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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
CARDIOMETRICS, INC.
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(Name of Issuer)
Common Stock, $.01 Par Value
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(Title of Class of Securities)
141906 10 7
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(CUSIP Number)
Reinhard J. Warnking
Endosonics Corporation
2870 Kilgore Road
Rancho Cordova, CA 95670
(916) 638-8008
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 3, 1997
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(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 7 pages)
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*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP NO. 141906 10 7 13D Page 2 of 7 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Endosonics Corporation
I.R.S. I.D. # 68-0028500
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO, WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
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7 SOLE VOTING POWER
NUMBER --------
OF -----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 1,090,618
OWNED BY -----------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON -------
WITH -----------------------------------------------
10 SHARED DISPOSITIVE POWER
-------
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,090,618
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN
SHARES*
[ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
14.82%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT
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Neither the filing of this Schedule 13D nor any of its contents shall be deemed
to constitute an admission by Endosonics Corporation ("Endosonics") that it is
the beneficial owner of any of the Common Stock referred to herein for purposes
of Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Act"),
or for any other purpose, and such beneficial ownership is expressly disclaimed
except with respect to 300,000 shares purchased by Endosonics over which
Endosonics has sole power to vote, direct the vote, dispose or direct the
disposition.
3.
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2, which is being filed pursuant to Rule 13d-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), amends the statement on Schedule 13D and Amendment
No. 1 to Schedule 13D electronically filed on February 5, 1997 and March 17,
1997, respectively, (the "Schedule 13D") by Endosonics Corporation
("Endosonics") relating to the common stock, par value $.01 per share (the
"Issuer Common Stock" or the "Shares"), of Cardiometrics, Inc. (the "Issuer"),
which has its principal executive offices at 645 Clyde Avenue, Mountain View,
California 94043. Unless otherwise indicated, all capitalized terms used herein
but not defined herein shall have the meanings ascribed to such terms in the
Schedule 13D.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Schedule 13D is hereby amended and restated in its
entirety to read as follows:
Pursuant to an Agreement and Plan of Reorganization dated January 26,
1997 (the "Reorganization Agreement"), among Endosonics, River Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary of Endosonics
("Merger Sub") and the Issuer, and subject to the conditions set forth therein
(including approval by stockholders of the Issuer), Merger Sub will be merged
with and into the Issuer (the "Merger"), with each share of Issuer Common Stock
being converted into .35 newly issued shares of Endosonics Common Stock, $0.001
par value (Endosonics Common Stock), .20 shares of CardioVascular Dynamics, Inc.
("CVD") Common Stock held by Endosonics, and $2.00 cash, subject to adjustment
such that based on the average of the closing prices of Endosonics' and CVD's
Common Stock as quoted on the Nasdaq National Market for the ten trading days
immediately preceding (and including) the third trading day prior to the
Cardiometrics stockholders meeting, the merger consideration shall be equal to
$9.00; provided that, if the CVD exchange ratio obtained thereby is greater than
.2636, the CVD exchange ratio shall be .2636; provided further that EndoSonics
has the right to substitute additional cash instead of increasing the CVD
exchange ratio (the "Exchange Ratio"). The foregoing summary of the Merger is
qualified in its entirety by reference to the copy of the Reorganization
Agreement included as Exhibit 1 to the Schedule 13D and incorporated herein in
its entirety by reference.
As of the date hereof, Endosonics beneficially owned 300,000 shares of
Issuer Common Stock. The aggregate purchase price of the Issuer Common Stock
purchased by Endosonics was $2,316,561.50.
4.
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ITEM 4. PURPOSE OF TRANSACTION.
Item 4(a) - (b) of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
(a) - (b) As described in Item 3 above, this statement relates to the
Merger of Merger Sub, a wholly-owned subsidiary of Endosonics, with and into
Issuer in a statutory merger pursuant to the Delaware General Corporation Law.
At the effective time of the Merger, the separate existence of Merger Sub will
cease to exist and Issuer will continue as the surviving corporation and as a
wholly-owned subsidiary of Endosonics (the "Surviving Corporation"). Holders of
outstanding Issuer Common Stock will receive, in exchange for each share of
Issuer Common Stock held by them, .35 newly issued shares of Endosonics Common
Stock, .20 shares of CVD Common Stock and $2.00 cash (subject to adjustment as
described in Item 3 above).
