<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9/A
(Amendment No. 10)
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. 10 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, and as subsequently amended, relating to
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 (the "Offer")
by Purchaser to purchase all outstanding shares of Common Stock, $0.01 per
value, of the Company ("Shares"). The original price of the Offer was $18.00 per
Share, net to the seller in cash, without interest thereon. On December 16,
1996, the per share price of the Offer was reduced by USS to $17.00.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
(a) On August 1, 1996, Leon C. Hirsch, President and Chief Executive Officer
of USS, advised Richard A. Auhll, President and Chief Executive Officer of the
Company, that USS was commencing the Offer the next day. Neither Mr. Auhll, nor
any other member of the Company's senior management or Board of Directors had
any other prior notice of the Offer, nor were they aware of USS's intention to
make the Offer.
On August 5, 1996, the Company's Board of Directors (the "Board") convened a
meeting, where the Board, with the assistance of senior management and Wilson
Sonsini Goodrich & Rosati ("WSGR"), reviewed the Company's financial performance
and the Offer, including its terms and conditions. The Board also discussed
potential defensive measures in response to the Offer, including the
implementation of a Stockholders Rights Plan. In addition, the Board decided to
retain Bear, Stearns & Co. Inc. ("Bear Stearns") to serve as financial advisors
to the Company and assist the Board in considering and analyzing the Offer.
On August 8, 1996, the Board convened an additional meeting, where the Board
continued its analysis of the Offer and the implementation of a Stockholders
Rights Plan. The Board also reviewed the Company's financial performance,
business strategy and strategic plan. The Board instructed management and the
Company's financial advisors to continue examining the Company's strategic plan
and to provide the Board with further analyses at the next Board meeting.
On August 13, 1996, the Board held an additional meeting to finalize its
review of the Offer and to make a recommendation in response to the Offer. In
addition, the Board determined that the implementation of a Stockholders Rights
Plan would be in the best interests of the Company and its stockholders. The
Board unanimously approved the Stockholders Rights Plan previously furnished to
the Board and instructed management to implement the Plan.
At the August 13, 1996 meeting, the Board determined that the best means for
providing value to its stockholders is for the Company to continue to pursue its
strategic plan and not to be put up for sale at this time. The Board unanimously
concluded that the Offer is inadequate and not in the best interests of the
Company and its stockholders. In particular, the Board determined that the
Company's strategic plan offers the potential for greater long-term benefits for
the Company's stockholders than the Offer based on, among other things, greater
opportunities for business expansion, revenue and earnings growth, as well as
benefits following the full integration of the business of Cabot Medical
Corporation ("Cabot") into the Company.
ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS REJECT THE OFFER AND NOT TENDER THEIR SHARES PURSUANT TO THE OFFER.
A copy of a letter to stockholders communicating the Board's recommendation
and a form of press release announcing such recommendation are filed as Exhibits
5 and 6 hereto, respectively, and are incorporated herein by reference.
(b) In reaching the conclusions referred to in Item 4(a), the Board of
Directors took into account numerous factors, including but not limited to the
following:
(i) The Board's familiarity with the business, financial condition,
prospects and current business strategy of the Company, the nature of the
business in which the Company operates and the Board's belief that the Offer
does not reflect the long-term values inherent in the Company. In this
regard, the Board particularly considered the following:
<PAGE>
ITEM 4. THE SOLICITATION OR RECOMMENDATION (CONTINUED)
- The Company's reputation as a provider of quality products and
services and its position in its industry as a technological
leader and innovator.
- The market share of the Company in the urology and gynecology
markets and new products planned for introduction in the
future.
- The expected growth rates of the markets for urological and
gynecological products and the product position of the Company
in such markets.
- The Company's long-term sales plan, including the effects of
products under development and enhancements to current
products.
- The cost savings and growth impact of the Cabot acquisition
which the Company expects to realize, including cost savings
from programs already in process and those that are currently
planned.
- The historical trading price of the Company's Common Stock,
including the Board's belief, based in part on the factors
referred to above, that the trading price for the Company's
Common Stock immediately prior to commencement of the Offer did
not reflect the long-term value inherent in the Company. In
this regard, the Board noted that the Offer represented a 23%
discount from the highest closing price of the Common Stock
during the 12-month period preceding the Offer.
- The risks inherent in achieving the Company's business plan.
(ii) The Company's prospects for future growth and profitability, based
on the Company's strategic plan, the various strategic initiatives which
have been implemented and investments that have been made over the past
several years, including the acquisition of Cabot, and other opportunities
that will be available in the future, the availability in the future of
certain new products and enhancements to current products in various stages
of development, and current conditions in the businesses in which the
Company operates.
(iii) The opinion of Bear Stearns to the effect that the consideration
offered pursuant to the Offer is inadequate from a financial point of view
to the stockholders of the Company (excluding USS and its affiliates). A
copy of the written opinion of Bear Stearns which sets forth the assumptions
made, matters considered and basis for their review is filed as Exhibit 7
hereto and incorporated herein by reference.
(iv) The Board's commitment to protecting the best interests of the
Company's stockholders.
(v) The disruptive effect of the Offer on the Company's employees,
suppliers and customers.
(vi) The numerous conditions to which the Offer is subject.
