<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Cordis Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
Dear Cordis Stockholder:
The Board of Directors cordially invites you to attend Cordis' Annual
Meeting of Stockholders, to be held on October 10, 1995, at our offices located
at 14201 N.W. 60th Avenue, Miami Lakes, Florida.
The Meeting will commence promptly at 2:00 p.m. in the Auditorium
located on the second level of the building.
To assure a quorum and that your shares will be voted at the Meeting
in accordance with your instructions, please sign and return the enclosed proxy
card in the envelope provided at your earliest convenience. Mailing your proxy
will not limit your right to vote in person at the Meeting.
If you plan to be present at the Meeting, please so indicate on the
proxy card.
Respectfully yours,
ROBERT Q. MARSTON
Chairman of the Board
<PAGE> 3
CORDIS CORPORATION
14201 N.W. 60th Avenue
Miami Lakes, Florida 33014
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 10, 1995
The Annual Meeting of Stockholders of Cordis Corporation will be held
at the offices of the Company, 14201 N.W. 60th Avenue, Miami Lakes, Florida,
on Tuesday, October 10, 1995, for the following purposes:
Item No. 1 Election of Directors;
Item No. 2 To ratify the appointment of independent
auditors;
Item No. 3 To ratify the amendment to the Restated
Articles of Incorporation to increase the
authorized Common Stock; and
Item No. 4 To transact such other business as may properly
come before the meeting.
Stockholders of record at the close of business on August 15, 1995
will be entitled to notice of, and to vote at, the Meeting or any adjournment
thereof. A list of such stockholders will be available for examination at the
Company's offices at 14201 N.W. 60th Avenue, Miami Lakes, Florida 33014 on and
after September __, 1995.
By Order of the Board of Directors,
DANIEL G. HALL
Secretary
September ___, 1995
IMPORTANT: THE PROMPT RETURN OF YOUR PROXY WILL SAVE THE COMPANY
THE EXPENSE OF A FURTHER REQUEST.
2
<PAGE> 4
CORDIS CORPORATION
14201 N.W. 60th Avenue
Miami Lakes, Florida 33014
PROXY STATEMENT
SEPTEMBER ___, 1995
The accompanying Proxy is solicited by the Board of Directors of
Cordis Corporation ("the Company") for use at the Annual Meeting of
Stockholders and any adjournment thereof ("the Meeting") to be held on October
10, 1995, at 2:00 p.m. at the Company's offices located at 14201 N.W. 60th
Avenue, Miami Lakes, Florida. When such Proxy is properly executed and
returned, the shares it represents will be voted at the Annual Meeting in
accordance with any directions noted thereon, or, if no direction is indicated,
it will be voted as recommended by the Board of Directors. Any Proxy given
pursuant to this solicitation may be revoked by the stockholder at any time
prior to the voting thereof.
Only stockholders of record as of August 15, 1995, will be entitled to
vote at the Annual Meeting and any adjournment thereof. On that date
16,392,697 shares of common stock were outstanding. Each share of common stock
entitles the holder thereof to one vote on each matter presented for action at
the Meeting. The holders of a majority of the shares entitled to vote at the
meeting must be present in person or represented by proxy in order to
constitute a quorum for all matters to come before the meeting. An affirmative
vote of a majority of the shares voting on each matter is required for approval
of Items 1 and 2. Adoption of Item 3 requires the affirmative vote of the
holders of a majority of the shares outstanding. Abstentions and broker
nonvotes will be considered solely for quorum purposes.
The approximate date of the first distribution of this Proxy Statement
and the accompanying Proxy is September __, 1995.
ITEM NO. 1
ELECTION OF DIRECTORS
All Directors are elected annually by the stockholders of the Company.
The Directors recommend that the full Board for the ensuing year shall
consist of nine Directors and further recommend the election of the nominees
listed below as Directors to hold office until the next Annual Meeting of
Stockholders and the election and qualification of their successors. Seven of
the nominees currently serves on the Board and were elected by the stockholders
at the last Annual Meeting. Two directors, Ms. Burzik and Mr. Razzouk, are
nominated for the first time. Pursuant to the Director Retirement Plan, Dr.
Marston has announced his intention to retire and will not stand for reelection
to the Board on October 10, 1995. If, at the time of the Annual Meeting any of
such nominees should be unable or decline to serve, the discretionary authority
provided in the Proxy will be exercised to vote for such other person or
persons as may be nominated by management. Management has no reason to believe
that any substitute nominee or nominees will be required.
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<PAGE> 5
THE BOARD RECOMMENDS THAT THE NOMINEES PROPOSED FOR ELECTION BE
APPROVED. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS
STOCKHOLDERS SPECIFY TO THE CONTRARY IN THEIR PROXIES.
The following table indicates the age, principal occupation or
employment currently and for the past five years, and the date each nominee was
first elected as Director.
<TABLE>
<CAPTION>
Year first
elected
Name (age) Principal Occupation or Employment a Director
- ---------- ---------------------------------- ------------
<S> <C> <C>
Catherine M. Burzik President, Chief Executive Officer -
(44) and Director, Kodak Health Imaging
Systems Inc., a subsidiary of
Eastman Kodak Company, since 1993.
From 1991 to 1993, General Manager,
Electronic Imaging Products, Health
Science Division of Eastman Kodak.
David R. Challoner, M.D. Vice President for Health Affairs, 1990
(60) University of Florida. Chairman of the
Board, Shands Hospital at the University
of Florida. Former Dean, St. Louis
University School of Medicine. Member,
Institute of Medicine, National Academy
of Sciences. Member, Directors'
Advisory Committee, National Institutes
of Health. Former President, American
Federation for Clinical Research.
Richard W. Foxen (67) Retired. Until 1988, Senior Vice President, 1989
Strategic Management and International,
Rockwell International Corporation; Former
Vice-President, European Operations, General
Electric Corporation; Adjunct Professor,
Business Administration, Carnegie-Mellon
University and University of Pittsburgh.
Donald F. Malin, Jr. Retired. Until 1991, Partner, Simpson 1982
(67) Thacher & Bartlett, Attorneys at Law,
New York City, legal counsel to the
Company.
</TABLE>
4
<PAGE> 6
<TABLE>
<S> <C> <C>
William J. Razzouk Executive Vice President of Worldwide -
(47) Customer Operations, Federal Express
Corporation and Director since 1993.
From 1990 to 1993 Senior Vice President-
Sales and Customer Services of Federal
Express Corporation. Director, Sanifill
Inc. and The National Sports Foundation.
Robert C. Strauss (54) President and Chief Executive Officer of 1987
the Company since February 1987. Formerly
Senior Vice President and Chief Financial
Officer from 1986 to 1987 and Vice President
and Chief Financial Officer from 1983 to 1986.
Trustee, University of Miami. Director,
Miami Children's Hospital, Health Industry
Manufacturers Association (HIMA), American
Bankers Insurance Group, United Way
and Enterprise Florida.
Jan L. de Ruyter van Retired. Senior Vice President, European 1990
Steveninck (65) Operations of the Company from 1987 to June,
1990. Before 1987, Vice President, European
Operations.
Wilton W. Webster, Jr. Vice President and Senior Scientific Advisor 1994
(67) of the Company since April, 1994. Founder
and Senior Scientific Advisor of Cordis
Webster, Inc. since December, 1994. Vice
President, Research & Development and Chief
Engineer of Cordis Webster Inc. from April
1994 to December, 1994. Formerly Vice President
and Chief Engineer from 1993 to 1994 and
Founder, Chairman of the Board, President
and Chief Executive Officer of Webster
Laboratories, Inc. from 1980 until 1993.
Patricia K. Woolf, Ph.D. Consultant, author, and lecturer, 1982
(60) Department of Molecular Biology, Princeton
University. Director, American Balanced
Fund, Income Fund of America, Growth
Fund of America, and Small Cap World Fund.
Director, General Public Utilities
Corporation, National Life Insurance
Company of Vermont and Crompton and Knowles
Corp. Trustee, New Economy Fund.
