as soon as practicable following the
consummation of the Offer, the Proposed Merger. The purpose of the Proposed
Merger is to acquire all Shares not purchased pursuant to the Offer or
otherwise. Pursuant to the Proposed Merger, each then outstanding Share (other
than Shares owned by Parent or any of its subsidiaries and Shares owned by
shareholders who perfect any available dissenters' rights they may have under
the DGCL) would be converted into the right to receive an amount in cash equal
to the price per Share paid by the Purchaser pursuant to the Offer. Although
it is the Purchaser's current intention to propose and seek to enter into a
definitive merger agreement with the Company with respect to the Proposed
Merger and to consummate the Proposed Merger as promptly as practicable, there
can be no assurance that the Proposed Merger will be consummated or, if
consummated, of the timing or terms thereof. Consummation of the Proposed
Merger will require the adoption of a resolution by the Company's board of
directors approving the Proposed Merger and the affirmative vote of the
holders of a majority of the outstanding Shares. Alternatively, if the
Purchaser purchases 90% or more of the Shares, the Proposed Merger could be
consummated without the approval of the shareholders through a Short-Form
Merger (described below under "The Proposed Merger").
Plans for the Company. Based upon publicly available information, Parent
believes that significant operating and sales synergies may be achievable by
the combined entity, which could include both increases in sales and margins
and reduced expenses. If and to the extent that the
24
<PAGE>
Purchaser acquires control of the Company or otherwise obtains access to the
books and records of the Company, Parent and the Purchaser intend to conduct a
detailed review of the Company and its assets, corporate structure, dividend
policy, capitalization, operations, properties, policies, management and
personnel and consider and determine what, if any, changes would be desirable
in light of the circumstances which then exist. Such strategies could include,
among other things, changes in the Company's business, corporate structure,
Certificate of Incorporation, By-laws, capitalization, management or dividend
policy.
Parent plans to commence a proxy contest to elect up to two directors and to
propose a resolution calling for the prompt sale of the Company at the Annual
Meeting. In connection with this proxy contest, Parent has given the Company
notice of its intent to nominate two persons to the board of directors and to
propose a resolution for consideration by the Company's shareholders. In
addition, Parent has filed with the Securities and Exchange Commission
preliminary proxy materials with respect to the Annual Meeting. The Company has
not publicly announced the date of the Annual Meeting of shareholders. See
Section 11.
Except as described in this Offer to Purchase, Parent and the Purchaser have
no present plans or proposals that would result in an extraordinary corporate
transaction, such as a merger, consolidation, reorganization, liquidation or
sale or transfer of a material amount of assets, involving the Company or any of
its subsidiaries, or any material changes in the Company's present
capitalization, dividend policy, corporate structure or business or any material
changes or reductions in the composition of its management or personnel.
The Proposed Merger. In general, under the DGCL, the Proposed Merger requires
the approval of the Company's Board of Directors and the approval by the
holders of a majority of the outstanding Shares.
Accordingly, if the Purchaser acquires more than a majority of the
outstanding Shares and the Company's Board of Directors approves the Proposed
Merger, the Purchaser would have the voting power to approve the Proposed
Merger without the vote of any other shareholders and could effect the Proposed
Merger by so voting.
Further, the DGCL would permit the Proposed Merger to occur without a vote of
the Company's shareholders (a "Short-Form Merger") only if the Purchaser were
to acquire at least 90% of the outstanding shares in the Offer. Accordingly, if
the Purchaser owns 90% or more of the outstanding Shares after consummation of
the Offer, a Short-Form Merger could be effected by the Purchaser without the
approval of the Company's shareholders or Board of Directors.
If, following the consummation of the Offer, the members of the Company's
Board of Directors in office at such time were to refuse to approve the
Proposed Merger (or any other transaction or corporate action proposed by the
Purchaser that required the approval of the Company's Board of Directors), the
Purchaser, in order to consummate the Proposed Merger (or any such other
transaction or corporate action), would first have to replace at least a
majority of the Company's Board of Directors with its own nominees. As a result
of the classified board provisions contained in the Company's Certificate of
Incorporation, at least two annual meetings of the Company's stockholders could
be required to enable nominees of the Purchaser to comprise a majority of the
Company's Board of Directors.
Neither Parent nor the Purchaser can give any assurance as to whether, as a
result of information hereafter obtained by either Parent or the Purchaser,
changes in general economic or market
25
<PAGE>
conditions or in the business of the Company, or other presently unforeseen
factors, the Proposed Merger will be submitted to the Company's shareholders
or whether the Proposed Merger will be delayed or abandoned. Whether or not
the Proposed Merger is consummated, Parent and the Purchaser reserve the right
to acquire additional Shares following the expiration of the Offer through
private purchases, market transactions, tender or exchange offers or otherwise
on terms and at prices that may be more or less favorable than those of the
Offer or, subject to any applicable legal restrictions, to dispose of any or
all Shares acquired by Parent and the Purchaser.
Dissenters' Rights. Each shareholder of record (as of the date fixed for
determining shareholders entitled to notice of the meeting of shareholders of
the Company at which the Proposed Merger is to be submitted or, if the
Proposed Merger is not subject to a vote of shareholders, the date on which an
agreement of merger with respect to the Proposed Merger is adopted by the
Board of Directors of the Company) will have the right to receive fair cash
value for such shareholder's Shares if such shareholder objects to the
Proposed Merger and otherwise properly exercises such shareholder's
dissenters' rights and the Proposed Merger is consummated. If the statutory
procedures for exercising or perfecting dissenters' rights are complied with
in accordance with the DGCL, then a judicial determination will be made as to
the fair cash value required to be paid to the dissenting shareholders for
their Shares. Any such judicial determination of fair cash value would be
based on the amount that a willing seller, under no compulsion to sell, would
be willing to accept, and a willing buyer, under no compulsion to purchase,
would be willing to pay (excluding any appreciation or depreciation in the
market value resulting from the Proposed Merger), and the value so determined
could be more or less than the price per share to be paid in the Offer or the
Proposed Merger.