The Offer is conditioned upon, among other things, the acquisition of Shares
pursuant to the Offer and the proposed merger following the Offer having been
approved pursuant to Section 203 of the Delaware General Corporation Law
("Section 203") or the Purchaser being satisfied in its sole discretion that
Section 203 is otherwise inapplicable to the acquisition of Shares pursuant to
the Offer and the proposed merger. In light of the Board's decision discussed
above, the Board has determined to take no action which would render Section 203
so inapplicable.
In view of the wide variety of factors considered in connection with its
evaluation of the Offer, the Board did not find it practicable to, and did not,
quantify or otherwise attempt to assign relative weights to the specific factors
considered in reaching its respective determinations.
On August 30, 1996, USS announced that the expiration of the Offer had been
extended to September 30, 1996. That day, the Company issued a press release
relating to USS's announcement. A
2
<PAGE>
ITEM 4. THE SOLICITATION OR RECOMMENDATION (CONTINUED)
copy of this press release is filed as Exhibit 20 to this statement. Also on
that day, the Company circulated a letter to its employees regarding the Offer,
a copy of which is filed as Exhibit 21 to this statement.
On October 1, 1996, USS announced that the expiration of the Offer had been
extended to December 13, 1996. On October 2, 1996, the Company issued a press
release relating to USS's announcement. A copy of this press release is filed as
Exhibit 24 to this statement.
On October 25, 1996, the Company sent a letter to its stockholders regarding
the Offer and the Company's financial results for the third quarter of 1996. A
copy of this letter is filed as Exhibit 25 to this statement.
On December 16, 1996, USS announced that the expiration of the Offer had
been extended to February 13, 1997, and that the price of the Offer had been
reduced to $17.00 per Share. On December 17, 1996, the Company issued a press
release relating to USS's announcement. A copy of this press release is filed as
Exhibit 26 to this statement.
On February 14, 1997, USS announced that the expiration of the Offer had
been extended to June 16, 1997. That day, the Company issued a press release
relating to USS's announcement. A copy of this press release is filed as
Exhibit 28 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(F) Letter to Employees Regarding the Offer
Exhibit 11(F) Complaint of William Steiner against the Company, its Directors and
certain of its officers, filed on or about August 15, 1996
Exhibit 12(F) Complaint of Charles Miller against the Company, its Directors and
certain of its officers, filed on or about August 15, 1996
Exhibit 13(F) Complaint of F. Richard Manson against the Company, its Directors
and certain of its officers, filed on or about August 15, 1996
Exhibit 14(F) Press Release of the Company dated August 19, 1996
Exhibit 15(F) Management Retention Plan
Exhibit 16(F) Sales Force Retention Plan
Exhibit 17(F) Managers, Professionals and Key Contributors Retention Plan
Exhibit 18(F) Press Release of the Company dated August 27, 1996
Exhibit 19(F) Letter to Employees Regarding the Retention Plans
Exhibit 20(F) Press Release of the Company dated August 30, 1996
Exhibit 21(F) Letter to Employees Regarding the Offer
Exhibit 22(F) Complaint of USS against the Company and its Directors, filed on or
about September 17, 1996
Exhibit 23(F) Press Release of the Company dated September 18, 1996
Exhibit 24(F) Press Release of the Company dated October 2, 1996
Exhibit 25(F) Letter to Stockholders regarding the Offer and the Company's
financial results for the third quarter of 1996
Exhibit 26(F) Press Release of the Company dated December 17, 1996.
Exhibit 27 **Reserved Under the EDGAR Filing System for Financial Data Schedule**
Exhibit 28 Press Release of the Company dated February 14, 1997
</TABLE>
3
<PAGE>
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS (CONTINUED)
- ------------------------
* Included in copy mailed to stockholders
(F) Previously filed
4
<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: February 17, 1997 CIRCON CORPORATION
By: /s/ Richard A. Auhll
Richard A. Auhll
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
5
<PAGE>
EXHIBIT 28
CIRCON RESPONDS TO U.S. SURGICAL'S FOURTH TENDER EXTENSION
SANTA BARBARA, CALIFORNIA (FEBRUARY 14, 1997) - Circon Corporation
(NASDAQ-NMS: CCON) today responded to U.S. Surgical's fourth extension of its
tender offer. "I strongly encourage U.S. Surgical to end this exercise in
futility," Richard A. Auhll, chairman of the board, president, and chief
executive officer of Circon said. "Our Board has determined that U.S.
Surgical's bid is entirely inadequate. This process has dragged on since
early August. As evidenced by our recent earnings release, our strategic plan
is on track. Our U.S. sales are recovering and our gross profit margin in the
fourth quarter increased to a very healthy 56.6%. In 1997 we will see the
savings from closing our Langhorne, PA facility. Furthermore, we are
introducing new products and moving forward with our strategic plan which
is well under way. We would like to get the U.S. Surgical distraction
behind us."
Circon is the leading U.S. supplier of products for minimally invasive
urological and gynecological surgery, including such hardware products as
endoscopes and video systems, and such disposable products as urological
stents, laparoscopic suction-irrigation devices, and a wide variety of
gynecological products.
###
CONTACT:
Judith Wilkinson
Abernathy MacGregor Group
(212) 371-5999
