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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
(Amendment No. 4)
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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)
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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)
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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>
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 Amendments No.
1-3, 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. 4. Capitalized
terms not defined herein have the meanings assigned thereto in the
Statement.
ITEM 10. ADDITIONAL INFORMATION.
An additional class action complaint has been filed against
the Company and its directors in Mary Pratt v. Catherine Burzik, et.
al., filed in the United States District Court for the Southern
District of Florida on October 24, 1995, seeking declaratory and
injunctive relief. A copy of this complaint is attached hereto as
exhibit (g)(6).
Further, the plaintiffs in Brickell Partners and Harry Lewis
v. Robert C. Strauss, et. al., which was filed in the United States
District Court for the Southern District of Florida, amended their
complaint on October 26, 1995. A copy of such amended complaint is
attached hereto as exhibit (g)(7).
On November 1, 1995, J&J issued a press release, a copy of
which is attached hereto as Exhibit (a)(12) and is incorporated herein
by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(12) Press Release, dated November 1, 1995.
(g)(6) Complaint in Mary Pratt v. Catherine Burzik, et. al.,
filed in the United States District Court for the
Southern District of Florida on October 24, 1995.
(g)(7) Amended complaint filed 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 26, 1995.
<PAGE>
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: November 2, 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
<PAGE>
INDEX TO EXHIBITS
Exhibit Sequentially
Number Exhibit Page
(a)(12) Press Release, dated November 1,
1995.................................
(g)(6) Complaint in Mary Pratt v.
Catherine Burzik, et. al., filed in
the United States District Court
for the Southern District of
Florida on October 24, 1995..........
(g)(7) Amended complaint filed 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 26, 1995.....................
<PAGE>
Exhibit (a)(12)
Johnson & Johnson
New Brunswick, NJ 08933
Press Contact: F. Robert Kniffin
(908) 524-3535
(Home) (609) 799-0369
Investor Contact: Annie H. Lo
(908) 524-6491
(Home) (908) 580-1258
FOR IMMEDIATE RELEASE
JOHNSON & JOHNSON TO SOLICIT CONSENTS TO REMOVE CORDIS BOARD
New Brunswick, N.J., November 1, 1995 -- Johnson & Johnson
(NYSE:JNJ) announced today that it will solicit written consents from
Cordis shareholders to remove and replace the Board of Directors of
Cordis Corporation (NASDAQ:CORD). The action follows the Cordis
Board's rejection of Johnson & Johnson's $105 per share stock-for-
stock merger proposal. The proposal was made on October 19, 1995,
after Cordis refused even to meet to discuss a transaction. Johnson &
Johnson continues to believe that the $105 price is full and fair. The
price represents a 35 times multiple of earnings and is an almost 70%
premium to the Cordis stock price before takeover speculation started
last July. Johnson & Johnson said that the actions Cordis has taken,
including adopting a clearly invalid poison pill and amending its
by-laws, are merely attempts to delay, and delay is not in the best
interests of the Cordis shareholders.
Cordis has still not set a record date to determine
shareholders entitled to vote through written consents. A request to
set the record date was delivered to Cordis on October 24, 1995, and
Cordis has 10 business days from such date to take action to set the
record date. When Cordis takes action to set the record date, Johnson
& Johnson will distribute consent solicitation materials to the Cordis
<PAGE>
shareholders. If shareholders holding a majority of the outstanding
Cordis shares deliver written consents, the Cordis Board would be
removed and replaced.
Exhibit (g)(6)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
MARY PRATT, Civil Action No.
Plaintiff, CLASS ACTION COMPLAINT
-against-
CATHERINE M. BURZIK, DAVID R.
CHALLONER, RICHARD W. FOXEN,
DONALD F. MALIN JR., WILLIAM J.
RAZZOUK, ROBERT C. STRAUSS, JURY TRIAL DEMANDED
JAN L. DE RUYTER VAN STEVENINCK,
WILTON W. WEBSTER JR., PATRICIA K.
WOOLF, ROBERT Q. MARSTON,
and CORDIS CORP.,
Defendants.
Plaintiff, by her undersigned attorneys, for her complaint
against defendants (the "Complaint"), alleges the following upon
information and belief, except as to Defendants. Paragraph 13 hereof, which
is alleged upon personal knowledge. Plaintiff's information and belief is
based upon, among other things, the investigation made by plaintiff's
attorneys, which investigation included, without limitation: (a) review and
analysis of filings made by defendants and Johnson & Johnson and Johnson &
Johnson's wholly-owned subsidiary, JNJ Acquisition Corp. (collectively,
with Johnson & Johnson, "J&J"), with the Securities and Exchange Commission
("SEC"); (b) review and
<PAGE>
analysis of securities analysts' reports concerning defendant Cordis Corp.
("Cordis" or the "Company"); (c) review and analysis of press releases
distributed by defendants and J&J; and (d) review and analysis of various
reports concerning the Company and J&J which have appeared in newspapers,
magazines and trade publications. Certain facts relevant to the causes of
action alleged herein are in the exclusive custody and control of the
defendants and are unavailable to plaintiff because, inter alia, (a) such
matters are reflected or memorialized in internal documents that are not
publicly available; and (b) plaintiff has not had the opportunity to gain
access to this information through discovery or by other means.
NATURE OF THE ACTION
1. This is a shareholders' class action lawsuit on behalf of the
public shareholders of defendant Cordis. These shareholders are currently
being deprived of the opportunity to realize the full benefits of their
investment in Cordis.
2. As more fully described below, the actions of the Individual
Defendants complained of herein lack any legitimate corporate or business
purpose and instead have been designed with the sole or primary purpose of
entrenching the Individual Defendants in office. In taking the actions
complained of, the Individual Defendants were and are attempting to
solidify their control over the business and affairs of Cordis by
preventing any third party
<PAGE>
disfavored by senior management from acquiring all or part of Cordis or
otherwise gaining control of the Company. In addition, the Individual
Defendants have manipulated the corporate machinery of Cordis by
fundamentally limiting the ability of Cordis's shareholders to associate
freely with one another and oppose incumbent management or affect corporate
policy through the proxy process or through shareholder resolutions.
3. On October 19, 1995, J&J commenced an all-cash tender offer
for all outstanding shares of Cordis common stock at a price of $100 per
share (the "Cash Offer"). That price represented a 16% premium over the
trading price of the Company's shares before the Cash Offer was announced
and in excess of a 61% premium over the price at which Cordis common stock
had traded on July 17, 1995, the day before market rumors of a pending
acquisition by J&J caused Cordis's shares to jump $10-3/4 , to $72-1/4. At
the time the Cash Offer was announced, J&J expressed its willingness to
conduct a negotiated stock acquisition with the Company on a tax-free basis
at a price of $105 (the "Stock Offer" and, collectively with the Cash
Offer, the "Offers"), a 22% premium over Cordis's closing price the day
before J&J announced its desire to acquire the Company. The Stock Offer
would also permit Cordis shareholders to realize substantial benefits from
the synergies which will be generated as a result of the combination of the
well-matched businesses of Cordis and J&J.
<PAGE>
4. At the same time J&J announced the Cash Offer, it announced
its intention to conduct a consent solicitation to remove and replace
Cordis's incumbent directors with other candidates and to pursue other
measures intended to facilitate a sale of the Company. J&J has now made
filings with the SEC which are necessary to commence a consent
solicitation.