From the time written demand for payment of the fair cash value is given
until either the termination of the rights and obligations arising from such
demand or the purchase of the Shares related thereto by the Company, all
rights accruing to the objecting shareholder, including voting and dividend or
distribution rights, will be suspended. If any dividend or distribution is
paid on Shares during the suspension, an amount equal to the dividend or
distribution which would have been payable on the Shares, but for such
suspension, shall be paid to the holder of record of the Shares as a credit
against the fair cash value of the Shares. If the right to receive the fair
cash value is terminated otherwise than by the purchase of the Shares by the
Company, all rights will be restored to the objecting shareholder and any
distribution that would have been made to the holder of record of the Shares,
but for the suspension, will be made at the time of such termination.
The foregoing summary of the rights of dissenting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights. The preservation
and exercise of dissenters' rights are conditioned on strict adherence to the
applicable provisions of the DGCL.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions
and which may under certain circumstances be applicable to the Proposed
Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Proposed Merger or other
business combination or (ii) the Proposed Merger or other business combination
is consummated within one year after the purchase of the Shares pursuant to
the Offer and the amount paid per Share in the Proposed Merger or other
business combination is at least equal to the amount paid per Share in the
Offer. If applicable, Rule 13e-3 requires, among other things, that certain
financial information concerning the fairness of the proposed transaction and
the consideration offered to minority shareholders in such transaction be
filed with the Commission and disclosed to shareholders prior to the
consummation of the transaction.
26
<PAGE>
13.DIVIDENDS AND DISTRIBUTIONS
If, on or after the Applicable Date (August 5, 1997), the Company should (a)
split, combine or otherwise change the Shares or its capitalization, (b)
acquire or otherwise cause a reduction in the number of outstanding Shares or
other securities or (c) issue or sell additional Shares (other than the
issuance of Shares under option 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, then, subject to the provisions of Section 14, the Purchaser, in
its sole discretion, may make such adjustments as it deems appropriate in the
Offer Price and other terms of the Offer, including, without limitation, the
number or type of securities offered to be purchased.
If, on or after the Applicable Date, the Company should declare or pay any
cash dividend on the Shares or other distribution on the Shares, or issue with
respect to the Shares any additional Shares, 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, payable or distributable to shareholders of record on a date prior
to the transfer of the Shares purchased pursuant to the Offer to the Purchaser
or its nominee or transferee on the Company's stock transfer records, then,
subject to the provisions of Section 14, (a) the Offer Price may, in the sole
discretion of the Purchaser, be reduced by the amount of any such cash
dividend or cash distribution and (b) the whole of any such noncash dividend,
distribution or issuance to be received by the tendering shareholders will (i)
be received and held by the tendering shareholders for the account of the
Purchaser and will be required to be promptly remitted and transferred by each
tendering shareholder to the Depositary for the account of the Purchaser,
accompanied by appropriate documentation of transfer, or (ii) at the direction
of the Purchaser, be exercised for the benefit of the Purchaser, in which case
the proceeds of such exercise will promptly be remitted to the Purchaser.
Pending such remittance and subject to applicable law, the Purchaser will be
entitled to all rights and privileges as owner of any such noncash dividend,
distribution, issuance or proceeds and may withhold the entire Offer Price or
deduct from the Offer Price the amount or value thereof, as determined by the
Purchaser in its sole discretion.
14. CERTAIN CONDITIONS OF THE OFFER
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,
(3) the Rights Condition shall have been satisfied,and (4) any waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer
shall have expired or been terminated. 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, 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
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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 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, other than the
routine application of the waiting period provisions of the HSR Act to the
Offer, 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
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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
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;
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(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 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
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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.
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 14 will be final and binding upon all parties.
15. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of publicly
available information filed by the Company with the Commission, neither the
Purchaser nor Parent is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of
Shares by the Purchaser pursuant to the Offer or the Proposed Merger or (ii)
any approval or other action, by any governmental, administrative or
regulatory agency or authority, domestic, foreign or supranational, that would
be required for the acquisition or ownership of Shares by the Purchaser as
contemplated herein. Should any such approval or other action be required, the
Purchaser currently contemplates that such approval or action would be sought.
While the Purchaser does not currently intend to delay the acceptance for
payment of Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or action, if
needed, would be obtained or would be obtained without substantial conditions
or that adverse consequences might not result to the business of the Company,
the Purchaser or Parent or that certain parts of the businesses of the
Company, the Purchaser or Parent might not have to be disposed of in the event
that such approvals were not obtained or any other actions were not taken. The
Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See Section 14.
