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:
[ X ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
[ ] Confidential for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Circon Corporation, a Delaware corporation (Commission File No. 0-12025)
------------------------------------------------------------------------
(Name of Registrant as Specified In its Charter)
________________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
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(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:
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2) Aggregate number of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary materials.
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THIS DOCUMENT IS A COPY OF THE PRILIMINARY PROXY STATEMENT FILED
ON APRIL 13,1995
CIRCON CORPORATION
6500 Hollister Avenue
Santa Barbara, California
Notice of Annual Meeting of Shareholders
June 1, 1995
You are cordially invited to attend the Annual Meeting of
Shareholders of Circon Corporation, which will be held on
Thursday, June 1, 1995, at 2:00 p.m., California time at Four
Seasons Biltmore Hotel, 1260 Channel Drive, Santa Barbara,
California, for the following purposes:
1. To elect one Director.
2. To vote upon a proposal to approve the Circon Corpoation 1995
Directors Stock Option Plan (200,000 shares).
3. To vote upon a proposal to increase the number of shares
authorized for issuance under the provisions ofthe Plan of the
1993 Stock Option Plan (1,000,000 shares).
4. To vote upon a proposal to amend the Company's
Certificate of Incorporation to require all shareholder action be
taken at a Shareholders Meeting.
5. To vote upon a shareholder proposal to recommend that the Board of
Directors declare a dividend.
6. To ratify the selection of independent auditors.
7. To transact such other business as may properly come before the
meeting.
The foregoing items of business are more fully described in
the Proxy Statement accompanying this notice.
Shareholders of record at the close of business on April 4,
1995, are entitled to vote at the Annual Meeting and any
adjournment thereof.
By Order of the Board of Directors,
April 26, 1995 Daniel J. Meaney, Jr.
Vice President and Secretary
IMPORTANT
To ensure your representation at the meeting, you are urged to
mark, sign, date and return the enclosed proxy as promptly as
possible in the postage-prepaid envelope enclosed for that
purpose. If you attend the meeting, you may vote in person even if
you returned a proxy.
CIRCON CORPORATION
6500 Hollister Avenue
Santa Barbara, California 93117
__________________________
PROXY STATEMENT
__________________________
Annual Meeting of Shareholders
To be Held June 1, 1995
INFORMATION CONCERNING PROXY SOLICITATION
This proxy statement and accompanying proxy are being
furnished to shareholders of Circon Corporation (the "Company") on
or about April 26, 1995, in connection with the solicitation by
the Board of Directors of proxies for use at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held at Four Seasons
Biltmore Hotel, 1260 Channel Drive, Santa Barbara, California, on
Thursday, June 1, 1995, at 2:00 p.m.
Any proxy given pursuant to this solicitation may be revoked
by the person giving it any time before it is exercised. Proxies
may be revoked by delivering to the Secretary of the Company a
written notice of revocation or a duly executed proxy bearing a
later date or by attending the meeting and voting in person.
All expenses incurred in connection with this solicitation,
including postage, printing, handling, and all the actual expenses
incurred by custodians, nominees, and fiduciaries in forwarding
proxy materials to beneficial owners, will be paid by Circon
Corporation. In addition to solicitation by mail, certain
officers, directors, and regular employees of the Company, who
will receive no additional compensation for their services, may
solicit proxies by telephone, facsimile or personal communication.
The Board of Directors has fixed the close of business of
April 4, 1995, as the record date (the "Record Date") for the
determination of shareholders entitled to vote at the Annual
Meeting. As of the Record Date, there were outstanding 7,970,703
shares of Common Stock.
QUORUM AND VOTING RIGHTS
A majority of the shares entitled to vote, present in person
or represented by proxy, will constitute a quorum at the Annual
Meeting. For purposes of determining a quorum, shares represented
by all valid proxies received will be counted, including proxies
that contain instructions to abstain as to certain votes and
proxies filed by brokers or others indicating that their voting
authority does not extend to all agenda items ("broker non-
votes"). In accordance with Delaware law, on each agenda item,
broker non-votes will be disregarded and abstentions will be
treated as negative votes.
Holders of Common Stock are entitled to one vote for each
share held as of the Record Date, except that cumulative voting
will apply in the election of Directors if any shareholder
properly notifies the Company of an intention to vote cumulatively
at the Annual Meeting. Such notice, to be effective, must be
received in writing by the Secretary of the Company not less than
35 days before the Annual Meeting and must provide certain
information prescribed by the Company's Bylaws. A copy of the
pertinent Bylaw can be obtained from the Secretary of the Company
at its offices in Santa Barbara. In the election of Directors
under cumulative voting, each shareholder is entitled to the
number of votes to which such shareholder's shares would normally
be entitled, multiplied by the number of Directors to be elected.
A shareholder may then cast all of such votes for a single
candidate or may allocate them among as many candidates as the
shareholder may choose (up to the number of Directors to be
elected).
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of
February 28, 1995, except as otherwise indicated, regarding shares
of Common Stock of the Company owned of record or known to the
Company to be owned beneficially by each director, each executive
officer, each beneficial owner of more than 5% of the Company's
Common Stock, and all directors and executive officers as a group.
<TABLE>
<CAPTION>
Shares
Beneficially Percent
Name Owned(1) of Class
<S> <C> <C>
Richard A. Auhll 1,517,579 18.6%
6500 Hollister Avenue
Santa Barbara, CA 93117
State of Wisconsin Investment Board
P.O. BOX 7842
Wisconsin 53707 650,000(2) 8.0%
Rudolf R. Schulte 406,412 5.0%
2927 De La Vina Street, Suite C
Santa Barbara, CA 93105
R. Bruce Thompson 33,346 *
Harold R. Frank 32,990 *
Winton L. Berci 21,200 *
Paul W. Hartloff, Jr. 18,143 *
John F. Blokker 17,143 *
Frank D. D Amelio 15,000 *
Daniel J. Meaney, Jr. 10,500 *
David P. Zielinski 7,200 *
All directors and executive officers
as a group (10 persons) 2,079,513 25.5%
</TABLE>
____________________________
* Less than 1%
(1) To the Company s best knowledge, the beneficial owners named
in the table have sole voting and investment power with respect to
the shares. Shares beneficially owned include shares issuable
upon exercise of any outstanding options or warrants outstanding
that may be exercised currently or within 60 days of the stated
reference date.