5. Instead of taking all reasonable steps to assure the
maximization of shareholder value, including the implementation of bidding
mechanisms to foster a fair auction of the Company to the highest bidder or
the exploration of strategic alternatives which will return greater or
comparable short-term and long-term value to plaintiff and the Class, the
Individual Defendants, the directors of Cordis, have wrongfully refused to
consider a bona fide offer for the Company at a price substantially in
excess of the market price of Cordis common stock prior to the announcement
of the Offers. Defendants' conduct is in abrogation of their fundamental
fiduciary duties to the public stockholders of Cordis to seek to maximize
the value of the Company's stock.
6. The conduct complained of herein is designed by the Individual
Defendants and other members of Cordis senior management to entrench the
officers and directors of Cordis in the management and control of the
Company and to advance their own personal interests at the expense of
Cordis's public shareholders. Indeed, defendants' present
<PAGE>
conduct represents the culmination of an entire series of steps which the
Individual Defendants have taken to deter and ultimately thwart any efforts
to acquire the Company which they have not initiated or approved. In
furtherance of these efforts, the Individual Defendants have adopted and
utilized, among other defensive weapons, a stockholder rights plan, known
in the parlance of the financial marketplace as a "poison pill," which is
designed to deter unsolicited acquisition offers by creating severe
economic penalties for any person attempting to effect a business
combination with Cordis without the approval of the Individual Defendants.
Cordis's poison pill (the "Poison Pill") was adopted on Tuesday, October
17, 1995, just two days before J&J launched the Cash Offer. Cordis
misleadingly represented at that time that the Poison Pill was adopted in
response to any known or expected takeover efforts, although the Company
had just refused to meet with J&J regarding the latter's serious expression
of interest in effectuating an acquisition of Cordis.
7. The Individual Defendants' preconceived plan and scheme to
thwart a fair and open auction that would maximize shareholder value is
intended to entrench themselves in office and to protect and advance their
own financial interests at the expense of the Company and its public
shareholders. These actions effectively increase and consolidate the
Individual Defendants' control and power over the management of Cordis and
perpetuate their
<PAGE>
employment and receipt of substantial salaries and other valuable
consideration and remuneration from Cordis at the expense of the Company's
shareholders.
8. Plaintiff also brings this action pursuant to Section 14(a) of
the Williams Act and Rule 14a-9 promulgated thereunder seeking a
determination that the election of directors at Cordis's annual meeting
held on October 10, 1995 (the "Annual Meeting"), was invalid and void
because the proxy statement disseminated in connection therewith (the
"Proxy Statement") misrepresented and omitted material facts in breach of
the Cordis directors' full disclosure obligations under federal and state
law. The Court should, inter alia, order a new annual meeting to be held
forthwith after full disclosure of all material facts.
9. Among other remedies, preliminary and permanent injunctive
relief are sought to protect Cordis public shareholders from the imminent
breach of duties owed to them by the Individual Defendants.
JURISDICTION AND VENUE
10. The claims asserted herein arise pursuant to Section 14(a) of
the Exchange Act, 15 U.S.C. ss. 78n(a), the rules and regulations
promulgated by the SEC thereunder and under applicable state law.
11. This Court has subject matter jurisdiction over this action
pursuant to Section 27 of the Exchange Act, 15 U.S.C. ss. 78aa, and 28
U.S.C. ss.ss. 1331(a) and 1367(a).
<PAGE>
12. Venue is appropriate in this District pursuant to 28 U.S.C.
ss. 1391(b) and (c). Defendant Cordis is incorporated in the State of
Florida and certain of the acts and occurrences underlying this Complaint
have occurred in this District.
PARTIES
13. Plaintiff Mary Pratt is and has been at all relevant times an
owner of Cordis common stock who has been damaged and is threatened with
further injury by the wrongful actions of the defendants as set forth
herein. Plaintiff brings this action as a class action on behalf of the
public shareholders of Cordis.
14. (a) Defendant Cordis is a Florida corporation with its
principal executive office located at 14201 Northwest 60th Avenue, Miami
Lakes, Florida 33014.
(b) The Company and its subsidiaries are engaged in the design,
manufacture and sale of medical devices and systems for the cardiology,
electrophysiology, radiology, interventional neuroradiology and
neuroscience markets. Cordis is the world's third-largest
balloon-angioplasty manufacturer.
(c) As of August 15, 1995, the Company had 16,392,697 shares
outstanding. Those shares are actively traded on the over-the-counter
NASDAQ market.
15. (a) Defendants Catherine M. Burzik, David R. Challoner,
Richard W. Foxen, Donald F. Malin Jr., William J. Razzouk, Robert C.
Strauss, Jan L. de Ruyter van Steveninck,
<PAGE>
Wilton W. Webster Jr. and Patricia K. Woolf are the present members of the
Board of Directors of Cordis (the "Board). Together with Robert Marston,
who stepped down from the Cordis Board on October 10, 1995, they are
referred to herein as the "Individual Defendants."
(b) Defendant Strauss also serves as the Company's Chief
Executive Officer and President. He has served as the Company's Chairman of
the Board since October 10, 1995, when Marston left that post. In the year
ended June 30, 1995, defendant Strauss received $490,185 in salary, bonus
and other annual compensation from Cordis. Srauss was also granted 25,000
shares of Cordis common stock and received payouts valued at $563,477 (50%
of which was in Cordis stock and 50% of which was in cash) pursuant to the
Company's 1991 Performance Unit Award Plan.
(c) Defendant Marston received $75,000 in compensation from the
Company in 1994.
(d) Each of the other Individual Defendants also receives
substantial annual compensation from defendant Cordis. In derogation of
their fiduciary duties to the Company's stockholders, each has personal and
financial interests in thwarting any threat to the incumbency and control
exercised by Cordis's senior management and members of its Board. Each
non-management director, other than defendant Marston, receives an annual
fee of $20,000, among other substantial benefits and perquisites of office.
Each of those Individual Defendants also receives a fee of $1250
<PAGE>
for each Board meeting attended and $750 for each committee meeting
attended. Committee chairmen are paid $1000 for each committee meeting
attended. Board members also receive 2000 shares of Cordis common stock
annually.
(e) As of August 22, 1995, Cordis' directors and officers owned
beneficially 1,584,751 shares, or 9.67% of the Company's common stock.
16. By virtue of their position as directors and/or officers of
Cordis and their exercise of control over the business and corporate
affairs of Cordis, the Individual Defendants have, and at all relevant
times had, the power to control and influence, and did control and
influence and cause Cordis to engage in the practices complained of herein.
The Individual Defendants owed and owe Cordis and its stockholders
fiduciary obligations and were and are required to: use their ability to
control and manage Cordis in a fair, just and equitable manner; act in
furtherance of the best interests of Cordis and its stockholders to
maximize stockholder value; govern Cordis in such a manner as to heed the
expressed views of its public shareholders; refrain from abusing their
positions of control; and refrain from advancing their own interests at the
expense of Cordis and its stockholders.
17. By virtue of the acts and conduct alleged herein, the
individual Defendants, who control the actions of Cordis, are breaching
their fiduciary duties to the public shareholders of the Company.
<PAGE>
18. The Individual Defendants are sued individually and as
co-conspirators and (as to non-Exchange Act claims) aiders and abettors, as
well as in their capacity as officers and/or directors of Cordis, and the
liability of each arises from the fact that they have engaged in all or
part of the unlawful acts, plans, schemes, or transactions complained of
herein.