Antitrust. Under the HSR Act, and the rules and regulations that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. Parent will file a Notification and Report Form with respect
to the Offer and the Proposed Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares under the Offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by Parent, unless Parent
receives a request for additional information or documentary material, or the
Antitrust Division and the FTC terminate the waiting period prior thereto. If,
within such 15-day period, either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the
waiting period will be extended and would expire at 11:59 p.m., New York City
time, on the tenth calendar day after the date of substantial compliance by
Parent with such request. Only one extension of the waiting period pursuant to
a request for additional information is authorized by the HSR Act. Thereafter,
such waiting period may be extended only by court order or with the consent of
Parent. The Purchaser will not accept for payment Shares tendered pursuant to
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the Offer unless and until the waiting period requirements imposed by the HSR
Act with respect to the Offer have been satisfied. See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of
Shares pursuant to the Offer and the Proposed Merger. At any time before or
after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the acquisition
of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares
acquired by the Purchaser or divestiture of substantial assets of Parent or
its subsidiaries. Private parties and state attorneys general may also bring
action under the antitrust laws under certain circumstances. Based upon an
examination of publicly available information relating to the businesses in
which Parent and the Company are engaged, Parent and the Purchaser believe
that the acquisition of Shares by the Purchaser will not violate the antitrust
laws. Nevertheless, there can be no assurance that a challenge to the Offer or
other acquisition of Shares by the Purchaser on antitrust grounds will not be
made or, if such a challenge is made, of the result. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
Parent filed a Notification and Report Form with respect to the Initial
Offer on August 2, 1996. On August 17, 1996, the 15 calendar day waiting
period under the HSR Act with respect to the Initial Offer expired.
Section 203 of the DGCL. Section 203, in general, prohibits a Delaware
corporation such as the Company from engaging in a "Business Combination"
(defined as a variety of transactions, including mergers, as set forth below)
with an "Interested Stockholder" (defined generally as a person that is the
beneficial owner of 15% or more of a corporation's outstanding voting stock)
for a period of three years following the date that such person became an
Interested Stockholder unless (a) prior to the date 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
stockholder becoming an Interested Stockholder, (b) upon consummation of the
transaction that resulted in the 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 by directors who are also officers of the corporation and
employee stock ownership 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 stockholders, 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.
Under Section 203, the restrictions described above do not apply if, among
other things (a) the corporation's original certificate of incorporation
contains a provision expressly electing not to be governed by Section 203; (b)
the corporation, by action of its stockholders, adopts an amendment to its
certificate of incorporation or by-laws expressly electing not to be governed
by Section 203, provided that, in addition to any other vote required by law,
such amendment to the certificate of incorporation or by-laws must be approved
by the affirmative vote of a majority of the shares entitled to vote, which
amendment would not be effective until 12 months after the adoption of such
amendment and would not apply to any Business Combination between the
corporation and any person who became an Interested Stockholder of the
corporation on or prior to the date of such adoption; (c) the corporation does
not have a class of voting stock that is (1) listed on a national securities
exchange, (2) authorized for quotation on an inter-dealer quotation system of
a registered national securities association or (3) held of record by more
than 2,000 stockholders, unless any of the foregoing results from action
taken, directly or indirectly, by an Interested Stockholder or from a
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transaction in which a person becomes an Interested Stockholder; or (d) a
stockholder becomes an Interested Stockholder "inadvertently" and thereafter
divests itself of a sufficient number of shares so that such stockholder
ceases to be an Interested Stockholder.
Section 203 provides that, during such three-year period, the corporation
may not merge or consolidate with an Interested Stockholder or any affiliate
or associate thereof, and also may not engage in certain other transactions
with an Interested Stockholder or any affiliate or associate thereof,
including, without limitation, (a) any sale, lease, exchange, mortgage,
pledge, transfer or other disposition of assets (except proportionately as a
stockholder of the corporation) having an aggregate market value equal to 10%
or more of the aggregate market value of all assets of the corporation
determined on a consolidated basis or the aggregate market value of all the
outstanding stock of a corporation; (b) any transaction which results in the
issuance or transfer by the corporation or by certain subsidiaries thereof of
any stock of the corporation or such subsidiaries to the Interested
Stockholder, except pursuant to a transaction which effects a pro rata
distribution to all stockholders of the corporation; (c) any transaction
involving the corporation or certain subsidiaries thereof which has the effect
of increasing the proportionate share of the stock of any class or series, or
securities convertible into the stock of any class or series, of the
corporation or any such subsidiary which is owned directly or indirectly by
the Interested Stockholder (except as a result of immaterial changes due to
fractional share adjustments) or (d) any receipt of the Interested Stockholder
of the benefit (except proportionately as a stockholder of such corporation)
of any loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
PURSUANT TO THE 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. SEE "INTRODUCTION--CERTAIN CONDITIONS TO THE OFFER".
Other State Laws. A number of other states have adopted laws and regulations
applicable to attempts to acquire securities of corporations which are
incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations
otherwise have substantial economic effects, in such states. In 1982, in Edgar
v. MITE Corp., the Supreme Court of the United States invalidated on
constitutional grounds the Illinois Business Takeover Statute, which, as a
matter of state securities law, made takeovers of corporations meeting certain
requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp.
of America, the Supreme Court held that the Indiana Control Share Acquisition
Act was constitutional. Such Act, by its terms, is applicable only to
corporations that have a substantial number of shareholders in Indiana and are
incorporated there. Subsequently, a number of Federal courts ruled that
various state takeover statutes were unconstitutional insofar as they apply to
corporations incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. The Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer and has not complied with any such laws. Should any
person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity
or applicability of any such statute in appropriate court proceedings. In the
event it is asserted that one or more state takeover laws is applicable to the
Offer or the Proposed Merger, and an appropriate court does not determine that
it is inapplicable or invalid as applied to the Offer or the Proposed Merger,
the Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined, the
Purchaser might be unable to accept for payment any Shares tendered
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pursuant to the Offer, or be delayed in continuing or consummating the Offer.
In such case, the Purchaser may not be obligated to accept for payment any
Shares tendered. See Section 14.
