-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R60R/DLrx4CrrQ+5PlM02utRN8YMEtuvWJ8GPEmnMtBShyIHweP15YG0d+16VEh/ Aido3AwpCzk9Ebwf/VXhiA== 0000950144-99-009112.txt : 19990727 0000950144-99-009112.hdr.sgml : 19990727 ACCESSION NUMBER: 0000950144-99-009112 CONFORMED SUBMISSION TYPE: PRE13E3 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990726 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAXXIM MEDICAL INC CENTRAL INDEX KEY: 0000858660 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 760291634 STATE OF INCORPORATION: TX FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: PRE13E3 SEC ACT: SEC FILE NUMBER: 005-41487 FILM NUMBER: 99669795 BUSINESS ADDRESS: STREET 1: 10300 49TH ST N CITY: CLEARWATER STATE: FL ZIP: 33762 BUSINESS PHONE: 7275612100 MAIL ADDRESS: STREET 1: 10300 49TH STREET NORTH CITY: CLEARWATER STATE: FL ZIP: 33762 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MAXXIM MEDICAL INC CENTRAL INDEX KEY: 0000858660 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 760291634 STATE OF INCORPORATION: TX FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: PRE13E3 BUSINESS ADDRESS: STREET 1: 10300 49TH ST N CITY: CLEARWATER STATE: FL ZIP: 33762 BUSINESS PHONE: 7275612100 MAIL ADDRESS: STREET 1: 10300 49TH STREET NORTH CITY: CLEARWATER STATE: FL ZIP: 33762 PRE13E3 1 MAXXIM MEDICAL, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13E-3 RULE 13E-3 TRANSACTION STATEMENT (Pursuant to Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 thereunder) MAXXIM MEDICAL, INC. (Name of Issuer) MAXXIM MEDICAL, INC. KENNETH W. DAVIDSON ERNEST J. HENLEY (Name of Person(s) Filing Statement) COMMON STOCK, PAR VALUE $.001 PER SHARE (Title of Class of Securities) 57777G 10 5 (CUSIP Number of Class of Securities) KENNETH W. DAVIDSON KENNETH W. DAVIDSON Chairman of the Board, President and Chief Executive ERNEST J. HENLEY Officer Maxxim Medical, Inc. Maxxim Medical, Inc. 10300 49th Street North 10300 49th Street North Clearwater, FL 33762 Clearwater, FL 33762 (727) 561-2100 (727) 561-2100
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) With copies to: PAUL R. LYNCH, ESQ. MICHAEL E. GIZANG, ESQ. Shumaker, Loop & Kendrick, LLP Skadden, Arps, Slate, Meagher & Flom LLP 101 E. Kennedy Blvd., Suite 2800 919 Third Avenue Tampa, FL 33602 New York, New York 10022 (813) 229-7600 (212) 735-2000
This statement is filed in connection with (check the appropriate box): a. [X] The filing of solicitation materials or an information statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the Securities Exchange Act of 1934. b. [ ] The filing of a registration statement under the Securities Act of 1933. c. [ ] A tender offer. d. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [X] CALCULATION OF FILING FEE 2 ============================================================================== Transaction Valuation * Amount of Filing Fee $373,802,475 $74,760 ============================================================================== * For purposes of calculating the fee only. Calculated in accordance with Rule 0-11(b)(2) under the Securities Exchange Act of 1934, as amended. Assumes the purchase of 13,732,826 shares of Common Stock, par value .001 per share, of Maxxim Medical, Inc. at $26.00 per share and the purchase of the underlying options to purchase Common Stock for an aggregate of $16,748,999. [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $74,760 Form or Registration No.: Preliminary Proxy Statement on Schedule 14A (filed concurrently with this Schedule 13E-3) Filing Party: Maxxim Medical, Inc. Date Filed: July 26, 1999 2 3 SCHEDULE 13E-3 INTRODUCTION This Rule 13e-3 transaction statement is being filed with the Securities and Exchange Commission in connection with the merger of Fox Paine Medic Acquisition Corporation with and into Maxxim Medical, Inc. ("Maxxim") pursuant to an Agreement and Plan of Merger, dated as of June 13, 1999, among Fox Paine Medic Acquisition Corporation and Maxxim. Under the merger agreement, Maxxim will continue as the surviving corporation and each share of Maxxim common stock, par value $.001 per share, outstanding immediately prior to the merger (together with the preferred stock purchase rights associated with those shares), other than a portion of the shares held by the Continuing Shareholders (as defined below), and shares held by dissenting shareholders, will be converted into the right to receive $26.00 in cash, without interest. The Continuing Shareholders are Kenneth W. Davidson, Peter M. Graham, David L. Lamont, Alan S. Blazei, Henry T. Dehart, Joseph D. Dailey, Jack F. Cahill, Suzanne R. Garon, Ernest J. Henley and Davis C. Henley. Mr. Davidson and Dr. Henley are members of Maxxim's board of directors and are filing this transaction statement together with Maxxim. All of the Continuing Shareholders are participating in the merger and will be treated differently than the other Maxxim shareholders. Upon consummation of the merger, Maxxim will be owned approximately 15% (before giving effect to options and warrants) by the Continuing Shareholders (Mr. Davidson will own 3.9% of Maxxim and Dr. Henley will own 3% of Maxxim) and 85% by affiliates of Fox Paine & Company, LLC, a private investment firm, and other related investors. Concurrently with the filing of this transaction statement, Maxxim has filed with the SEC a preliminary Proxy Statement on Schedule 14A (the "Proxy Statement") in connection with a special meeting of the shareholders of Maxxim, at which meeting the shareholders will be asked to approve the merger agreement. The following cross reference sheet is being supplied pursuant to General Instruction F to Schedule 13E-3 and shows the location in the preliminary Proxy Statement of the information required to be included in response to the items of this statement. The information set forth in the preliminary Proxy Statement, including all appendices thereto, is hereby expressly incorporated herein by reference and the responses to each item are qualified in their entirety by the provisions of the preliminary Proxy Statement. CROSS REFERENCE SHEET