</TABLE>
5
<PAGE> 7
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has standing Audit, Compensation
and Quality committees. It has no nominating committee. However, in April of
1995 the Board of Directors formed a Search Committee to identify candidates
for election as Company Directors. The members of this ad hoc committee are
Richard W. Foxen, Chairman, Robert Q. Marston and Robert C. Strauss. The
Committee considered various candidates and recommended two candidates for
election as Company Directors.
The members of the Audit Committee during fiscal 1995 were Richard W.
Foxen (Chairman), Donald F. Malin, Jr., Patricia K. Woolf and David R.
Challoner. The Committee held three meetings during fiscal 1995. During that
year, the Audit Committee, among other things, (i) recommended that Deloitte &
Touche be appointed as the Company's independent auditors; (ii) reviewed the
audit activities of both the independent auditors and the internal auditor of
the Company; (iii) met separately and privately with the independent auditors,
the internal auditor and with the Company's financial, accounting and
management officers to insure that the scope of activities of the independent
and internal auditors had not been restricted and that adequate responses to
their recommendations had been received; and (iv) made periodic reports to the
Board.
The members of the Compensation Committee during fiscal 1995 were
Donald F. Malin, Jr. (Chairman), Jan L. de Ruyter van Steveninck and Richard W.
Foxen. The Committee held three meetings during fiscal 1995. During that
year, the Compensation Committee, among other things, (i) reviewed salaries of
the Chief Executive Officer and corporate officers of the Company; (ii)
considered management's proposals for granting of stock options under the
Cordis Corporation Non-Qualified Stock Option Plan and approved such grants of
stock options; (iii) established performance goals for the Cordis Corporation
1991 Performance Unit Award Plan ("PUAP") and approved the grants of Awards
under the PUAP; (iv) reviewed the Cordis Corporation Director Retirement Plan
and Director compensation practices; (v) reviewed other compensation matters,
including the method of payment of Awards under the PUAP; and (vi) made
periodic reports to the Board.
The members of the Quality Committee during fiscal 1995 were Patricia
K. Woolf, (Chairman), David R. Challoner, and Jan L. de Ruyter van Steveninck.
The Committee held four meetings during fiscal 1995. During that year, the
Quality Committee, among other things, (i) reviewed and monitored the auditing
activities of the Company and the results of those audits; (ii) reviewed the
Company's quality functions and regulatory compliance activities; (iii)
reviewed the independent quality consultant's audit of the
6
<PAGE> 8
Company's facility; (iv) reviewed and approved the Quality Committee Charter,
as restated; and (iv) made periodic reports to the Board.
MEETING ATTENDANCE
The Board of Directors held a total of six meetings, during fiscal
1995. Each Director attended in excess of 75% of the total number of meetings
of the Board and of each Committee of the Board on which such Director served
during the fiscal year. On average, each Director attended 95% of the meetings
held.
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS. Directors who are compensated as employees
of the Company receive no additional compensation as Directors. Each Director
who is not an employee of the Company receives an annual retainer of $20,000; a
fee of $1,250 for each Board Meeting attended; and $750 for each Committee
Meeting attended. Committee Chairmen are paid $1,000 for each Committee Meeting
attended. Dr. Marston, as Chairman of the Board during fiscal 1995, received an
annual retainer of $75,000, but received no additional compensation for meeting
attendance.
CORDIS CORPORATION DIRECTOR NON-QUALIFIED STOCK OPTION PLAN ("the
Plan"). The Plan became effective on June 5, 1990. It provides incentives in
the form of stock option grants to non-employee Directors of the Company. The
grants are intended to recognize the expertise and contributions provided to
the Company by the members of the Board of Directors and to provide the Board
of Directors with a proprietary interest in the Company, enhancing their
personal interest in the Company's continued success and progress. The Plan is
administered by the Compensation Committee of the Board of Directors.
The Plan currently authorizes the issuance of 200,000 shares of the
Company's common stock. The options, 2,000 of which are granted automatically
every year to each non-employee Director, fully vest one year after the
anniversary of the date of the grant, are granted at a price equal to the
market value of the shares on the date of the grant and must be exercised
within ten years of the date of grant. In the case of a Director's death, the
options vest immediately. The options continue to vest during the period of
any disability or retirement.
The options granted under this Plan are not assignable or transferable
by optionees. The Plan provides that if there is a change in control, defined
as the acquisition by any person of direct or indirect beneficial ownership of
the Company's outstanding voting securities in a quantity sufficient to cause a
change in the composition of the Company's Board of Directors, completion of a
tender or exchange offer of 50% or more of the voting securities of the Company
or the merger or consolidation of the Company with another corporation or the
transfer of all or
7
<PAGE> 9
substantially all of the assets of the Company, all options will be 100%
vested.
CORDIS CORPORATION DIRECTOR RETIREMENT PLAN. Each non-employee
director who retires from the Board after he or she has served on the Board for
five years is eligible for benefits, for a period equal to two times his or her
years of active service as a Director, equal to the annual retainer paid at the
time of his or her retirement, increased by one-half of any subsequent
increase in the annual retainer awarded to active Directors.
The Plan waives the years-of-service eligibility requirement if a
Director is forced to retire as a result of a disability or incapacity or a
merger or acquisition of the Company. The Plan, unless waived by the Board,
requires a Director to retire from active service on the Board if his or her
72nd birthday occurs on or before the 15th day of October in any year in which
such Director shall stand for reelection to the Board of Directors.
If a retired Director dies during the period in which retirement
benefits are payable, such payments shall be paid to the Director's designated
beneficiary or to his or her estate, for a period of one year after his or her
death or for the remaining period for which such retirement benefits are
payable, whichever occurs first. Any Director who has been an employee of the
Company shall not be eligible for benefits under the Plan except for
reimbursement of expenses incurred in meeting attendance and meeting fees equal
to the meeting fees paid to active Directors. In the event that a Director
desires to retire or is forced to retire subsequent to the merger or
acquisition of the Company, the Plan allows the retiring Director to elect
acceleration of benefits under the Plan by requesting a present value, lump sum
payment; to request the Company to purchase an annuity which would pay to the
Director a sum equal to the benefits he or she would have received under the
Plan; or to elect payments of benefits in accordance with the terms and
provisions of the Plan.
CORDIS CORPORATION DIRECTOR DEFERRED COMPENSATION PLAN. This Plan,
restated and amended, effective July 1, 1995, allows non-employee directors to
defer up to 100% of their compensation. The amounts deferred may be invested
among a portfolio of funds selected and managed by the Company. Participants
elect the timing and manner in which the amounts deferred shall be paid. All
elections made by the participants are irrevocable except as specifically
provided in the Plan.
8
<PAGE> 10
INDEMNIFICATION AGREEMENTS WITH DIRECTORS. In addition to maintenance
of director and officer liability insurance, the Company has entered into
indemnification agreements with each of the Directors. The indemnification
agreements provide, in certain instances, for advancement and payment of costs,
including attorneys' fees, damages, judgments, fines or settlements incurred or
paid by, or on behalf of, Directors and which relate to activities in their
capacities as Directors of the Company. The Company, pursuant to the
agreements, retains subrogation rights to recover any advances which are
subsequently paid by a third party. The agreements are binding on the Company
and any successor to the Company.