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.
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. The Company has agreed to provide
such information. Accordingly, this lawsuit is in suspense.
16. FEES AND EXPENSES
Salomon Brothers is acting as Dealer Manager in connection with the Offer
and serving as financial advisor to the Purchaser and Parent in connection
with the proposed acquisition of the Company. As compensation for such
services, Parent has agreed to pay Salomon Brothers an initial fee of
$750,000, which was payable upon commencement of the Initial Offer. In
addition, Parent has also agreed to pay Salomon Brothers a fee of $2,500,000
(less any fees theretofore paid) contingent upon consummation of the
acquisition by merger, tender offer or otherwise by Parent of the Company or
the purchase by Parent of all or substantially all of the assets, or more than
50% of the equity securities, of the Company (collectively, "Acquisition
Transaction"). If no Acquisition Transaction is consummated, Parent has agreed
to pay Salomon Brothers a fee (in addition to the initial $750,000 fee) equal
to 11.1% of the sum of the aggregate profit received by Parent from sales of
Shares owned by Parent plus any "break-up," termination, expense reimbursement
or similar fees or payments received by Parent, but in no event in excess of
an additional $1 million. In addition, Parent has agreed to reimburse Salomon
Brothers for its reasonable out-of-pocket expenses, including, without
limitation, reasonable fees and disbursements of its counsel, incurred in
connection with the Offer and the Proposed Merger or otherwise arising out of
Salomon Brothers' engagement, and has also agreed to indemnify Salomon
Brothers (and certain affiliated persons) against certain liabilities and
expenses, including, without limitation, certain liabilities under the federal
securities laws. Salomon Brothers also acted as the Parent's agent for the
acquisition in the open market of Shares prior to the date hereof, for which
it received customary fees, and has rendered, and may from time to time in the
future render, various investment banking services to Parent and its
affiliates, for which it has received and is expected to receive customary
fees.
Kissel-Blake Inc. has been retained by the Purchaser as Information Agent in
connection with the Offer. The Information Agent may contact holders of Shares
by mail, telephone, telex, telegraph and personal interview and may request
brokers, dealers and other nominee shareholders to forward material relating
to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services
in addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith. The Purchaser has agreed to indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including, without limitation, certain liabilities under the
federal securities laws.
First Chicago Trust Company of New York has been retained as the Depositary.
The Purchaser will pay the Depositary reasonable and customary compensation
for its services in connection with the Offer, will reimburse the Depositary
for its reasonable out-of-pocket expenses in connection therewith and will
indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
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Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks
and trust companies and other nominees will, upon request, be reimbursed by
Parent or the Purchaser for customary clerical and mailing expenses incurred
by them in forwarding offering materials to their customers.
17. MISCELLANEOUS
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.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER 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 (THE "SCHEDULE 14D-1") PURSUANT TO RULE 14D-3
UNDER THE EXCHANGE ACT, TOGETHER WITH EXHIBITS, FURNISHING CERTAIN ADDITIONAL
INFORMATION WITH RESPECT TO THE OFFER, AND MAY FILE AMENDMENTS THERETO. SUCH
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 WITH
RESPECT TO THE COMPANY (EXCEPT THAT SUCH MATERIAL WILL NOT BE AVAILABLE AT THE
REGIONAL OFFICES OF THE COMMISSION).
USS ACQUISITION CORP.
August 5, 1997
35
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER
Parent. Set forth below are the name, business address and present principal
occupation or employment, and material occupations, positions, offices or
employments for the past five years of each director and executive officer of
Parent. Except as otherwise noted, the business address of each such person is
150 Glover Avenue, Norwalk, Connecticut 06856, and, except as otherwise noted,
each such person is a United States citizen. In addition, except as otherwise
noted, each director and executive officer of Parent has been employed in his
or her present principal occupation listed below during the last five years.
Directors of Parent are indicated by an asterisk.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
<S> <C>
Julie K. Blake*.............. 1992-1994, Executive Vice President and Chief
Operating Officer, Flavin, Blake & Co., Inc.;
Vice President, J.P. Morgan & Co. Incorporated,
1970-1992.
John A. Bogardus, Jr.*....... Director, Alexander & Alexander Services Inc.,
insurance brokerage and financial services
firm, New York, N.Y., from 1988 to May 1995;
prior thereto, its Chairman of the Board and
Director since 1987; prior thereto, its
Chairman of the Board, Chief Executive Officer
and Director.
Thomas R. Bremer*............ Senior Vice President and General Counsel since
January 1, 1994 of Parent; Vice President and
General Counsel since 1989; prior thereto,
General Counsel since 1988.
Peter Burtscher.............. Mr. Burtscher is Vice President, Sales and
Marketing, Latin America and Pacific Rim of
Parent since May 1, 1997; prior thereto, Group
Vice President of Parent since 1993; prior
thereto, Vice President, International
Distributor Sales since 1982. Mr. Burtscher is
a citizen of Austria.
Leon C. Hirsch*.............. Chairman of the Board and Chief Executive
Officer since July 1996; prior thereto,
Chairman of the Board, President and Chief
Executive Officer since 1987.
Richard A. Douville.......... Mr. Douville is Senior Vice President, Chief
Financial Officer of Parent since January 1,
1997; prior thereto, Vice President and
Treasurer, and Chief Financial Officer, of
Parent since July, 1996; prior thereto, Vice
President and Treasurer since April 1993.
Richard N. Granger........... Mr. Granger is Vice President, Research and
Development of Parent. He has held such
position since 1993.
