<PAGE> 1
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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
(AMENDMENT NO. 2)
------------------------
CORDIS CORPORATION
(Name of Subject Company)
JOHNSON & JOHNSON
JNJ ACQUISITION CORP.
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED RIGHTS)
(Title of Class of Securities)
21852510
(CUSIP Number of Class of Securities)
------------------------
JOSEPH S. ORBAN, ESQ.
JOHNSON & JOHNSON
ONE JOHNSON & JOHNSON PLAZA
NEW BRUNSWICK, NEW JERSEY 08933
(908) 524-2488
(Name, Address and Telephone Number of Persons authorized to
Receive Notices and Communications on Behalf of Bidders)
------------------------
COPY TO:
ROBERT A. KINDLER, ESQ.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
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Page 1 of 53 pages
Exhibit Index located on Page 4
<PAGE> 2
JNJ Acquisition Corp. and Johnson & Johnson hereby amend their Tender Offer
Statement on Schedule 14D-1 (the "Statement"), originally filed on October 19,
1995, as amended by Amendment No. 1, with respect to JNJ Acquisition Corp.'s
offer to purchase all outstanding shares of Common Stock, par value $1.00 per
share, of Cordis Corporation, a Florida corporation, together with any
associated rights, as set forth in this Amendment No. 2. Capitalized terms not
defined herein have the meanings assigned thereto in the Statement.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Cordis Corporation, a Florida
corporation (the "Company"), and the address of its principal executive offices
is 5200 Blue Lagoon Drive, Suite 200, Miami, Florida 33126.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
On October 24, 1995, JNJ Acquisition Corp. delivered a demand to the
Company, requesting that the Board of Directors fix a record date to determine
the shareholders entitled to take certain actions by written consent, and J&J
issued a press release, a copy of which is attached hereto as Exhibit (a)(10)
and is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Multiple class action complaints have been filed against the Company and
its directors by shareholders of the Company seeking declaratory and injunctive
relief. Copies of these complaints are attached hereto as exhibits (g)(2)-(4)
and are incorporated herein by reference.
On October 24, 1995, J&J issued a press release, a copy of which is
attached hereto as Exhibit (a)(10) and is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(10) Press Release, dated October 24, 1995.
(g)(2) Complaint in Brickell Partners and Harry Lewis v. Robert C.
Strauss, et. al. filed in the United States District Court for the
Southern District of Florida on October 20, 1995.
(3) Complaint in Brickell Partners v. Robert C. Strauss, et. al. filed
in the 11th Judicial Circuit in and for Dade County, Florida on
October 19, 1995.
(4) Complaint in Harry Lewis v. Robert C. Strauss, et. al. filed in the
Circuit Court for the 11th Judicial Circuit in and for Dade County,
Florida on October 19, 1995.
2
<PAGE> 3
SIGNATURES
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: October 24, 1995
JOHNSON & JOHNSON
By: /s/ JAMES T. LENEHAN
------------------------------------
Name: James T. Lenehan
Title: Member, Executive Committee
JNJ ACQUISITION CORP.
By: /s/ JOSEPH S. ORBAN
------------------------------------
Name: Joseph S. Orban
Title: President
3
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
---------- ----------------------------------------------------------------------- ------------
<C> <C> <S> <C>
(a) (10) Press Release, dated October 24, 1995. ................................
(g) (2) Complaint in Brickell Partners and Harry Lewis v. Robert C. Strauss,
et.al. filed in the United States District Court for the Southern
District of Florida on October 20, 1995. ............................
(g) (3) Complaint in Brickell Partners v. Robert C. Strauss, et.al. filed in
the 11th Judicial Circuit in and for Dade County, Florida on October
19, 1995. ...........................................................
(g) (4) Complaint in Harry Lewis v. Robert C. Strauss, et.al. filed in the
Circuit Court for the 11th Judicial Circuit in and for Dade County,
Florida on October 19, 1995. ........................................
</TABLE>
4
<PAGE> 1
EXHIBIT (A)(10)
<PAGE> 2
EXHIBIT (A)(10)
JOHNSON & JOHNSON
NEW BRUNSWICK, N.J.
08933
<TABLE>
<S> <C>
Press Contact: F. Robert Kniffin
(908) 524-3535
(Home) (609) 799-0369
Investor Contact: Annie H. Lo
(908) 524-6491
(Home) (908) 580-1258
</TABLE>
FOR IMMEDIATE RELEASE
JOHNSON & JOHNSON REQUESTING CORDIS TO SET RECORD DATE
FOR WRITTEN CONSENT TO REMOVE AND REPLACE CORDIS BOARD
------------------------------
New Brunswick, N.J., October 24, 1995 -- Johnson & Johnson (NYSE:JNJ)
announced today that it is requesting that Cordis Corporation (NASDAQ:CORD) set
a record date as soon as possible with respect to the solicitation of written
consents to remove and replace the Cordis Board. Under the By-law adopted by
Cordis on October 23, 1995, the record date must be within the next 20 business
days. As previously stated, if Cordis does not promptly agree to a $105 per
share stock-for-stock merger, Johnson & Johnson intends to solicit written
consents in order to remove and replace the Cordis Board in order to effect such
merger. Cordis shareholders as of the record date would be entitled to vote in
such consent solicitation.
<PAGE> 1
EXHIBIT (g)(2)
<PAGE> 2
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
...........................................X
)
BRICKELL PARTNERS, )
a Florida Partnership, ) Civil Action No.
and HARRY LEWIS, Individually ) 95-2320
And On Behalf of All Others ) CIV-DAVIS
Similarly Situated, )
)
Plaintiffs, )
) CLASS ACTION COMPLAINT
) ----------------------
- against - )
)
ROBERT C. STRAUSS, WILTON W. ) MAGISTRATE
WEBSTER, JR., DAVID R. ) JOHNSON
CHALLONER, RICHARD W. )
FOXEN, DONALD F. MALIN, JR., )
JAN VAN STEVENINCK, PATRICIA K. )
WOOLF, CATHERINE M. BURZIK, )
WILLIAM J. RAZZOUK, and )
CORDIS CORPORATION, )
)
Defendants. )
...........................................X
Plaintiffs, by their attorneys, allege upon personal knowledge
as to their own acts and upon information and belief as to all other matters,
as follows:
JURISDICTION AND VENUE
1. Plaintiffs bring this Action pursuant to Sections
14(a) and 20 of the Securities Exchange Act of 1934 (the "1934 Act") and Rule
14a-9 adopted by the Securities Exchange Commission, (the "SEC") thereunder and
applicable principles of common law.