9
<PAGE> 11
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth as of August 22, 1995 the number of
shares of Common Stock beneficially owned by each Director, Director nominee
and by each of the Executive Officers named below:
<TABLE>
<CAPTION>
Number of Percentage
Common Shares of Ownership
Beneficially (*Designates
Beneficial Owners (1) Owned Less than 1%)
- --------------------- -------------- -------------
<S> <C> <C>
Catherine M. Burzik -
David R. Challoner, M.D. 11,700 (2) *
Richard W. Foxen 11,000 (2) *
Donald F. Malin, Jr. 9,500 (2) *
Robert Q. Marston, M.D. 8,000 (2) *
William J. Razzouk -
Jan L. de Ruyter van Steveninck 4,000 (2) *
Wilton W. Webster, Jr. 1,004,740 (3) 6.1%
Patricia K. Woolf, Ph.D. 12,350 (2) *
Robert C. Strauss 161,176 (3) 1.0%
Rudy J. Kranys 145,068 (3) *
Alfred J. Novak 81,260 (3) *
Philip J. Monks 58,682 (3) *
Egbert Ratering 112,085 (3) *
All Directors, Director
nominees and Executive
Officers as a group (23) 1,981,846 (4) 12.1%
including the above
</TABLE>
(1) Beneficial ownership, as listed in the chart, includes shares of Common
Stock directly owned or held by the persons named and the group referred to, or
by certain members of their families.
(2) Includes shares of Common Stock which may be acquired, when vested, by the
exercise of options granted under the Cordis Corporation Director
Non-Qualified Stock Option Plan as follows: Dr. Challoner - 10,000; Mr. Foxen -
10,000; Mr. Malin - 8,000; Dr. Marston - 8,000; Mr. van Steveninck - 4,000;
Dr. Woolf - 10,000.
(3) Includes shares of Common Stock which may be acquired, when vested, by the
exercise of options granted under the Cordis Corporation Non-Qualified Stock
Option Plan, as follows: Mr. Webster - 3,000; Mr. Strauss - 121,000; Mr. Kranys
- - 60,500; Mr. Novak - 60,500; Mr. Monks 54,500; and Mr. Ratering - 39,600.
(4) Includes 648,900 shares of Common Stock which may be acquired, when vested,
by the exercise of options granted under the Cordis Corporation Non-Qualified
Stock Option Plan and Director Non-Qualified Stock Option Plan.
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<PAGE> 12
COMPLIANCE WITH THE REPORTING REQUIREMENTS OF SECTION 16(a)
There was a failure to file on a timely basis one Form 4, Statement of
Changes in Beneficial Ownership, with the Securities and Exchange Commission,
as required under Section 16(a) of the Securities Exchange Act of 1934, by
Egbert Ratering, Vice President, Worldwide Manufacturing, relating to four sale
transactions that occurred in March, 1995. The Form 4 was filed one day late.
SECURITY OWNERSHIP OF CERTAIN OTHER BENEFICIAL OWNERS
The following chart names all beneficial owners (other than management
of the Company) of the Company's voting stock known to the Company to own more
than 5% of the voting stock based on their last 13G filing.
<TABLE>
<CAPTION>
Name and Address Number of Common Percentage
of Beneficial Owner Shares Beneficially Owned of Ownership
- ------------------- ------------------------- ------------
<S> <C> <C>
AIM Management Group, Inc. 2,126,000 13.0%
11 Greenway Plaza
Houston, TX 77046
Twentieth Century Companies 875,000 5.3%
4500 Main Street
Kansas City, MO 64141-9210
</TABLE>
11
<PAGE> 13
EXECUTIVE COMPENSATION
The following Summary Compensation Table represents, for each of the
last three fiscal years, the annual compensation paid by the Company, together
with long-term and other compensation, for the Chief Executive Officer and the
four most highly compensated Executive Officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
--------------------------------------- ----------- ---------
Other All
Annual Securities LTIP Other
Salary Bonus Compensation Underlying Payouts Compensation
Name and Principal Position Year ($)(1) ($)(1)(2) ($) Options(#) $)(3) ($)(4)
- --------------------------- ---- -------- --------- ------------ ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert C. Strauss 1995 $459,039 $ 22,750 25,000 $563,477 $8,386
President and Chief 1994 $430,000 30,000 $312,247 $8,174
Executive Officer 1993 $420,000 $183,951 22,000 $8,088
Rudy J. Kranys 1995 $235,961 $ 11,750 12,500 $256,231 $7,687
Senior Vice President, 1994 $220,000 15,000 $149,687 $7,119
Worldwide Research and 1993 $215,000 $ 91,976 11,000 $7,036
Product Development
Alfred J. Novak 1995 $235,961 $ 41,750 12,500 $281,705 $6,217
Vice President, 1994 $220,000 15,000 $156,122 $5,073
and Chief Financial Officer 1993 $215,000 $ 91,976 11,000 $4,066
Philip J. Monks 1995 $199,464 $ 10,000 $36,258 (5) 12,500 $283,331 N/A
Vice President, Worldwide 1994 $196,622 $49,777 (6) 15,000 $150,181 N/A
Marketing and Sales 1993 $191,891 $ 91,976 $46,158 (7) 11,000 N/A
Egbert Ratering 1995 $199,464 $ 10,000 12,500 $283,331 N/A
Vice President, Worldwide 1994 $196,717 $ 13,833(8) 15,000 $150,181 N/A
Manufacturing 1993 $192,061 $ 91,976 11,000 N/A
</TABLE>
(1) Amounts shown include cash compensation earned by the named executive
during the year covered, including amounts deferred at the election of those
officers. Bonuses for fiscal 1995, 1994 and 1993 were paid in the year
subsequent to the year in which they were earned.
(2) For 1995, the cash bonus amounts were awarded pursuant to the individual
objective performance program. Mr. Novak received a special bonus in the
amount of $30,000 to reward him for his efforts in connection with various
business transactions and his temporary assumption of responsibility for the
U.S. Marketing and Sales organization. For 1993 the amounts awarded pursuant
to the 1991 Performance Unit Award Plan were in the form of Company stock. The
value of the units was calculated according to the fair market value of Company
stock on or about the date of payout based on the number of units awarded and
percentage of achievement. The 1993 awards were based on one-year performance
periods whereby the target amounts for return on assets and sales growth
yielded payments of 100.941%.
(3) In 1994 the amounts paid pursuant to the 1991 Performance Unit Award Plan
were distributed as follows: 50% in the form of Company stock and 50% in cash.
The value of the units awarded in stock was calculated according to the fair
market value of Company stock on or about the date of payout based on the
number of units awarded and percentage of achievement. The value of the units
awarded in cash was calculated according to the average of the last twenty
trading days in the month of June 1994. In 1995, the amounts paid were
distributed 100% in the form of Company stock and the value of the units
awarded was calculated according to the fair market value of Company stock as
of the date of the Compensation Committee meeting, August 21, 1995, based on
the number of units awarded and percentage of achievement. The 1994 and 1995
awards were based on three-year performance periods whereby the target
performance achievements for return on assets, sales growth and targeted sales
per employee yielded in 1994 a payment of 110.38% for the Corporate group,
105.83% for the Miami group and 106.18% for the European group, and in 1995 a
payment of 138.61% for the Corporate group, 126.08% for the Miami group and
139.40% for the European group.
(4) Company contributions to the Tax-Sheltered Investment Plan and dollar
value of life insurance premiums paid by the Company. European Officers do not
participate in the Tax-Sheltered Investment Plan.
(5) Includes reimbursements of $17,052 for schooling of dependents under the
Company's Expatriate Policy and automobile reimbursement allowance of $19,206.
(6) Includes reimbursements of $33,638 for schooling of dependents under the
Company's Expatriate Policy and automobile reimbursement allowance of $16,139.
(7) Includes reimbursements of $32,118 for schooling of dependents under the
Company's Expatriate Policy and automobile reimbursement allowance of $14,040.
(8) Mr. Ratering received a bonus in 1994 for twenty years of service with the
Company.
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<PAGE> 14
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE OF THE BOARD
Decisions regarding annual and long-term executive compensation of the
Company's executives and the Chief Executive Officer are made by the Board upon
the recommendation of the Compensation Committee. Recommendations of the
Compensation Committee relating to the compensation of the Company's executive
officers are submitted to the full Board for approval, except for awards under
certain stock-based compensation plans, which are approved solely by the
Committee. No member of the Compensation Committee is presently an officer or
employee of the Company or any of its subsidiaries.
The purpose of this report is to inform shareholders of the Company's
compensation policies for the Chief Executive Officer and other executive
officers and the rationale for compensation paid to executive officers and the
Chief Executive Officer.