ITEM IN CAPTION OR LOCATION SCHEDULE 13E-3 IN THE PROXY STATEMENT -------------- ---------------------- Item 1(a) "Summary - The Participants" Item 1(b) "Summary - The Special Meeting," "Historical Market Information" and "The Special Meeting - Record Date and Voting" Item 1(c) - (f) "Historical Market Information" Item 2(a) - (g) "Summary - The Participants," "Historical Market Information" and "Information About the Transaction Participants - The Continuing Shareholders" Item 3(a)(1) "Summary - Interests of Certain Persons in the Merger," "Historical Market Information" and "Special Factors-Interests of Certain Persons in the Merger" Item 3(a)(2) "Summary - Interests of Certain Persons in the Merger," "Historical Market Information," "Special Factors-Background of the Merger" and "- Interests of Certain Persons in the Merger"
4 Item 3(b) "Summary - Structure of the Transactions," "- The Voting Agreements," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Background of the Merger," "- Interests of Certain Persons in the Merger," "The Special Meeting - Voting Agreements" and "The Merger" Item 4(a) "Questions and Answers about the Merger," "Summary -Structure of the Transactions," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "- Appraisal Rights," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "- Certain Effects of the Merger; Conduct of Business After the Merger," "Merger Financing," "The Merger," "Appraisal Rights" and Appendix A to the Proxy Statement Item 4(b) "Questions and Answers about the Merger," "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "The Merger - Merger Consideration" and "- Treatment of Maxxim Stock Options" Item 5(a) "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "Special Factors - Structure of the Transactions; Transaction Participants," "- Certain Effects of the Merger; Conduct of Business After the Merger" and "The Merger - Structure and Effective Time" Item 5(b) "Merger Financing - Senior Bank Loans" Item 5(c) "Special Factors - Interests of Certain Persons in the Merger," "- Certain Effects of the Merger; Conduct of Business After the Merger" and "The Merger - Directors and Officers" Item 5(d) "Summary - Merger Financing," "Historical Market Information," "Merger Financing," "The Merger Treatment of Maxxim Stock Options" and "- Retirement/Amendment of Maxxim Senior Notes" Item 5(e) * Item 5(f) - (g) "Special Factors - Certain Effects of the Merger; Conduct of Business after the Merger" Item 6(a) "Summary - Merger Financing" and "Merger Financing" Item 6(b) "The Merger - Expenses" and "- Estimated Fees and Expenses of the Merger" 2 5 Item 6(c) "Summary - Merger Financing" and "Merger Financing" Item 6(d) * Item 7(a) "Questions and Answers about the Merger," "Summary - Structure of the Transactions," "Special Factors - Structure of the Transactions; Transaction Participants," "- Background of the Merger," "- Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger," "- The Continuing Shareholders' Reasons for the Merger," "- Interests of Certain Persons in the Merger," "The Merger - Structure and Effective Time" and "- Consideration" Item 7(b)-(c) "Special Factors - Background of the Merger," "-Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger" and "Information about the Transaction Participants - Fox Paine Medic Acquisition Corporation and the other Fox Paine Entities" Item 7(d) "Questions and Answers About the Merger," "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "- Accounting Treatment," "- Merger Financing," "- Interests of Certain Persons in the Merger," "- Appraisal Rights," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger" "- Certain Effects of the Merger; Conduct of Business After the Merger," "Merger Financing," "The Merger - Structure and Effective Time," " - Merger Consideration," "- Treatment of Maxxim Stock Options," "- Retirement/Amendment of Maxxim Senior Notes," "- Directors and Officers," "Appraisal Rights" and "Federal Income Tax Consequences" Item 8(a) - (b) "Questions and Answers About the Merger," "Summary - Recommendations to Shareholders," "- Fairness Opinion," "Special Factors - Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board," "Opinion of Lazard Freres & Co. LLC," "- The Continuing Shareholders' Reasons for the Merger" and "- Position of the Continuing Shareholders as to Fairness of the Merger" Item 8(c) "The Special Meeting - Required Vote" Item 8(d) - (e) "Questions and Answers about the Merger," "Summary - Recommendations to Shareholders," "- Fairness Opinion," "Special Factors - Background of the Merger," "- Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger" and "- Opinion of Lazard Freres & Co. LLC" Item 8(f) "Special Factors - Background of the Merger" and "Recommendation of the Special Committee and of the 3 6 Full Maxxim Board; Fairness of the Merger" Item 9(a)-(c) "Summary - Fairness Opinion," "Special Factors Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board; Fairness of the Merger," "Opinion of Lazard Freres & Co. LLC" and Appendix B to Proxy Statement Item 10(a)-(b) "Principal Shareholders and Stock Ownership of Management and Others" Item 11 "Summary - Structure of the Transactions" "- The Voting Agreements," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "The Special Meeting - Required Vote," "- Voting Agreements" and "The Merger" Item 12(a) - (b) "Questions and Answers About the Merger," "Summary - The Voting Agreements," "- Recommendations to Shareholders," "Special Factors - Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board; Fairness of the Merger," "- The Continuing Shareholders' Reasons for the Merger," " - Position of the Continuing Shareholders as to Fairness of the Merger," "The Special Meeting - Required Vote" and "- Voting Agreement" Item 13(a) "Summary - Appraisal Rights," "The Special Meeting - Record Date and Voting," "Appraisal Rights" and Appendix C to the Proxy Statement Item 13(b) - (c) * Item 14(a) - (b) "Selected Historical Consolidated Financial Data" and "Incorporation of Certain Documents by Reference" Item 15(a) - (b) "The Special Meeting - Proxies; Revocation" and "The Merger - Estimated Fees and Expenses of the Merger" Item 16 Proxy Statement Item 17(a) - (f) * - ------------------- * Not applicable or answer is negative. ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION. (a) The information set forth in the section entitled "Summary - The Participants" of the Proxy Statement is incorporated herein by reference. (b) The information set forth in the sections entitled "Summary - The Special Meeting," "Historical Market Information" and "The Special Meeting - Record Date and Voting" of the Proxy Statement is incorporated herein by reference. 4 7 (c)-(f) The information set forth in the section entitled "Historical Market Information" of the Proxy Statement is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(g) This statement is being filed jointly by Maxxim, Kenneth W. Davidson and Ernest J. Henley. The information set forth in the sections entitled "Summary - The Participants," "Historical Market Information" and "Information About the Transaction Participants - The Continuing Shareholders" of the Proxy Statement is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS. (a)(1) The information set forth in the sections entitled "Summary - Interests of Certain Persons in the Merger," "Historical Market Information" and "Special Factors - Interests of Certain Persons in the Merger" of the Proxy Statement is incorporated herein by reference. (a)(2) The information set forth in the section entitled "Summary - Interests of Certain Persons in the Merger," "Historical Market Information," "Special Factors - Background of the Merger" and "- Interests of Certain Persons in the Merger" of the Proxy Statement is incorporated herein by reference. (b) The information set forth in the section entitled "Summary - Structure of the Transactions," "- The Voting Agreements," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Background of the Merger," "- Interests of Certain Persons in the Merger," "The Special Meeting - Voting Agreements" and "The Merger" of the Proxy Statement is incorporated herein by reference. ITEM 4. TERMS OF THE TRANSACTION. (a) The information set forth in the Proxy Statement under "Questions and Answers about the Merger," "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "- Appraisal Rights," "Special Factors - Structure of the Transactions; Transaction Participants," "Interests of Certain Persons in the Merger," "- Certain Effects of the Merger; Conduct of Business After the Merger," "Merger Financing," "The Merger," "Appraisal Rights" and Appendix A to the Proxy Statement is incorporated herein by reference. (b) The information set forth in the Proxy Statement under "Questions and Answers about the Merger," "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "The Merger - Merger Consideration" and "- Treatment of Maxxim Stock Options" is incorporated herein by reference. ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. (a) The information set forth in the Proxy Statement under "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "Special Factors - Structure of the Transactions; Transaction Participants," "Certain Effects of the Merger; Conduct of Business After the Merger" and "The Merger - Structure and Effective Time" and is incorporated herein by reference. (b) The information set forth in the Proxy Statement under "Merger Financing - Senior Bank Loans" is incorporated herein by reference. (c) The information set forth in the Proxy Statement under "Special Factors - Interests of Certain Persons in the Merger," "- Certain Effects of the Merger; Conduct of Business After the Merger" and "The Merger Directors and Officers" is incorporated herein by reference. 5 8 (d) The information set forth in the Proxy Statement under "Summary - Merger Financing," "Historical Market Information," "Merger Financing," "The Merger - Treatment of Maxxim Stock Options" and "- Retirement/Amendment of Maxxim Senior Notes" is incorporated herein by reference. (e) None. (f)-(g) The information set forth in the Proxy Statement under "Special Factors - Certain Effects of the Merger; Conduct of Business after the Merger," is incorporated herein by Merger. ITEM 6. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION. (a) The information set forth in the Proxy Statement under "Summary - Merger Financing" and "- Merger Financing" is incorporated herein by reference. (b) The information set forth in the Proxy Statement under "The Merger - Expenses" and "- Estimated Fees and Expenses of the Merger" is incorporated herein by reference. (c) The information set forth in the Proxy Statement under "Summary - Merger Financing" and "Merger Financing" is incorporated herein by reference. (d) Not applicable. ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS. (a) The information set forth in the Proxy Statement under "Questions and Answers About the Merger," "Summary - Structure of the Transactions," "- Interests of Certain Persons in the Merger," "Special Factors Structure of the Transactions; Transaction Participants," "- Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board; Fairness of the Merger," "- The Continuing Shareholders' Reasons for the Merger," "- Interests of Certain Persons in the Merger," "The Merger - Structure and Effective Time" and "Consideration" is incorporated herein by reference. (b)-(c) The information set forth in the Proxy Statement under "Special Factors - Background of the Merger," "- Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger" and "Information about the Transaction Participants - Fox Paine Medic Acquisition Corporation and the Other Fox Paine Entities" is incorporated herein by reference. (d) The information set forth in the Proxy Statement under "Questions and Answers About the Merger," "Summary - Structure of the Transactions," "- Terms of the Merger Agreement," "- Accounting Treatment," "- Merger Financing," "Interests of Certain Persons in the Merger," "- Appraisal Rights," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "- Certain Effects of the Merger; Conduct of Business After the Merger," "Merger Financing," "The Merger - Structure and Effective Time," " Merger Consideration," "- Treatment of Maxxim Stock Options," "- Retirement/Amendment of Maxxim Senior Notes," "Directors and Officers," "Appraisal Rights" and "Federal Income Tax Consequences" is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. (a)-(b) The information set forth in the Proxy Statement under "Questions and Answers About the Merger," "Summary - Recommendations to Shareholders," "- Fairness Opinion," "Special Factors - Background of the Merger," "Recommendations of the Special Committee and of the Full Maxxim Board," "- Opinion of Lazard Freres & Co. LLC," "The Continuing Shareholders' Reasons for the Merger" and "- Position of the Continuing Shareholders as to Fairness of the Merger" is incorporated herein by reference. (c) The information set forth in the Proxy Statement under "The Special Meeting - Required Vote" is incorporated herein by reference. 6 9 (d)-(e) The information set forth in the Proxy Statement under "Questions and Answers about the Merger," "Summary - Recommendations to Shareholders," "Special Factors - Background of the Merger," "- Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger" and "- Opinion of Lazard Freres & Co. LLC" is incorporated herein by reference. (f) The information set forth in the Proxy Statement "Special Factors - Background of the Merger" and "- Recommendation of the Special Committee and of the Full Maxxim Board; Fairness of the Merger" is incorporated herein by reference. ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS. (a)-(c) The information set forth in the Proxy Statement under "Summary - Fairness Opinion," "Special Factors - Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board," "Opinion of Lazard Freres & Co. LLC" and Appendix B to Proxy Statement is incorporated herein by reference. ITEM 10. INTEREST IN SECURITIES OF THE ISSUER. (a)-(b) The information set forth in the Proxy Statement under "Principal Shareholders and Stock Ownership of Management and Others" is incorporated herein by reference. ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S SECURITIES. The information set forth in the Proxy Statement under "Summary - Structure of the Transactions," "- The Voting Agreements," "- Terms of the Merger Agreement," "- Interests of Certain Persons in the Merger," "Special Factors - Structure of the Transactions; Transaction Participants," "- Interests of Certain Persons in the Merger," "The Special Meeting - Required Vote," "- Voting Agreement" and "The Merger" is incorporated herein by reference. ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO THE TRANSACTION. (a)-(b) The information set forth in the Proxy Statement under "Questions and Answers About the Merger" "Summary - The Voting Agreements," "- Recommendations to Shareholders," "Special Factors - Background of the Merger," "- Recommendations of the Special Committee and of the Full Maxxim Board; Fairness of the Merger," "- The Continuing Shareholders' Reasons for the Merger," " - Position of the Continuing Shareholders as to Fairness of the Merger" "The Special Meeting - Required Vote" and "- Voting Agreement" is incorporated herein by reference. ITEM 13. OTHER PROVISIONS OF THE TRANSACTION. (a) The information set forth in the Proxy Statement under "Summary - Appraisal Rights," "The Special Meeting - Record Date and Voting," "Appraisal Rights" and Appendix C to the Proxy Statement is incorporated herein by reference. (b) None. (c) Not applicable. ITEM 14. FINANCIAL INFORMATION. (a)-(b) The information set forth in the Proxy Statement under "Selected Historical Consolidated Financial Data" and "Incorporation of Certain Documents by Reference" is incorporated herein by reference. 7 10 ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED. (a)-(b) The information set forth in the Proxy Statement under "The Special Meeting - Proxies; Revocation" and "The Merger - Estimated Fees and Expenses of the Merger" is incorporated herein by reference. ITEM 16. ADDITIONAL INFORMATION. The entirety of the Proxy Statement is incorporated herein by reference. ITEM 17. MATERIAL TO BE FILED AS EXHIBITS. (b) Opinion of Lazard Freres & Co. LLC (included as Appendix B to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(1) Agreement and Plan of Merger, dated as of June 13, 1999, among Fox Paine Medic Acquisition Corporation and Maxxim (included as Appendix A to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(2) Form of Voting Agreement, by and between Fox Paine Medic Acquisition Corporation and each of 10 shareholders of Maxxim Medical, Inc. (included as Appendix D to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(3) Investor Participation Agreement, dated as of June 13, 1999, by and among Fox Paine Medic Acquisition Corporation and each of 10 shareholders of Maxxim Medical, Inc., in their individual capacities (d)(1) Preliminary letter to shareholders (included in the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(2) Preliminary notice of special meeting of shareholders (included in the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(3) Preliminary Proxy Statement (incorporated by reference to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(4) Preliminary form of proxy (incorporated by reference to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(5) Press release issued by Maxxim and Fox Paine & Company, LLC dated as of June 14, 1999 (incorporated by reference to the Current Report on Form 8-K filed by Maxxim Medial, Inc. on June 16, 1999) (e) Articles 5.11, 5.12 and 5.13 of the Texas Business Corporation Act (included as Appendix C to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (f) Not applicable. 