(2) Information is given as of December 31, 1994, and is based on
a Schedule 13G filed by this shareholder.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's Board of Directors is divided into three
classes. The term of one of the three classes expires each year.
The term of the Class I Directors expires in 1997 and each third
year thereafter, the term of the Class II Director expires in 1995
and each third year thereafter, and the term of the Class III
Directors expires in 1996 and each third year thereafter. If any
Director who was elected while serving as an officer ceases to be
an officer during that Directors' term, such Director's term will
expire at the next subsequent annual meeting of Shareholders.
One Class II Director will be elected at the 1995 Annual
Meeting. The Board of Directors has nominated Rudolf R. Schulte
who is currently serving as a Class II Director. Unless otherwise
specified, proxies will be voted for the election of this nominee.
The Board's nominee has agreed to serve if elected, but in the
event that the nominee is not available to serve, the proxy holders
will vote for the election of such other person as the Board may
direct.
The following persons are currently serving on the Board of
Directors of the Company:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Principal Occupation CLASS Age Director
Since
Richard A. Auhll Chairman of the Board, President, and
Chief Executive Officer of the Company I 53 1969
John F. Blokker Chairman of the Board and Chief
Executive Officer, Luxcom, Inc. III 65 1991
Harold R. Frank Chairman of the Board, Applied
Magnetics Corporation III 70 1984
Paul W. Hartloff, Jr. Partner, law firm of Schramm &
Raddue I 61 1991
Rudolf R. Schulte Chairman of the Board,
Pudenz-Schulte Medical
Research Corporation II 63 1977
</TABLE>
Mr. Auhll has been the Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since 1969.
Mr. Auhll has a Bachelor of Science degree in Engineering from the
University of Michigan, a Master of Science degree in Engineering
from Stanford University, and a Master of Business Administration
degree from Harvard University. Prior to 1969, Mr. Auhll held
positions with United Technologies Corporation and was a management
consultant. He is past Chairman of the Board of Directors of
Seton School for Developmentally Disabled Children. Mr. Auhll is
a member of the Board of Trustees of the University of California
at Santa Barbara Foundation.
Mr. Blokker is Chairman of the Board and Chief Executive
Officer of Luxcom, Inc. He was a general partner of Hambrecht &
Quist Venture Partners, an investment banking firm, from February
1985 to February 1988. Prior to 1985, he served for twenty-seven
years in various executive and management positions including Vice
President, General Manager with Hewlett-Packard Company, a
manufacturer of computers and electronic test and measurement
instruments. He is a member of the Boards of Directors of Mid-
Peninsula Bank of Palo Alto and Whittier Trust Company.
Mr. Frank founded Applied Magnetics Corporation, a magnetic
head manufacturer, and has served as Chairman of its Board of
Directors since its inception. Mr. Frank also currently serves on
the Boards of Directors of Trust Company of the West, La Cumbre
Savings Bank, and as Chairman of the Board of Key Technology, Inc.
Mr. Frank has also served as Chairman of the American Electronics
Association.
Mr. Hartloff is a senior partner of the law firm of Schramm &
Raddue. He has been a partner in that firm since 1964. He serves
as a member of the Board of Directors and Secretary of Selvac
Corporation. Mr. Hartloff served as Secretary of Circon
Corporation from 1977 until 1988.
Mr. Schulte was a founder of Heyer-Schulte Corporation and
served as President and Chairman of its Board of Directors from
1963 until it was acquired by American Hospital Supply Corporation
in 1974. Mr. Schulte has been anindependent investor since 1974
and since 1978 has served as Chairman of the Board of Directors of
Pudenz-Schulte Medical Research Corporation, a manufacturer of
medical products.
Board Meetings and Committees
During 1994 the Board of Directors met four times. All
directors attended 100% of the meetings of the Board of
Directors and of the committees on which they served in 1994.
The Company has an Audit Committee and a Compensation
Committee. The function that would be performed by a nominating
committee is performed by the Board of Directors as a whole.
The Audit Committee, which consists of directors Blokker,
Hartloff and Frank held one meeting in 1994. The Audit Committee
recommends engagement of the Company's independent auditors,
approves the services performed by the Company's independent
auditors and reviews the Company's accounting principles and its
system of internal accounting controls.
The Compensation Committee, which consists of directors Auhll,
Frank and Schulte, held one meeting in 1994. The Compensation
Committee reviews and makes recommendations to the Board
concerning the Company's executive compensation policy, bonus
plans and equity incentive plans. The Compensation Committee also
administers the Company's stock option plans.
Board Compensation
Directors, other than officers of the Company, receive a
retainer fee of $2,500 annually for service on the Board,
including service on any Board Committees. These directors also
receive a fee of $500 for each Board and committee meeting
attended and reimbursement for expenses incurred in connection
with attendance at Board and committee meetings.
<PAGE>
PROPOSAL NO. 2
APPROVAL OF AMENDMENT TO
1993 STOCK OPTION PLAN
The 1993 Stock Option Plan (the "1993 Option Plan") was
adopted by the Board of Directors and approved by the
stockholders in May 1993. A total of 1,000,000 shares of Common
Stock was reserved for issuance when the 1993 Option Plan was
adopted. The 1993 Option Plan provides for the granting to
employees (including employee directors and officers) of the
Company of incentive stock options within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and for the granting of nonstatutory stock options to employees and
consultants of the Company.
Proposal
In April 1995, the Board of Directors approved an amendment to
the 1993 Option Plan to increase the number of shares reserved for
issuance thereunder by 1,000,000 additional shares. At the Annual
Meeting, the stockholders are being requested to approve this
amendment.
Recommendation of the Board of Directors
As of March 31, 1995, options to purchase 618,174 shares were
outstanding under the 1993 Option Plan and 381,826 shares remained
available for future grants. In 1994, the Company granted an
unusually large number of stock options, including many that
replaced expiring stock options that had been granted in 1987 in
connection with the Company's acquisition of ACMI. That
acquisition increased the number of the Company's employees by
approximately 435%. Based on current plans, the Company does not
anticipate that stock options to be granted in 1995 will approach
the levels granted in 1994, or that they will use up the
approximately 381,826 shares remaining available under the 1993
Option Plan. However, the Company is growing and the additional
shares authorized by the Amendment will provide increased
flexibility to the Board of Directors for the future. The Company
believes that stock options motivate high levels of performance
and provide an effective means of recognizing employee
contributions to the success of the Company. Moreover, stock
options appreciate in value only if the market price of the Common
Stock appreciates, which means that the incentive of employee
option holders coincides with the interests of the stockholders.
