CIRCON CORPORATION
SUPPLEMENT
TO PROXY STATEMENT
FOR 1995 ANNUAL MEETING OF SHAREHOLDERS
On April 25, 1995, Circon Corporation ("Circon") and Cabot
Medical Corporation ("Cabot") jointly announced the signing of a
definitive agreement to merge the companies. Under the terms of
the agreement, Circon will issue 0.415 share of Circon Common Stock
in exchange for each outstanding share of Cabot. The exchange of
shares will result in Cabot becoming Circon's wholly owned
subsidiary. Circon will also assume the outstanding Cabot stock
options, which will become options to purchase Circon Common Stock,
with appropriate adjustments to the number of shares and option
exercise price of each Cabot option.
Cabot is the largest U.S. producer of gynecology sterilization
and gynecology-laparoscopy suction/irrigation devices and has the
largest share of the U.S. urology premium stent market.
The merger is subject to various conditions, including the
approval of shareholders of both companies. A special meeting of
Circon shareholders will be held for this purpose, probably in
July. Shareholders will receive another proxy statement in
connection with that special meeting.
In view of the pending merger with Cabot, this Supplement
provides additional information concerning three items of business
described in the proxy statement for the Annual Meeting to be held
on June 1.
1. Election of Director. As described in the proxy
statement, the shareholders will elect one Class II Director at the
Annual Meeting. The Board's nominee for that position is Rudolf R.
Schulte, who currently serves on the Board. The terms of the
agreement with Cabot provide that, at such time as the merger
becomes effective, the Circon Board will appoint Warren G. Wood,
Chief Executive Officer of Cabot, to be a Class II Director. The
Class II Director elected at the Annual Meeting will retain his
position, so that there will then be two Directors in each of Class
I, Class II and Class III.
2. Amendment to 1993 Stock Option Plan. As described in the
proxy statement, the shareholders at the Annual Meeting will vote
upon the proposal to increase by 1,000,000 the number of shares in
the 1993 Stock Option Plan. The currently outstanding Cabot stock
options to be assumed by Circon under the terms of the merger will
not be issued under the 1993 Stock Option Plan. The additional
1,000,000 shares will be available for future option grants to
employees of Circon and its subsidiaries, including Cabot employees
if the merger is approved by the shareholders.
3. Shareholder Proposal to Recommend That the Board Declare
a Cash Dividend. In connection with the merger, Circon may be
required to retire certain indebtedness of Cabot. Funding this and
future working capital requirements could involve Circon incurring
new indebtedness of approximately $50 to $75 Million. It is likely
that the terms of any such new indebtedness would prohibit the
payment of cash dividends, at least until a substantial portion of
the debt is repaid.
April 26, 1995