8 11 SIGNATURE After due inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. MAXXIM MEDICAL, INC. Date: July 23, 1999 By: /s/ Kenneth W. Davidson ------------------------------------- Kenneth W. Davidson, Chairman of the Board, President and Chief Executive Officer Date: July 23, 1999 /s/ Kenneth W. Davidson ------------------------------------- Kenneth W. Davidson Date: July 23, 1999 /s/ Ernest J. Henley ------------------------------------- Ernest J. Henley 9 12 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ------- ----------- (b) Opinion of Lazard Freres & Co. LLC (included as Appendix B to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(1) Agreement and Plan of Merger, dated as of June 13, 1999, among Fox Paine Medic Acquisition Corporation and Maxxim (included as Appendix A to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(2) Form of Voting Agreement, by and between Fox Paine Medic Acquisition Corporation and each of 10 shareholders of Maxxim Medical, Inc. (included as Appendix D to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (c)(3) Investor Participation Agreement, dated as of June 13, 1999, by and among Fox Paine Medic Acquisition Corporation and each of 10 shareholders of Maxxim Medical, Inc., in their individual capacities (d)(1) Preliminary letter to shareholders (included in the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(2) Preliminary notice of special meeting of shareholders (included in the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(3) Preliminary Proxy Statement (incorporated by reference to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(4) Preliminary form of proxy (incorporated by reference to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (d)(5) Press release issued by Maxxim and Fox Paine & Company, LLC dated as of June 14, 1999 (incorporated by reference to the Current Report on Form 8-K filed by Maxxim Medical, Inc. on June 16, 1999) (e) Articles 5.11, 5.12 and 5.13 of the Texas Business Corporation Act (included as Appendix C to the Preliminary Proxy Statement filed by Maxxim Medical, Inc. on July 23, 1999 under cover of Schedule 14A) (f) Not applicable. 10 EX-99.C3 2 INVESTOR PARTICIPATION AGREEMENT 1 EXHIBIT (C)(3) INVESTOR PARTICIPATION AGREEMENT THIS INVESTOR PARTICIPATION AGREEMENT (this "Agreement"), dated June 13, 1999, is made by and among Fox Paine Medic Acquisition Corporation, a Texas corporation ("Purchaser") and the undersigned individuals, whose names are set forth on the signature page below (collectively, the "Investors" and, together with Purchaser, the "Parties"), acting in their individual capacities (other than Kenneth W. Davidson, who is acting in his individual capacity and as general partner of Davidson Management International Limited Partnership). WHEREAS, concurrently herewith, Purchaser and Maxxim Medical, Inc., a Texas corporation (the "Company"), are entering into an Agreement and Plan of Merger, of even date herewith (the "Merger Agreement"), providing for a recapitalization transaction that will result in Purchaser and the Investors owning substantially all of the outstanding capital stock of the Company, as more fully set forth therein; NOW, THEREFORE, in consideration of the promises and the representations, warranties and agreements contained herein, the parties hereto agree as follows: 1. Parties to be Bound by Attached Term Sheet. The Parties, and each of them, severally agree to all of the terms and conditions set forth in the term sheet attached hereto as Annex A and the attachments thereto (the "Term Sheet") and the stock and option treatment provided therein, and, unless and until definitive documentation incorporating the terms set forth in the Term Sheet has been executed and delivered, each of the Parties agrees that the Term Sheet constitutes a binding agreement among the Parties, enforceable against each such Party in accordance with its terms. 2. Execution of Definitive Documentation. Each Party agrees to negotiate in good faith and use all reasonable efforts to prepare, execute and deliver definitive agreements and other instruments implementing the terms set forth in the Term Sheet on reasonable and customary terms; provided, however, that no failure or delay in the delivery and execution of such definitive agreements or instruments shall affect the validity, enforceability or binding nature of the Term Sheet. Without limiting the foregoing, Purchaser agrees that after Closing the Company will prepare, adopt and effectuate any employee benefit plans, including stock option plans, and including issuing options to purchase shares of its capital stock pursuant to such plans, as may be necessary to effectuate the purposes and intent of the Term Sheet. 