2. This Court has jurisdiction pursuant to Section 27 of
the 1934 Act 15 U.S.C. sec. 78aa, and under principles of pendent jurisdiction.
<PAGE> 3
3. Venue is proper in this district because the events
and omissions giving rise to the claims alleged herein have occurred, are
occurring and, unless restrained, will continue to occur, in this district,
including the dissemination of false and misleading proxy solicitation
material. Cordis is incorporated in Florida and has its principal place of
business in this district. In addition, defendants transacted business in this
district during the Class period, as defined below.
4. In connection with the acts and conduct alleged in
this complaint, defendants directly and indirectly, used the means and
instrumentalities of interstate commerce, including the mails and telephone
communication, and the facilities of national securities exchanges, namely,
NASDAQ's National Market System.
PARTIES
5. Plaintiffs are and, at all relevant times, have been
the owners of shares of Cordis common stock.
6. Cordis is a corporation duly organized and existing
under the laws of the State of Florida. Cordis designs, manufactures and sells
certain medical devices consisting of angiographic catheters, neuroscience
devices and related instrumentation. Cordis maintains its principal executive
offices at 14201 Northwest 60th Avenue, Miami Lakes, Florida. Cordis has
approximately 16.4 million
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shares of common stock outstanding and hundreds of stockholders of record.
Cordis' stock trades over the NASDAQ National Market System.
7. Defendant Robert C. Strauss ("Strauss") is and at all
relevant times hereto has been the President, Chief Executive Officer, and
Chairman of the Board of Directors of Cordis.
8. Wilton W. Webster, Jr. ("Webster") is and at all
relevant times hereto has been a Vice President and a director of Cordis.
9. Defendants David R. Challoner, Richard W. Foxen,
Donald F. Malin, Jr., Jan van Steveninck, Catherine M. Burzik, William J.
Razzouk, and Patricia K. Woolf are directors of Cordis.
10. The defendants named in paragraphs 7 through 9 are
hereinafter referred to as the "Individual Defendants."
11. Because of their positions as officers/directors of
the Company, the Individual Defendants owe a fiduciary duty of loyalty and due
care to plaintiffs and the other members of the class.
12. Each defendant herein is sued individually as a
conspirator and aider and abettor, as well as in his/her capacity as an officer
and/or director of the Company, and the liability of each arises from the fact
that he or she
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has engaged in all or part of the unlawful acts, plans, schemes, or
transactions complained of herein.
CLASS ACTION ALLEGATIONS
13. Plaintiffs bring this action in their own behalf and
as a class action, pursuant to Rule 23(a) and (b)(2) and (3) of the Federal
Rules of Civil Procedure, on behalf of all stockholders of the Company as of
August 15, 1995 and their successors in interest, except defendants herein and
any person, firm, trust, corporation, or other entity related to or affiliated
with any of the defendants, or any of the Company's principal stockholders, who
will be threatened with injury arising from defendants' actions as is described
more fully below.
14. This action is properly maintainable as a class
action.
15. The class is so numerous that joinder of all members
is impracticable. The Company has thousands of stockholders who are scattered
throughout the United States.
16. There are questions of law and fact common to the
class that predominate over questions affecting any individual class member.
The common questions include, inter alia, whether:
(a) defendants violated federal securities laws
by the acts and omissions alleged herein;
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<PAGE> 6
(b) the proxy solicitation material disseminated
by Cordis to the Class omitted and/or misrepresented material facts;
(c) defendants participated in and pursued the
common course of conduct complained of;
(d) defendants acted willfully or recklessly in
omitting and/or misrepresenting material facts;
(e) defendants breached their fiduciary duties
owed by them to plaintiffs and other members of the Class by failing and
refusing to attempt in good faith to maximize shareholder value in the sale of
Cordis;
(f) Cordis' Poison Pill was defensively enacted
and implemented to entrench defendants in their office and deprive Cordis
public shareholders of the maximum value of their holdings;
(g) defendants have breached or aided and abetted
the breach of the fiduciary duties owed by them to plaintiffs and other members
of the Class;
(h) defendants engaged in a plan and scheme to
thwart and reject offers and proposals from third parties, including Johnson &
Johnson ("J&J"), who is a major manufacturer and seller of a range of health
care products; and
(i) plaintiffs and the other members of the Class
are being and will continue to be injured by the
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<PAGE> 7
wrongful conduct alleged herein and, if so, what is the proper remedy and/or
measure of damages.
17. Plaintiffs are committed to prosecuting the action
and have retained competent counsel experienced in litigation of this nature.
Plaintiffs' claims are typical of the claims of the other members of the class
and plaintiffs have the same interests as the other members of the class.
Plaintiffs are adequate representatives of the class.
SUBSTANTIVE ALLEGATIONS
18. On October 19, 1995, the Dow Jones News Wire reported
that J&J would commence "a $100-a-share cash tender offer for all of the
outstanding stock of Cordis after Cordis rebuffed J&J's offer to negotiate a
merger." The estimated value of the tender offer is $1.6 billion.
19. In connection with the tender offer, J&J announced
that it had previously offered as much as $105-a-share in a stock-for-stock,
tax-free transaction which was valued at $1.7 billion - or $100 million more
than the tender offer. However, Cordis rejected this transaction and refused
to negotiate with J&J. The $105 per share offering price represents a 22%
premium over the trading price of Cordis stock on one day prior to announcement
of the J&J tender offer.
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<PAGE> 8
20. As further evidence of defendants' intransigence, The
Wall Street Journal reported on October 16, 1995, that the Individual
Defendants had adopted and implemented a Poison Pill in anticipation of the J&J
tender offer. Under the Plan, which is effective immediately, shareholders are
given a dividend of one share purchase right ("Right") for each common share
outstanding at the close of business on October 23, 1995.
21. The adoption and implementation of the Poison Pill
has the force and effect of entrenching the Individual Defendants in their
corporate offices against any real or perceived threat to their control, and
dramatically impairs the rights of Class members to exercise freedom of choice
in a proxy contest or to avail themselves of a bona fide offer to purchase
their shares by an acquiror, such as J&J, unfavored by incumbent management.
This fundamental shift of control of the Company's destiny from the hands of
its shareholders to the hands of the Individual Defendants results in a
heightened fiduciary duty of the Individual Defendants to consider, in good
faith, a third party bid, such as J&J, and further requires the Individual
Defendants to pursue a third party's interest in acquiring the Company and to
negotiate in good faith with a bidder on behalf of the Company's shareholders.
22. The purpose, intent and effect of the Poison Pill, in
the face of J&J's pending offer for the Company, is
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<PAGE> 9
to thwart, deter, impede, and delay the acquisition of Cordis by J&J.