CLASS ACTION ALLEGATIONS
19. Plaintiff brings this action for declaratory, injunctive and
other relief on his own behalf and as a class action on behalf of all
common stockholders of Cordis (except defendants herein and any person,
firm, trust, corporation or other entity related to or affiliated with any
of the defendants) and their successors in interest, who are being
specially injured and deprived of the opportunity to maximize the value of
their Cordis shares by the wrongful acts of the Individual Defendants
described herein (the "Class") and whose franchise and ownership rights
have been impaired by the unlawful actions complained of herein.
20. This action is properly maintainable as a class action for
the following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. As of August 15, 1995, the Company had 16,392,697 shares
outstanding held by hundreds, if not thousands, of shareholders of record
and beneficial owners scattered throughout the United States.
<PAGE>
(b) The parties defending against the Class have acted or refused
to act on grounds generally applicable to the Class, thereby making
appropriate the final injunctive and declaratory relief requested herein.
Plaintiff and the Class have a common and undivided interest in obtaining
the injunctive and declaratory relief requested herein.
(c) There are questions of law and fact which are common to the
Class and which predominate over questions affecting any individual Class
member. These common questions include, inter alia, the following:
(i) whether the Individual Defendants have breached the fiduciary
and other common law duties owed by them to plaintiff and other members of
the Class by, inter alia, failing and refusing to attempt in good faith to
maximize shareholder value in the contemplated acquisition of Cordis by a
third party;
(ii) whether defendants are wrongfully impeding takeover attempts
at the expense of Cordis's public stockholders;
(iii) whether defendants have engaged and are continuing to
engage in a plan and scheme to entrench themselves in their positions of
control within Cordis at the expense of Cordis's public stockholders;
(iv) whether the election of directors at the Company's October
10, 1995 Annual Meeting was invalid;
<PAGE>
(v) whether plaintiff and the other members of the Class would be
irreparably damaged were the Individual Defendants not enjoined from
continuing in the conduct described in this Complaint; and
(vi) whether plaintiff and the other members of the Class are
being or will continue to be injured by the wrongful conduct alleged herein
and, if so, what is the proper rendering and/or measure of damages.
21. 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. Plaintiff is an adequate representative of the Class
and has retained counsel experienced in class and shareholder litigation.
Plaintiff will fairly and adequately protect the interests of the Class.
22. A class action is superior to other available methods for the
fair and efficient adjudication of this action, and no unusual difficulties
are likely to be encountered in the management of this action as a class
action. The likelihood of individual class members prosecuting separate
claims is remote as a result of the substantial expense such an individual
litigation would entail.
<PAGE>
SUBSTANTIVE ALLEGATIONS
A. The Substantial Benefit of a J&J/Cordis Merger
23. J&J, like Cordis, has built a substantial position in recent
years in the coronary care device business. In particular, J&J has achieved
great success in marketing its coronary stent, a wire-mesh cylinder which
is implanted in coronary arteries to keep them open.
24. As Cowen & Co. analyst Dan Lemaitre stated in the October 20,
1995 edition of The Wall Street Journal, a combination of Cordis and J&J
consequently "makes terrific sense from a strategic point of view." J&J's
stents are implanted in artery walls following the treatment of those
arteries with angioplasty balloons, the largest source of Cordis's
revenues. Once the angioplasty balloons are threaded into clogged arteries
to reopen them, stents are inserted to improve circulation through the
arteries on a long-term basis. Without the insertion of a stent, the
arteries of approximately 40% of angioplasty patients clog again. Among the
products manufactured by Cordis is a high-pressure angioplasty balloon that
is used to implant artery stents, including those manufactured by J&J.
25. Despite the dramatic success it has experienced with its
stent business (the product, which was introduced only a year ago, is
expected to produce $450 million in sales for J&J this year), J&J has been
unable to broaden its line of cardiovascular products. J&J consequently
views Cordis as a natural fit with its stent
<PAGE>
business. A combination of the two companies would, as The Wall Street
Journal reported on October 20, "create a powerful competitor in the
coronary-artery market" by enabling the combined entity to market itself as
a one-stop shop for coronary-artery products. Such streamlined marketing is
becoming an increasingly significant factor in achieving success in the
medical device market as hospitals seek to cut costs by limiting the number
of suppliers with which they do business. By combining J&J's stent products
with Cordis's other coronary devices, the combined entity will also achieve
increased pricing flexibility by packaging the two companies' complementary
products.
26. A combination of the two companies would further benefit
Cordis by enabling the Company to improve its ability to quickly introduce
new products to the market, an obvious necessity in the fast-changing
medical device business. As a Southeast Research Partners analyst stated in
a January 24, 1995 Reuters report, "It's been hard for [Cordis] to ramp up
the manufacturing, training and introduction of new products into the
market as fast as they would like." J&J's massive manufacturing and
distribution networks will enable the Company to overcome these current
shortcomings.
27. J&J's proposed Stock Merger would permit the Company's
shareholders to share in the future benefits of this business combination
as the holders of J&J common stock. The Cash Offer, while it offers Cordis
shareholders
<PAGE>
a substantial premium over the pre-announcement market price of their
Cordis shares, does not present shareholders with that opportunity to share
in the future appreciation of the combined entity's value. J&J's proposed
Stock Offer also offers Cordis shareholders an opportunity to collect a
substantial premium on a tax-free basis. In contrast, if the Board
maintains its current stonewalling tactics, J&J has announced its intention
to proceed with and seek to implement the lower priced, taxable Cash Offer.
B. J&J's Attempts to Acquire Cordis
in a Negotiated Transaction
28. In light of the substantial synergies that will be generated
by a combination of J&J and Cordis, J&J has persistently and actively
pursued a negotiated business combination with Cordis. Beginning in 1992,
representatives of a J&J subsidiary have engaged in intermittent
discussions with, among other representatives of Cordis, defendant Strauss,
regarding potential business ventures.
29. More recently, on September 5, 1995, Ralph Larsen, J&J's
Chairman and CEO, telephoned defendant Marston, to express J&J's interest
in pursuing a negotiated acquisition of Cordis. Later the same day, Larsen
was contacted by defendant Foxen and the two discussed a potential
acquisition of Cordis. Foxen agreed at that time that he and Marston would
meet with Larsen on September 12, 1995, in New York City.
<PAGE>
30. Larsen and Robert N. Wilson, Vice Chairman of J&J, met with
defendants Marston and Foxen on September 12, 1995. At that time, the J&J
representatives outlined J&J's desire to acquire Cordis in a tax-free,
stock-for-stock merger.
31. The next day, Larsen was contacted by defendant Marston, who
requested that Larsen contact defendant Strauss. During that conversation,
Strauss, after first expressing reluctance to meet with Larsen prior to the
Company's Annual Meeting, agreed to convene such a meeting on September 21
or 22, 1995.
32. On September 15, 1995, Larsen called Strauss and a meeting
between J&J and Cordis was scheduled for September 21, 1995. On September
19, 1995, however, Strauss telephoned Larsen and informed him that during
the course of a telephonic meeting of the Board it had been decided that no
meeting with J&J should be held until after the Company's Annual Meeting,
which was scheduled for October 10, 1995. When Larsen inquired as to the
reason for that delay, Strauss responded that the Board felt it required
time to do an evaluation of the Company.
C. Cordis's Annual Meeting
33. On or about September 15, 1995, the Individual Defendants
caused a Proxy Statement to be sent to Cordis's shareholders in connection
with the Company's annual shareholder meeting. The Annual Meeting was held
in the Company's offices on October 10, 1995. At that meeting,
<PAGE>
each of the Individual Defendants was elected or re-elected to the Cordis
Board. In addition, at that meeting, the directors obtained shareholder
approval to appoint the accounting firm Deloitte & Touche as the Company's
auditor.