3. Merger Agreement. Each Investor hereby acknowledges that such Investor has read the Merger Agreement and has had an opportunity to consult with such Investor's counsel concerning the same, and the Investor accepts and agrees to the terms and conditions of the Merger Agreement that relate to the treatment of such Investor's shares of Company common stock (including as provided in Section 1.8(b)) and such Investor's options to purchase shares of Common Stock (including as provided in Section 1.10), and the Investor hereby irrevocably 2 waives any claim that the Merger Agreement, the Merger or any other transaction contemplated by the Merger Agreement (including the Circon Sale (as defined therein)) violates any right of the Investor under the Texas Business Corporation Act, any fiduciary obligation owed by the Company or any of its directors or officers to the Investor, or any obligation owed by the Company to the Investor pursuant to any agreement between the Company and the Investor or pursuant to any employee benefit plan or stock option or similar plan of the Company in which the Investor participates. 4. Miscellaneous. The Parties hereto agree as follows: a) Amendments. This Agreement may not be amended except by an instrument in writing signed by all of the Parties hereto; provided that any Party may waive or amend any right of such Party hereunder. b) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more of the counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that each Party need not sign the same counterpart. c) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to the conflicts of law principles thereof. d) Termination. In the event the Merger Agreement is terminated in accordance with its terms prior to the occurrence of the Effective Time, this Agreement shall terminate, and no party shall have any rights or obligations hereunder and this Agreement shall become null and void and have no further legal effect immediately following the termination of the Merger Agreement in accordance with its terms. Nothing in this Section shall relieve any party of liability for breach of this Agreement. e) Obligations Several. The obligations of the Investors hereunder shall be several and not joint and several. -2- 3 IN WITNESS WHEREOF, Purchaser, the Company, and each of the Investors has executed this Agreement as of the date first written above. FOX PAINE MEDIC ACQUISITION CORPORATION By: /s/ Saul A. Fox --------------------------------------- Name: Saul A. Fox Title: Chief Executive Officer (Investor Signatures appear on following page) 4 INVESTORS: /s/ Kenneth W. Davidson ----------------------------------------------------- Name: Kenneth W. Davidson, in his individual capacity and as general partner of Davidson Management International Limited Partnership /s/ Peter M. Graham ----------------------------------------------------- Name: Peter M. Graham /s/ David L. Lamont ----------------------------------------------------- Name: David L. Lamont /s/ Henry T. DeHart ----------------------------------------------------- Name: Henry T. DeHart /s/ Jack F. Cahill ----------------------------------------------------- Name: Jack F. Cahill /s/ Alan Blazei ----------------------------------------------------- Name: Alan Blazei /s/ Joseph Dailey ----------------------------------------------------- Name: Joseph Dailey /s/ Suzanne Garon ----------------------------------------------------- Name: Suzanne Garon /s/ Ernest J. Henley ----------------------------------------------------- Name: Ernest J. Henley /s/ Davis C. Henley ----------------------------------------------------- Name: Davis C. Henley 5 PROJECT MEDIC MANAGEMENT/DIRECTOR EQUITY INVESTMENT AND STOCK AND COMPENSATION TERM SHEET This term sheet sets forth the principal terms and conditions under which the executive management team (the "Management Investors") and Ernest J. Henley and Davis C. Henley (the "Other Investors", and together with the Management Investors, the "Rollover Investors") of Maxxim Medical, Inc. ("Medic" or the "Company") are to retain an equity interest in Medic and Circon Corporation ("Citron") upon the recapitalization of the Company and related transactions (the "Recapitalization") by the investment funds managed by Fox Paine & Company, LLC ("Fox Paine") and the Rollover Investors. It also sets forth the principal terms and conditions of the ongoing stock and compensation arrangements. RECAPITALIZATION PRICE: $26 per share. ROLLOVER INVESTORS: The names, share ownership, vested options, and unvested options of each Rollover Investor are summarized in Exhibit A. Exhibit B provides additional detail concerning the split-up of Citron from Medic and its effect on shares and options held by the Rollover Investors. If, in order to facilitate the Recapitalization, Fox Paine reallocates its relative equity contributions between Medic and Citron, the Rollover Investors agree that their respective equity in Medic and Citron will also be equitably adjusted in order to preserve the proportionate ownership between the Rollover Investors and Fox Paine currently reflected in Exhibits A and B. SHARE OWNERSHIP AND ROLLOVER: The Rollover Investors collectively own 927,318 shares of Medic common stock (excluding shares owned by the Other Investors not being rolled over) (see Exhibit A). Each Rollover Investor will retain the number of shares in Medic and acquire with the proceeds of the cashout of Medic shares in the Merger the number of shares in Citron in each case as set forth in Annex III to Exhibit B. VESTED AND The Management Investors collectively hold options UNVESTED OPTIONS: to purchase 1,084,200 shares of Medic common stock (see Exhibit A). Upon the consummation of the transaction, the Management Investors will receive a cash payment in respect of 635,864 options (both vested or unvested) equal to the difference between the Recapitalization Price and the exercise price of each such option (less applicable withholding taxes) on the same basis as other Medic option holders are being cashed out in the transaction (options at various purchase prices to be cashed out proportionately). The after-tax cash proceeds from the cancellation of the 635,864 Medic options will be required to be reinvested in Medic common stock