POLICIES AND OBJECTIVES
The Compensation Committee's executive compensation policies are
designed to attract, motivate, reward and retain qualified executives by
providing competitive levels of salary and incentive compensation to the Chief
Executive Officer and other executive officers. This objective is achieved
through cash compensation, the performance unit award and stock option plans
and other programs described below. Executive compensation is intended to be
competitive with the compensation levels of executives of other companies in
the same industry, or with companies that have comparable sales volumes, while
reflecting the Company's current and long-term performance. To establish
competitive levels of compensation, the Compensation Committee annually
evaluates total compensation packages offered by competitive companies.
Executive level compensation is generally targeted above the median range of
compensation paid to executives of companies of similar size and industry.
Survey data analyzed in establishing compensation levels for executives include
companies that are within the industry group, S & P Medical Products & Supplies
Index, shown in the performance graph on page 22. The primary focus of the
Compensation Committee in determining total executive compensation is incentive
compensation based upon the Company's current and long-term performance, the
long-term growth of the Company and shareholder value. As a result of the
emphasis on corporate performance, in any given year the compensation of the
Company's executives may differ significantly from the compensation paid to
executives of the Company's competitors.
All executive officers, including the Chief Executive Officer, are
eligible to participate in the Company's incentive compensation plans, which
currently consist of the 1991 Performance Unit Award
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<PAGE> 15
Plan and the Non-Qualified Stock Option Plan for management. Subjective
factors of individual performance are considered in establishing base salaries,
the quantity of performance unit awards and stock option grants. A separate
individual objective performance bonus program was also implemented exclusively
for fiscal 1995 to reward individual achievement by certain officers of
performance objectives approved by the Compensation Committee.
RELATIONSHIP OF EXECUTIVE COMPENSATION TO COMPANY PERFORMANCE
The Compensation Committee's objective in setting the Chief Executive
Officer's annual compensation and that of other executive officers is to base a
significant percentage of compensation upon annual and long-term company
performance criteria, and to a lesser degree, on individual performance. For
this reason the Compensation Committee has emphasized return on assets, sales
growth, sales per employee and other financial performance factors in
determining the annual and long-term compensation for all executive officers.
The Company's financial performance, as well as general market conditions, are
significant factors influencing the Company's stock price.
BASE SALARY
The base salaries of the Chief Executive Officer and other senior
executives are governed by Company performance and the competitive survey data
previously described.
As a result of salary comparisons for the chief executive officers and
other executives in comparable companies surveyed and the current executive
salary levels of the Company's Chief Executive Officer and other executives and
the Company's overall performance, the Compensation Committee recommended and
the Board approved a 5.81% increase in the Chief Executive Officer's base
salary for 1995. There were no salary increases in 1994.
CASH AND STOCK INCENTIVE PROGRAMS
Performance Unit Award Plan
The Company's 1991 Performance Unit Award Plan ("the Plan") is
designed to provide long-term incentives to the Chief Executive Officer and
other executives. The Compensation Committee has the exclusive power to select
the officers and key employees who will be granted awards under the Plan, to
determine the type, size and terms of awards granted, including the time of
vesting and payment of awards, to establish objectives and conditions for
vesting and earning awards, to determine terms and conditions for the lapse of
restrictions applicable to any awards, and to determine whether awards will be
paid. The Compensation Committee considers target performance objectives based
on the Company's long-term financial goals and payout levels available under
the Plan to determine the number of units awarded to the Chief Executive
Officer and to other executive officers.
14
<PAGE> 16
Under the Plan, target performance objectives are established annually
by the Compensation Committee and in the past differed according to
geographical regions. Because of the Company's shift to a global focus,
future objectives will place greater emphasis on performance in achieving
corporate goals. These objectives may include one or more of the following
performance measures: growth in Company sales, return on net assets and sales
per employee. Performance criteria considered in determining the number of
performance units, if any, to be granted to executives include: responsibility
level, past performance, potential, cash compensation levels and other
considerations as the Compensation Committee may deem appropriate. Grants of
performance units to the Chief Executive Officer are assessed on the basis of
the Chief Executive Officer's individual contributions to overall performance
and the Company performance factors described above.
Performance unit award payouts may range from zero up to percentages
in excess of 100% of the target amount, depending upon the Company's
performance in any given year. Awards under the Plan are made in Common Stock
of the Company, cash or a combination of Common Stock and cash. For fiscal
1995, the amounts awarded pursuant to the Plan were in the form of Common Stock
of the Company and the value of the units was calculated according to the fair
market value of Company stock on August 21, 1995. For fiscal 1995 the amounts
awarded were based on achievements calculated according to performance in
geographical regions. The number of performance units awarded to the Chief
Executive Officer, 6,000, during the past fiscal year, reflects the Company's
successful performance and his individual contributions.
Change of Control Arrangements. The Plan presently provides that in
the event of a change in control of the Company, as defined in the Plan,
performance unit awards will vest immediately in a pro rata amount, based upon
the portion of the performance period elapsed prior to the change in control
and certain projected assumptions of performance achievements, had the change
in control not occurred.
Non-Qualified Stock Option Plan
The Company's Non-Qualified Stock Option Plan for management is
intended to motivate the Chief Executive Officer, executives and key employees
who contribute materially to the success and profitability of the Company by
providing recipients of stock option grants with a proprietary interest in the
Company, thereby enhancing their personal interest in the continued success of
the Company. Options are awarded at the market value of the shares on the date
of grant and become vested one year from the date of grant or at such other
incremental vesting periods as the Compensation Committee establishes, subject
to a change in control, as defined in the Plan. The Compensation Committee
generally considers individual performance, responsibility, and the Company's
financial performance during the fiscal year in determining the number of
options awarded to the Chief Executive Officer and to the other executive
officers.
15
<PAGE> 17
The stock options awarded to the Chief Executive Officer at the
conclusion of the fiscal year, as reported in the Option Grants Table, were
based upon Company performance, level of responsibility, salary and individual
performance. The Compensation Committee considered the total number of options
outstanding when determining the options awarded to the Chief Executive Officer
and the other executive officers.
The Plan currently authorizes a maximum of 2,625,000 shares of the
Company's Common Stock. As of June 30, 1995, there were 554,820 shares
available for future grants. The Compensation Committee believes that granting
options to executives and key employees is consistent with the philosophy that
stock ownership by management is beneficial to the enhancement of shareholder
value.
Change of Control Arrangements. The Plan presently provides that in
the event of a change in control of the Company, defined as the acquisition by
any person of direct or indirect beneficial ownership of the Company's
outstanding voting securities in a quantity sufficient to cause a change in the
composition of the Company's Board of Directors, completion of a tender or
exchange offer of 50% or more of the voting securities of the Company or the
merger or consolidation of the Company with another corporation or the transfer
of all or substantially all of the assets of the Company, all options will be
100% vested.
Other Plans
For fiscal 1995, the Compensation Committee approved an individual
objective performance bonus plan for the Chief Executive Officer and certain
executive officers. The purpose of the plan is to reward the Chief Executive
Officer and a select group of executive officers for achievement of certain
individual performance objectives established by the Committee. Cash
bonuses in the maximum amount of 7% of annual base salary were paid to the
executives achieving some or all of their established goals, as determined by
the Compensation Committee. The Compensation Committee determined that the
Chief Executive Officer should be rewarded in the amount of 5% of his annual
base salary.
At various times in the past, the Company has adopted certain employee
benefit plans in which executives, including the Chief Executive Officer, are
permitted to participate on the same terms as non-executive employees who meet
the applicable eligibility criteria. The Compensation Committee has determined
that having the Company's matching contribution under the Tax-Sheltered
Investment Plan in the form of Company stock is beneficial in further aligning
employees' and shareholders' long-term financial interests. Other than the
value of the Company match, benefits under the Tax-Sheltered Investment Plan
are not tied to Company performance.