The Company believes that grants of stock options are of great
value in recruiting and retaining highly qualified management,
technical and other key personnel who are in great demand. The
ability to grant options will be important to the future success of
the Company by allowing it to remain competitive in attracting and
retaining such key personnel.
The Board of Directors recommends that the stockholders vote
FOR approval of the proposed amendment to the 1993 Option Plan.
Approval of the proposed amendment to the 1993 Option Plan
will require the affirmative vote of holders of a majority of the
shares of Common Stock represented and entitled to vote on this
proposal at the Annual Meeting.
Summary of the 1993 Option Plan
Certain features of the 1993 Option Plan are outlined below.
Administration. The 1993 Option Plan is administered by a
committee of the Company's Board of Directors (the "Committee"),
except that the Chief Executive Officer is authorized to grant
options to any employee who is not an officer or director of the
Company. The interpretation and construction of any provision of
the 1993 Option Plan is within the sole discretion of the
Committee, whose determination is final and conclusive. Members of
the Committee receive no additional compensation for their services
in connection with the administration of the 1993 Option Plan.
Eligibility. The 1993 Option Plan provides that options may
be granted to employees (including officers) and consultants of the
Company and its subsidiaries, provided that incentive stock options
may be granted only to employees (including officers). The
Committee or the Chief Executive Officer, as authorized by the
Board of Directors and within specified limits, selects the
optionees and determines the number of shares to be subject to
each option. In making such determination, there is taken into
account the duties and responsibilities of the optionee, the value
of the optionee's services, the optionee's present and potential
contribution to the success of the Company, the anticipated number
of years of future service of the optionee and other relevant
factors. As of March 31, 1995, there were approximately 200
persons eligible to participate in the 1993 Option Plan.
The 1993 Option Plan does not provide for a maximum number of shares of
Common Stock which may be granted under options to any employee or
consultant.
Terms of Options. Each option granted under the 1993 Option
Plan is evidenced by a written stock option agreement between the
Company and the optionee. In general, an option becomes
exercisable in increments during its term, as determined by the
Committee on the date of grant. Options may have a maximum term of
ten years from the date of grant. The current form of option
agreement provides for a ten year term. No option may be exercised
after the expiration of its term.
The exercise price of options granted under the 1993 Option
Plan is determined by the Committee but, in the case of incentive
stock options, may not be less than 100% of the market value of the
Common Stock on the date the option is granted, and in the case of
other options, may not be less than 85% of such market value. On
March 31, 1995, the market price of the Company's Common Stock was
$19.50. Depending on the terms of the particular option, payment
for shares issued upon exercise may consist of cash, check,
personal promissory note or the surrender of shares owned by the
optionee, or such other lawful payment determined by the Committee.
If an optionee's employment or consulting relationship with
the Company terminates for any reason, the option shall be
exercisable within such period of time as is determined by the
Committee to the extent that such option rights were exercisable on
the date of termination, and thereafter the option shall terminate.
An option is not transferable by the optionee, other than by will
or the laws of descent and distribution.
The option agreement may contain such other terms, provisions
and conditions not inconsistent with the 1993 Option Plan as may be
determined by the Committee. The Committee may, with the consent
of any optionee, cancel or amend the terms (including price) of any
outstanding option.
In the event of changes in the Common Stock by reason of
dividends paid in stock, stock splits, reclassifications,
recapitalizations, mergers, consolidations, reorganizations or
liquidations, the Committee shall make such adjustments in the
option price and the number and class of shares subject to the
option under the 1993 Option Plan as it shall deem appropriate.
Such adjustment or modification shall be binding and conclusive.
In the event of a proposed dissolution or liquidation of the
Company, the option will terminate immediately prior to the
consummation of any such proposed action unless otherwise provided
by the Board of Directors. In the event of any merger of the
Company or any acquisition of all or substantially all of its
assets or stock, or any liquidation of the Company, the Committee
shall have the power to make arrangements which shall be binding
upon the holders of unexpired option rights for the substitution of
new options for any unexpired options then outstanding under the
1993 Option Plan or for the assumption by the Company's successor
of any such unexpired options or for the acceleration of the
expiration date of options.
Amendment and Termination. The Board of Directors may at any
time amend or terminate the 1993 Option Plan. To the extent
necessary to comply with rules promulgated under Section 16 of the
Securities Exchange Act of 1934 or to comply with Sections 421 and
422 of the Internal Revenue Code and any regulations thereunder,
any amendment made to the 1993 Option Plan will require approval of
the shareholders of the Company.
Federal Income Tax Information. Options granted under the
1993 Option Plan may be either "incentive stock options," as
defined in Section 422 of the Code, or nonstatutory stock options.
An optionee who is granted an incentive stock option will not
recognize taxable income either at the time the option is granted
or upon its exercise, although the exercise may subject the
optionee to the alternative minimum tax. Upon the sale or exchange
of the shares more than two years after grant of the option and one
year after exercising the option, any gain or loss will be treated
as long-term capital gain or loss. If these holding periods are
not satisfied, the optionee will recognize ordinary income at the
time of sale or exchange equal to the difference between the
exercise price and the lower of (i) the fair market value of the
shares at the date of the option exercise or (ii) the sale price of
the shares. A different rule for measuring ordinary income upon
such a premature disposition may apply if the optionee is also an
officer or director of the Company. The Company will be entitled
to a deduction in the same amount as the ordinary income recognized
by the optionee. Any gain or loss recognized on such a premature
disposition of the shares in excess of the amount treated as
ordinary income will be characterized as long-term or short-term
capital gain or loss, depending on the holding period.
All other options which do not qualify as incentive stock
options are referred to as nonstatutory stock options. An optionee
will not recognize any taxable income at the time of granting of a
nonstatutory stock option. However, upon its exercise, the
optionee will recognize taxable income generally measured as the
excess of the then fair market value of the shares purchased over
the purchase price. Any taxable income recognized in connection
with an option exercise by an optionee who is also an employee of
the Company will be subject to tax withholding by the Company.
Upon resale of such shares by the optionee, any difference between
the sales price and the optionee's purchase price, to the extent
not recognized as taxable income as described above, will be
treated as long-term or short-term capital gain or loss, depending
on the holding period. The Company will be entitled to a tax
deduction in the same amount as the ordinary income recognized by
the optionee with respect to shares acquired upon exercise of a
nonstatutory stock option.