34. The Company further sought approval at the Annual Meeting of
the Board's decision to amend the Company's Restated Articles of
Incorporation to increase the number of authorized shares of Cordis common
stock from 50,000,000 to 150,000,000. Among the reasons cited by the
Individual Defendants for adopting that amendment was a desire to
facilitate the adoption of "a new shareholders rights plan to replace the
Shareholder Rights Plan which currently expires in September 1996 . . ."
The Individual Defendants represented in the Proxy Statement that "[t]he
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."
35. The Proxy Statement further stated that the newly-issued
shares could operate as an anti-takeover defensive mechanism that:
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 an 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,
<PAGE>
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. [Emphasis added.]
36. The Proxy Statement was consequently materially inaccurate,
false and misleading. Cordis had been approached by J&J concerning a
proposed acquisition well in advance of the date of the Annual Meeting, yet
endeavored to conceal this fact from Cordis's shareholders in order to
facilitate defendants' entrenchment efforts. Defendants thus wrongly acted
and conspired to conceal any disclosure of J&J's overtures when they were
seeking shareholder approval of potent new anti-takeover defensive
mechanisms and also seeking election or re-election to the Board.
37. Furthermore, the Proxy Statement was false and misleading in
that, among other things: (i) it failed to disclose the Individual
Defendants' actual entrenchment motives in connection with their proposals;
and (ii) it failed to disclose that the proposals were made in an attempt
to thwart immediate takeover interest.
38. When faced with an explicit choice between being permitted to
decide for themselves the merits of a potential value-maximizing
transaction or granting control to the Board to decide independently to
utilize a large
<PAGE>
number of newly-authorized shares to thwart a takeover in any manner it saw
fit, the Company's shareholders soundly rejected this proposal at the
Annual Meeting. The Individual Defendants were, however, elected (or
re-elected) to their positions on Cordis's Board based upon the false
representations made in the Proxy Statement. Cordis further received
approval of Deloitte & Touche as the Company's auditors at the Annual
Meeting.
D. J&J's Acquisition Proposal
39. Despite Strauss's indication that he would meet with
representatives of J&J to discuss a possible acquisition following the
Company's Annual Meeting, the Individual Defendants continued to stonewall
J&J. The day after the Annual Meeting, Strauss telephoned Larsen and
informed him that the Board had met and decided that the Company should
remain independent and that Strauss should not meet with J&J. When Larsen
inquired as to how such a decision had been made before the Board had the
opportunity to be informed of the specific terms of J&J's proposal, the
strategic reasons for a business combination and the benefits to the
Company's shareholders, employees and customers, Strauss simply repeated
that he would not meet with Larsen. Nevertheless, Larsen expressed to
Strauss J&J's continued interest in pursuing a negotiated transaction at
that time and urged Strauss and Cordis to reconsider their apparently
intractable position.
<PAGE>
40. Given the Individual Defendants' refusal to so much as meet
with J&J to discuss a possible transaction, J&J decided to commence the
Cash Offer on October 19, 1995. Pursuant to the Cash Offer, J&J has offered
to purchase all outstanding shares of Cordis common stock, together with
all associated rights, at a price of $100 per share, net to the seller in
cash.
41. In conjunction with its announcement of the Cash Offer, J&J
also announced that, if Cordis does not promptly agree to the Stock Offer,
J&J intends to solicit written consents from Cordis's shareholders to
remove and replace the Individual Defendants as directors of the Company.
J&J has commenced the procedures necessary to obtain SEC approval of such a
consent solicitation.
42. In an October 19, 1995 letter to Strauss informing him of the
commencement of the Cash Offer, however, J&J expressed its continued
willingness to negotiate a value-maximizing transaction with Cordis.
Specifically, the letter informed Strauss that J&J remained willing to
consummate the Stock Offer -- a negotiated, tax-free, stock-for-stock
transaction with Cordis at a price of $105 per Cordis share.
43. The Offers are fully financed and are not subject to any
condition with respect to financing.
44. Following the announcement of the Offers, the Individual
Defendants responded with a terse announcement
<PAGE>
that the Company had "no definitive comment" and stated that the Board
"will evaluate and react" to the proposals.
45. The widespread belief among market experts is that J&J would
be willing to improve upon its already attractive proposal. For example, an
October 19, 1995, Reuters report quoted Piper Jaffray analyst Archie Smith
as stating, "There's no question in my mind that this is just a starting
point." Similarly, Dow Jones News Service quoted Sam Navarro, an analyst
with UBS Securities, as stating, "I wouldn't be surprised if [$105] was a
starting point."
46. The belief that J&J or some other acquiror would be willing
to improve upon the substantial premium presented by J&J's tax-free $105
proposed merger price is so widespread among investors that, within two
days after the announcement of the Offer, Cordis's market price soared to
$109.625, well above the currently-proposed price of the Stock Offer.
47. Even without a further price increase, the Stock Offer
represents an extremely attractive opportunity to Cordis shareholders. As
Larsen pointed out in his letter to defendant Strauss on October 19, 1995,
the $105 proposal represents a premium of approximately 70% over the market
price of Cordis common stock prior to July 18, 1995, the day rumors of an
acquisition of Cordis by J&J were first reported on wire services. That
price is also a 16% premium over the trading price of the Company's shares
immediately before the Cash Offer was announced.
<PAGE>
E. Defendants' Entrenchment Maneuvers
48. Cordis and the Individual Defendants have indicated no
willingness to negotiate with J&J for a higher price and have failed to
implement any bidding or other market check mechanism designed to elicit a
superior offer.
49. Indeed, it is reported that Cordis has retained the services
of the New York law firm Simpson Thacher & Bartlett and the investment bank
Morgan Stanley Group to assist in Cordis's takeover defense.
50. Cordis's failure to open meaningful negotiations with J&J,
coupled with the reported meetings with lawyers and advisors proficient in
anti-takeover defensive strategies, indicate that the Cordis Board is not
acting loyally and diligently in the best interests of Cordis's
shareholders, but rather is taking steps to entrench existing management
and the existing Board.
1. The Poison Pill
51. In fact, just six days after the Annual Meeting, and the
shareholders' clear rejection of intensified defensive measures, defendants
swiftly moved to impede a transaction with J&J, or any other potentially
value-maximizing transaction, by adopting a new, enhanced Poison Pill
shareholder rights plan. The Poison Pill supplanted a previous shareholder
rights plan that Cordis had implemented on September 12, 1986, and was
scheduled to expire in 1996.
<PAGE>
52. Despite the fact that defendants acknowledged in the Proxy
Statement that the proposal to expand the number of authorized shares of
the Company was designed, in part, to facilitate the adoption of a new
shareholder rights plan, no mention was made in the Proxy Statement of the
material facts that the Company presently intended to adopt, and had plans
in place to implement a new, reinforced Poison Pill, which would expand
upon the anti-takeover effect of the existing shareholder rights plan, and
would be put in place irrespective of the result of the shareholder
referendum on the adoption of new defensive measures.
53. Pursuant to the Poison Pill, defendants redeemed the rights
issued in connection with the Company's 1986 shareholder rights agreement
and increased their ability to fend off unsolicited offers for control of
the Company.
54. The Poison Pill was implemented by declaring a dividend of
one capital stock purchase right per share to the Company's shareholders of
record as of October 23, 1995. In the event an outside entity, such as J&J,
acquires a 15% or greater interest in Cordis, the rights will become
exercisable and holders of the rights, other than the acquiring entity,
will be entitled to apply the exercise price to the purchase of common
shares of the Company at one-half of the then-current market price.