As a further effort to motivate and retain qualified executives and
key employees, the Cordis Corporation Executive Deferred Compensation Plan (the
"Deferred Plan") as amended and
16
<PAGE> 18
restated effective July 1, 1995, and the Supplemental Executive Retirement Plan
were implemented. The Chief Executive Officer, selected executives and other
key employees are eligible to participate in either plan. Under the Deferred
Plan, participants can defer up to 100% of their total cash compensation.
Amounts deferred are invested among a portfolio of funds selected and managed
by the Company.
The Compensation Committee believes that its executive compensation
objectives are served by the compensation policies and plans described above,
by encouraging long-term performance and by promoting management retention,
while aligning shareholders' and management's interests in the performance of
the Company's Common Stock.
Tax Deductibility Considerations
The Compensation Committee has reviewed the Company's compensation
plans with regard to the deduction limitation under the Omnibus Budget
Reconciliation Act of 1993. This Act made certain non-performance based
compensation to executives of public companies in excess of $1 Million
non-deductible to the Company beginning in fiscal 1995. At this time, it is
not anticipated that any executive officer will receive any such compensation
in excess of this limit during fiscal 1996. The Committee has determined that
the Cordis Corporation Non-Qualified Stock Option Plan, as amended, meets the
requirements for deductibility under the Act by limiting to 200,000 the amount
of options that may be granted to any one officer or key employee over the next
three years. The Committee will continue to review the issue and evaluate
whether the compensation plans should be altered in the future to meet the
deductibility requirements.
SUBMITTED BY THE COMPENSATION COMMITTEE.
Donald F. Malin, Jr.
Richard W. Foxen
J. L. de Ruyter van Steveninck
17
<PAGE> 19
OPTION GRANTS TABLE
The following table provides information on grants of options to
purchase the Company's Common Stock pursuant to the Cordis Corporation
Non-Qualified Stock Option Plan (the "Plan") during the fiscal year ended June
30, 1995 to the named Executive Officers:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
Individual Grants for Option Term (10 Years)(2)
---------------------------------------------------- -----------------------------
Number of % of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration
Name (#)(1) Year ($/Sh) Date 0%($) 5%($) 10%($)
- ---- ---------- ---------- -------- ---------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Strauss 25,000 10.03% $63.00 6/12/05 $0 $990,500 $2,510,250
Rudy J. Kranys 12,500 5.02% $63.00 6/12/05 $0 $495,250 $1,255,125
Alfred J. Novak 12,500 5.02% $63.00 6/12/05 $0 $495,250 $1,255,125
Philip J. Monks 12,500 5.02% $63.00 6/12/05 $0 $495,250 $1,255,125
Egbert Ratering 12,500 5.02% $63.00 6/12/05 $0 $495,250 $1,255,125
</TABLE>
________________
(1) The Cordis Corporation Non-Qualified Stock Option Plan, as amended,
provides for the grant of options for a period of ten (10) years from the date
of grant. Under the Plan, the vesting schedule for the above executives is 10%
during the second year, 20% during the third year, 30% during the fourth year,
and the balance during the fifth year. All remaining options are exercisable
and expire on the tenth anniversary of the date of grant. The exercise price
of each share subject to options is equal to the fair market value of the share
on the date of grant.
(2) Optionees will not realize value under the 1995 option grants without a
stock price appreciation which will benefit all shareholders. If the Company's
stock does not appreciate in value above the option price set forth above,
there will be no benefit to shareholders or to optionees. If the Company's
stock appreciates 5% in value, the potential appreciation in stock value to
shareholders would be approximately $648,245,000. If the Company's stock
appreciates 10% in value, the potential appreciation in stock value to
shareholders would be approximately $1,642,865,000. Total number of shares
outstanding as of June 30, 1995, was 16,361,568. The assumed rates of stock
price appreciation are set by the Securities and Exchange Commission's proxy
statement disclosure rules. These assumptions are not intended to forecast
future price appreciation of the Company's stock price. The Company's stock
price may increase or decrease over the time period set forth above.
18
<PAGE> 20
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table contains information relating to the exercise of
stock options by the named Executive Officers in fiscal 1995 as well as the
number and value of their unexercised options as of June 30, 1995:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year, and FY-End Option Values
Number of Securities
Underlying Unexercised Value of Unexercised
Options at FY-End In-the-Money Options
(#) at FY-End($)(2)
Shares Acquired Value --------------------------- -------------------------
Name on Exercise (#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert C. Strauss 24,000 $1,059,000 44,800 76,200 $1,530,900 $1,551,850
Rudy J. Kranys 13,000 $ 645,125 22,400 38,100 $ 765,450 $ 775,925
Alfred J. Novak 23,000 $1,020,375 22,400 38,100 $ 765,450 $ 775,925
Philip J. Monks 19,000 $ 708,375 16,400 38,100 $ 585,450 $ 775,925
Egbert Ratering 13,000 $ 557,375 22,400 38,100 $ 765,450 $ 775,925
</TABLE>
________________
(1) Market value of underlying securities at exercise minus the exercise
price.
(2) Market value of underlying securities at June 30, 1995 closing
($66.75) minus the option price. The values were calculated only for
"In-the-Money" options, which consist of those options with an exercise price
below $66.75 per share.
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table provides information relating to performance units
awarded to the named Executive Officers under the Cordis Corporation 1991
Performance Unit Award Plan:
<TABLE>
<CAPTION>
Long-Term Incentive Plans -- Awards in Last Fiscal Year
Estimated Future Payouts
Under Non-Stock Price-Based
Performance Plans
Number of or Other Periods --------------------------------------
Shares, Units Until
or Other Maturation Threshold Target Maximum
Name Rights(#)(1) or Payout (#) (#) (#)
- ---- ------------ -------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Robert C. Strauss 6,000 7/1/95-6/30/98 0 6,000 11,250
Rudy J. Kranys 3,000 7/1/95-6/30/98 0 3,000 5,625
Alfred J. Novak 3,000 7/1/95-6/30/98 0 3,000 5,625
Philip J. Monks 3,000 7/1/95-6/30/98 0 3,000 5,625
Egbert Ratering 3,000 7/1/95-6/30/98 0 3,000 5,625
</TABLE>
(1) The performance objectives are based on the following weightings: 50% of a
payout is based on achievement of sales growth, 25% is based on achievement of
return on assets and 25% is based on targeted improvement on sales per
employee.
19
<PAGE> 21
RETIREMENT BENEFITS
The following table illustrates the estimated aggregate annual
retirement benefits under the Company's U.S. Retirement Plan and the U.S.
Supplemental Executive Retirement Plan, assuming retirement at age 65, based on
years of credited service and the highest five consecutive years' average pay.
(Primary Social Security Benefits are not included. Effective July 1, 1989,
the benefit formula under the Plan was changed from a Social Security Offset
formula).
Pension Plan Table (U.S. Plan)
Annual Retirement
<TABLE>
<CAPTION>
Years of Credited Service
----------------------------------------------
Average Salary 15 20 25 30 35
- -------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$150,000 ....... $ 35,900 $ 47,900 $ 59,900 $ 59,900 $ 59,900
$200,000 ....... $ 48,700 $ 64,900 $ 81,100 $ 81,100 $ 81,100
$250,000 ....... $ 61,400 $ 81,900 $102,400 $102,400 $102,400
$300,000 ....... $ 74,200 $ 98,900 $123,600 $123,600 $123,600
$350,000 ....... $ 86,900 $115,900 $144,900 $144,900 $144,900
$400,000 ....... $ 99,700 $132,900 $166,100 $166,100 $166,100
$450,000 ....... $112,400 $149,900 $187,400 $187,400 $187,400
$500,000 ....... $125,200 $166,900 $208,600 $208,600 $208,600
$550,000 ....... $137,900 $183,900 $229,900 $229,900 $229,900
$600,000 ....... $150,700 $200,900 $251,100 $251,100 $251,100
</TABLE>
The Retirement Plan ("the Plan") is a defined benefit plan to which
the Company contributes amounts required to fund this Plan as computed by
standard actuarial methods. The Plan provides a monthly pension to qualifying
employees who terminate from the Company with at least five years of service.