Thomas D. Guy................ Mr. Guy is Senior Vice President, Operations of
Parent. He has held such position since 1994.
Charles E. Johnson........... Mr. Johnson is Vice President, Education of
Parent. He has held such position since 1994.
Turi Josefsen*...............
Executive Vice President and, since July, 1994
President, International Operations; prior
thereto, Executive Vice President and
President, Auto Suture Companies.
</TABLE>
S-1
<PAGE>
PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
---- -----------------------------------
Douglas L. King*............. President and Director, Smyth, Sanford & Gerard
Reinsurance Intermediaries, Inc., insurance and
reinsurance brokers. Director, Healthplex, Inc.
a dental administration service company, New
York, N.Y.
Robert A. Knarr.............. Mr. Knarr is Executive Vice President, Sales
and Marketing, North America of Parent, since
January, 1997; prior thereto, Senior Vice
President and General Manager, U.S. and Canada
of Parent since 1994; prior thereto, Senior
Vice President, Marketing since January 1992.
Pamela Komenda............... Ms. Komenda is Corporate Secretary of Parent.
She has held such position since 1989.
Bernard Mardirossian......... Mr. Mardirossian is Vice President, Finance and
Distribution, International, of Parent since
July, 1997; prior thereto, Senior Director,
International Accounting, since 1992; prior
thereto, Director, International Accounting
since 1989.
William F. May*.............. Chairman of the Board, Statue of Liberty-Ellis
Island Foundation, Inc., New York, N.Y., since
1995, prior thereto, its Chairman and Chief
Executive Officer; Director, Salomon Inc, New
York, N.Y.; Trustee, University of Rochester;
Trustee, American Museum of Natural History;
Director, Lincoln Center; Trustee, Columbia
Presbyterian Hospital; Trustee, Committee for
Economic Development.
Louis J. Mazzarese........... Mr. Mazzarese is Vice President, Quality and
Regulatory Affairs of Parent. He has held such
position since 1992.
James R. Mellor*............. Chairman and Chief Executive Officer, General
Dynamics Corporation, until May, 1997; prior to
May 1994, its President and Chief Executive
Officer from 1993 to 1994, President and Chief
Operating Officer from 1991 to 1993, and
Executive Vice President from 1981 to 1990;
Director, Bergan Brunswig Corporation, Computer
Sciences Corporation, and Pinkerton's, Inc.
Eitan Nahum.................. Mr. Nahum is Vice President, Strategic Planning
& Business Development of Parent. He has held
such position since 1995. Mr. Nahum is a
citizen of Israel.
David Renker................. Mr. Renker is Vice President, Human Resources
since July, 1997; prior thereto, Senior
Director, Human Resources since 1994; prior
thereto, Director, Employee Relations since
1993.
Barry D. Romeril*............ Executive Vice President and Chief Financial
Officer, Xerox Corporation. Mr. Romeril is a
citizen of the United Kingdom.
Howard M. Rosenkrantz*....... President and Chief Operating Officer since
July, 1996; prior thereto, Senior Vice
President, Finance and Chief Financial Officer
since 1992; prior thereto, Vice President,
Finance; Trustee, Committee for Economic
Development.
Joseph C. Scherpf............ Mr. Scherpf is Vice President and Controller of
Parent. He has held such position since 1984.
S-2
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The 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: Facsimile Transmission: By Hand or By Overnight
Courier:
Tenders & Exchanges (201) 222-4720
P.O. Box 2569--Suite or Tenders & Exchanges
4660 (201) 222-4721 14 Wall Street
Jersey City, New Jersey Suite 4680--8th Floor--CR
07303-2559 New York, New York 10005
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 Offer to Purchase, the 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:
[LOGO OF 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)(2)
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 5, 1997
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, SEPTEMBER 25, 1997,
UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Depositary
By Mail: By Hand: By Overnight Courier:
Tenders & Exchanges Tenders & 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,
Jersey City, NJ Vietnam Veterans Memorial Plaza 8th Floor--CIR
07303-2569 New York, NY 10041 New York, New York 10005
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
- --------------------------------------------------------------------------------
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**
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
TOTAL SHARES
- --------------------------------------------------------------------------------
* 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) RIGHTS CERTIFICATE(S) TENDERED*
APPEAR(S) ON RIGHTS CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------------------------------------------------------------------
RIGHTS
EVIDENCED
RIGHTS CERTIFICATE BY RIGHTS 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 Rights
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 Rights 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 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). Delivery of documents
to a Book-Entry Transfer Facility does not constitute delivery to the
Depositary.
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 Rights Certificates (as defined in the
Offer to Purchase) have been distributed to holders of Shares prior to the
date of tender pursuant to the Offer, Rights 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 Rights 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 Rights 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 Rights Certificates are distributed. The Purchaser
reserves the right to require that it receive such Rights 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, Rights 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.
2
<PAGE>
Shareholders whose certificates evidencing Shares ("Share Certificates")
and, if applicable, Rights Certificates are not immediately available
(including if the Distribution Date has occurred, but Rights 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 Offer to Purchase) 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. 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
Offer to Purchase) 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 $16.50 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 5, 1997 (the
"Offer to Purchase"), 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 5,
1997 (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 Rights Certificates have been distributed to
holders of Shares prior to the date of tender pursuant to the Offer, Rights
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 Rights Certificates have not been
distributed prior to the time Shares are tendered herewith, the undersigned
agrees hereby to deliver Rights 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 Rights
5
<PAGE>
Certificates are distributed. The Purchaser reserves the right to require that
the Depositary receive such Rights 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,
Rights 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, 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 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 Rights
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 Rights 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
Rights 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
Rights Certificates evidencing Rights 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)
[_] Rights Certifi-
cate(s) to:
Mail [_] check [_] Share Certif-
Name: ____________________________ icate(s) [_] Rights
(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 Offer to
Purchase), and, unless and until the Purchaser declares that the Rights
Condition is satisfied, Rights 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 Rights 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 Rights Certificates have not yet
been distributed), who cannot deliver their Share Certificates or, if
applicable, Rights 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, Rights 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 Rights Certificates are distributed to
shareholders by the Company, all as described in Section 2 of the Offer to
Purchase.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND, IF APPLICABLE, RIGHTS 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 Rights 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, 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 OFFER TO PURCHASE).