55. The Poison Pill represents a significant enhancement of the
defensive measures available to the
<PAGE>
Company under its 1986 shareholder rights plan. First, the trigger point of
the Poison Pill has been set at 15%. Under the replaced plan, the
shareholder rights were issued ten days after a person or group acquired a
20% interest in the Company or announced a tender offer for 30% or more of
the Company's stock.
56. Moreover, the replaced plan was only a "flip over" poison
pill, i.e., it permitted Cordis shareholders to purchase common stock of
the acquiror equal to twice the value of the exercise price of the right.
Such plans do not prevent acquirors from obtaining a controlling, but less
than 100%, interest in a company because the flip-over provision does not
become operative unless the acquiror attempts to obtain all of the
company's common stock by means of a merger or other similar transaction.
57. Once J&J or some other acquiror obtained a 50% interest in
Cordis, it would have been simple for the acquiror to dismantle the
replaced poison pill by means of a consent solicitation or some other
method.
58. The new Poison Pill, in addition to this flip-over provision,
provides for a "flip-in" mechanism to enhance the Individual Defendants'
ability to repel unsolicited acquisition efforts. The flip-in provision
provides for Cordis shareholders to purchase shares of Cordis at one-half
the market price in the event J&J or some other acquiror obtains a 15%
interest in the Company. A
<PAGE>
merger or similar transaction with an outside entity need not be
implemented for such a provision to be operative.
59. In practice, the Poison Pill makes it prohibitively expensive
to acquire control of Cordis without the consent of the Individual
Defendants, irrespective of the interests of Cordis's shareholders. In some
circumstances, such poison pill plans may deter unfair offers. Here,
however, where a bidder has made an acquisition offer at a substantial
premium over market price, negotiations with the bidder regarding
redemption of the poison pill and a possible higher acquisition price
should be initiated without delay by the Board, which owes the Company's
public shareholders unwavering duties of care and loyalty and an enhanced
duty to seek to maximize shareholder value. Those duties prohibit the
directors from unjustifiably and uncompromisingly seeking to block any
proposed transaction which may reward shareholders with maximum value for
their holdings. Defendants have thwarted the will of Cordis' shareholders
in adopting the Poison Pill within days of the defeat of their proposal at
the Annual Meeting to increase the number of authorized shares.
60. Given the nature and value of the Offers, the Board should
utilize the Poison Pill only to facilitate thorough negotiations with J&J
and other potential acquirors of the Company and to employ leverage to
obtain a value-maximizing transaction for the Company. To this point, the
Poison Pill has been utilized only to advance the selfish
<PAGE>
interests of the Board and Cordis's executives in entrenching themselves in
office at the expense of the Company's public stockholders.
61. The Individual Defendants' failure to utilize the Poison Pill
in a manner designed to maximize shareholder value violates the fiduciary
duties they owe to Cordis stockholders because the Individual Defendants'
conduct will deny plaintiff and the Class the opportunity to weigh a bona
fide offer for control of Cordis at a price well in excess of the Company's
pre-announcement market price. Plaintiff and the Class will suffer
irreparable injury if defendants are permitted to continue this pattern of
misconduct.
2. Florida Anti-Takeover Defenses
62. In addition to the newly-implemented Poison Pill, Cordis has
a number of defenses available for use against hostile bids under
applicable Florida corporation law. These defenses include a provision of
Florida corporation law (FBCA ss. 607.0902), entitled "Control-Share
Acquisitions."
63. The Control-Share Acquisitions statute applies to any
corporation (an "Issuing Public Corporation") that has not opted out of the
statute's coverage that (i) has 100 or more shareholders; (ii) has its
principal place of business, its principal office, or substantial assets
within Florida; and (iii) has either (a) more than 10 percent of its
shareholders resident in Florida, (b) more than 10 percent of its shares
owned by residents of Florida,
<PAGE>
or (c) 1,000 shareholders resident in Florida. While it is permissible for
corporations to opt-out of this provision, Cordis has not exercised that
option.
64. The Control-Share Acquisitions statute provides that shares
in a corporation that are purchased in a control share acquisition have
voting rights only to the extent authorized by a majority of shareholders
other than holders of interested shares (defined to include shares which
are beneficially owned by an acquiring person, any officer of the issuing
corporation or any employee of the corporation who is also a director). A
control share acquisition is defined, inter alia, as the acquisition of
beneficial ownership of shares with a majority or more of all voting power.
A control share acquisition does not include an acquisition which has been
approved by the board of directors of the Issuing Public Corporation.
65. In practice, the effect of the Control-Share Acquisitions
statute is that shares acquired in an unsolicited tender offer only carry
voting rights to the extent authorized by a majority of holders of shares
other than those already acquired in the tender offer. Moreover, the
shareholder vote on the resolution regarding the voting rights to be
accorded the acquiror's control shares is not required to be taken until
the next scheduled special or annual meeting of shareholders, unless the
acquiring person delivers a control share acquisition statement to the
Issuing Public Corporation, requests a special meeting of
<PAGE>
shareholders for the specific purpose of determining control share voting
rights, and agrees to pay the Issuing Public Corporation's expenses for the
special meeting. In that event, the directors of the Issuing Public
Corporation may wait for up to 50 days after receipt of the demand by the
acquiring person before holding the special meeting.
66. Given the nature and value to Cordis's shareholders of the
Offers, the Board should be permitted to rely upon the protections offered
by the Control-Shares Acquisition statute only to the extent that such
reliance facilitates the thorough negotiation of a value-maximizing
transaction with J&J or another potential acquiror or increases the
Company's leverage in conducting such negotiations. To date, the Individual
Defendants have given no indication that they intend to limit their
reliance upon the statute to such uses or purposes.
67. The Individual Defendants' failure to utilize the
Control-Shares Acquisition statute in a manner designed to maximize
shareholder value violates the fiduciary duties they owe to Cordis
stockholders because the Individual Defendants' conduct will deny plaintiff
and the Class the opportunity to weigh a bona fide offer for control of
Cordis at a price well in excess of the Company's pre-announcement market
price. Plaintiff and the Class will suffer irreparable injury if defendants
are permitted to continue this pattern of misconduct.
<PAGE>
68. Another provision of Florida corporation law (FBCA ss.
607.0901), provides additional protection for the Board against an
unsolicited takeover attempt. That statute, entitled "Affiliated
Transactions", applies, inter alia, to any Florida corporation, such as
Cordis, that has not opted-out of the statute's coverage.
69. The Affiliated Transactions statute was designed to impede
coercive and inadequate tender offers and to assure that shareholders in
hostile takeovers would receive a fair, non-coercive proposal in any
second-step merger. The statute provides that if a person acquires more
than ten percent of a corporation's voting shares (thereby becoming an
"Interested Shareholder"), such Interested Shareholder may not engage in an
"Affiliated Transaction" (defined to include a merger or consolidation)
with that corporation, subject to certain exceptions. Section 607.0901 does
not prohibit an Affiliated Transaction under various circumstances,
including any instance in which the Affiliated Transaction has been
approved by a majority of the Disinterested Directors (as defined therein).
70. Given the nature and value to Cordis's shareholders of the
Offers, the Board should be permitted to rely upon the protections offered
by the Affiliated Transactions statute only to the extent that such
reliance facilitates the thorough negotiation of a value-maximizing
transaction with J&J or another potential acquiror or increases the
Company's leverage in negotiating such a
<PAGE>
transaction. To date, the Individual Defendants have given no indication of
an intention to limit their reliance upon the statute to such uses or
purposes.