23. Defendants' recalcitrance to consider and promptly
act upon J&J's earlier overtures and formal offer has no valid business
purpose, and simply evidences their disregard for the attractive premium being
offered to Cordis shareholders. By failing to meet and negotiate or offer to
meet and negotiate with J&J, defendants are depriving plaintiffs and the Class
of the right to share in the assets and businesses of Cordis and receive the
maximum value for their shares.
24. On October 20, 1995, it was reported by The Wall
Street Journal that J&J had been attempting to negotiate a merger with Cordis
for more than a month and had each of its acquisition overtures rebuffed by the
Company.
25. J&J had initiated a series of telephone conferences
and meetings with Cordis on several occasions commencing September 6, 1995. On
September 12, 1995, Ralph S. Larsen ("Larsen"), Chairman of the Board of J&J,
held a teleconference with a Robert Marston ("Marston"), the Company's former
Chief Executive Officer, to outline the strategic advantages of a Cordis/J&J
combination. Among other things, Larsen indicated that it was J&J's intent to
have Cordis operated as a separate subsidiary within the J&J company. Marston
did not respond to Larsen's proposal but stated that Cordis would have to
consider the proposal.
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<PAGE> 10
26. On September 13, 1995, representatives of J&J and
Cordis spoke and after reviewing the strategic benefits of the merger, set up
another meeting regarding a negotiated transaction on either September 21,
1995. However, on September 19, 1995, defendant Strauss telephoned Larsen that
the Cordis Board of Directors had met and determined that it would be premature
to meet with J&J until after the October 10, 1995 Annual Meeting.
27. Cordis filed certain proxy materials (the "proxy
materials") with the SEC in connection with its Annual Meeting on October 10,
1995 (the "Annual Meeting"). The proxy materials were disseminated on or about
September 15, 1995 to stockholders of record as of August 15, 1995. The proxy
materials made no mention or disclosure of the serious merger interest
expressed by J&J or the other discussions referred to above. As a result, the
proxy materials were materially incomplete because of defendants' failure to
disclose the existence of the J&J bona fide interest in completing an
acquisition.
28. Cordis' proxy material related to the Company's
September 15, 1995 Annual Meeting, which was held to consider, inter alia:
(a) the election of the Company's directors, and (b) an amendment to the
Company's articles of incorporation to increase the number of authorized but
unissued shares which could be issued in the event of a hostile offer. The
proxy materials only stated that
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<PAGE> 11
approval of the proposed amendments to Cordis' articles of incorporation "might
deter a bidder from seeking to acquire shares of the Company on an unfriendly
basis." No mention, however, was made of the fact J&J had already made
repeated overtures for control of the Company prior to the October 10, 1995
meeting. At a vote taken at the Annual Meeting, the Company's shareholders
approved the election of the directors but soundly defeated the proposal
concerning the amendments to the articles of incorporation.
29. Despite the defendants' failure to secure a mandate
from the Company's shareholders not to obstruct and acquisition offer which
could maximize the value of the stockholder's investment, defendants
nevertheless contacted J&J on October 11, 1995 and informed them, without
shareholders' knowledge, that Cordis would remain independent. Moreover, six
days later defendants caused Cordis to institute the Poison Pill.
30. Defendants continued their pattern of
misrepresentation when they announced the creation of the Poison Pill on
October 16, 1995. It was reported by the Dow Jones News Wire that the Company
had stated that it had not enacted the Poison Pill in response to any takeover
attempt. In light of the on-going attempts by J&J, Cordis had no truthful
basis to make any such representation.
COUNT I
VIOLATION OF SECTION 14(A) OF THE SECURITIES
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<PAGE> 12
AND EXCHANGE ACT OF 1934 AND SEC RULE 14A-9
31. Plaintiffs repeat and reallege the allegations set
forth above in paragraphs 1 through 30.
32. Section 14(a) provides, in pertinent part, as follows:
It shall be unlawful for any person, by the use of the mails
or by any means or instrumentality of interstate commerce . .
. in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the
public interest or for the protection of investors, to solicit
. . . any proxy or consent or authorization in respect of any
security . . . registered pursuant to section 12 of this
title.
33. Rule 14a-9 is a rule promulgated by the SEC under
Section 14(a). Rule 14a-9 provides, in pertinent part, as follows:
No solicitation subject to this regulation shall be made by
means of any proxy statement, form of proxy, notice of
meeting, or other communication, written or oral, containing
such statement which, at the time and in the light of the
circumstances under which it is made, is false or misleading
with respect to any material fact, or omits to state any
material fact necessary in order to make the statements
therein not false or misleading . . . .
34. In disseminating the proxy materials in connection
with October 10, 1995 shareholder meeting, defendants intentionally or with
reckless disregard omitted and misrepresented material facts concerning the
existence of takeover attempts by J&J as set forth above.
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<PAGE> 13
35. The Cordis securities are registered pursuant to
Section 12 of the 1934 Act, as amended.
36. The proxy materials were disseminated by defendants
on behalf of Cordis. Thus all defendants, who constitute the Board of Cordis
participated in the violation of Section 14(a) and Rule 14a-9.
37. As a result of the actions of defendants, plaintiffs
and the other members of the Class have and will be damaged in that they will
have been provided with the proxy materials which contain material
misrepresentations and omissions.
38. As a proximate result of the violations of Section
14(a) and Rule 14a-9 alleged herein, plaintiffs and the Class have suffered and
will suffer immediate and irreparable injury.
39. Plaintiffs and the Class have no adequate remedy at
law.
COUNT II
BREACH OF FIDUCIARY DUTY
40. Plaintiffs repeat and reallege the allegations set
forth in paragraphs 1 through 39.
41. Defendants owe fundamental fiduciary obligations to
Cordis's shareholders to take all necessary and appropriate steps to maximize
the value of their shares. In addition, the Individual Defendants have the
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<PAGE> 14
responsibility to act independently so that the interests of Cordis's public
stockholders will be protected, to seriously consider all bona fide offers for
the Company, and to conduct fair and active bidding procedures or other
mechanisms for checking the market to assure that the highest possible price is
achieved. Further, the directors of Cordis must adequately ensure that no
conflict of interest exists between the Individual Defendants' own interests
and their fiduciary obligations to maximize stockholder value or, if such
conflicts exist, to insure that all such conflicts will be resolved in the best
interests of the Company's shareholders.
42. Because defendants dominate and control the business
and corporate affairs of Cordis and because they are in possession of private
corporate information concerning Cordis' assets, businesses and future
prospects, there exists an imbalance and disparity of knowledge of economic
power between defendants and the public shareholders of Cordis. This
discrepancy makes it grossly and inherently unfair for defendants to entrench
themselves at the expense of its public shareholders.