As an inducement to Endosonics to enter into the Reorganization
Agreement, each stockholder who is a party to the Voting Agreement, dated as of
January 26, 1997, as amended on April 3, 1997 (the "Voting Agreement"), among
the parties thereto (collectively, the "Voting Agreement Stockholders") and
Endosonics, has, by executing the Voting Agreement, irrevocably appointed
Endosonics (or any nominee of Endosonics) as his, hers or its lawful attorney
and proxy. Such proxy gives Endosonics the limited right to vote an aggregate of
790,618 shares of Issuer Common Stock beneficially and collectively owned by the
Voting Agreement Stockholders (the "Shares") in all matters related to the
Merger. The Voting Agreement Stockholders and the number of Shares beneficially
owned by each of them is set forth in Schedule B hereto which is hereby
incorporated by reference. The foregoing summary of the Voting Agreement is
qualified in its entirety by reference to the copy of Amendment No. 1 to Voting
Agreement included as Exhibit 1 to this Amendment No. 2 to Schedule 13D and to
the copy of the Voting Agreement included as Exhibit 2 to the Schedule 13D, both
of which are incorporated herein in their entirety by reference.
In exercising its right to vote the Shares as lawful attorney and
proxy of the Voting Agreement Stockholders, Endosonics (or any nominee of
Endosonics) will be limited, at every Issuer stockholders meeting and every
written consent in lieu of such meeting to vote the shares (i) in favor of
approval of the Merger and the Reorganization Agreement and in favor of any
matter that could reasonably be expected to facilitate the Merger and (ii)
against any proposal for any recapitalization, merger, sale of assets or other
business combination (other than the Merger) between Issuer and any person or
entity other than Endosonics or any other action or agreement that would result
in a breach of any covenant, representation or warranty or any other obligation
or agreement of Issuer under the Reorganization Agreement or which could result
in any of the conditions to Issuer's obligations under the Reorganization
Agreement not being fulfilled. The Voting Agreement Stockholder may vote the
Shares on all other matters.
5.
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The Voting Agreement terminates upon the earlier to occur of (i) such date and
time as the Merger shall become effective in accordance with the terms and
provisions of the Reorganization Agreement and (ii) six months after the date of
termination of the Reorganization Agreement.
Pursuant to the Reorganization Agreement, Endosonics and Issuer
entered into a Stock Option Agreement, dated January 26, 1997 ("Option
Agreement"). The Option Agreement grants Endosonics the right, under certain
conditions, to purchase up to 1,379,717 shares of Issuer Common Stock at a price
of $9.00 per share, payable in cash, or at Acquiror's option, Target shall loan
Acquiror the exercise price (less the par value of the shares issued upon
exercise, such par value to be paid in cash) pursuant to an interest free
one-year term loan. Subject to certain conditions, the Option Agreement may be
exercised in whole or in part by Endosonics after the occurrence of any of the
events described in Section 7.3(b) of the Reorganization Agreement or if a
Takeover Proposal or Trigger Event is consummated. At any time during which the
Option Agreement is exercisable, Endosonics shall have the right to sell to
Issuer and Issuer shall be obligated to repurchase from Endosonics, and, subject
to Section 7(c) of the Option Agreement, Issuer shall have the right to
repurchase from Endosonics and Endosonics shall be obligated to sell to Issuer,
all or any portion of the Issuer shares purchased by Endosonics pursuant to the
Option Agreement. The foregoing summary of the Option Agreement is qualified in
its entirety by reference to the copy of the Option Agreement included as
Exhibit 3 to the Schedule 13D and incorporated herein in its entirety by
reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) - (b) of the Schedule 13D is hereby amended and restated in
its entirety to read as follows:
(a) - (b) As a result of the Voting Agreement and recent purchases of
Issuer Common Stock, Endosonics may be deemed to be the beneficial owner of at
least 1,090,618 shares of Issuer Common Stock. Such Issuer Common Stock
constitutes approximately 14.82% of the issued and outstanding shares of Issuer
Common Stock.
Endosonics has shared power to vote 790,618 of the Shares for the
limited purposes described in Item 4 above. Endosonics has sole
power to vote or to direct the vote or to dispose or to direct the disposition
of 300,000 shares of Issuer Common Stock. To the best of Endosonics' knowledge,
no shares of Issuer Common Stock are beneficially owned by any of the persons
named in Schedule A to the Schedule 13D.
6.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: April 21, 1997
ENDOSONICS CORPORATION
By: /s/ Donald D. Huffman
-------------------------------------
Donald D. Huffman, Vice President
Finance and Administration, and Chief
Financial Officer
7.