A participant who is eligible to receive a retirement benefit will receive a
monthly benefit equal to the sum of: (1) 1.1% of his average monthly earnings
(over his five highest consecutive years of pay, including bonus and overtime
up to 50% of base pay) times his years of service (maximum 25 years); and (2)
0.6% of the average monthly earnings in excess of Covered Compensation (average
of taxable wage bases under Section 230 of the Social Security Act) times
credited service (maximum 25 years).
20
<PAGE> 22
The credited years of service and current pay covered for each of the
individuals named in the Cash Compensation Table is as follows:
<TABLE>
<CAPTION>
1995 Covered
Years Credited Compensation
-------------- ------------
<S> <C> <C>
Robert C. Strauss 12 $775,921
Rudy J. Kranys 11 $389,294
Alfred J. Novak 11 $394,884
Philip J. Monks (1) -
Egbert Ratering (1) -
</TABLE>
(1) Philip J. Monks is a member of and contributes a percentage of his salary
to the United Kingdom Plan which does not provide a guaranteed pension at
retirement, but is based on funds accrued to purchase a pension to the member's
requirement. The Company also contributes a percentage of Mr. Monks' salary to
the United Kingdom Plan. Egbert Ratering is covered under the Dutch Plan, as
set forth in the pension table below.
The following table illustrates the estimated aggregate annual
retirement benefits under the Company's Dutch Retirement Plan based on years of
credited service and last annual pay, as defined:
<TABLE>
<CAPTION>
Pension Table (Dutch Plan)
Years of Credited Service
----------------------------------------------
Average Salary 15 20 25 30 35
- -------------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
$150,000 ....... $ 33,768 $ 45,024 $ 56,280 $ 67,537 $ 78,793
$200,000 ....... $ 46,893 $ 62,524 $ 78,155 $ 93,787 $109,418
$250,000 ....... $ 60,018 $ 80,024 $100,030 $120,037 $140,043
$300,000 ....... $ 73,143 $ 97,524 $121,905 $146,287 $170,668
$350,000 ....... $ 86,268 $115,024 $143,780 $172,537 $201,293
$400,000 ....... $ 99,393 $132,524 $165,655 $198,787 $231,918
$450,000 ....... $112,518 $150,024 $187,530 $225,037 $262,543
$500,000 ....... $125,643 $167,524 $209,405 $251,287 $293,168
$550,000 ....... $138,768 $185,024 $231,280 $277,537 $323,793
$600,000 ....... $151,893 $202,524 $253,155 $303,787 $354,418
</TABLE>
The Dutch Plan, available to all Roden employees, provides
supplemental retirement benefits calculated on the basis of the number of years
of service multiplied by 1.75% multiplied by the pension earnings (annual
salary minus the social security offset of approximately $21,400). The Dutch
Plan is designed to provide a pension benefit equal to 70% of the recipient's
last pension earnings after 40 years of service; however, salary increases
subsequent to age 55 are only partially taken into account. Both the Company
and the employee contribute to the Plan.
21
<PAGE> 23
COMPANY FINANCIAL PERFORMANCE
The following graph compares the performance of the Company's Common
Stock with the S&P 500 and the S&P Medical Products & Supplies Index. The
comparison of total return (change in year end stock price plus reinvested
dividends) for each of the years assumes that $100 was invested on June 30,
1990 in each of the Company, the S&P 500 Index and the S&P Medical Products &
Supplies Index with investment weighted on the basis of market capitalization:
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
[GRAPH]
<TABLE>
<CAPTION>
Fiscal Year Cordis S&P 500 S&P Medical
----------- ------ ------- -----------
<S> <C> <C> <C>
6/30/90 100 100 100
6/30/91 147 107 133
6/30/92 116 122 152
6/30/93 168 138 124
6/30/94 204 140 120
6/30/95 351 177 184
</TABLE>
22
<PAGE> 24
During 1987, the Company initiated a plan to dispose of all businesses
other than its angiographic and neuroscience product lines. Since that time,
the Company has strengthened its financial performance, as shown on the
following charts, through sales growth, increased earnings per share from
continuing operations and maintenance of a return on equity of greater than 20%
for the past five years.
SALES
(millions)
<TABLE>
<S> <C>
1991 $203
1992 $230
1993 $267
1994 $337
1995 $443
</TABLE>
EARNINGS PER SHARE
Continuing Operations
<TABLE>
<S> <C>
1991 $1.32
1992 $1.65
1993 $1.94
1994 $2.27
1995 $3.00
</TABLE>
RETURN ON EQUITY
Continuing Operations
<TABLE>
<S> <C>
1991 26.5%
1992 25.7%
1993 23.5%
1994 21.4%
1995 20.7%
</TABLE>
23
<PAGE> 25
ITEM NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has reappointed Deloitte & Touche to be the
Company's independent auditors for the fiscal year ending June 30, 1996. The
firm of Deloitte & Touche has served as the Company's independent auditors
since April 1991. Deloitte & Touche has advised the Company that neither the
firm nor any of its members or associates has any direct financial interest or
any material indirect financial interest in the Company or any of its
affiliates other than as accountants.
Although the appointment of independent auditors does not require
ratification by the stockholders, the Board of Directors considers it
appropriate to obtain such ratification. Accordingly, the vote of stockholders
on this matter is advisory in nature. The Board of Directors recommends that
the appointment of Deloitte & Touche as the Company's independent auditors for
the fiscal year ending June 30, 1996, be ratified by the stockholders at the
Annual Meeting.
Representatives from the firm of Deloitte & Touche are expected to be
present at the Annual Meeting, will be given the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF THE INDEPENDENT AUDITORS, DELOITTE & TOUCHE. PROXIES SOLICITED
BY THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY TO THE
CONTRARY IN THEIR PROXIES.
24
<PAGE> 26
ITEM NO. 3
AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
The Restated Articles of Incorporation of the Company, as amended and as
presently in effect, provide that the authorized capital stock of the Company
shall consist of fifty million (50,000,000) shares of Common Stock, par value
$1.00 per share (the "Common Stock"), and two million five hundred thousand
(2,500,000) shares of preferred stock, par value $1.00 per share (the
"Preferred Stock"). As of June 30, 1995, there were 16,361,568 shares of
Common Stock issued and outstanding and no shares of Preferred Stock issued or
outstanding. As of that date, 2,332,666 shares of Common Stock were reserved
for issuance under the Company's various compensation plans and 8,180,784
shares of Common Stock were reserved for issuance under the Company's Rights
Agreement dated September 12, 1986, as amended, (the "Shareholder Rights
Plan"), leaving a balance of 23,124,982 authorized, unissued and unreserved
shares of Common Stock.
On August 22, 1995, the Company's Board of Directors approved an
amendment to Article III of the Company's Restated Articles of Incorporation,
as amended, to increase the authorized number of shares of Common Stock of the
Company from fifty million (50,000,000) shares to one hundred fifty million
(150,000,000) shares, and directed that the amendment in the form set forth in
Annex I (the "Amendment") be submitted to a vote of the shareholders of the
Company at the Annual Meeting. No change in the authorized Preferred Stock is
being proposed.
The Board of Directors believes that the proposed increase in the
authorized shares of Common Stock is desirable to enhance the Company's
flexibility in connection with possible future actions, such as stock splits,
stock dividends, acquisitions, financing transactions, employee benefit plan
issuances, a new shareholder rights plan to replace the Shareholder Rights Plan
which currently expires in September 1996 and such other corporate purposes as
may arise. Having such authorized Common Stock available for issuance in the
future would give the Company greater flexibility and would allow additional
shares of Common Stock to be issued without the expense and delay of a special
shareholders' meeting. Such a delay might deny the Company the flexibility the
Board views as important in facilitating the effective use of the Company's
shares. The rules of the National Association of Securities Dealers, Inc.