43. The Individual Defendants have breached their
fiduciary and other common law duties owed to plaintiffs and other members of
the Class in that they have not and are not exercising independent business
judgment and have acted and are acting to the detriment of the Class.
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<PAGE> 15
44. In connection with the conduct described herein, the
Individual Defendants breached their fiduciary duties by, among other things:
a. rejecting the J&J proposal without fully
informing themselves about or intentionally
ignoring the future prospects of a combined
Cordis/J&J company, or the intrinsic worth of
Cordis;
b. failing and refusing to meet with
representatives of J&J; and
c. erecting defensive measures such as Cordis'
Poison Pill plan, which was designed to make
it prohibitively expensive for an unapproved
third party from acquiring the assets or
control of the Company.
45. Moreover, defendants have refused to take those steps
necessary to ensure that Cordis's shareholders will receive maximum value for
their shares of Cordis stock. Defendants have thus refused to seriously
consider the pending offer, and have failed to announce any active auction or
open bidding procedures best calculated to maximize shareholder value in
selling the Company.
46. The Individual Defendants are acting to entrench
themselves in their offices and positions and
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<PAGE> 16
maintain their substantial salaries and perquisites, all at the expense and to
the detriment of the public shareholders of Cordis.
47. By the acts, transactions and courses of conduct
alleged herein, the Individual Defendants, individually and as part of a common
plan and scheme in breach of their fiduciary duties and obligations, are
attempting unfairly to deprive plaintiffs and other members of the Class of the
premium they could realize in an acquisition transaction and to ensure
continuance of their positions as directors and officers, all to the detriment
of Cordis' public shareholders. The Individual Defendants have been engaged in
a wrongful effort to entrench themselves in their offices and positions of
control and prevent the acquisition of Cordis except on terms which would
further their own personal interests.
48. As a result of the actions of the Individual
Defendants, plaintiffs and the other members of the Class have been and will be
damaged in that they have not and will not receive their fair proportion of the
value of Cordis's assets and businesses and/or have been and will be prevented
from obtaining a fair and adequate price for their shares of Cordis's common
stock.
49. Plaintiffs seek preliminary and permanent injunctive
relief and declaratory relief preventing defendants from inequitably and
unlawfully depriving
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<PAGE> 17
plaintiffs and the Class of their rights to realize a full and fair value for
their stock at a substantial premium over the market price, by unlawfully
entrenching themselves in their positions of control, and to compel defendants
to carry out their fiduciary duties to maximize shareholder value.
50. Only through the exercise of this Court's equitable
powers can plaintiffs be fully protected from the immediate and irreparable
injury which defendants' actions threaten to inflict. Defendants are
precluding the shareholders' enjoyment of the full economic value of their
investment by failing to proceed expeditiously and in good faith to evaluate
and pursue a premium acquisition proposal which would provide consideration for
all shares at a very attractive price.
51. Unless enjoined by the Court, defendants will
continue to breach their fiduciary duties owed to plaintiffs and the members of
the Class, and/or aid and abet and participate in such breaches of duty, and
will prevent the sale of Cordis at a substantial premium, all to the
irreparable harm of plaintiffs and other members of the Class.
52. Plaintiffs and the Class have not adequate remedy at
law.
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<PAGE> 18
WHEREFORE, plaintiffs demand judgment as follows:
(a) Declaring this to be a proper class action
and certifying plaintiffs as class representatives;
(b) Declaring that defendants have violated
Section 14(a) of the 1914 Act and Rule 14a-9 promulgated thereunder;
(c) Declaring the election of the Company's
directors at the Annual Meeting null and void as a result of their election on
materially fraudulent proxy materials, and directing the appointment of a
trustee to consider and respond to J&J's offer;
(d) Declaring that defendants have breached their
fiduciary duties to plaintiffs and the other members of the Class;
(e) Ordering the Individual Defendants to carry
out their fiduciary duties to plaintiffs and the other members of the Class by
announcing their intention to:
(i) cooperate fully with any entity or
person, including J&J, having a bona fide interest in proposing any
transactions which would maximize shareholder value, including but not limited
to, a merger or acquisition or Cordis;
(ii) immediately undertake an appropriate
evaluation of Cordis's worth as a merger/acquisition candidate;
- 17 -
<PAGE> 19
(iii) take all appropriate steps to enhance Cordis's
value and attractiveness as a merger/acquisition candidate;
(iv) take all appropriate steps to effectively
expose Cordis to the marketplace in an effort to create an active auction of
the Company;
(v) act independently so that the interests or the
Company's public shareholders will be protected; and
(vi) adequately ensure that no conflicts of interest
exist between the Individual Defendants' own interest and their fiduciary
obligation to maximize shareholder value or, in the event such conflicts exist,
to ensure that all conflicts of interest are resolved in the best interests of
the public shareholders of Cordis;
(f) Ordering the Individual Defendants, jointly and severally
to account to plaintiffs and the Class for all damages suffered and to be
suffered by them as a result of the acts and transactions alleged herein,
(g) Ordering defendants to use the Company's Poison Pill only
in such a manner to maximize shareholder value;
(h) Awarding plaintiffs the costs and disbursements of this
action, including a reasonable allowance for plaintiffs' attorneys' and expert'
fees; and
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<PAGE> 20
(i) Granting such other and further relief as may be
just and proper.
JURY DEMAND
Plaintiffs and the Class, pursuant to Fed. R. Civ. P. 38(b), hereby
demand a trial by jury on all issues contained herein.
Dated: October 20, 1995
HANZMAN CRIDEN KORGE
HERTZBERG & CHAYKIN, P.A.
By: /s/ Michael E. Criden
------------------------------------
Michael A. Hanzman, F.B.N. 510637
Michael E. Criden, F.B.N. 714356
2100 First Union Financial Center
200 South Biscayne Blvd.
Miami, FL 33131
(305) 579-1222
LERNER & PEARCE, P.A.
By: /s/ Robert W. Pearce
------------------------------------
Robert W. Pearce, F.D.N. 344575
2888 East Oakland Park Blvd.
Fort Lauderdale, FL 33306
(305) 563-8111
Co-Liaison Attorneys for Plaintiffs
Of Counsel:
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
GOODKIND LABATON RUDOFF
& SUCHARON LLP
100 Park Avenue
New York, New York 10017
(212) 907-0700
- 19 -
<PAGE> 1
EXHIBIT (g)(3)
<PAGE> 2
IN THE CIRCUIT COURT OF THE
11TH JUDICIAL CIRCUIT IN
AND FOR DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
CASE NO: 95-20617
BRICKELL PARTNERS THE ORIGINAL FILED
a Florida Partnership, IN THE OFFICE OF
Individually CLERK CIRCUIT COURT
And On Behalf of All Others DADE CO. FLA. ON
Similarly Situated, OCTOBER 19, 1995
Plaintiff,
CLASS ACTION COMPLAINT
- against -
ROBERT C. STRAUSS, WILTON W.