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SCHEDULE B
<TABLE>
<CAPTION>
Stockholder Shares Beneficially Owned
- ----------- -------------------------
<S> <C>
Bay Partners IV, L.P. 304,730
California BPIV, L.P. 26,499
Robert Colloton 31,508
Neal Dempsey 336,412*
Robert J. Erra 7,708
Jeff M. Folick 1,458
Jeffrey S. Frisbie 61,276
Stanley Levy, Jr. 28,110
David B. Musket 13,958
Menahem Nassi 187,003
Robert Y. Newell IV 40,207
Kevin Rhatigan 9,250
Michael J. Sorna 60,421
H. Raymond Wallace 13,307
</TABLE>
* Includes 304,730 shares owned by Bay Partners IV, L.P. and 26,499 shares
owned by California BPIV, L.P. Mr. Dempsey, a Director of the Company, is
a General Partner of Bay Management Company IV, L.P., the General Partner
of Bay Partners IV, L.P., and of California BPIV, L.P. Because of such
relationships, Mr. Dempsey may be deemed to share voting and investment
powers over the shares held by Bay Partners. Mr. Dempsey disclaims
beneficial ownership of the shares held by Bay Partners IV, L.P. and
California BPIV, L.P., except to the extent of his pecuniary interest
therein.
8.
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EXHIBIT 1
Amendment No. 1 to Voting Agreement
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AMENDMENT NO. 1 TO VOTING AGREEMENT AND IRREVOCABLE PROXY
THIS AMENDMENT NO. 1 to the Voting Agreement (the "Original Voting
Agreement") dated January 26, 1997, by and between Endosonics Corporation, a
Delaware corporation (the "Company"), and the undersigned stockholder (the
"Stockholder") of Cardiometrics, Inc., a Delaware corporation ("Target"), and
the Irrevocable Proxy dated January 26, 1997, executed by Stockholder pursuant
to the Original Voting Agreement (the "Proxy"), is made this 3rd day of April,
1997, by and among the Company and the Stockholder.
WHEREAS, the Company has inadvertently become an "Acquiring Person"
pursuant to Target's December 3, 1996 Stockholder Rights Plan and intends to
divest itself of its interests in a sufficient number of shares of Target
capital stock in order to cease being an "Acquiring Person;" and
WHEREAS, the parties hereto desire to amend the Original Voting
Agreement and the Proxy to reduce the number of shares of Target capital stock
subject to the Original Voting Agreement and the Proxy.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Recital C of the Original Voting Agreement is hereby amended and
replaced in its entirety with the following:
"C. The Stockholder is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
of such number of shares of the outstanding Common Stock, $0.01 par value
per share, of Target as is indicated on the final page of this Agreement
(the "Total Shares," of which shares the number of issued and outstanding
shares of Common Stock of Target actually owned by Stockholder as of
January 26, 1997 shall be referred to herein as the "Shares"); and"
2. Section 1.2 of the Original Voting Agreement is hereby amended and
replaced in its entirety with the following:
"1.2 New Shares. Stockholder agrees that any shares of capital stock of
Target that Stockholder acquires upon the exercise of options which are
both (i) vested to purchase such shares as of December 31, 1996 and (ii) at
an exercise price less than $8.00 ("New Shares") shall be subject to the
terms and conditions of this Agreement to the same extent as if they
constituted Shares."
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3. Section 4 of the Original Voting Agreement is hereby amended and
replaced in its entirety with the following:
"4. Representations, Warranties and Covenants of Stockholder.
Stockholder hereby represents, warrants and covenants to Acquiror that
Stockholder (i) is the beneficial owner of the Shares, which at the date of
this Agreement and at all times up until the Expiration Date will be free
and clear of any liens, claims, options, charges or other encumbrances;
(ii) does not beneficially own any shares of capital stock of Target other
than the Total Shares (excluding shares as to which Stockholder currently
disclaims beneficial ownership in accordance with applicable law); and
(iii) has full power and authority to make, enter into and carry out the
terms of this Agreement and the Proxy."
4. The first paragraph of the Proxy is hereby amended and replaced in
its entirety with the following:
"The undersigned stockholder of Cardiometrics, Inc., a Delaware
corporation ("Target"), hereby irrevocably (to the full extent
permitted by Section 212 of the Delaware General Corporation Law)
appoints the members of the Board of Directors of Endosonics
Corporation, a Delaware corporation ("Acquiror"), and each of them, as
the sole and exclusive attorneys and proxies of the undersigned, with
full power of substitution and resubstitution, to vote and exercise all
voting and related rights (to the full extent that the undersigned is
entitled to do so) with respect to the Shares (as such term is defined
in the Voting Agreement (as defined below)) in accordance with the
terms of this Proxy. All shares of the capital stock of Target
beneficially owned by the undersigned stockholder of Target as of the
date of this Proxy are listed on the final page of this Proxy. Upon the
undersigned's execution of this Proxy, any and all prior proxies given
by the undersigned with respect to any Shares are hereby revoked and
the undersigned agrees not to grant any subsequent proxies with respect
to the Shares until after the Expiration Date (as defined below)."
5. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
2.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1
to the Voting Agreement as of the date first above written.
THE COMPANY:
ENDOSONICS CORPORATION, a Delaware
corporation
By:__________________________________
Name:________________________________
Title:_______________________________
STOCKHOLDER:
____________________________________
Name:_______________________________