("NASD") currently require shareholder approval by issuers of securities traded
on the NASDAQ National Market System, on which the Company's Common Stock is
currently traded, as to the issuance of shares of common stock or securities
convertible into common stock in several instances, including stock option or
purchase plans for directors or officers where the securities that may be
issued exceed the lesser of 1% of the number of outstanding shares of common
stock, 1% of the voting power outstanding or 25,000
25
<PAGE> 27
shares, actions resulting in a change of control of the company, acquisition
transactions involving directors, officers or substantial security holders
where the present or potential issuance of such securities could result in an
increase in outstanding common shares of 5% or more, acquisition transactions
generally where the present or potential issuance of such securities could
result in an increase in outstanding common shares of 20% or more, and certain
other sales or issuances of common stock (or securities convertible into or
exercisable for common stock) in a non-public offering equal to 20% or more of
the voting power outstanding before the issuance for less than the greater of
book or market value of the stock. Exceptions to these rules may be made upon
application to the NASD when (i) the delay in securing stockholder approval
would seriously jeopardize the financial viability of the enterprise and (ii)
reliance by the company on this exception is expressly approved by the
company's audit committee or a comparable body. In other instances, the
issuance of additional shares of Common Stock would be within the discretion of
the Board of Directors, without the requirement of further action by
shareholders except as otherwise required by applicable law or any stock
exchange on which the Company's securities may then be listed. The Company is
not presently engaged in any negotiations with respect to the use of any shares
of the additional authorized Common Stock, nor are there currently any
commitments, arrangements, understandings or plans with respect to the issuance
of such shares.
The proposed shares of Common Stock for which authorization is sought
would be part of the existing class of such Stock and would increase the number
of shares of Common Stock available for issuance by the Company, but would have
no effect upon the terms of the Common Stock or the rights of the holders of
such Stock. If and when issued, the proposed additional authorized shares of
Common Stock would have the same rights and privileges as the shares of Common
Stock presently outstanding. Holders of Common Stock will not have preemptive
rights to purchase additional shares of Common Stock.
The future issuance of additional shares of Common Stock on other than
a pro rata basis may dilute the ownership of current shareholders. Such
additional shares could also be used to block an unsolicited acquisition
through the issuance of large blocks of stock to persons or entities considered
by the Company's officers and directors to be opposed to such acquisition,
which might be deemed to have an anti-takeover effect (i.e., might impede the
completion of a merger, tender offer or other takeover attempt). In fact, the
mere existence of such a block of authorized but unissued shares, and the
Board's ability to issue such shares without shareholder approval, might deter
a bidder from seeking to acquire shares of the Company on an unfriendly basis.
While the authorization of additional shares of Common Stock might have such
effects, the Board of Directors of the Company does not intend or view the
proposed increase in authorized Common Stock as an anti-takeover measure, nor
is the Company aware of any proposed transactions of this type.
26
<PAGE> 28
The affirmative vote of a majority of the outstanding shares of Common
Stock entitled to vote thereon will be required to approve the Amendment. If
the Amendment is approved by the shareholders of the Company, such amendment
will become effective when articles of amendment to the Company's Restated
Articles of Incorporation are filed with the Florida Department of State.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION TO INCREASE THE
AUTHORIZED COMMON SHARES OF THE COMPANY BY 100,000,000 SHARES TO A TOTAL OF
150,000,000.
STOCKHOLDER PROPOSALS FOR 1996
Stockholders who wish to propose matters for consideration at the 1996
Annual Meeting must deliver them to the Company by May 18, 1996 for inclusion
in the Proxy Statement for that Meeting.
GENERAL
The management does not know of any matters, other than the foregoing,
that will be presented for consideration at the Annual Meeting. However, if
other matters properly come before the Annual Meeting, or any adjournment
thereof, the persons named in the accompanying Proxy will vote in accordance
with their best judgment with respect to such matters.
The entire cost of soliciting management proxies will be borne by the
Company. Proxies will be solicited principally through the use of the mails,
but directors, officers and regular employees of the Company may, without
additional compensation, use their personal efforts by telephone or otherwise
to obtain proxies.
27
<PAGE> 29
ANNEX I
PROPOSED AMENDMENT TO ARTICLE III
OF THE RESTATED ARTICLES OF INCORPORATION
Article III, as amended to reflect the proposed increase in authorized
Common Stock, will read in its entirety as follows:
ARTICLE III
CAPITAL STOCK
The maximum number of shares of stock that this corporation is
authorized to have outstanding is One Hundred Fifty Million (150,000,000)
shares of common stock of $1 par value and Two Million Five-hundred Thousand
(2,500,000) shares of preferred stock of $1 par value, all of which shall be
issued fully paid and non-assessable. The consideration that the corporation
shall receive for the issuance of its common stock, or for the sale of treasury
stock, shall be fixed and determined by the Board of Directors, but not for
less than the equivalent of its full par value.
No stockholder shall be entitled to subscribe to, or have any
pre-emptive rights in or to, any new shares of stock of the corporation, or in
or to any distribution of unissued or treasury shares of the corporation's
stock.
The common and preferred stock of $1.00 par value authorized by this
Article may be issued by the corporation in exchange for, or the conversion of,
evidences of indebtedness, obligations, notes, bonds or debentures either of
this corporation or corporations created by any other state or government.
1. Shares of preferred stock may be issued from time to time in
one or more series as in this Article III provided. All shares of preferred
stock shall be of equal rank and shall be identical in all respects, except in
respect of the particulars fixed by the Board of Directors for series of the
preferred stock as permitted by the provisions of this Article III. Each series
of preferred stock shall be distinctively designated and all shares of any one
series of preferred stock shall be identical in all respects with all the other
shares of such series, except that shares of any one series issued at different
times may differ as to the dates, if any, from which dividends thereon shall be
cumulative.
2. Authority is hereby expressly granted to the Board of
Directors, by resolution or resolutions, from time to time to create and
provide for the issuance of series of the preferred stock and, in connection
with the creation of each such series, to fix by the resolution or resolutions
providing for the creation and issue of shares of such series the following
provisions of the shares of such series, so far as not inconsistent with the
provisions of this Article III applicable to all series of preferred stock:
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(a) The designation of such series and the number of
shares comprising such series, which number may (except where
otherwise provided by the Board of Directors in creating such series)
be increased or decreased (but not below the number of shares then
outstanding) from time to time by like action of the Board of
Directors;
(b) The dividend rate per annum, if any, at which holders
of shares of such series shall be entitled to receive dividends,
whether or not dividends on the shares of such series shall be
cumulative, the times at which and the quarterly dividend periods for
which dividends on such series shall be paid, the date or dates, if
any, from which dividends shall be cumulative and the other
conditions, if any, on which such dividends shall be paid;
(c) The time or times, if any, at which the shares of
such series shall be subject to redemption, in whole or in part, the
price or prices to which holders of shares of such series shall be
entitled upon such redemption, and the other terms and conditions, if
any, on which shares of such series may be so redeemed;
(d) The amount or amounts and the other rights, if any,
to which the holders of shares of such series shall be entitled upon
the dissolution, liquidation or winding up of the affairs of the
corporation or upon any other distribution of the assets of the
corporation;
(e) The sinking fund or purchase fund provisions, if any,
for the redemption or purchase of shares of such series and, if any
such fund is so provided for the benefit of such shares, the amount of
such fund and the manner of its application;
(f) The extent of the voting powers, if any, of the
shares of such series;
(g) Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other class or
classes of stock, or of any series thereof, of the corporation and, if
so convertible or exchangeable, the conversion or exchange price or
prices or rate or rates, the adjustments thereof and the other terms
and conditions, if any, on which shares shall be so convertible or
exchangeable; and
(h) Any other preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, of shares of such series as are not fixed and
determined in this Article III.
