<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9/A
(Amendment No. 1)
Solicitation/Recommendation Statement Pursuant to
Section 14(d)(4) of the Securities Exchange Act of 1934
CIRCON CORPORATION
(Name of Subject Company)
CIRCON CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, $.01 par value
(Title of Class of Securities)
172736 10 0
(CUSIP Number of Class of Securities)
RICHARD A. AUHLL
President and Chief Executive Officer
Circon Corporation
6500 Hollister Avenue
Santa Barbara, California 93117
(805) 685-5100
(Name, address and telephone number of person authorized to receive
notice and communications on behalf of person(s) filing statement)
Copy to:
LARRY W. SONSINI, ESQ.
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304-1050
(415) 493-9300
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 supplements the Schedule 14D-9 of Circon Corporation, a
Delaware corporation (the "Company"), filed with the Securities and Exchange
Commission ("SEC") on August 15, 1996, relating to the tender offer disclosed in
a Tender Offer Statement on Schedule 14D-1, dated August 2, 1996 (the "Schedule
14D-1"), filed with the SEC by USS Acquisition Corp. (the "Purchaser"), a
Delaware corporation and wholly-owned subsidiary of United States Surgical
Corporation, a Delaware corporation ("USS"), relating to an offer by Purchaser
to purchase all outstanding Shares at a price of $18.00 per Share, net to the
seller in cash, without interest thereon.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
On August 16, 1996 the Company mailed a letter to its employees regarding
the Offer. A copy of the letter is filed as Exhibit 10 to this statement.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
Exhibit 1(F) The "Board Compensation," "Remuneration of Officers," "Report of the
Compensation Committee" and "Compensation Committee Interlocks and
Insider Participation" sections of the Proxy
Exhibit 2(F) Article Ninth of Certificate of Incorporation, as amended
Exhibit 3(F) Article V of the Bylaws
Exhibit 4(F) Form of Indemnification Agreement
Exhibit 5*(F) Letter to Stockholders regarding Board's Recommendation
Exhibit 6(F) Press Release Announcing Board's Recommendation
Exhibit 7(F) Opinion of Bear, Stearns & Co. Inc.
Exhibit 8*(F) Summary of Stockholders Rights Plan
Exhibit 9(F) Press Release of the Company dated August 5, 1996
Exhibit 10 Letter to Employees Regarding the Offer
</TABLE>
- ------------------------
* Included in copy mailed to stockholders
(F) Previously filed
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
<TABLE>
<S> <C>
Dated: August 16, 1996 CIRCON CORPORATION
By: /s/ Richard A. Auhll
Richard A. Auhll
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
2
<PAGE>
EXHIBIT 10
[LETTERHEAD]
August 16, 1996
FELLOW EMPLOYEES:
You are all aware that two weeks ago, U.S. Surgical announced that it was
making an offer to acquire Circon. Specifically, they began a tender offer
for Circon shares at $18 per share. A tender offer is a particular offer to
buy Circon common stock that is governed by the federal securities laws.
Under these laws, the offer cannot close until August 29; that is, U.S.
Surgical cannot buy shares, even if stockholders want to sell them, until
that date.
This is an unsolicited offer. We have never said Circon was for sale. We
are not trying to sell the company. We did not ask U.S. Surgical to make an
offer. We did not even know it was coming. I was informed of the offer for
the first time the night before it was made.
But I and the other members of the Board of Directors have a fiduciary
duty to carefully review any offer and to decide if it is in the best
interests of the stockholders, employees, customers and other constituencies
to accept or reject the offer. The Board has now carried out this duty. We
have met on several occasions over the last ten days to consider the offer.
We retained expert financial and legal advisers to assist the Board. We
reviewed the offer and the company's situation, including the company's
strategic plan, in detail and reached a decision based on this careful and
thorough study.
Based on this review, the Board unanimously rejected U.S. Surgical's
offer. Circon was not for sale before this offer, and we are still not trying
to sell the company. We have a strategic plan in place. It is an excellent
plan, and we are confident that we can continue to put it into effect. We
believe it will produce superior value for our stockholders. We also decided
that even if we were planning to sell the company, the price that U.S.
Surgical has offered is entirely inadequate. Additionally, U.S. Surgical's
offer is highly conditional. Therefore, the board formally recommended that
our stockholders not tender their shares to U.S. Surgical. That
recommendation is included in documents we sent to all stockholders earlier
today.
