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