WEBSTER, ROBERT O. MARSTON,
DAVID R. CHALLONER, RICHARD W.
FOXEN, DONALD F. MALIN, JR.,
JAN VAN STEVENINICK, PATRICIA K.
WOOLF, and CORDIS CORPORATION,
Defendants.
- --------------------------------------
Plaintiff, by its attorneys, alleges upon personal knowledge as to his
own acts and upon information and belief as to all other matters, as follows:
JURISDICTION AND VENUE
1. This is an action for injunctive relief and damages in excess
of fifteen thousand ($15,000) dollars, exclusive of interest, costs, and
attorneys fees.
2. Plaintiff Brickell Partners ("Brickell") is a partnership
organized under the laws of the State of Florida, which is located in Miami,
Dade County, Florida.
A. Defendant Cordis Corporation ("Cordis" or the "Company") is a
corporation organized under the laws of the State of Florida, with its
principal place of business in Miami Lakes,
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Dade County, Florida.
NATURE OF THE ACTION
1. This is a stockholders' class action lawsuit brought on behalf
of the public stockholders of Cordis Corp., who have been, and continue to be,
deprived of the opportunity to realize fully the benefits of their investment
in the Company. The individual defendants have wrongfully refused to properly
consider a bona fide offer for the Company from Johnson & Johnson ("J&J"), and
have taken a reactive defensive action, which was wrongfully designed to
entrench Cordis officers and directors in their positions of control, and which
was and is unreasonable in relation to any perceived threat posed by J&J's
offer. In furtherance of these efforts, the individual defendants specifically
adopted and implemented a Rights Agreement dated on or about October 16, 1995
(known in the parlance of the financial marketplace as a "Poison Pill"), which
is designed to deter unsolicited acquisition offers by creating economic
penalties for any person attempting to effect a business combination without
approval of the individual defendants. As reported by the financial news
media, the individual defendants have failed and refused to adequately consider
the J&J offer. Their actions constitute unfair dealing and a breach of
fiduciary duty to maximize shareholder value. The individual defendants are
using their fiduciary positions of control over Cordis to thwart others in
their legitimate attempts to acquire Cordis, and the individual defendants are
trying to
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entrench themselves in their positions with the Company.
Parties
2. Plaintiff is and, at all relevant times, has been the owner of
shares of Cordis common stock.
3. Cordis is a corporation duly organized and existing under the
laws of the State of Florida. Cordis designs, manufactures and sells certain
medical devices consisting of angiographic catheters, neuroscience devices and
related instrumentation. Cordis maintains its principal executive offices at
14201 Northwest 60th Avenue, Miami Lakes, Florida. Cordis has approximately
16.4 million shares of common stock outstanding and hundreds of stockholders
of record. Cordis' stock trades over the NASDAQ National Market System.
4. Defendant Robert C. Strauss ("Strauss") is and at all relevant
times hereto has been the President, Chief Executive Officer, and a director of
Cordis.
5. Wilton W. Webster ("Webster") is and at all relevant times
hereto has been a Vice President and a director of Cordis.
6. Defendants Robert Q. Marston, David R. Challoner, Richard W.
Foxen, Donald F. Malin, Jr., Jan Van Steveninick, and Patricia K. Woolf are
directors of Cordis.
7. The defendants named in paragraphs 4 through 6 are hereinafter
referred to as the "Individual Defendants."
8. Because of their positions as officers/directors of the
Company, the Individual Defendants owe a fiduciary duty of loyalty and due care
to plaintiff and the other members of the
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class.
9. Each defendant herein is sued individually as a conspirator
and aider and abettor, as well as in his/her capacity as an officer and/or
director of the Company, and the liability of each arises from the fact that he
or she has engaged in all or part of the unlawful acts, plans, schemes, or
transactions complained of herein.
CLASS ACTION ALLEGATIONS
10. Plaintiff brings this case in his own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all stockholders of the Company, except defendants herein and any person, firm,
trust, corporation, or other entity related to or affiliated with any of the
defendants, or any of the Company's principal stockholders, who will be
threatened with injury arising from defendants' actions as is described more
fully below.
11. This action is properly maintainable as a class action.
12. The class is so numerous that joinder of all members is
impracticable. The Company has thousands of stockholders who are scattered
throughout the United States.
13. There are questions of law and fact common to the class that
predominate over questions affecting any individual class member. The common
questions include, inter alia, whether:
a. defendants have breached their fiduciary duties owed by
them to plaintiffs and other members of the Class by
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failing and refusing to attempt in good faith to maximize shareholder value in
the sale of Cordis;
b. Cordis' Poison Pill was defensively enacted and
implemented to entrench defendants in their office and deprive Cordis public
shareholders of the maximum value of their holdings;
c. defendants have breached or aided and abetted the breach
of the fiduciary duties owed by them to plaintiffs and other members of the
Class;
d. defendants engaged in a plan and scheme to thwart and
reject offers and proposals from third parties; including J&J; and
(v) plaintiffs and the other members of the Class
are being and will continue to be injured by the wrongful conduct alleged
herein and, if so, what is the proper remedy and/or measure of damages.
14. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the class and plaintiff has
the same interests as the other members of the class. Plaintiff is an adequate
representative of the class.
SUBSTANTIVE ALLEGATIONS
15. By the acts, transactions, and courses of conduct alleged herein,
defendants, individually and as part of a common plan and scheme and/or aiding
and abetting one another in total
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disregard of their fiduciary duties, are attempting to deprive plaintiff and
the Class unfairly of the opportunity to maximize the value of their investment
in Cordis.
16. On October 19, 1995, the Dow Jones News Wire reported that J&J
would commence "a $100-a-share cash tender offer for all of the outstanding
stock of Cordis after Cordis rebuffed J&J's offer to negotiate a merger." The
estimated value of the tender offer is $1.6 billion.
17. J&J announced that it had previously offered as much as
$105-a-share in a stock-for-stock, tax-free transaction which was valued at
$1.7 billion - or $100 million more than the tender offer. However, Cordis
rejected this transaction and refused to negotiate with J&J. The $105 per
share offering price represents a 22% premium over the trading price of Cordis
stock on one day prior to announcement of the J&J tender offer.