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.
PROVISION OF TIN TO 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
FORM W-9 individuals, this is your
social security number. If ----------------------
you do not have a number, Employer
see Obtaining a Number in Identification Number
DEPARTMENT OF the enclosed Guidelines.)
THE TREASURY Certify by signing and
INTERNAL dating below. Note: If the
REVENUE account is in more than one
name, see the chart in the
enclosed Guidelines to
determine which number to
give the payer.
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)
August 5, 1997
13
<PAGE>
EXHIBIT 99(A)(3)
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 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 Offer to Purchase dated
August 5, 1997 (the "Offer to Purchase")) 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 Offer to Purchase) 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.
THE DEPOSITARY FOR THE OFFER IS:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Mail: By Hand: By Overnight
Tenders and Exchanges Courier:
Tenders & Exchanges
Tenders & Exchanges c/o The Depository Trust Company 14 Wall Street
P.O. Box 2569--Suite 55 Water Street, DTC TAD Suite 4680--8th
4660 Vietnam Veterans Memorial Plaza Floor-CIR
Jersey City, New New York, NY 10041 New York, New York
Jersey 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,and the 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.
Number of Shares:
- ------------------------------------------
Number of Rights:
- ------------------------------------------
Certificate Nos. (if available):
- ------------------------------------------
Share Certificates
- ------------------------------------------
Rights 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 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 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:
____________________________________, 1997
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)(4)
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
$16.50 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, SEPTEMBER 25, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
August 5, 1997
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 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 $16.50 per Share and 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 5, 1997
(the "Offer to Purchase") and in the 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 Offer
to Purchase) 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 Rights
Certificates (as defined in the Offer to Purchase) have been distributed to
holders of Shares prior to the date of tender pursuant to the Offer, Rights
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 Rights
<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 Rights 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 Rights Certificates are distributed. The Purchaser
reserves the right to require that the Depositary receive such Rights
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, Rights Certificates, if such
Rights 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 whose certificates for Shares and, if applicable, Right Certificates
are not immediately available (including if Rights 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 Offer to Purchase) must tender
their Shares and, if applicable, Rights according to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2
of the 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, THE SATISFACTION OF THE
MINIMUM CONDITION, THE RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION,
THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE HART-
SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER AND THE SATISFACTION OF THE OTHER CONDITIONS SET FORTH
IN SECTION 14 OF THE OFFER TO PURCHASE. 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 Offer to Purchase, dated August 5, 1997;
2. A Letter of Transmittal to be used by holders of Shares in accepting
the Offer and tendering Shares and/or Rights;
3. A 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 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;
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
2
<PAGE>
representing the tendered Shares and, if applicable, Rights should be (i)
delivered or (ii) tendered by book-entry transfer, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
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 all outstanding Shares (and, if applicable, 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, (ii) the 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 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 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, SEPTEMBER 25, 1997, UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed 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 Letter of Transmittal and the Offer to Purchase.
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.
The Offer is made solely by the Offer to Purchase and the 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
3
<PAGE>
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.
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.
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)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$16.50 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, SEPTEMBER 25, 1997,
UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
August 5, 1997
To Our Clients:
Enclosed for your consideration is the Offer to Purchase dated August 5,
1997 (the "Offer to Purchase") and the Letter of Transmittal (which, together
with the Offer to Purchase 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 Offer to Purchase) 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 $16.50 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, and the 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 Rights Certificates (as defined in the
Offer to Purchase) have been distributed to holders of Shares prior to the
date of tender pursuant to the Offer, Rights 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 Rights 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 Rights 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 Rights Certificates are distributed. The Purchaser
reserves
<PAGE>
the right to require that the Depositary receive such Rights 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, Rights 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, Rights
Certificates, are not immediately available (including, if Rights 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 Offer to
Purchase) must tender their Shares and, if applicable, Rights according to the
guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase. See Instruction 2 of the 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
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 Offer Price is $16.50 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 September 25, 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, THE SATISFACTION OF
THE MINIMUM CONDITION, THE RIGHTS CONDITION, THE BUSINESS COMBINATION
CONDITION, THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND
THE REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE
OTHER CONDITIONS SET FORTH IN SECTION 14 OF THE OFFER TO PURCHASE.
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 Letter of
Transmittal, stock transfer taxes on the purchase of Shares and/or Rights
by the Purchaser pursuant to the Offer.