71. The Individual Defendants' failure to utilize the Affiliated
Transactions statute in a manner designed to maximize shareholder value
violates the fiduciary duties they owe to Cordis stockholders because the
Individual Defendants' conduct will deny plaintiff and the Class the
opportunity to weigh a bona fide offer for control of Cordis at a price
well in excess of the Company's pre-announcement market price. Plaintiff
and the Class will suffer irreparable injury if defendants are permitted to
continue this pattern of misconduct.
F. Irreparable Injury
72. Despite the tremendous value presented by the Offers to
Cordis's shareholders, the Individual Defendants, by virtue of tactics
which are solely or primarily designed to entrench themselves in office and
their failure to announce an immediate and receptive response, are acting
in derogation of the fiduciary duties they owe to Cordis's shareholders to
maximize shareholder value and act loyally and diligently in the best
interests of the Company's stockholders.
73. The defendants' unwillingness to seriously consider J&J's
Offers stems from their desires to entrench themselves in their positions
of dominance and control of the Company and to continue to reap the very
generous
<PAGE>
economic benefits which are contingent upon their continued dominance and
control of Cordis and its officers, contrary to the expressed will of the
majority of Cordis shareholders. Instead of proceeding with alacrity and
diligence to negotiate further a potential acquisition by J&I or another
entity or to develop other value-maximizing alternatives, the Board is
proceeding on a course of resistance and is refusing to implement
strategies designed to maximize shareholder value.
74. The preliminary and permanent injunctive relief requested
herein is therefore necessary to prevent the Company's stockholders from
suffering irreparable injury as a result of the Individual Defendants'
intransigence. There is no adequate remedy at law for the following
injuries with which Cordis's shareholders are currently threatened:
(a) Cordis's stockholders may be deprived of any opportunity to
receive the benefits of J&J's premium Offers;
(b) Cordis's stockholders may be deprived of the opportunity to
choose for themselves whether to receive the benefits of J&J's Offers or to
remain stockholders of an independent Cordis; and
(c) Cordis's stockholders will be deprived of the opportunity to
receive the maximum value possible for their Cordis stock as a result of
the Individual Defendants'
<PAGE>
refusal to negotiate with J&J or seek alternatives in order to maximize
short-term and long-term value.
G. Declaratory Relief
75. The Court may grant the declaratory relief sought herein
pursuant to 28 U.S.C. ss. 2201 and Fed. R. Civ. P. 57. Cordis's expressed
unwillingness even to meet to consider or discuss a combination or merger
with J&J demonstrates that there is a substantial controversy between
plaintiff, class members and defendants. The adverse legal interests of the
parties are real and immediate. The granting of the requested declaratory
relief will serve the public interest by affording relief from uncertainty
and by avoiding delay and will conserve judicial resources by avoiding
piecemeal litigation.
FIRST CLAIM
76. Plaintiff repeats and realleges each allegation contained in
paragraphs 1 through 75 as if fully set forth herein.
77. This claim alleges violations of fiduciary and other common
law duties on the part of the Individual Defendants.
78. The Individual Defendants owe fundamental fiduciary
obligations to the Company's shareholders to take all necessary and
appropriate steps to maximize the value of Cordis common stock. In
addition, the Individual Defendants are obliged to act independently so
that the interests of Cordis public stockholders will be protected, to
consider
<PAGE>
seriously 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 value available to Cordis shareholders is achieved.
Further, the directors of the Company must adequately ensure that no
conflict of interest exists between defendants' own interests and their
fiduciary obligations to maximize stockholder value or, if such conflicts
exist, to ensure that all such conflicts are resolved in the best interests
of the Company's public stockholders.
79. Cordis represents a highly attractive acquisition candidate.
Defendants' conduct has deprived and will continue to deprive the Company's
public shareholders of the very substantial control premium now being
offered and which further exposure of the Company to the market could
provide.
80. The Individual Defendants have breached the fiduciary and
other common law duties they owe to plaintiff 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 in
order to benefit themselves and other members of Cordis's senior management
and Board.
81. Moreover, the Individual Defendants have refused to take
those steps necessary to ensure that the Company's shareholders will
receive maximum value for their shares of Cordis stock. Defendants have
refused to consider
<PAGE>
seriously the J&J Offers and have failed to announce any active auction or
open bidding procedures best calculated to maximize shareholder value in
selling the Company.
82. 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 detriment of the public
shareholders of Cordis.
83. By virtue of the acts and conduct alleged herein, the
Individual Defendants, who control the actions of the Company, have carried
out a preconceived plan and scheme to place their own personal interests
ahead of the interests of the shareholders of Cordis and thereby entrench
themselves in their offices and positions within the Company. The
Individual Defendants have violated their fiduciary duties owed to
plaintiff and 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 Company's public shareholders for their own personal
benefit.
84. As a result of the actions of the individual Defendants,
plaintiff and 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 common
stock.
<PAGE>
85. 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 and to compel defendants to carry out their fiduciary duties
to maximize shareholder value.
86. Only through the exercise of this Court's equitable powers
can plaintiff and class members be fully protected from the immediate and
irreparable injury which the defendants' actions threaten to inflict.
87. Unless enjoined by the Court, defendants will continue to
breach the fiduciary duties they owe to plaintiff and the members of the
Class, and/or to 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 the other members of the Class.
88. Plaintiff and the Class have no adequate remedy at law.
SECOND CLAIM
89. Plaintiff repeats and realleges each allegation contained in
paragraphs 1 through 88 as if fully set forth herein.
90. This claim alleges violations of fiduciary and other common
law duties on the part of the Individual Defendants.
<PAGE>
91. As the directors of a corporation faced with a bona fide
offer for the sale of control of the corporation, the Individual Defendants
have a duty to act on an informed basis to secure the best value reasonably
available to Cordis's public stockholders and their conduct in that regard
is subject to enhanced scrutiny.
92. As a result of the acts and conduct described above, the
Individual Defendants are not fully informing themselves, are not acting in
good faith and have deliberately and/or recklessly breached their fiduciary
and other common law duties which they owe to plaintiff and the other
members of the Class, have engaged in unfair dealing for their own benefit
and to the detriment of the Class, and have pursued a course of conduct
designed to prevent an acquisition of the Company. Among other things, the
Poison Pill, the Individual Defendants' refusal to negotiate in good faith
with J&J or any other potential acquiror and the Individual Defendants'
refusal to remove the Offers from the restrictions presented by ss.ss.
607.0901 and 607.0902 of the Florida corporation law have the effect of
entrenching the Individual Defendants in their corporate offices against
any real or perceived threat to their control and impair 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 not
favored by incumbent management.
<PAGE>
93. To the extent that the conduct of the Individual Defendants
is based upon what they perceive to be a threat that J&J or any other third
party will acquire control over Cordis, the Individual Defendants have a
heightened fiduciary duty to act in the best interest of the Company's
public stockholders and to act reasonably with regard to any perceived
threat. They have recklessly and in bad faith violated such duties.
94. By virtue of the acts and conduct alleged herein, the
Individual Defendants, who control the actions of the Company, are carrying
out a preconceived plan and scheme to entrench themselves in office, to
thwart a fair and open auction of the Company that would maximize
shareholder value, and to protect their own financial interest at the
expense of plaintiff and other members of the Class. Such actions are
grossly disproportionate to any real or apparent threat to Cordis or its
shareholders. As a result of the steps taken by defendants to thwart a
takeover and entrench their positions, plaintiff and the Class have been
and will continue to be damaged.