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3. The powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, applicable to the preferred stock of all
series are as follows:
(a) Out of the funds of the corporation legally available
for dividends, the holders of the preferred stock of each series shall
be entitled to receive, when and as declared by the Board of
Directors, cash dividends at such rate, if any and no more, and
payable at such times and for such quarterly dividend periods as shall
be fixed for such series by the Board of Directors as herein
permitted. Dividends on any shares of preferred stock shall be
cumulative only if and to the extent fixed by resolution of the Board
of Directors. Accumulations of dividends, if any, shall not bear
interest.
No such dividend shall be paid or declared and set apart for
payment on any share of preferred stock for any quarterly dividend
period unless a dividend for the same quarterly dividend period and
all past quarterly dividend periods, if any, ending within such
quarterly dividend period, ratably in proportion to the respective
annual dividend rates fixed therefor, shall be or have been paid or
declared and set apart for payment on all shares of preferred stock of
all series then outstanding and entitled to receive dividends for such
quarterly dividend period or for any past quarterly dividend period,
if any, ending within such quarterly dividend period.
In no event, so long as any preferred stock shall remain
outstanding, shall any dividend, other than a dividend payable in
shares of common stock be declared or paid upon, nor shall any
distribution be made upon, any common stock, nor shall any shares of
common stock be purchased or redeemed by the corporation other than in
exchange for common stock, nor shall any monies be paid or made
available for a sinking fund for the purchase or redemption of any
common stock, unless in each instance accrued and unpaid dividends on
all outstanding shares of the preferred stock for all past dividend
periods shall have been paid and the dividend on all outstanding
shares of the preferred stock for the then applicable current
quarterly dividend period shall have been paid, or declared and a sum
sufficient for the payment thereof set apart.
(b) In the event of any liquidation, dissolution or
winding up of the affairs of the corporation, the holders of preferred
stock shall be entitled to receive, out of the assets of the
corporation available for distribution to its stockholders, an amount
in cash for each share equal to the amount payable on such share in
such event provided for by the Board of Directors as permitted herein
for the series of preferred stock
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of which such share is a part plus, in each case, an amount equal to
all dividends accrued and unpaid on such share up to the date fixed
for distribution, and no more, before any distribution shall be made
to the holders of the common stock.
If upon any such liquidation, dissolution or winding up of the
corporation its net assets shall be insufficient to permit the payment
in full of the respective amounts to which the holders of all
outstanding preferred stock of all series are entitled as above
provided, the entire remaining net assets of the corporation shall be
distributed among the holders of preferred stock of all series in
amounts proportionate to the full amounts to which they are
respectively so entitled, pursuant to the resolution of the Board of
Directors fixing and determining the relative rights and preferences
of the shares of each series.
Neither the merger nor consolidation of the corporation, nor
the sale, lease or conveyance of all or a part of its assets, shall be
deemed to be a voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the corporation within the meaning of
this subparagraph (b).
4. (a) Except for such voting powers as may be granted to
the holders of preferred stock by law, subparagraph (b) of this paragraph 4, or
as may be granted to the holders of any one or more series of preferred stock
by the Board of Directors in accordance with paragraph 2(f) of this Article
III, voting power shall be vested exclusively in the common stock. At every
meeting of the stockholders of the corporation every holder of common stock
entitled to vote shall be entitled to one vote for each share of common stock
registered in his name on the books of the corporation and, except as otherwise
provided, herein, by law or pursuant to the resolution of the Board of
Directors fixing and determining the relative rights and preferences of the
shares of each series, the common stock and the preferred stock of the
corporation (and any other capital stock of the corporation at the time
entitled thereto), shall vote together as a class.
(b) At any time when six (6) quarterly dividends, whether
cumulative or non-cumulative, on any one or more series of preferred stock
entitled to receive dividends, whether cumulative or non-cumulative, shall be
in default, the holders of all such cumulative series at the time or times
outstanding as to which such default shall exist shall be entitled, at the next
annual meeting of stockholders or special meeting held in place thereof, at
which time the number of directors constituting the Board of Directors shall be
increased by two, voting as a class, whether or not the holders thereof shall
otherwise be entitled to vote, to the exclusion of the holders of common stock,
to vote for and elect two members of the Board of Directors of the corporation
to fill such newly-created directorships. All rights of all series of preferred
stock to participate in the election of directors
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pursuant to this subparagraph 4(b) shall continue in effect, in the case of all
series of preferred stock entitled to receive cumulative dividends, until
cumulative dividends have been paid in full or set apart for payment on each
cumulative series which shall have been entitled to vote at the previous annual
meeting of stockholders, or special meeting held in place thereof, or, in the
case of all series of non-cumulative preferred stock, until non-cumulative
dividends have been paid in full or set apart for payment for four consecutive
quarterly dividend periods on each non-cumulative series which shall have been
entitled to vote at the previous annual meeting of stockholders or special
meeting held in place thereof. Whenever the holders of the preferred stock
shall be divested of such voting right hereinabove provided, the directors so
elected by the preferred stock shall thereupon cease to be directors of the
corporation and thereupon the number of directors shall be reduced by two.
Directors elected by the holders of any one or more series of stock voting
separately as a class, may be removed only by a majority vote of such series,
voting separately as a class, so long as the voting power of such series shall
continue. The holders of the common stock, voting as a class, to the exclusion
of the holders of such series so entitled to vote for and elect members of the
Board of Directors pursuant to this subparagraph 4(b) shall be entitled to vote
for and elect the balance of the Board of Directors. No stockholder entitled to
vote at any particular time in accordance with the foregoing provisions shall
have more than one vote for each share of stock held of record by him at the
time entitled to voting rights.
(c) Subject to all of the rights of the preferred stock
or any series thereof, the holders of the common stock shall be entitled to
receive, when and as declared by the Board of Directors, out of funds legally
available for that purpose, dividends payable in cash, stock or otherwise.
(d) In the event of any liquidation, dissolution or
winding up of the affairs of the corporation, if the holders of all series of
the preferred stock shall have received all the amounts to which they shall be
entitled in such event in accordance with the provisions of this Article III
and any further provisions prescribed in accordance herewith, the holders of
the common stock shall be entitled, to the exclusion of the holders of the
preferred stock of all series, to share in all the remaining assets of the
corporation available for distribution to the stockholders.
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Appendix A
CORDIS CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD OCTOBER 10, 1995
The undersigned hereby constitutes and appoints ROBERT Q. MARSTON and
ROBERT C. STRAUSS, and each of them, with power of substitution, as attorneys
and proxies to appear and vote all of the shares of Common Stock standing in
the name of the undersigned, at the Annual Meeting of Stockholders of Cordis
Corporation, to be held on Tuesday, October 10, 1995, at 2:00 p.m. and at any
adjournment thereof:
1. ELECTION OF DIRECTORS [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
listed below AS INDICATED BELOW
(INSTRUCTION: TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, OR FOR ALL
NOMINEES AS A GROUP, MARK THE BOX NEXT TO THE NOMINEE'S NAME OR THE GROUP
BELOW)
[ ] R. C. STRAUSS [ ] R. W. FOXEN [ ] J. L. de RUYTER VAN STEVENINCK
[ ] C. M. BURZIK [ ] D. F. MALIN [ ] P. K. WOOLF
[ ] D. R. CHALLONER [ ] W. J. RAZZOUK [ ] W. W. WEBSTER
[ ] ALL NOMINEES AS A GROUP
2. PROPOSAL TO RATIFY APPOINTMENT OF DELOITTE & TOUCHE as the Company's
independent auditors for the year ending June 30, 1996;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO RATIFY THE AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION
to increase the authorized Common Stock; and
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CORDIS CORPORATION
(Continued and to be signed on other side)
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(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
Dated ________________________, 1995. ____________________________________
(Signature)
____________________________________
(Signature)
Please sign exactly as name appears
below. When shares are held by
joint tenants, both should sign.
When signing as attorney, as
executor, administrator, trustee or
guardian, please give full title as
such. If a corporation, please
sign in full corporate name by
President or other authorized
officer. If a partnership, please
sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE MARK THIS BOX:
I plan to attend the Annual Meeting