The Offer is made solely by the Offer to Purchase and the 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
2
<PAGE>
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 Offer
to Purchase dated August 5, 1997, and the 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
Offer to Purchase) 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 $16.50 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: _____________________________, 1997
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
<PAGE>
Exhibit 99(A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, any one
of the
individuals(1)
3. Husband and wife (joint account) The actual owner
of the account
or, if joint
funds, either
person(1)
4. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
5. Adult and minor (joint account) The adult or, if
the minor is the
only
contributor, the
minor(1)
6. Account in the name of guardian or committee for a The ward, minor,
designated ward, minor, or incompetent person or incompetent
person(3)
7. a The usual revocable savings trust account (grantor is The grantor-
also trustee) trustee(1)
b So-called trust account that is not a legal or valid The actual
trust under State law owner(1)
8. Sole proprietorship account The owner(4)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- ------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of Agriculture in the name The public
of a public entity (such as a State or local government, entity
school district, or prison) that receives agricultural
program payments
</TABLE>
- -------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or pat-
ronage dividends in gross income, such failure will be treated as being due to
negligence and will be subject to a penalty of 5% on any portion of an under-
payment attributable to that failure unless there is clear and convincing evi-
dence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of
an offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
August 5, 1997 and the related 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. However, the Purchaser may, in its discretion, take such action as
it may deem necessary to make the Offer in any jurisdiction and extend the Offer
to holders of Shares in such jurisdiction. In those jurisdictions where
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of USS
Acquisition Corp. by Salomon Brothers Inc (the "Dealer Manager") or one or more
registered brokers or dealers that are licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
CIRCON CORPORATION
AT
$16.50 NET PER SHARE
BY
USS ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
UNITED STATES SURGICAL CORPORATION
USS Acquistion Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of United States Surgical Corporation, a Delaware
corporation ("Parent"), is 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 $16.50 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 5, 1997 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context otherwise
requires, all references to Shares shall include the associated Rights.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 6:00 P.M., NEW YORK CITY TIME, ON
THURSDAY, SEPTEMBER 25, 1997, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
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 Offer to Purchase) 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 14 of the Offer to Purchase. The Offer is not conditioned on
the receipt of financing.
The purpose of the Offer 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 Parent or any of its subsidiaries and Shares owned by
shareholders who perfect their appraisal rights under applicable law) would be
converted into the right to receive an amount in cash equal to the price per
Share paid by the Purchaser pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary (as defined in the Offer to Purchase) of the Purchaser's acceptance
of such Shares for payment pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payments from the Purchaser and transmitting such payments to
validly tendering shareholders. Under no circumstances will interest on the
purchase price for Shares be paid by the Purchaser, regardless of any delay in
making such payment. In all cases, payment for Shares tendered and accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares (the "Share
Certificates"), or timely confirmation of a book-entry transfer of such Shares
into the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in Section 2 of the Offer to Purchase) pursuant to the procedures set
forth in Section 2 of the Offer to Purchase, (ii) the 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 Letter of
Transmittal. The Purchaser expressly reserves the right, in its sole discretion,
at any time or from time to time, to extend for any reason the period of time
during which the Offer is open, including the occurrence of any condition
specified in Section 14 of the Offer to Purchase, by giving oral or written
notice of such extension to the Depositary. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw his Shares. Any
such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
expiration date of the Offer.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 6:00 p.m., New York City time,
on Thursday, September 25, 1997 (or, if the period of time for which the Offer
is open, the latest time and date at which the Offer, as so extended by the
Purchaser, shall expire) and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after October
3, 1997. For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates evidencing Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such Share Certificates, the serial numbers shown on
such Share Certificates must be submitted to the Depositary and the signature(s)
on the notice of withdrawal must be guaranteed by an Eligible Institution (as
defined in Section 2 of the Offer to Purchase), unless such Shares have been
tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Purchaser, in its sole discretion, whose determination will be final and
binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
Requests are being made to the Company for the use of the Company's
shareholder list and security position listings for the purpose of disseminating
the Offer to holders of Shares and communicating with shareholders in connection
with the Offer. The Offer to Purchase and the related Letter of Transmittal and,
if required, other relevant materials will be mailed to record holders of Shares
whose names appear on the Company's shareholder list and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the shareholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares by
the Purchaser following receipt for such lists or listings from the Company, or
by the Company if it so elects.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is made
with respect to the Offer.
Questions and requests for assistance may be directed to the Dealer Manager or
the Information Agent at their respective addresses and telephone numbers as set
forth below. The Purchaser will not pay any fees or commissions to any broker or
dealer or to any other person (other than the Dealer Manager and the Information
Agent) for soliciting tenders of Shares pursuant to the Offer. Additional copies
of the Offer to Purchase, the Letter of Transmittal and all other tender offer
materials may be obtained from the Information Agent or the Dealer Manager or
from brokers, dealers, commercial banks and trust companies, and will be
furnished promptly at the Purchaser's expense.
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
Call Collect (212) 783-7292
August 5, 1997
<PAGE>
EXHIBIT 99(A)(8)
UNITED STATES
SURGICAL CORPORATION
NEWS RELEASE
FOR IMMEDIATE RELEASE: AUGUST 5, 1997
INVESTOR CONTACT: U.S. SURGICAL HOME PAGE: MEDIA CONTACT:
Marianne Scipione http://www.ussurg.com Steve Rose
Vice President Director
Corporate Communications Media Relations
203-845-1404 203-845-1732
[email protected] [email protected]
U.S. SURGICAL MAKES NEW TENDER OFFER OF
---------------------------------------
$16.50 PER SHARE FOR CIRCON
---------------------------
NORWALK, Conn. -- United States Surgical Corporation (NYSE:USS)
announced today that it has commenced a new cash tender offer for all of the
outstanding common shares of Circon Corporation (NASDAQ:CCON) at $16.50 per
share.
"We believe that U.S. Surgical's offer is a highly attractive
opportunity for Circon shareholders, with a price/earnings ratio of more that
235 times trailing 12 months' earnings," said Leon C. Hirsch, chairman of USS.