at 6 the Recapitalization Price (the "Medic Additional Shares"). Each Management Investor will receive a new option in respect of the number of shares of Medic common stock set forth on Annex III to Exhibit B at an exercise price equal to the Recapitalization Price (the aggregate being 635,864 less the Medic Additional Shares purchased pursuant to the prior sentence). The remaining 448,336 options in Medic held by the Management Investors will be canceled and each Management Investor will also receive new options in respect of a number of shares of Citron equal to such canceled option shares and with an exercise price equal to the Recapitalization Price. In addition, the Management Investors will be entitled to receive a cash bonus payment of approximately $5.4 million in the aggregate as provided for in item 3 of the "Option Rollover Mechanics" section of Exhibit B hereto. New options will be fully vested and permit cashless exercise with "mature" shares (payment of the exercise price with previously owned shares). CITRON TAX LOAN: In connection with the Citron share rollover from Medic shares, tax loans will be extended to the Rollover Investors in an amount sufficient to cover the taxes due on the Medic shares sold to rollover into the Citron rollover shares. Interest on the loans will be imputed at the minimum allowable rate and will be "bonused" and grossed-up for the tax on any bonus amounts. The Citron tax loans will be mandatorily repayable from the after-tax proceeds of the sale of Citron shares (and not required to be repaid from the proceeds of the sale of Medic shares), and shall not accelerate on termination of employment. EXISTING MANAGEMENT PROMISSORY NOTES: In May 1997, the Company issued 400,000 shares of common stock pursuant to a Senior Management Stock Purchase Plan at $13.00 per share. The stock was issued in exchange for an aggregate of $4,498,000 currently outstanding principal amount in non-interest bearing, full recourse promissory notes (the "Management Promissory Notes") due May 23, 2000 from the participating managers who are Management Investors. The Management Promissory Notes will remain outstanding after the Recapitalization and be extended until the tenth anniversary of the closing (except that (x) Management Promissory Notes from any employee who is not a Management Investor will be required to be repaid by the employee in connection with the cash-out of his or her options provided for in the Merger Agreement and (y) the Management Investors will be required to prepay the Notes with the after-tax proceeds of any sales of stock or options made after the Effective Time). The 50% profit recovery provision currently in place shall be amended out of the documents. The Management Promissory Notes will not accelerate on termination 7 of employment. The Management Promissory Notes and related security arrangements will be split pro rata between Medic and Citron. NEW MANAGEMENT EQUITY INCENTIVE PLAN: The Company and Citron each will provide a New Management Equity Incentive Plan (the "New Incentive Plan") which will grant to the Management Investors, as of the Effective Time, options (the "Option Pool") to purchase up to 10% of the common equity of the Company and Citron (in each case on a fully diluted basis) at a strike price equal to the Recapitalization Price. The New Incentive Plan will generally provide for a ten year option term and will permit cashless exercise with "mature" shares (payment of the exercise price with previously owned shares). EBITDA Targets will be adjusted equitably to reflect acquisitions and dispositions. The Option Pool will consist of (x) half performance-based options ("Pool A Options") that vest according to the schedule below and (y) half time-based options that vest in equal increments on each of the first through fifth anniversaries of the closing (the "Time Based Options").
VESTING SCHEDULE FOR POOL A COMPANY OPTIONS --------------------------------------------------- FISCAL EBITDA % OF OPTION POOL VESTING THROUGH YEAR TARGET ACHIEVEMENT OF EBITDA TARGET 1999 $80.9 20% 2000 $84.3 20% 2001 $88.5 20% 2002 $92.9 20% 2003 $97.6 20% VESTING SCHEDULE FOR POOL A CITRON OPTIONS --------------------------------------------------- FISCAL EBITDA % OF OPTION POOL VESTING THROUGH YEAR TARGET ACHIEVEMENT OF EBITDA TARGET 1999 $24.6 20% 2000 $37.4 20% 2001 $38.9 20% 2002 $40.5 20% 2003 $42.1 20%
8 Pool A Options that do not vest will become "Pool B Options" and will vest at the earliest of: (i) the next fiscal year in which the EBITDA Target is achieved, (ii) Fox Paine's realization of its investment in the Company or Citron, as the case may be, provided that such realization yields an IRR to Fox Paine of at least 30.0% after giving effect to the vesting and exercise of the Pool B Options pursuant to this clause (ii), or (iii) the ninth anniversary of the date of grant. For the purposes of the Pool B Options, a primary initial public offering of the Company's or Citron's stock, as the case may be (an "Initial Public Offering"), shall not constitute a realization of Fox Paine's investment in the Company or Citron, respectively. The Time Based Options and the Pool A Options will also vest and be exercisable, regardless of the passage of time, upon Fox Paine's realization of an IRR of at least 30.0%. ALLOCATION OF OPTION POOL: The total Option Pool will be granted to the Management Investors, based on the recommendation of Kenneth W. Davidson for approval by the Compensation Committee of the Board of Directors. TERMINATION OF NEW INCENTIVE PLAN OPTIONS: Stock options granted under the New Incentive Plans that are unvested as of the date of a Management Investor's termination of employment with the Company, Citron and/or their respective subsidiaries for any reason will be forfeited upon the date of termination. Stock