The foregoing is only a summary of the effect of federal
income taxation upon the optionee and the Company with respect to
the grant and exercise of options under the 1993 Option Plan. It
does not purport to be complete, and it does not discuss the tax
consequences of the optionee's death or the income tax laws of any
municipality, state or foreign country in which an optionee may
reside.
Participation in the 1993 Option Plan. The following table
sets forth information with respect to options granted under the
1993 Option Plan during the fiscal year ended December 31, 1994 to
(i) each of the officers named in the Summary Compensation Table,
(ii) all executive officers as a group, and (iii) all other
employees (excluding executive officers) as a group:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Position Shares Subject to
Options Granted
Richard A. Auhll Chairman of the Board, President, and
Chief Executive Officer of the Company *
R.Bruce Thompson Executive Vice President, Chief Financial
Officer 20,000
Frank D. D'Amelio Vice President, Chief Manufacturing
Officer 23,750
David P. Zielinski Vice President, General Manager, ACMI
Division 23,750
Winton L. Berci Vice President, Marketing and Sales 20,000
All executive officers as a group
( persons)
All other employees (excluding
executive officers) as a group
</TABLE>
<PAGE>
PROPOSAL NO. 3
APPROVAL OF 1995 DIRECTORS STOCK OPTION PLAN
The 1995 Directors Stock Option Plan (the "1995 Directors
Plan") was adopted by the Board of Directors in April 1995. A
total of 200,000 shares is reserved under the 1995 Directors Plan
for issuance to directors who are not employees of the Company.
The 1995 Directors Plan is substantially similar to the 1984
Directors Stock Option Plan (the "1984 Directors Plan"), which
expired in 1994.
Proposal
At the Annual Meeting, the stockholders are being requested
to approve the 1995 Directors Plan. Approval will require the
affirmative vote of holders of a majority of the shares of Common
Stock represented and entitled to vote on this proposal at the
Annual Meeting.
Recommendation of the Board of Directors
The Board of Directors believes that grants of stock options
have been critically important in recruiting, retaining and
motivating non-employee directors. The Company s relatively modest
cash compensation of non-employee directors (see "Election of
Directors - Board Compensation") is not considered sufficient
alone to obtain the services of non-employee directors of the
caliber and experience needed for the Company s Board of Directors.
The Company s executive officers believe that the independent
judgement of the non-employee directors provides a valuable
resource to the Company. In addition, the increased
responsibilities of directors of publicly held corporations has
increased the difficulty of recruiting outside directors. The
Board of Directors believes that continuing the practice of
granting stock options to outside directors will be a more
effective method of compensation than increasing their cash
compensation and will also make their financial incentives coincide
with the interests of shareholders, because stock options only
appreciate in value if the market value of the Common Stock
increases.
The practice under the recently expired 1984 Directors Plan
was to grant a single option for 40,000 shares to each director,
vesting over a period of seven years. Although the 1995 Directors Plan, like
the 1984 Directors Plan, permits multiple options to be granted to a director
and does not place a limit on the number of shares covered by each option,
the Board of Directors expects the 1995 Directors Plan to be administered
similarly to the 1984 Directors Plan.
The Board of Directors recommends that the stockholders vote
FOR approval of the 1995 Directors Plan.
Summary of the 1995 Directors Plan
The key features of the 1995 Directors Plan are similar to
those of the 1993 Option Plan described under Proposal No. 2,
except as highlighted below.
Administration. The administrative Committee consists of non-
employee directors who received their option more than one year
prior to service on the Committee and employee directors who are
not eligible to receive an option under the 1995 Directors Plan.
Eligibility. Only non-employee directors are eligible to
receive stock options under the 1995 Directors Plan.
Terms of Options. Options granted under the 1984 Directors
Plan had terms of ten years and vested over seven years, a practice
expected to be continued under the 1995 Directors Plan, although
this is not mandated.
Federal Income Tax Information. Only nonstatutory options
can be granted under the 1995 Directors Plan.
<PAGE>
PROPOSAL NO. 4
REQUIREMENT THAT STOCKHOLDER ACTION BE
TAKEN AT A MEETING RATHER THAN BY WRITTEN CONSENTS
The Company's Board of Directors has unanimously approved and
recommends that the stockholders of the Company approve the
addition of a new Article TWELFTH to the Certificate of
Incorporation, which would require that all stockholder action be
taken at stockholders' meetings, rather than by written consents.
Under Delaware law, unless a corporation's certificate of
incorporation provides otherwise, any action required or permitted
to be taken by stockholders at a meeting may also be taken
without a stockholder meeting and vote if written consents are
signed by stockholders having sufficient voting power to take
such action if a stockholder meeting were held and all
stockholders were present. The Company's Certificate of
Incorporation currently does not prohibit or restrict stockholder
action by written consent. Proposed Article TWELFTH of the
Certificate of Incorporation would prohibit stockholder action by
written consents, thereby requiring all stockholder action to be
taken at an annual meeting or special meeting of the stockholders,
which under the Company's Certificate of Incorporation may be
called only by the Board of Directors. The Board of Directors
believes that the Company should provide all of its stockholders
an opportunity to participate in a meeting where stockholder
action is proposed to be taken, rather than have stockholder
action effected by written consents without any meeting.
Advantages
Eliminating stockholder action by written consent would
ensure the Company's stockholders an opportunity to participate
in proposed stockholder action through discussions and exchanges
of views at stockholder meetings. Although persons who solicit
written consents from more then ten stockholders would be
required by the Federal proxy solicitation rules to provide
stockholders with disclosures of the type made in a proxy
statement, the action on which consents were solicited could be
decided as soon as the requisite consents were obtained, without
any requirement for a meeting at which stockholders could appear
and be heard by the other stockholders. In addition, the Board
of Directors might not have adequate time to respond appropriately
to a surprise solicitation of written stockholder consents.
The Board of Directors also believes that eliminating
stockholder action by written consents may encourage persons
seeking to acquire control of the Company to negotiate with the
Board of Directors. This may enable the Board of Directors to
evaluate any such proposals, determine whether they are in the best
interests of the Company's stockholders at that time and, if
appropriate, consider alternatives.