18. As further evidence of defendants' intransigence, The Wall
Street Journal reported on October 16, 1995, that the Individual Defendants had
adopted and implemented a Poison Pill in anticipation of the J&J tender offer.
Under the Plan, which is effective immediately, shareholders are given a
dividend of one share purchase right ("Right") for each common share
outstanding at the close of business on October 13, 1995
19. The adoption and implementation of the Poison Pill has the force
and effect of entrenching the Individual Defendants in their corporate offices
against any real or perceived threat to their control, and dramatically impairs
the rights of Class members
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to exercise freedom of choice in a proxy contest or to avail themselves of a
bona fide offer to purchase their shares by an acquiror, such as J&J, unfavored
by incumbent management. This fundamental shift of control of the Company's
destiny from the hands of its shareholders to the hands of the Individual
Defendants results in a heightened fiduciary duty of the Individual Defendants
to consider, in good faith, a third party bid, such as J&J, and further
requires the Individual Defendants to pursue a third party's interest in
acquiring the Company and to negotiate in good faith with a bidder on behalf of
the Company's shareholders.
20. The purpose, intent and effect of the Poison Pill, in the face of
a pending offer for the Company, is to thwart, deter, impede, and delay the
acquisition of Cordis by J&J.
21. Defendants' recalcitrance to consider and promptly act upon J&J's
earlier overtures and formal offer has no valid business purpose, and simply
evidences their disregard for the attractive premium being offered to Cordis
shareholders. By failing to meet and negotiate or offer to meet and negotiate
with J&J, defendants are depriving plaintiff and the Class of the right to
share in the assets and businesses of Cordis and receive the maximum value for
their shares.
22. Cordis represents a highly attractive acquisition candidate.
Defendants' conduct would deprive Cordis' public shareholders of the very
substantial control premium that J&J is prepared to pay, or of the enhanced
premium which further negotiation or exposure of Cordis to the market could
provide.
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23. Defendants owe fundamental fiduciary obligations to Cordis's
shareholders to take all necessary and appropriate steps to maximize the value
of their shares. In addition, the Individual Defendants have the
responsibility to act independently so that the interests of Cordis's public
stockholders will be protected, to seriously consider all bona fide offers for
the Company, and to conduct fair and active bidding procedures or other
mechanisms for checking the market to assure that the highest possible price is
achieved. Further, the directors or Cordis must adequately ensure that no
conflict of interest exists between the Individual Defendants' own interests
and their fiduciary obligations to maximize stockholder value or, if such
conflicts exist, to insure that all such conflicts will be resolved in the best
interests of the Company's shareholders.
24. Because defendants dominate and control the business and
corporate affairs of Cordis and because they are in possession of private
corporate information concerning Cordis's assets, businesses and future
prospects, there exists an imbalance and disparity of knowledge of economic
power between defendants and the public shareholders of Cordis. This
discrepancy makes it grossly and inherently unfair for defendants to entrench
themselves at the expense of its public shareholders.
25. The Individual Defendants have breached their fiduciary and other
common law duties owed to plaintiffs and other members of the Class in that
they have not and are not exercising independent business judgment and have
acted and are acting to the
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detriment of the Class.
36. In connection with the conduct described herein, the Individual
Defendants breached their fiduciary duties by, among other things:
a. rejecting the J&J proposal without fully informing
themselves about or intentionally ignoring the future
prospects of a combined Cordis/J&J company, or the
intrinsic worth of Cordis;
b. failing and refusing to meet with representatives of
J&J; and
c. erecting defensive measures such as Cordis' Poison
Pill plan, which was designed to make it
prohibitively expensive for an unapproved third party
from acquiring the assets or control of the Company.
27. Moreover, defendants have refused to take those steps necessary
to ensure that Cordis's shareholders will receive maximum value for their
shares of Cordis stock. Defendants have thus refused to seriously consider
the pending offer, and have failed to announce any active auction or open
bidding procedures best calculated to maximize shareholder value in selling
the Company.
28. The Individual Defendants are acting to entrench themselves in
their offices and positions and maintain their substantial salaries and
perquisites, all at the expense and to the
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detriment of the public shareholders of Cordis.
29. By the acts, transactions and courses of conduct alleged herein,
the Individual Defendants, individually and as part of a common plan and scheme
in breach of their fiduciary duties and obligations, are attempting unfairly to
deprive plaintiff and other members of the Class of the premium they could
realize in an acquisition transaction and to ensure continuance of their
positions as directors and officers, all to the detriment of Cordis' public
shareholders. The Individual Defendants have been engaged in a wrongful effort
to entrench themselves in their offices and positions of control and prevent
the acquisition of Cordis except on terms which would further their own
personal interests.
30. As a result of the actions of the Individual Defendants,
plaintiffs and the other members of the Class have been and will be damaged in
that they have not and will not receive their fair proportion of the value of
Cordis's assets and businesses and/or have been and will be prevented from
obtaining a fair and adequate price for their shares of Cordis's common stock.
31. Plaintiff seeks preliminary and permanent injunctive relief and
declaratory relief preventing defendants from inequitably and unlawfully
depriving plaintiff and the Class of their rights to realize a full and fair
value for their stock at a substantial premium over the market price, by
unlawfully entrenching themselves in their positions of control, and to compel
defendants to carry out their fiduciary duties to maximize
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shareholder value.
32. Only through the exercise of this Court's equitable powers
can plaintiff be fully protected from the immediate and irreparable injury
which defendants' actions threaten to inflict. Defendants are precluding the
shareholders' enjoyment of the full economic value of their investment by
failing to proceed expeditiously and in good faith to evaluate and pursue a
premium acquisition proposal which would provide consideration for all shares
at a very attractive price.
33. Unless enjoined by the Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the members of the Class, and/or
aid and abet and participate in such breaches of duty, and will prevent the
sale of Cordis at a substantial premium, all to the irreparable harm of
plaintiff and other members of the Class.
34. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) Declaring this to be a proper class action and certifying
plaintiff as a class representative;
(b) Ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by announcing
their intention to:
(i) cooperate fully with any entity or person,
including J&J, having a bona fide interest in proposing any transactions which
would maximize shareholder value, including but
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not limited to, a merger or acquisition of Cordis;
(ii) immediately undertake an appropriate evaluation
or Cordis's worth as a merger/acquisition candidate;
(iii) take all appropriate steps to enhance Cordis's
value and attractiveness as a merger/acquisition candidate;
(iv) take all appropriate steps to effectively
expose Cordis to the marketplace in an effort to create an active auction of
the Company;
(v) act independently so that the interests of the
Company's public shareholders will be protected; and
(vi) adequately ensure that no conflicts of interest
exist between the Individual Defendants' own interest and their fiduciary
obligation to maximize shareholder value or, in the event such conflicts exist,
to ensure that all conflicts of interest are resolved in the best interests of
the public shareholders of Cordis;
(c) Ordering the Individual Defendants, jointly and severally
to account to plaintiff and the Class for all damages suffered and to be
suffered by them as a result of the acts and transactions alleged herein;
(d) Preliminarily and permanently enjoining the
implementation of the Company's Poison Pill;
(e) Awarding plaintiff the costs and disbursements of this
action, including a reasonable allowance for plaintiff's attorneys' and expert'
fees; and
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(f) Granting such other and further relief as may be just and
proper.