options (under old and new plans) that are vested as of the date of termination may be exercised for one year following the termination of employment. Vested stock options that are not exercised within one year of the date of termination will be forfeited. BONUSES: The Management Investors will receive aggregate bonus compensation, as specified in Exhibit C. EXISTING SEVERANCE AGREEMENTS/NEW EMPLOYMENT AGREEMENTS: Existing employment agreements and severance agreements for the Management Investors will be terminated without payment and superseded by new employment agreements that will become effective upon the consummation of the transaction. The material terms of the new agreements are set forth on Exhibit D. TAG-ALONG RIGHT: If, at any time prior to an Initial Public Offering, Fox Paine or a Rollover Investor (as the case may be) accepts a third party offer to sell any or all of its common stock in either company (other than to a permitted transferee), Fox Paine and each other Rollover Investor (as the case may be) will be able to participate on a proportionate basis, based on ownership, at the same price and on the same terms in the sale of shares of such company. 9 DRAG-ALONG RIGHTS: Prior to an Initial Public Offering, if Fox Paine sells at least 50% of its common stock in either company in a bona fide arm's length transaction or series of related transactions, Fox Paine may require the Rollover Investors to sell a proportional number (on an as-converted basis) of their shares of common stock in that same company in the same transaction (at the same price and on the same terms, with appropriate adjustments for warrants or options). REGISTRATION RIGHTS: After an Initial Public Offering, the Rollover Investors will have one demand in Citron and two in Medic, and Fox Paine will have five in each. All such parties will have full piggybacks in each other's demands, with no relative priority as to cutbacks; cutbacks will be proportional based on ownership among the parties, no matter who initiated the demand. Fox Paine and Rollover Investors will also have customary "piggyback" registration rights. Expenses, in both demands and piggybacks, to be borne by Medic or Citron, as the case may be. Other customary registration rights provisions will apply, including holdbacks, indemnification and contribution provisions. If Fox Paine is permitted to sell secondary shares in an Initial Public Offering, the Rollover Investors will get a proportionate opportunity. RIGHT OF FIRST OFFER: Fox Paine and the Rollover Investors will have reciprocal proportional rights of first offer (seller to propose minimum sale price) on transfers of shares (acceptance must be all shares offered or none as to the group), other than transfers to customary permitted transferees (including with respect to Fox Paine, its investors and affiliates, and including with respect to Rollover Investors, family members and trusts for them), prior to an Initial Public Offering. Permitted transferees step into shoes of transferor for transfer restriction and registration rights provisions. LIQUIDITY UPON DEATH OR DISABILITY AND CERTAIN TERMINATIONS: Citron Shares: The Management Investors will have the right to "put" all of their Citron shares to Citron at fair market value, upon death or disability or termination of employment for Good Reason, or by the companies without Cause (each as defined in the Employment Agreement). Medic Shares: The Management Investors will have the right to "put" their shares of Medic which were acquired upon the exercise of stock options (provided that the shares have been held for at least six months), less the number of shares used to exercise in cashless exercises, but including the Medic Additional Shares (the governing objective being to preserve recapitalization accounting) to Medic at 10 fair market value, upon death or disability or termination of employment for Good Reason or by the companies without Cause. Notwithstanding the above, the put rights described above will be subject to each company's available cash flow, debt restrictions and any legal restrictions on distributions of cash from the relevant company. In the event the payments with respect to put rights are not satisfied in whole or in part immediately, the payments will be a continuing obligation of the relevant company and such rights will be satisfied before the payment of any dividends or distributions to shareholders. Any unpaid amounts upon exercise of a put right will accrue interest at applicable "afr" rate. The put rights terminate upon an Initial Public Offering. CALL RIGHT: Prior to an Initial Public Offering, Citron will have call rights at fair market value with respect to Citron stock only, upon a termination of employment by the companies for Cause or by the Management Investor voluntarily (without Good Reason). BOARD OF DIRECTORS: Each Company's Board of Directors will initially consist of Kenneth W. Davidson (Chairman), Ernest J. Henley, Ph.D. and one other member to be appointed by the Rollover Investors and four members designated by Fox Paine (not limiting Fox Paine or the companies' rights to add additional directors). The right to appoint Board members will terminate upon an Initial Public Offering or significant reduction in ownership percentage. While Ken Davidson is CEO or Chairman of the Board, all three Rollover Investor representatives will be designated by him; thereafter, by plurality vote of shares held by the Rollover Investors. INDEMNITY: Following the consummation of the transaction, the Board of Directors of each Company will adopt a customary mandatory indemnification and expense advancement policy for officers, subject to any limitations imposed by applicable law. [Exhibits A, B, C and D and the annexes thereto are omitted] -----END PRIVACY-ENHANCED MESSAGE-----