Disadvantages
Eliminating stockholder action by written consent would
preclude the proposed action until the next stockholder meeting,
even if holders of a majority of the outstanding shares believed
such action to be in their best interests, and could deter parties
from seeking to take over the Company even at prices higher than
prevailing market prices for the Common Stock.
The Board of Directors recommends a vote FOR Proposal No. 4.
Adoption of Proposal No. 4 will require the affirmative vote
of a majority of the outstanding shares of Common Stock.
Background
The Board of Directors believes that eliminating the written
consent procedure could in some circumstances hinder a party
seeking to gain control of the Company without negotiation with the
Board of Directors and could enhance the Board's ability to
negotiate with such a party on behalf of the Company's
stockholders. The existing Certificate of Incorporation has
certain provisions that may also discourage non-negotiated attempts
to acquire control of the Company.
Classified Board of Directors. There are three classes of
directors, each of which is elected by the stockholders only once
every three years. This arrangement makes it difficult for a
person seeking control, even a person owning or having proxies to
vote a majority of the outstanding shares, to effect a change in
the majority of the Board of Directors until at least two annual
meetings of stockholders have occurred. Directors are elected
only at annual meetings.
Board Control Over Size and Vacancies. The Board of Directors
has sole authority to make changes in the authorized number of
directors and to fill a vacancy on the Board of Directors.
Board Control Over Timing of Stockholder's Meetings. The
Board of Directors has sole authority to set the time of the annual
meeting of stockholders and to call special meetings of
stockholders.
Removal of Directors. A provision of the Certificate of
Incorporation restricts the right of stockholders to remove a
director prior to the expiration of the director's term except for
"cause" and then only upon approval of holders of a majority of the
outstanding shares.
Changes in Bylaws. The Board of Directors can adopt, amend or
repeal Bylaws by action of a majority of the authorized number of
directors. Stockholders can make such changes in the Bylaws only
by the affirmative vote of the holders of at least two-thirds of
the outstanding shares.
Authorized Common and Preferred Stock. The Certificate of
Incorporation authorizes the Board of Directors to issue up to
50,000,000 shares of Common Stock (of which 7,970,709 were issued
and outstanding as of the Record Date) and 5,000,000 shares of
Preferred Stock (of which no shares are issued and outstanding)
having rights, preferences and privileges to be determined by the
Board of Directors without further action by the stockholders.
The authorized Common or Preferred Stock could be issued for
purposes, such as a private sale to a purchaser sympathetic with
the Board of Directors or an issuance under a stockholders'
rights plan, that could discourage any change of control not
negotiated with the Board of Directors. Also, Preferred Stock that
could be issued in the future might have terms that would
effectively discourage such a non-negotiated change of control.
<PAGE>
PROPOSAL NO. 5
STOCKHOLDER REQUEST THAT THE
BOARD OF DIRECTORS DECLARE A CASH DIVIDEND
The following proposal has been presented by Cynthia Ann
Alexander, Trustee of Cynthia Ann Alexander Trust, 12320 W. 82d
Place, Lenexa, Kansas 66215, who is the owner of 600 shares of the
Company's Common Stock:
"WHEREAS, Circon realized $0.11 per share net earnings in
the second quarter of 1994, and
WHEREAS, Circon has no debt and $20.1 million in cash,
NOW, THEREFORE, BE IT RESOLVED that the Board of
Directors be requested to declare a cash dividend to the
holders of Circon Common Stock at the next meeting of the
Board of Directors".
Recommendation of the Board of Directors
Although the Company is operating profitably and has cash
available more than sufficient to meet the immediate needs of its
business, the Board of Directors has determined that the Company's
cash reserves should be retained for future growth, including
opportunities involving acquisitions of companies or products
complementary to the Company's business. Accordingly, the Company
has not paid dividends. This policy was reviewed and confirmed at
a recent meeting of the Board of Directors, which intends to
reconsider the dividend policy in the future on an annual basis, or
more frequently if circumstances warrant.
Under applicable state law, dividend policy is appropriately
left to the discretion of the Board of Directors, whose members are
elected by the stockholders to exercise sound judgment in
deciding such matters based on more comprehensive information than
is accessible to stockholders generally. Such information
includes new business and product opportunities that could enhance
the Company's growth rate, industry trends that could make
advisable a cautious management of available cash, income tax
considerations that could favor growth of capital over current
distributions and dividend restrictions imposed or likely to be
imposed by lenders.
Proposal No. 5 requests the Board of Directors to declare a
cash dividend at its next meeting. The Board of Directors believes
that the stockholders should reject this proposal because the
policy of not paying cash dividends was reviewed and confirmed at
a recent meeting of the Board of Directors, which intends to
reconsider the dividend policy in the future. Proposal No. 5 is a
request that the Board of Directors change the dividend policy at
its next meeting. The Board of Directors considers the request to
be inappropriate under the circumstances and believes that the
Directors, as elected fiduciaries of the stockholders, are in the
best position to determine the Company's dividend policy.
The Board of Directors recommends a vote AGAINST Proposal No. 5.
Approval of Proposal No. 5 will require the affirmative vote
of the holders of a majority of the shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on
the matter.
PROPOSAL NO. 6
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed, subject to ratification
by the shareholders, the firm of Arthur Andersen LLP , certified
public accountants, to audit the consolidated financial statements
of the Company and its subsidiary for the fiscal year ending
December 31, 1995. Arthur Andersen LLP has served as independent
certified public accountants of the Company since 1977. A
representative of Arthur Andersen LLP is expected to be present
at the Annual Meeting of Shareholders and will be given the
opportunity to make a statement and to respond to appropriate
questions. A majority of the shares represented at the meeting and
entitled to vote on this proposal is required to ratify the
selection of Arthur Andersen LLP as independent auditors. In
addition to Mr. Auhll, the following Executive Officers of the
Company are elected by and serve at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name Position age Officer
Since
Winton L. Berci Vice President, Marketing
and Sales 39 1989
Frank D. D'Amelio JrVice President, Chief
Manufacturing Officer 36 1989
Daniel J. Meaney, Jr. Vice President, Secretary
and General Counsel 58 1988
R. Bruce Thompson Executive Vice President,
Chief Financial Officer 51 1982
David P. Zielinski Vice President, ACMI
Division General Manager 52 1994
</TABLE>
Winton Berci joined the Company as Vice President, Marketing
and Sales, in 1989. Prior to joining Circon, he worked for
fourteen years with Karl Storz Endoscopy America, Inc., a major
Circon competitor. He held various positions with Karl Storz
including Director of Marketing for six years. Mr. Berci has a
Bachelor of Science degree in Mechanical Engineering from
California State University.