95. The Individual Defendants have at all times been fiduciaries
of the members of the Class. As set forth herein, they have breached and
are continuing to breach their fiduciary duties to Cordis's shareholders in
order to entrench themselves in office and to continue receiving their
compensation, fees and other benefits of office.
<PAGE>
96. The conduct of the Individual Defendants in refusing to
negotiate with J&J or any other potential acquiror of Cordis while
steadfastly maintaining the preemptive Poison Pill and the anti-takeover
defenses available under ss.ss. 607.0901 and 607.0902 in place constitutes
a violation of that duty. The Individual Defendants have not undertaken
reasonable efforts to identify and ascertain the risk, if any, presented by
J&J's Offers. Furthermore, the preemptive defensive tactic adopted by
defendants in response to the Offers are not reasonable in relation to any
threat which may be presented to Cordis and its stockholders.
97. By reason of the foregoing, the Individual Defendants have
violated their fiduciary duties to plaintiff and the Class by failing to
ensure that the defensive tactics they adopt are reasonable under the
circumstances and are designed not to interfere with the goal of maximizing
shareholder value.
98. As a result of the actions of the Individual Defendants,
plaintiff and 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 common
stock. Defendants are unlawfully manipulating the corporate machinery of
Cordis for their own benefit.
<PAGE>
99. 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 and to compel defendants to carry out their fiduciary duties
to maximize shareholder value and not adopt or employ draconian
anti-takeover measures.
100. Only through the exercise of this Court's equitable powers
can plaintiff and class members be fully protected from the immediate and
irreparable injury which the defendants' actions threaten to inflict.
101. Unless enjoined by the Court, defendants will continue to
breach the fiduciary duties they owe to plaintiff and the members of the
Class, and/or to aid and abet and participate in such breaches of duty, and
will continue to entrench themselves in office, all to the irreparable harm
of plaintiff and the other members of the Class, and in defiance of the
wishes of Cordis shareholders.
102. Plaintiff and the Class have no adequate remedy at law.
THIRD CLAIM
103. Plaintiff repeats and realleges each allegation contained in
paragraphs 1 through 102 as if fully set forth herein.
<PAGE>
104. This claim arises under Section 14(a) of the Exchange Act,
Rule 14a-9 promulgated thereunder and related common law.
105. Section 14(a) and Rule 14a-9 require proxy statements to
fully and fairly disclose all information necessary for a shareholder to
make an informed decision regarding how to vote his or her shares.
Specifically, Rule 14a-9 prohibits the use of false or misleading
statements or omissions of material fact in the solicitation of proxies.
Florida law similarly requires complete candor when directors solicit the
votes or approval of a company's shareholders.
106. Cordis and the Individual Defendants disseminated a Proxy
Statement dated September 15, 1995, to Cordis stockholders of record on
August 15, 1995, in connection with Cordis's October 10, 1995 Annual
Meeting. All of the members of the Board (the Individual Defendants herein)
were nominated for election or re-election to the Board at the Annual
Meeting. The accounting firm Deloitte & Touche was also proposed to
shareholders as the Company's auditors. Furthermore, an amendment to the
Company's Restated Articles of Incorporation to increase the number of
authorized shares of Cordis common stock from 50,000,000 to 150,000,000 was
also proposed at the meeting.
107. At the Annual Meeting, all of the members of the Board
received the requisite majority vote for election to the Board and Deloitte
& Touche was approved as the
<PAGE>
Company's auditor. The anti-takeover amendment to the Company's Restated
Articles of Incorporation was, however, defeated.
108. In the Proxy Statement, defendants represented, among other
things, that "[t]he 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."
Defendants also represented that they were not "aware of any proposed
transactions" which would involve any actual or potential change of control
over Cordis.
109. These statements were materially false and incomplete and
omitted to state material facts necessary to make the statements made not
misleading. Well in advance of the Annual Meeting, J&J had approached
Cordis to negotiate a friendly acquisition of the Company. In fact, either
before or within one day of Annual Meeting, the Board decided to undertake
all steps necessary to prevent an acquisition of the Company by J&J,
friendly or otherwise.
110. The Proxy Statement also stated that one effect of the
proposed amendment to the Company's Restated Articles of Incorporation
would be to facilitate the Company's adoption of a new shareholder rights
plan. Despite that statement, however, the Proxy Statement failed to
disclose that the Individual Defendants were then actively considering the
adoption of the Poison Pill, a
<PAGE>
measure designed to provide the Individual Defendants with additional
weapons with which to thwart J&J's efforts to obtain control of Cordis, and
were implementing the necessary procedures to immediately adopt a
replacement (and reinforced) Poison Pill.
111. Within six days of the Annual Meeting, defendants had
adopted the new Poison Pill, despite the disapproving vote at the Annual
Meeting. Defendant's misleading disclosures were consequently an integral
component of their efforts to entrench themselves in office, and thwart
J&J's (undisclosed) expression of interest in the Company, as well as the
wishes of Cordis' stockholders.
112. Under the circumstances, defendants were obligated to
disclose the material facts that J&J was in the midst of efforts to acquire
Cordis and that defendants planned to adopt the Poison Pill to impede and
thwart those efforts, particularly in light of defendants' misleading
statement that they were aware of no acquisition proposals for the Company.
113. Less than two weeks after the meeting, these material facts
were belatedly disclosed for the first time in connection with J&J's tender
offer materials with respect to its unsolicited takeover effort. If
Cordis's stockholders had been apprised of these material facts by
defendants in a timely manner, they could have been motivated to vote
against the election of the Individual Defendants as directors and clearly
conveyed to Cordis's
<PAGE>
Board that entrenchment tactics, self-dealing and refusal to entertain
premium offers are neither fair nor acceptable to the public stockholders.
Such facts would, at a minimum, have assumed clear-cut significance in the
deliberations of Cordis's shareholders.
114. Because of defendants' defective disclosure, the election of
directors and other matters voted on at the 1995 Annual Meeting were not
properly voted upon in accordance with applicable federal and state law.
Accordingly, the election of directors at the 1995 Annual Meeting should be
invalidated and the approval of Deloitte & Touche as the Company's auditors
should be similarly revoked.
Exhibit (g)(7)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Civil Action No.
BRICKELL PARTNERS, a Florida 95-2320-Civ-Moore
Partnership, and HARRY LEWIS,
Individually And On Behalf of All
Others Similarly Situated,
Plaintiffs,
AMENDED CLASS
-against- ACTION COMPLAINT
ROBERT C. STRAUSS, WILTON W. WEBSTER,
JR., DAVID R. CHALLONER, RICHARD W.
FOXEN, DONALD F. MALIN, JR., JAN VAN
STEVENINCK, PATRICIA K. WOOLF,
CATHERINE M. BURZIK, WILLIAM J.
RAZZOUK, and CORDIS CORPORATION,
Defendants.
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. S78aa, and under principles of pendent jurisdiction.
<PAGE>
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, manufacturers 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
<PAGE>
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 has engaged in all or part of the
unlawful acts, plans, schemes, or transactions complained of herein.
<PAGE>
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;
(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;
<PAGE>
(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 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
<PAGE>
the class. Plaintiffs are adequate representatives of the class.