JURY DEMAND
Plaintiff and the plaintiff class hereby demand a trial by jury on
all issues contained herein.
Dated: October 23, 1995
LERNER & PEARCE, P.A.
By:
----------------------------
Robert W. Pearce
2888 East Oakland Park Blvd.
Forth Lauderdale, FL 33306
(305) 563-8111
Attorneys for Plaintiff
Of Counsel:
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
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EXHIBIT (g)(4)
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IN AND FOR THE CIRCUIT COURT
FOR THE 11TH JUDICIAL CIRCUIT
IN AND FOR DADE COUNTY, FLORIDA
GENERAL JURISDICTION DIVISION
CASE NO:
HARRY LEWIS, on behalf of himself
and all others similarly situated,
Plaintiff, CLASS ACTION
COMPLAINT
- against -
CORDIS CORP., DAVID R. CHALLONER,
RICHARD W. FOXEN, DONALD F. MALIN,
JR., JAN L. DE RUYTER VAN
STEVENINCK, ROBERT C. STRAUSS,
PATRICIA K. WOOLF, WILTON W.
WEBSTER, JR., CATHERINE M. BURZIK
and WILLIAM J. RAZZOUK,
Defendants.
...................................
Plaintiff alleges upon information and belief except as to paragraph
1, which is alleged on knowledge, as follows:
THE PARTIES
1. Plaintiff is and at all times relevant hereto has been the owner
of shares of the common stock of Cordis Corp. ("Cordis" or the "Company").
2. Cordis is a corporation organized and existing under the laws of
the State of Florida with offices
<PAGE> 3
in Miami Lakes, Florida. Cordis has approximately 16 million shares of common
stock issued and outstanding which trade on the NASDAQ national market system.
3. (a) Defendant Robert C. Strauss is and has been at all relevant
times hereto the president, chief executive officer and Chairman of the Board
of the Company.
(b) Defendants David R. Challoner, Richard W. Foxen, Donald
F. Malin, Jr., Jab L. de Ruyter van Steveninck, Patricia K. Woolf, Wilton W.
Webster, Jr., Catherine M. Burzik and William J. Razzouk (together with
Strauss, hereinafter referred to as the "Individual Defendants") are and at all
relevant times hereto have been directors of the Company.
4. The Individual Defendants set forth above are officers and/or
directors of Cordis and, as such, are in a fiduciary relationship with plaintiff
and the other public stockholders of Cordis and owe to plaintiff and other
members of the class the highest obligations of good faith, fair dealing and
full disclosure. This obligation includes negotiating in good faith with
potential bidders for the Company, and not placing their own interests and
desires to maintain and entrench themselves in their positions over the
interests of the public shareholders to obtain the highest possible price for
their equity interests.
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CLASS ACTION ALLEGATIONS
5. Plaintiff brings this case on his own behalf and as a class
action, pursuant to Rule 1.222 of the Florida Rules of the Civil Procedure, on
behalf of all public stockholders of Cordis, and their successors in interest,
who are or will be threatened with injury arising from defendants' actions as
more fully described herein (the "Class"). Excluded from the Class are
defendants herein and any person, firm, trust, corporation, or other entity
related to or affiliated with any of the defendants.
6. This action is properly maintainable as a class action.
7. The class is so numerous that joinder of all members is
impracticable. As of August 22, 1994, there were approximately 1,120
shareholders of record located throughout the United States.
8. There are questions of law and fact which are common to the class
and which predominate over questions affecting any individual class member.
9. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Accordingly,
plaintiff is an adequate representative
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of the class and will fairly and adequately protect the interests of the class.
CLAIM FOR RELIEF
10. Cordis makes and markets angiographic devices, including
catheters and related equipment, electrophysiology, radiology, intervential
neuroradiology and neuroscience products. Cordis manufactures a line of
catheters, for instance, often used to place Johnson & Johnson's ("J&J")
stents in coronary arteries.
12. J&J is a major manufacturer and seller of a range of health care
products.
13. In an October 19, 1995 news wire, J&J disclosed that, about a
month ago, it had proposed to meet with Cordis to discuss a possible merger.
The news wire further disclosed that, after its October 10 annual meeting,
representatives of Cordis turned down the proposal. The proposal would have
provided Cordis shareholders with a stock for stock transaction with an
immediate worth of $105 per share, and an opportunity to participate in the
appreciation which would result from the combined company. The total stock for
stock proposal was estimated to be worth about $1.7 billion.
14. As a consequence of the Individual Defendants' failure to
negotiate with J&J, on October 19, 1995, J&J announced that it intended to
commence an all cash
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tender offer for all the outstanding shares of Cordis at $100 per share -- a
transaction which has an estimated worth of only $1.6 billion, and precludes
Cordis shareholders from being able to participate in the appreciation of their
equity holdings which will occur when the entities are combined.
15. The Company has a poison pill plan enacted in 1986. At their
Annual Meeting of Stockholders on October 10, 1995, the Company sought
shareholder approval to amend its articles of incorporation to increase the
number of authorized but unissued shares which could be issued in the event of
a hostile offer (such as the J&J offer) to block such an offer. The increase of
these shares was put before the shareholders for a vote on October 10th, after
J&J had contacted Cordis with a potential merger proposal, but was rejected.
Nevertheless, on or around October 16, 1995, Cordis' directors adopted a new
shareholder rights plan supplanting the September 12, 1986 Plan. Cordis' newly
implemented Shareholder Rights Plan was adopted to secure the Company against a
hostile offer.
16. J&J has filed suit to force Cordis to revoke its rights plan.
17. The Individual Defendants have failed to negotiate in good faith
with J&J and instead have continued to secure their positions of control over
Cordis by failing to rescind the "poison pill," adopting further
anti-takeover
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devices and rejecting out of hand, and without adequate negotiation or
consideration, the J&J offer.