Frank D'Amelio was appointed Vice President, Chief
Manufacturing Officer in 1994, prior to which he was Vice
President, General Manager of the Video Division since 1993, and
Vice President, CIRCON ACMI Engineering and Quality Control,
beginning in 1989. Prior to 1989, Mr. D'Amelio held various
positions with the Company including Director of Quality Assurance.
He joined ACMI in 1982. Mr. D'Amelio has a Bachelor's Degree in
Electrical Engineering from the University of Hartford.
Daniel Meaney joined Circon as Vice President, Secretary and
General Counsel, in 1988. Mr. Meaney is a registered patent
attorney and prior to joining the Company, he engaged in the
practice of law for 24 years including private practice, as former
Secretary and General Counsel for Applied Magnetics Corporation,
and as outside patent counsel for Circon. Mr. Meaney has a
Bachelor of Electrical Engineering degree from the Institute of
Technology, University of Minnesota, and a Juris Doctorate from
William Mitchell College of Law, St. Paul, Minnesota.
Bruce Thompson has been Executive Vice President and Chief
Financial Officer since 1985, and Vice President since 1982. He
joined the Company in 1977 as Controller. Prior to 1977, Mr.
Thompson held positions with Heyer-Schulte Corporation, a
subsidiary of American Hospital Supply Corporation, and Cutter
Laboratories Inc. Mr. Thompson has a Bachelor of Arts degree in
Economics from Stanford University, and a Master of Business
Administration degree from the University of California at Los
Angeles.
David Zielinski was appointed Vice President, ACMI Division
General Manager in 1994, prior to which he was Vice President of
Manufacturing for Circon ACMI. Prior to 1986, Mr. Zielinski held
various positions with the Company including Director of
Manufacturing for ACMI. He joined ACMI in 1982. Prior to joining
ACMI, Mr. Zielinski held various positions with General Electric.
Mr. Zielinski has a Bachelor of Science degree in Electrical
Engineering from University of Evansville and a Master of Arts
degree in Business Administration from Union College.<PAGE>
REMUNERATION OF OFFICERS
Compensation Tables
Summary Compensation Table. The following table sets forth
three years of compensation history for the Chief Executive Officer
and each of the other four most highly compensated executive
officers of the Company as of the last completed fiscal year:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annual Compensation (1) Long-Term Compensation
Awards Payouts
Other Securities
Annual Restricted Underlying LTIP All Other
Name and Compen- Stock Options Payouts Compen- Compen
Principal Position Year Salary ($) Bonus ($) sation ($) ($) (#) ($) sation ($)
R. Auhll
President and 1994 $237,930 $107,475 - - - - $10,210(2)
Chairman of the 1993 $231,000 $24,000 - - 40,000 - $8,839
Board 1992 $217,000 $85,560 - - - - $7,542
R.B. Thompson
Executive Vice 1994 $140,080 $52,202 - - 20,000 - $3,977(3)
President and 1993 $136,000 $12,000 - - - - $3,729
Chief Financial 1992 $128,000 $39,798 - - - - $3,758
Officer
F. D'Amelio
Vice President 1994 $143,000 $48,310 - - 23,750 - $3,303(4)
Chief Manufactur- 1993 $125,000 $9,000 - - 4,879 - $2,398
ing Officer 1992 $108,000 $34,357 - - - - $943
D. Zielinski
Vice President 1994 $136,000 $51,790 - - 23,750 - $3,559(5)
ACMI Division 1993 $120,500 $20,038 - - - - $3,328
General Manager 1992 $112,600 $38,973 - - - - $3,290
W. Berci
Vice President 1994 $132,000 $36,073 - - 20,000 - $2,567(6)
Marketing and 1993 $128,000 $15,000 - - - - $2,560
Sales 1992 $122,700 $25,153 - - - - $2,393
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) Reflects $4,422 Company match of employee contributions to 401(k) plan and $5,788 premium on life insurance
paid by the Company.
(3) Reflects $2,510 Company match of employee contributions to 401(k) plan and $1,467 premium on life insurance
paid by the Company.
(4) Reflects $2,793 Company match of employee contributions to 401(k) plan and $510 premium on life insurance
paid by the Company.
(5) Reflects $2,238 Company match of employee contributions to 401(k) plan and $1,321 premium on life insurance
paid by the Company.
(6) Reflects $2,115 Company match of employee contributions to 401(k) plan and $452 premium on life insurance
paid by the company.
</TABLE>
<PAGE>
Option Grants in Last Fiscal Year. The following table sets
forth, for each of the executive officers named in the Summary
Compensation Table above, stock options granted during 1994 and
their potential realizable value. The Company has never granted
stock appreciation rights (SARs).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Potential Realized Value Percentage of Total
Number of % of Total at Assumed Annual Rate of Increase at Assumed Annual
Securities Options Stock Price Appreciation Rate of Appreciation
Underlying Granted to for Option Term Stated Below
Options Employees in Exercise Expiration ------------------------ --------------------------
Name Granted(#) Fiscal Year Price ($/Sh) Date 5%($) 10%($) 5% 10%
All Shareholders(1) - - - - $46,294,218 $117,326,412 99.0% 99.0%
R. Auhll - - - - - - - -
R.B. Thompson 20,000(2) 3.4% $9.25 8/9/04 $116,400 $295,000 0.2% 0.2%
F. D'Amelio 23,750(3) 4.0% $9.25 8/9/04 $138,225 $350,313 0.3% 0.3%
D. Zielinski 23,750(2) 4.0% $9.25 8/9/04 $138,225 $350,313 0.3% 0.3%
W. Berci 20,000(2) 3.4% $9.25 8/9/04 $116,400 $295,000 0.2% 0.2%
(1) Total dollar gain on assumed annual rate of stock appreciation shown here and calculated on 7,954,333 shares
outstanding as of December 31,1994, based on a ten year term.
(2) Options were granted on 8/10/94, at the closing price on that date and are exercisable cumulatively at an annual
rate of 14.3% of the total shares granted beginning one year from date of grant for seven years. Options expire
ten years from date of grant.
