DEFA14A 1 ddefa14a.txt SOLICITING MATERIAL UNDER SECTION 240.14A-12 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [_] Definitive Proxy Statement [_] Definitive Additional Materials [X] Soliciting Material Under Section 240.14a-12 VidaMed, Inc. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: --------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: --------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 --------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: --------------------------------------------------------------------------- (5) Total fee paid: --------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: --------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: --------------------------------------------------------------------------- (3) Filing Party: --------------------------------------------------------------------------- (4) Date Filed: --------------------------------------------------------------------------- [LOGO](TM) VidaMed(R) VidaMed, Inc. Medtronic, Inc. Randy Lindholm, Chairman, President & CEO Rachael Scherer John Howe, Chief Financial Officer Investor Relations (510) 492-4900 763-505-2694 www.vidamed.com Jessica Stoltenberg Investor Contacts Public Relations Lippert/Heilshorn & Associates 763-505-3333 Bruce Voss (bvoss @lhai.com) Martin Halsall (mhalsall@lhai.com) (310) 691-7100 MEDTRONIC AGREES TO ACQUIRE VIDAMED VidaMed's TUNA(R) System Strengthens Medtronic's Position in Urological Market MINNEAPOLIS, Dec. 6, 2001 - Medtronic, Inc. (NYSE: MDT), announced today that it has agreed to acquire VidaMed, Inc. (Nasdaq: VIDA). VidaMed's TUNA(R)(transurethral needle ablation) system treats benign prostatic hyperplasia (BPH), a non-cancerous condition also known as "enlarged prostate," which affects up to 23 million men worldwide. The agreement, valued at approximately $326 million in the aggregate, provides that each VidaMed shareholder will receive $7.91 per share in cash upon consummation of the transaction. Completion of the acquisition is subject to customary conditions, including approval by shareholders, and Hart-Scott-Rodino clearance. The companies expect to complete the transaction during the first calendar quarter of 2002. Medtronic has held a minority investment in VidaMed since January 2000. Banc of America Securities LLC acted as exclusive financial advisor to VidaMed in connection with this transaction. "The acquisition of VidaMed complements our rapidly growing Urological business, which includes the Medtronic InterStim(R) therapy for urinary control and a full line of urological diagnostic products for the treatment of urinary incontinence," said Art Collins, Medtronic president and chief executive officer. "We believe VidaMed's patented TUNA therapy provides a compelling alternative to a lifelong commitment to drugs or radical surgery that can have significant side-effects," added Scott Ward, president of Medtronic Neurological and Diabetes. Randy Lindholm, Chairman, President and Chief Executive Officer of VidaMed, commented: "This partnership with Medtronic represents an excellent transaction for our shareholders, employees and customers. It offers an attractive, premium value to our shareholders who invested in our company as we developed and commercialized our technology. Our employees and customers will also benefit from our association with Medtronic, whose technological leadership in the medical device field and substantial resources will accelerate the market acceptance and advance the technological superiority of the TUNA system. Our board has unanimously concluded that this transaction is in the best interests of the company and its shareholders." About 50 percent of men over 50, and 80 percent of men over 80, suffer from BPH, a progressive and naturally occurring condition that affects the prostate gland. The prostate surrounds the urethra and forms part of the male reproductive system. The gland enlarges with age until it partially closes the urethra and restricts urine flow from the bladder, creating significant lifestyle issues, including the frequent and urgent need to urinate, especially at night. Currently, the three primary therapies approved for treatment of BPH are medication, surgery and ablation. Men on drug therapy frequently experience side-effects such as nausea and dizziness. Oral medications may also become less effective over time. Those who undergo surgery can experience undesirable side-effects, including incontinence and/or sexual dysfunction. VidaMed's non-surgical TUNA therapy can be completed in the urologist's office in less than 30 minutes, requires minimal anesthesia and allows men to return to normal activities within 24 hours. The system delivers low-level, precisely controlled radiofrequency energy directly into the prostate to diminish obstructing tissue. VidaMed's TUNA therapy received marketing clearance from the U.S. Food and Drug Administration (FDA) in 1996 and was approved by Medicare for in-office reimbursement on Jan. 1, 2000. More than 25,000 TUNA procedures have been performed worldwide. Founded in 1992 and headquartered in