18. Cordis' poison pill and the Individual Defendants' rejection of
the J&J offer, has the effect of entrenching the Individual Defendants in
control of Cordis, and in response to the J&J proposal, the Individual
Defendants have refused to rescind, waive or otherwise abolish the terms of the
Cordis poison pill.
19. J&J's tender offer will be for 100% of Cordis' outstanding stock,
which, in turn, will invoke the poison pill. This will make J&J's tender offer
prohibitively expensive, may well discourage J&J from continuing its tender
offer, and has resulted in J&J's commencing a suit against Cordis.
20. Defendants' failure to take rescind, waive or otherwise abolish
the terms of the poison pill, to fail to negotiate with J&J and to increase
Cordis' anti-takeover provisions constitutes a breach of defendants' fiduciary
duties owed to plaintiff and other members of the Class. It will have the
effect of making the J&J proposal cost-prohibitive, and therefore may
discourage J&J from going forward with a tender offer--the primary alternative
which would enable J&J shareholders to maximize the value of their equity
holdings.
21. At all times herein, defendants were and are obligated to
adequately consider, in a timely fashion and on
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an informed basis, any reasonable proposal from any party, not to place their
own self-interests and personal considerations ahead of the interests of the
stockholders and to make corporate decisions in good faith. The actions of the
Individual Defendants in maintaining and refusing to waive or otherwise rescind
the poison pill were fundamentally motivated to further their own
self-interests and objectives, and correspondingly preserve and protect their
emoluments and positions in the Company, all in violation of their fiduciary
duties and to the detriment of the shareholders of the Company.
22. The Individual Defendants' entrenchment motives are evidenced
by, inter alia, the following:
(a) Through the maintenance of the poison pill, and
defendants' failure to waive its terms, defendants have erected a virtually
insurmountable barrier to persons who may wish to acquire Cordis, obtain
control or take steps to maximize shareholder value, and are thereby attempting
to entrench themselves in their positions of control and improperly advance
their own personal agenda at the expense of Cordis' public stockholders;
(b) In reality, the poison pill provisions are designed to
prevent unsolicited takeovers from succeeding. Defendants' inaction concerning
the waiver or rescission of the poison pill are indicative of their true
motives and objectives; and
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(c) Defendants' efforts to increase Cordis' anti-takeover
devices when confronted with a merger proposal and potential hostile takeover
by J&J.
23. In failing to negotiate with J&J, increasing Cordis'
anti-takeover devices, and failing to waive or rescind the poison pill, the
Individual Defendants have acted to manipulate the corporate machinery of
Cordis, thereby impairing the corporate democratic process within the Company
at the expense and to the detriment of the Company's common stockholders. By
maintaining the poison pill and increasing the Company's anti-takeover devices,
the Individual Defendants have restrained and impaired the ability of Cordis'
stockholders to affect corporate policy, and freely structure the directorial
constituency of the Company. The poison pill, inter alia, impedes shareholder
ability to accumulate shares and associate together to replace incumbent
management, oppose any management initiative, or otherwise affect corporate
policy through stockholder resolutions.
24. Defendants' fiduciary obligations require them to:
(a) undertake an appropriate evaluation of any bona fide
offers, and take appropriate steps to solicit all potential bids for the
Company or its assets, consider strategic alternatives and maximize shareholder
value;
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<PAGE> 10
(b) act independently, including appointing a disinterested
committee so that the interests of Cordis' public stockholders would be
protected;
(c) adequately ensure that no conflicts of interest exist
between defendants' own interests and their fiduciary obligations to the public
stockholders of Cordis;
(d) waive or otherwise rescinding the Cordis poison pill so
that the interests of Cordis' public stockholders will be protected.
25. Defendants have failed to dislcose whether they will negotiate
with J&J to seek to maximize shareholder value, or attempt to pursue
alternative transactions.
26. The J&J proposal represents an opportunity to effect a change of
control of Cordis, its business and affairs. In a change of control
transaction, the Individual Defendants necessarily and inherently suffer from a
conflict of interest between their own personal desires to retain their offices
in Cordis, with the emoluments and prestige which accompany those offices, and
their fiduciary obligation to maximize shareholder value in a change of control
transaction. Because of such conflict of interest, it is unlikely that
defendants will be able to represent the interests of Cordis' public
stockholders with the impartiality that their fiduciary duties require, nor
will they be able to ensure that their conflicts of interest will
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be resolved in the best interests of Cordis' public stockholders.
27. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who direct the actions of the Company, are carrying out a
preconceived plan and scheme to entrench themselves in office and to protect
and advance their own proposal parochial interests at the expense of Cordis.
Defendants' conduct has disenfranchised the Company's stockholders in their
ability to exercise their right to vote for directors of their choice and to
influence corporate policy through the proxy mechanism.
28. As a result of the foregoing, the Individual Defendants have
breached and/or aided and abetted breaches of fiduciary duties owed to Cordis
and its stockholders.
29. Unless enjoined by this Court, defendants will breach their
fiduciary duties owed to plaintiff and the other members of the Class and may
benefit themselves in their corporate offices, all to the irreparable harm of
the Class, as aforesaid.
30. Plaintiff and the other members of the Class have no adequate
remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) declaring this to be a proper class action;
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(b) ordering the Individual Defendants to carry out their
fiduciary duties to plaintiff and the other members of the Class by announcing
their intention to:
(i) undertake an appropriate evaluation of
alternatives designed to maximize value for Cordis' public stockholders;
(ii) adequately ensure that no conflicts of
interests exist between defendants' own interests and their fiduciary
obligations to public stockholders or, if such conflicts exist, to ensure that
all the conflicts would be resolved in the best interests of Cordis' public
stockholders; and
(iii) act independently by, inter alia, appointing a
completely disinterested committee to review this and other alternatives, so
that the interests of Cordis' public stockholders would be protected;
(c) ordering defendants, jointly and severally, to account
to plaintiff and the other members of the Class for all damages suffered and to
be suffered by them as a result of the acts and transactions alleged herein;
(d) declaring that the Individual Defendants and each of them
have violated their fiduciary duties to the Class;
(e) rescinding and rendering void the poison pill;
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(f) awarding plaintiff the costs and disbursements of the
action, including a reasonable allowance for plaintiff's attorney's fees and
experts' fees; and
(g) granting such other and further relief as this Court may
deem to be just and proper.
Dated: October 19, 1995
HANZMAN CRIDEN KORGE
HERTZBERG & CHAVKIN, P.A.
2100 First Union Financial
Center
200 S. Biscayne Boulevard
Miami, FL 33131
(305) 579-1222
Attorneys for Plaintiff
Of Counsel:
GOODKIND LABATAN RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, NY 10017
(212) 907-0700