(3) Options were granted on 8/10/94, at the closing price on that date and are exercisable cumulatively at the rate
of 2,863 for each of the first four years, 3,863 for years five and six and 4,572 in year seven. Options expire
ten years from date of grant.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values. The following table sets forth, for each of the
executive officers named in the Summary Compensation Table above,
each exercise of stock options during the year ended December 31,
1994 and the year-end value of unexercised options:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Number of Securities Value of Unexercised
Underlying Unexercised Options In-the-Money Options
Shares at Fiscal Year End 1994 at Fiscal Year End 1994
Acquired on Value -------------------------------- ------------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable (2) Unexercisable (2)
R. Auhll - - 10,000(3) 30,000 5,000(3) $15,000
R.B. Thompson 37,000 $337,625 - 20,000 - $30,000
F. D'Amelio 3,800 $33,250 15,697 31,932 $107,099 $58,716
D. Zielinski 25,000 $225,000 - 23,750 - $35,625
W. Berci - - 27,200 20,000 $183,600 $30,000
(1) Excess of market price over exercise price, on the date of exercise.
(2) Excess of $10.75 (market price at year end) over exercise price.
(3) Mr. Auhll also holds warrants to purchase 100,000 shares which were fully exercisable at year end.
The value of these warrants, computed as in note (2), was 614,000. The warrants were issued in
connection with Mr. Auhll's guarantee of certain indebtedness of the Company and not in
connection with his performance of services to the Company.
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
Compensation Principles
The compensation policies of the Company for all employees,
including executive officers, are guided by the following
principles:
Attract, retain and motivate well qualified employees who
contribute to the long-term success of the Company.
Encourage the development and achievement of objectives
that enhance long-term shareholder value.
Relate compensation to the overall success of the Company
which includes providing sales growth coupled with sound
financial performance, quality products and services for
customers,and fostering an environment which enables employees
to achieve objectives.
Executive Compensation Practices
The Company's executive compensation program consists
primarily of cash and equity based elements. Salary and annual
awards, if warranted, under the Management Incentive Compensation
Program ("MICP") comprise the cash elements. Grants of stock
options under the Company's employee stock option plans and
participation in the Company's employee stock purchase plan
comprise the equity based elements. The Company also provides
health and welfare benefits to the named officers through programs
that are generally available to all employees. In addition, all
Company officers are entitled to have life insurance up to four
times their annual base salary.
The Compensation Committee would consider whether or not the
Company will seek to qualify some of its compensation paid to
executive officers for an exemption from the compensation deduction
cap when it becomes appropriate.
Cash Components
It is the Company's intent to provide a compensation program
that can attract, motivate and retain high performance executives
who are critical to the long-term success of the Company. Salary
levels and MICP target levels are established annually for
executive officers by the Compensation Committee, after a review of
compensation surveys for the medical/dental equipment and supply
industry. For 1994, the survey group consisted of 289 publicly
traded companies whose sales averaged $434 million and whose
principal business was the manufacture or distribution of
medical/dental equipment and supplies. Of these companies, 133 are
included in the NASDAQ index covering medical stocks (see "Stock
Performance Graph"). The Company's cash compensation level is
slightly below average competitive levels. Salaries for executive
officers are established by evaluating the responsibilities of the
position held and the experience of the individual and by reference
to the competitive marketplace for executive talent. Accordingly,
in April, 1994 salary adjustments for the named officers were set
in a manner to bring them closer to the average of comparable
companies and to be consistent with average salary adjustment for
all Company employees.
The MICP plan provides for annual awards which are paid after
the end of the fiscal year, based on the achievement of pre-
established annual increases in specific objectives. The overall
MICP program typically has many objectives. The 1994 MICP plan had
125 objectives. For every participant, a target payout is
established for each objective and the weighting or value is
assigned to each component by the Compensation Committee. Each
MICP participant has a unique set of objectives which constitute
his or her MICP program. There are also one or two subjective
elements in each participant's program. An individual objective
has a pre-established minimum performance level before any payment
will occur and a maximum performance level where further payment
ceases. The range of payouts for each objective is from zero to
200% of a target amount. The Compensation Committee establishes
goals for overall growth in sales, gross profit, operating and net
income on a Company wide basis. Using these Company wide goals as
guidelines, targets are then determined for other business units,
and other subsets of sales, gross profit and operating income.
Awards are prorated for participation for less than one year.
Employees with other commission or bonus arrangements are generally
excluded from participation in the MICP plan. The MICP plan may be
modified from time to time, or discontinued at the discretion of
the Compensation Committee. During 1994, executive officers had
six to twelve objectives in their MICP program with each objective
having a weight of two to fifty percent of their total program.
The weight of the objectives varied widely among the group depend
on the responsibilities of the individual. Actual payouts for the
individual MICP programs averaged 100% of target.
Employees, including executive officers, who participate in
the 401(k) plan may receive a Company matching contribution of up
to a maximum of 1.5% of their salary per year.
Equity Based Components
The Company utilizes equity based compensation in the form of
stock options and a 20% matching program for stock purchases under
a stock purchase plan for its employees to focus employees and
management on creating and enhancing long term shareholder value.
The actual value of such equity based compensation correlates
directly to the Company's stock price performance.
Stock options are an essential element of the Company's
compensation program. This component is intended to provide a long
term incentive for employees to stay with the Company and to
motivate them to work toward appreciation in the price of the
Company stock over time. One hundred eighty five employees ( or
approximately 24 % of all employees) participate in the various
employee stock option plans. Stock options are currently
outstanding under the 1979 Employee Stock Option Plan, the 1983
Employee Stock Option Plan, which expired in 1989 and 1993
respectively and the 1993 Stock Option Plan (the"1993 Plan").
In determining the number of shares subject to options being
granted to executive officers, the Compensation Committee considers
survey data on options granted to executives with comparable
positions at comparable companies, the number of shares subject to
options previously granted to the executive, the number of unvested
shares subject to outstanding options held by the executive (which
is an indicator of the retention value of the outstanding options)
and an evaluation of the executives individual performance. In
1993, the Compensation Committee focused primarily on the number of
vested and unvested shares held by individual officers and stock
options held by individuals in comparable positions in other
companies to determine the number of options granted to executive
officers.
The options granted in 1994 under the 1993 Plan had an
exercise price of not less than the fair market value (the
NASDAQ/NMS closing price) of the common stock on the grant date and
will only have value if the stock price increases subsequent to the
date of grant. In general, these options become exercisable
cumulatively at an annual rate of 14.3% of the total shares granted
for seven years commencing one year from the date of grant. The
1979, 1983 and 1993 Plans provide for full vesting of options in
the event there is a change in control of the Company.