Fremont, California, VidaMed had revenues of $8.2 million in fiscal 2000. Medtronic, Inc., headquartered in Minneapolis, is the world's leading medical technology company, providing lifelong solutions for people with chronic disease. Its Internet address is www.medtronic.com. This press release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements regarding the anticipated results of and benefits from and the timing of Medtronic's acquisition of VidaMed. These statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties including risks relating to VidaMed's and Medtronic's business and the risk that the acquisition will not be consummated. When used in this release and documents referenced, the words "anticipate," "believe," "estimate," and "expect" and similar expressions, as they relate to VidaMed, Medtronic or their respective management are intended to identify such forward-looking statements, but are not the exclusive means of identifying these statements. Descriptions of the risks, uncertainties and other factors that could affect the companies' future operations and results can be found in VidaMed's and Medtronic's prior filings with the Securities and Exchange Commission. In particular, readers are referred to VidaMed's Form 10-K for the year ended December 31, 2000 and Form 10-Q for the quarter ended September 30, 2001 and Medtronic's Form 10-K for the year ended April 27, 2001, as amended on October 26, 2001 and Form 10-Q for the quarter ended July 27, 2001. This document does not constitute a solicitation by VidaMed or its board of directors or executive officers or any approval or action of its stockholders. VidaMed will file a proxy statement and other relevant documents concerning the proposed transaction with the Securities and Exchange Commission, or SEC. Stockholders are urged to read the proxy statement, and any other relevant documents filed with the SEC, carefully when they become available because they will contain important information about the companies and the proposed transaction. You will be able to obtain free copies of these documents at the website maintained by the SEC at http://www.sec.gov. In addition, stockholders may obtain free copies of documents filed with the SEC by contacting VidaMed's investor relations department, 46107 Landing Parkway, Fremont, California 94538, (510) 492-4900. The following individuals, each of whom is a director or an executive officer of VidaMed, may be deemed to be participants in the solicitation of proxies from the stockholders of VidaMed with respect to the transactions contemplated by the merger agreement. As of December 5, 2001, each such person beneficially owned the number of outstanding shares of VidaMed common stock indicated: Randy D. Lindholm, 28,827 shares; John F. Howe, 21,000 shares; Stephen J. Williams, 4,243 shares; Lewis P. Chapman, no shares; Elizabeth H. Davila, 10,000 shares; Michael D. Ellwein, 6,100,000 shares (which number includes 6,100,000 shares beneficially owned by affiliated entities of Medtronic); Robert J. Erra, 2,766 shares; Paulita M. LaPlante, no shares; and Kurt C. Wheeler, no shares. The directors and executive officers of VidaMed have interests in the merger, some of which may differ from, or may be in addition to, those of the stockholders of VidaMed generally. Those interests include: . Medtronic has agreed to provide indemnification and director and officer liability insurance coverage to the directors and executive officers of VidaMed following the merger; . certain officers and directors hold options to purchase shares of VidaMed common stock which will be cancelled in exchange for cash payments by VidaMed (along with all other outstanding options) in anticipation of the merger. The number of options eligible for cashout which are held by each officer and director, and the total amount of each individual's potential cashout payment, is as follows: Randy D. Lindholm, 2,147,554 options for a potential payment of $11,895,800; John F. Howe, 471,496 options for a potential payment of $2,639,056; Stephen J. Williams, 451,250 options for a potential payment of $2,099,145; Lewis P. Chapman, 300,000 options for a potential payment of $1,229,100; Elizabeth H. Davila, 30,000 options for a potential payment of $167,925; Michael D. Ellwein, 25,000 options for a potential payment of $95,875; Robert J. Erra, 21,668 options for a potential payment of $87,847; Paulita M. LaPlante, 30,000 options for a potential payment of $179,805; and Kurt C. Wheeler, 30,000 options for a potential payment of $179,805; . under their individual severance agreements, Randy D. Lindholm, John F. Howe, Stephen J. Williams and Lewis P. Chapman, who are all executive officers of VidaMed, are each entitled to certain cash payments and other benefits if they terminate their employment or their employment is terminated without cause after the completion of the merger; and . in connection with the merger, certain executive officers of VidaMed may enter into employment or consulting agreements with Medtronic. It is not certain at this time which, if any, of VidaMed's officers will enter into these agreements.