The Board took one other action that is important in this context. We
adopted a stockholders rights plan. These plans are becoming increasingly
common these days and are already in place in many of the Fortune 500
companies. What our plan means is this: if U.S. Surgical, or any other
stockholder, acquires more than 15 percent of all our shares without Board
approval, then every other stockholder essentially has the right to purchase
additional shares at a price equal to half their market value.
The importance of this stockholders rights plan is that it makes it very
expensive -- prohibitively expensive -- for someone to take over Circon
without the approval of the Board of Directors. The Board has the
opportunity to examine all alternatives and make a decision or recommendation
that is best for stockholders, and also look out for the interests of
employees and customers.
This morning, we filed a formal statement, saying these things, with the
Securities & Exchange Commission, sent a copy of this statement to all of our
stockholders, and issued a press release announcing our decision. The
question is: What happens now? And what does it all mean for you?
<PAGE>
FELLOW EMPLOYEES letter August 16, 1996
Page 2
- ------------------------------------------------------------------------------
Unless we hear something to the contrary, we have to assume that U.S.
Surgical is going to proceed with its tender offer despite our Board's
negative recommendation. It is a definite possibility that U.S. Surgical will
take legal action challenging Board actions including the stockholders rights
plan.
The U.S. Surgical offer expires on August 29th. But is very common for
these offers to be extended once, twice, even half a dozen times. That often
happens when the company making the offer does not get enough shares
tendered, and hopes that with a little more time, it can change a few more
minds. Bruce Thompson and I will be spending a lot of time between now and
the 29th talking to our stockholders, and we expect U.S. Surgical will be
doing exactly the same.
An extension could also happen because, in the end, it will be very
difficult for U.S. Surgical to succeed without gaining the approval of the
Board. So they could keep extending their offer to try to increase the
pressure on us. The process could go on for quite a long time. Just last
week, we heard that Moore Corporation dropped its effort to take over Wallace
Computer Services after a year of trying. Earlier this year, Hasbro turned
back a hostile bid from Mattel, and Alumax turned back one from Kaiser
Aluminum.
It is also very common these days for bidders and others to file lawsuits
to try and further pressure the Board. Just looking at recent offers, the
Wallace and Hasbro Boards were sued within days after their rejection of bids.
There are a number of other things that could happen. I am not going to
try to list them all here. The important point is that the Board's position
is this: We have got a great future ahead of us. That future is going to
create a lot of value for our stockholders. We do not need to sell the
company to create this value for our stockholders. And, even if we did
want to sell, this offer just would not cut it.
We will keep you informed of new developments as they arise. But I
understand that this is a disturbing period for all of you. It is tough to
concentrate. Believe me, I feel exactly the same way. But I know we are
taking the right course, and I am confident we can make it work.
The Board knows that employee morale and security are essential if we are
going to keep this company growing and do all the things we need to do in the
coming months. For that reason, the Board has engaged a consultant to advise
us on an employee retention program that is appropriate for our situation. We
have asked our consultant to move quickly, and I will report back to you on
whatever decision we make.
Two more things: Now that we have said "no" to U.S. Surgical, you may find
members of the press trying to get comments they can put in their newspapers.
A remark that is taken out of context could be harmful to us. So let me ask
that you refer any press inquiries you receive to Bruce Thompson's office.
You may also get calls from stock market speculators, although they may
identify themselves otherwise. Send these calls to Bruce's office as well.
The rule should be: don't discuss anything related to the current situation
with people outside the company.
<PAGE>
FELLOW EMPLOYEES letter August 16, 1996
Page 3
- ------------------------------------------------------------------------------
Lastly, in a situation like this, success is often the best defense. The
better we perform, the more investors will believe in our strategic plan, and
in our ability to make it happen.
As you all know, we have had a bumpy ride in the last few months -- for a
lot of reasons I do not need to rehash here. That is why our stock price has
dropped to a point where U.S. Surgical can make a low-ball offer look like a
big premium. I hope you also know, we are starting to see light at the end of
the tunnel, and we feel very good about our chances of getting back on our
growth track in the near future. I suspect that is one reason why U.S.
Surgical is so interested right now at this moment.
The fact that we are getting back on track is due to a lot of hard work
from all of you. I and all members of the Board, are deeply appreciative of
the effort and ingenuity you have put into Circon. But this is not time to let
up. Now, more than ever, our performance really matters.
Sincerely,
CIRCON CORPORATION
RICHARD A. AUHLL
President
Chairman of the Board