1994 Chief Executive Compensation
Mr. Auhll, in his capacity as Chairman of the Board, Chief
Executive Officer and President participates in the same
compensation programs as the other named officers. The
Compensation Committee has based Mr. Auhll's total compensation,
including compensation derived from the MICP plan and the stock
option plan at a level it believes is competitive with comparably
sized medical companies, based on survey data.
After considering all factors with respect to Mr. Auhll, the
committee approved a $237,930 salary for 1994, an increase of 3.0%
over his $231,000 salary for the prior year. Mr. Auhll's target
bonus for 1994 MICP program was set at $92,000. Mr. Auhll's MICP
program consisted of nine objectives covering sales growth,
operating performance and financial ratios, each having a weight of
two to fifty percent of his total program. Mr. Auhll's bonus
program had payouts for individual factors that range from 0% to
171% of the target values for 1994. This resulted in an actual
payout of $107,475 or 117% of his target bonus. Mr. Auhll's cash
compensation falls 3% above the average cash compensation when
compared to the CEOs in the survey group.
<PAGE>
Directors Auhll, Frank and Schulte comprise the Compensation
Committee. Mr. Auhll participates in discussions regarding
compensation for executive officers, except discussions regarding
the Chief Executive Officer. Mr. Auhll does not serve on the Board
of Directors or Compensation Committee of any entity whose
executive officers serve on the Board of Directors of Circon
Corporation.
Respectfully submitted,
Richard A. Auhll
Harold R. Frank
Rudolf R. Schulte
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph shows the cumulative performance for the
Company's Common Stock over the last five years compared with the
performance of the NASDAQ Composite index (U.S. companies) and an
index of NASDAQ-listed companies with standard industrial
classification codes beginning with "38" (SIC 3800-3899, Measuring,
analyzing, and controlling instruments; photographic, medical and
optical goods; watches and clocks), published by the Center for
Research in Security Prices, University of Chicago. The price of
the Common Stock, and the levels of such indices, on December 31,
1989, have been converted to a base of 100 in the graph. The
performance shown is not necessarily indicative of future
performance.
Shareholders interested in obtaining a list of companies
included in the industry index may do so by written request to the
Company.
SUBMISSION OF SHAREHOLDER PROPOSALS
Individual shareholders of the Company may be entitled to
submit proposals which they believe should be voted upon by the
shareholders. The Securities and Exchange Commission has adopted
regulations which govern the inclusion of such proposals in annual
proxy materials.
If a shareholder desires to have a proposal included in the
Proxy Statement and form of Proxy of the Board of Directors for the
1996 Annual Meeting of Shareholders, such proposal must be received
by the close of business on January 26, 1996, at the executive
offices of the Company, 6500 Hollister Avenue, Santa Barbara,
California 93117, Attention: Office of the Secretary.
Each proponent and each proposal submitted must conform to the
applicable proxy rules of the Securities and Exchange Commission
concerning the submission, content and form of shareholder
proposals.
FINANCIAL STATEMENTS
The Company's 1994 Annual Report to the shareholders, which
has been mailed to shareholders with this Proxy Statement, contains
audited consolidated financial statements of the Company. Such
Annual Report does not constitute a part of the proxy soliciting
material. If any shareholder did not receive such Annual Report,
we will immediately mail one upon receipt of a request from such
shareholder.
THE COMPANY WILL MAIL WITHOUT CHARGE TO ANY SHAREHOLDER UPON
WRITTEN REQUEST A COPY OF THE ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS, SCHEDULES AND A LIST OF
EXHIBITS. REQUESTS SHOULD BE SENT TO SHAREHOLDER RELATIONS:
Circon Corporation
6500 Hollister Avenue
Santa Barbara, CA 93117
VOTING OF PROXIES AND OTHER MATTERS
Properly executed and returned proxies, unless revoked, will
be voted as directed by the shareholders or in the absence of such
direction, will be voted for the election of the Director Nominees
to the Board of Directors and in favor of ratification of the
selection of independent auditors.
Management does not know of any other matters which will come
before the Annual Meeting. However, if any other matter should come
before the Annual Meeting or any adjournment thereof, the proxies
will be voted in the manner directed by the Board of Directors.
By Order of the Board of Directors,
DANIEL J. MEANEY. JR.
Vice President and Secretary
CIRCON CORPORATION FOR 1995 ANNUAL MEETING OF SHAREHOLDERS
The undersigned appoints R. A. Auhll and R. B. Thompson, and
each of them, proxies with full power of substitution, to vote all
shares of Common Stock of Circon Corporation which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of
Circon Corporation to be held on June 1, 1995, at 2:00 p.m. at Four
Seasons Biltmore Hotel, 1260 Channel Drive, Santa Barbara,
California, upon the following matters:
1. Election of Director:
FOR Nominee Rudolph R. Schulte WITHHOLD Authority to Vote
for Rudolph R. Schulte
2. Proposal to approve the Circon Corpration 1995 Director's Stock
Option Plan
FOR AGAINST ABSTAIN
3. Proposal to increase the number of shares authorized for issuance under
the provisions of the 1993 Stock Option Plan (1,000,000 shares)
FOR AGAINST ABSTAIN
4. Proposal to amend the Company's Certificate ofIncorporation to require
all stockholder action to be taken at a Shareholders Meeting
FOR AGAINST ABSTAIN
5. Proposal to recommend that the Board of Directors declare a dividend
FOR AGAINST ABSTAIN
6. Ratification of the selection of Arthur Andersen & Company as independent
public accountants for the Company
FOR AGAINST ABSTAIN
(Continued and to be signed on reverse side)
In their discretion, the proxies are authorized to vote upon
such other matters which may properly come before the meeting or
any adjournment or adjournments thereof.
This proxy will be voted as directed or, if no contrary
direction is indicated, will be voted for the Director, the manner
recommended by the Board of Directors on matters (2) through (6)
above and as said proxies deem advisable on such other matters as
may come before the meeting.
Dated_________________________, 1995
___________________________________
___________________________________
This signature should conform to your
name as printed hereon and returned
promptly in the enclosed envelope.
Persons signing as fiduciaries should so
indicate. Co-owners should all sign.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