"We would still prefer to meet with Circon's management and negotiate a merger
on a friendly basis, but they have turned down every request for a meeting.
"The sales and operating synergies between USS and Circon are
significant. Circon is the largest producer of laparoscopic scopes, video
systems and endoscopic suction irrigation devices in the United States. These
products represent an ideal complement to USS' $500 million minimally invasive
product lines. Circon will also provide a major platform for U.S. Surgical to
expand its presence in the areas of urology and gynecology. In addition, Circon
is the largest producer of uretral stents in the United States and number one in
gynecological sterilization products.
Mr. Hirsch added, "Since USS' original tender offer of August 2, 1996,
Circon's financial performance has continuously deteriorated. Circon's latest
results clearly demonstrate that Circon management continues to fail to create
tangible operational improvements. Operating income for the six month period
ended June 30 was down 22% compared to the comparable six months in 1996, while
the operating margin for the same period dropped to 4% from 6%. Additionally,
second quarter operating income fell more than 25% from first quarter, earnings
per share dropped 50% and the operating margin was down to 4% from 5%.
-more-
150 Glover Avenue, Norwalk, Connecticut 06856
<PAGE>
Page Two of Three
"While Circon's management has touted the fact that their second quarter
sales were the highest since the merger with Cabot Medical in August 1995, they
failed to mention that second quarter revenues are still lower than the third
quarter of 1995 and on an operating basis the quarter just ended is one of the
worst in the last eight quarters."
USS' tender offer is conditioned on, among other things, the acquisition
of at least 67% of Circon's shares on a fully diluted basis, the inapplicability
of Circon's "poison pill" rights plan and Section 203 of the Delaware General
Corporation Law to the offer and USS' proposed merger. The offer and withdrawal
rights will expire at 6:00 p.m., New York City time, September 25, 1997.
Following the completion of the tender offer, U.S. Surgical intends to
consummate a merger in which all remaining shareholders will also receive $16.50
per share.
USS currently owns 14.8% of outstanding Circon shares, the approximate
maximum number of shares USS can purchase without triggering Circon's "poison
pill." USS acquired 1,000,100 shares on the open market prior to commencing an
$18 per share cash tender offer on August 2, 1996. After amending the original
offer twice, USS acquired an additional 973,174 shares in a $14.50 per share
cash tender offer that was completed on July 14, 1997.
Circon shareholders have demonstrated overwhelming support of USS'
original and amended tender offers. In December 1996, 7,726,701 shares were
tendered, which with the 1,000,100 shares already owned by USS, represented 79%
of Circon's common stock not owned by Circon's management and board, based on
their September 1996 10-Q and June 1996 proxy statement. In July, the amended
offer of $14.50 per share was oversubscribed 400%, with 4,508,000 shares
tendered.
United States Surgical Corporation is a diversified surgical products
company specializing in minimally invasive technologies that improve patient
care and lower health care costs.
Some of the statements contained in this document are forward-looking
and are based on management's current expectations. Actual results may differ
materially from such expectations due to factors discussed in the "Financial
Condition" section of USS' Form 10-K as filed with the Securities and Exchange
Commission.
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<PAGE>
Page Three of Three
Certain Additional Information: United States Surgical Corporation will
be soliciting proxies in opposition to the Board of Directors of Circon
Corporation to elect two directors and approve a shareholder proposal at
Circon's 1997 Annual Meeting of Shareholders. The following persons may be
deemed participants in such solicitation of proxies: United States Surgical
Corporation, USS Acquisition Corp., Thomas R. Bremer, Leon C. Hirsch, Pamela
Komenda, Marianne Scipione, Scott Spitzer, Charles M. Elson and Victor H.
Krulak.
United States Surgical Corporation is the beneficial owner of 1,959,348
shares of Circon common stock, USS Acquisition Corp. is the beneficial owner of
973,174 shares. Mr. Elson is the beneficial owner of 6,963 shares and Mr. Krulak
is the beneficial owner of 6,963 shares of Circon common stock. Mr. Krulak and
Mr. Elson received such shares of common stock from United States Surgical
Corporation in connection with their agreement to stand for election as a
director of Circon. In addition, United States Surgical Corporation has agreed
to indemnify Mr. Elson and Mr. Krulak to the extent permitted by applicable law,
from and against any and all expenses, liabilities or losses of any kind arising
out of any threatened or filed claim, action, suit, or proceeding asserted
against or incurred by either Mr. Elson or Mr. Krulak in his capacity as a
nominee for election as a director of Circon. Following their election to the
Circon Board, if Circon does not provide Mr. Elson and Mr. Krulak with the same
indemnification agreements provided to the current directors of Circon, United
States Surgical Corporation has agreed to enter into agreements providing the
same level of indemnification. United States Surgical Corporation has also
agreed to reimburse each of Mr. Elson and Mr. Krulak for his reasonable out-of-
pocket expenses, including reasonable fees and expenses of counsel.
Although Salomon Brothers Inc ("Salomon Brothers"), which is acting as
dealer manager in connection with the proposed acquisition of Circon, does not
admit that it or any of its director, officers, employees or affiliates is a
"participant", as defined in Schedule 14A promulgated by the Securities and
Exchange Commission under the Securities Act of 1934, as amended, or that such
Schedule 14A requires the disclosure of certain information concerning them,
the following employees of Salomon Brothers may assist United States Surgical
Corporation in such a solicitation. Wilder Fulford (managing director), John
Fowler (managing director), Adam Berger (vice president) and Richard Upton
(associate).
* * *