SUBSTANTIVE ALLEGATIONS
J&J's $100 Per Share Offer
18. As described below, prior to October 19, 1995,
representatives of J&J initiated a series of communications with
Cordis representatives in an effort to explore a Cordis/J&J business
combination. After delaying a formal response to these inquiries, on
or about October 11, 1995, Cordis advised J&J that the Company would
remain independent.
19. 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. Also on October 19, 1995, J&J announced its intention to
solicit written consents from Cordis shareholders to remove and
replace the Individual Defendants if Cordis does not promptly agree to
the merger (the "consent solicitation").
20. 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
<PAGE>
price represents a 22% premium over the trading price of Cordis stock
on one day prior to announcement of the J&J tender offer.
The Poison Pill and By-Law Amendment
21. As further evidence of defendants' intransigence, on
October 16, 1995, Cordis issued a press release (the "October 16, 1995
press release") that the Company had adopted and implemented a Poison
Pill (the "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 (the "right") for each common
share outstanding at the close of business on October 23, 1995. Under
the terms of the Poison Pill, as disclosed in the October 16, 1995
press release, in the event a person (i.e., J&J) acquires 15% or more
of Cordis common stock, holders of rights other than the acquiring
party, would be entitled to purchase Company common shares at one-half
of their then-current market price. These terms of the Poison Pill
have the effect of potentially making it prohibitively expensive to
acquire control of the Company.
22. Although not disclosed in the October 16, 1995 press
release, the Poison Pill also contained redemption and amendment
provisions (collectively the "redemption and amendment provisions")
typically not found in poison pills adopted by other companies. Under
this
<PAGE>
provision, and in circumstances applicable here, the decision to
redeem the rights or amend the Poison Pill requires the concurrence of
a majority of the Company's "continuing directors" (i.e., the
"Individual Defendants"). As described below, the redemption and
amendment provisions seriously jeopardize the ability of a company,
i.e., J&J, to conduct a consent solicitation to remove and replace
Cordis directors.
23. On October 20, 1995, J&J announced that it had filed
preliminary written consent materials with the SEC.
24. On October 24, 1995, Cordis announced that the
Individual Defendants had adopted a change in the Company's by-laws
(the "by-law amendment"). The by-law amendment, which is designed to
delay J&J from launching its consent solicitation, requires that (a)
the Individual Defendants be told in advance of any attempt by a
shareholder to launch a consent solicitation; and (b) the record date
be set within twenty business days thereafter. As a result of the
by-law amendment, J&J cannot commence the consent solicitation until
November 21, 1995.
25. On or about October 25, 1995, Cordis disclosed for the
first time the redemption and amendment provisions of the Poison Pill.
26. The adoption and implementation of the Poison Pill,
including the redemption and amendment provisions, has the force and
effect of entrenching the Individual
<PAGE>
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 consent solicitation 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.
27. The purpose, intent and effect of the Poison Pill and
the by-law amendment, in the face of J&J's interest in acquiring the
Company, is to thwart, deter, impede, and delay the acquisition of
Cordis by J&J. Moreover, the redemption and amendment provisions of
the Poison Pill are an improper and unlawful attempt by the Individual
Defendants to interfere with the consent solicitation. Unless these
provisions are declared null and void, Cordis shareholders may not
agree to the consent solicitation because of an uncertainty as to
whether J&J could thereafter redeem the rights or amend the Poison
Pill and consummate its tender offer.
<PAGE>
28. Defendants' recalcitrance to consider and promptly act
upon J&J's earlier overtures described below 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.
Pre-Tender Offer Communications
Between J&J and Cordis
29. 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.
30. 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.
<PAGE>
31. 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.
32. 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.
33. Cordis's 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
<PAGE>
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 approval of the proposed amendments to
Cordis's 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.
34. Despite the defendants' failure to secure a mandate from
the Company's shareholders not to obstruct an 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.
35. 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. Moreover, it was
not until October 25, 1995 that the full terms of the Poison Pill,
including the redemption and amendment provisions, were disclosed.
<PAGE>
COUNT I
Violation of Section 14(a) of the Securities
and Exchange Act of 1934 and SEC Rule 14a-9
36. Plaintiffs repeat and reallege the allegations set forth
above in paragraphs 1 through 35.
37. 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.
38. 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 . . . .
39. 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 and the other
communications with J&J as set forth above.
<PAGE>
40. The Cordis securities are registered pursuant to Section
12 of the 1934 Act, as amended.
41. 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.
42. 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.
43. 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.
44. Plaintiffs and the Class have no adequate remedy at law.
COUNT II
Breach of Fiduciary Duty
45. Plaintiffs repeat and reallege the allegations set forth
in paragraphs 1 through 44.
46. 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
<PAGE>
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 stockholders value or, if such
conflicts exist, to insure that all such conflicts will be resolved in
the best interests of the Company's shareholders.
47. 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.
48. 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.
<PAGE>
49. 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;
c. erecting defensive measures such as Cordis's
Poison Pill plan, which was designed to interfere
with the consent solicitation and make it
prohibitively expensive for an unapproved third
party from acquiring the assets or control of the
Company; and
d. Adopting the by-law amendment.
50. 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.
<PAGE>
51. 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
detriment of the public shareholders of Cordis.
52. 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 to improperly interfere with the consent
solicitation and to unfairly 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's 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.
53. 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 are being denied the opportunity to participate
in the consent solicitation and 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 commons stock.
<PAGE>
54. Plaintiffs seek preliminary and permanent injunctive
relief and declaratory relief preventing defendants from inequitably
and unlawfully depriving 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 shareholders value.
55. 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.
56. 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.
57. Plaintiffs and the Class have no adequate remedy at law.
<PAGE>
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 1934 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 of Cordis;
(ii) immediately undertake an appropriate
evaluation of Cordis's worth as a merger/acquisition candidate;
<PAGE>
(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 interest 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) Declare the redemption and amendment provisions of
the Poison Pill and the by-law amendment null and void;
<PAGE>
(i) Awarding plaintiffs the costs and disbursements of
this action, including a reasonable allowance for plaintiffs'
attorneys' and expert fees; and
(i) Granting such other and further relief as may be
just and proper.
<PAGE>
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 26, 1995
HANZMAN CRIDEN KORGE HERTZBERG &
CHAYKIN, P.A.
By:
-----------------------------------
Michael R. Criden, F.B.N. -714356
Mark J. Heise, F.B.N. 771090
2100 First Union Financial Center
200 South Biscayne Blvd.
Miami, FL 33131
(305) 579-1222
LERNER & PEARCE, P.A.
Robert W. Pearce
2888 East Oakland Park Blvd.
Fort Lauderdale, FL 33306
(305) 563-8111
Co-Liaison Attorneys for
Plaintifffs
Of Counsel:
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, New York 10017
(212) 907-0700
<PAGE>
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the
foregoing was hand-delivered this 26th day of October, 1995 to:
CHARLES C. KLINE, WHITE & CASE, Attorneys for Defendants, at 200 South
Biscayne Boulevard, Suite 4900, Miami, Florida, 33131; and by mail to
MICHAEL CHEPIGA, ESQUIRE, SIMPSON, THACHER & BARTLETT, Attorneys for
Defendants, at 425 Lexington Avenue, New York, New York, 10017-3909.
HANZMAN CRIDEN KORGE HERTZBERG &
CHAYKIN, P.A.
By:
-----------------------------------
Michael R. Criden, F.B.N. -714356
Mark J. Heise, F.B.N. 771090
2100 First Union Financial Center
200 South Biscayne Blvd.
Miami, FL 33131
(305) 579-1222
