As filed with the Securities and Exchange Commission on April 11, 2003
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONMED Corporation
(Exact name of registrant as specified in its charter)
New York 16-0977505
(State or other (I.R.S. employer
jurisdiction of identification
incorporation or number)
organization)
525 French Road
Utica, New York 13502-5994
(315) 797-8375
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Daniel S. Jonas
Vice President - Legal Affairs
and General Counsel
525 French Road
Utica, New York 13502-5994
(315) 624-3208
(Name, address, including zip code,
and telephone number, including area
code, of agent for service)
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Approximate date of commencement of proposed sale to the public: At such
time or times as may be determined by the selling shareholders after this
registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. | |
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_| ____________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_| ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed maximum
Title of maximum aggregate Amount of
shares to Amount to be offering price offering price registration
be registered Registered per unit (1) (1) fee
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Common Stock, par value
$0.01 per share... 34,634 shares $17.10 $592,241 $48.00
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(1) Estimated in accordance with Rule 457(c) under the Securities Act of 1933
solely for purposes of calculating the registration fee (based on the
average of the high and low prices of CONMED Corporation Common Stock as
reported on the Nasdaq Stock Market on April 9, 2003).
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
PROSPECTUS (Subject to Completion)
Dated April 11, 2003
CONMED Corporation
34,634 Shares of Common Stock
(Par Value $0.01 Per Share)
This prospectus relates to an offering by the selling shareholder of
34,634 shares of common stock of CONMED Corporation. All of the shares offered
by this prospectus were acquired by the selling shareholder in connection with
our acquisition of its assets related to its business of development,
manufacture, marketing and sale of products and services for operating rooms.
CONMED will not receive any of the proceeds from the sale of the shares.
The selling shareholder has advised us that it proposes to offer the
shares from time to time and in any of several different ways. The selling
shareholder may offer shares:
o through brokers in ordinary brokerage transactions;
o to underwriters or dealers in negotiated transactions; or
o by a combination of these methods of sale.
The selling shareholder may offer shares at various prices, including:
o at fixed prices;
o at market prices at the time of sale;
o at prices related to prevailing market prices; or
o at negotiated prices.
CONMED's common stock is currently listed on the Nasdaq Stock Market under
the symbol "CNMD". On April 10, 2003, the last sale reported on the Nasdaq Stock
Market was $17.00 per share.
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An investment in the shares involves significant risks. Please read the
information under the caption "Risk Factors" beginning on page 3 to learn about
some factors you should consider before investing in our shares of common stock.
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Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. It is illegal for anyone to tell you otherwise.
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell or to buy only the shares offered by this prospectus, but only
under circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only to the date below.
The date of this prospectus is , 2003.
TABLE OF CONTENTS
Page
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Cautionary Statement Concerning Forward-Looking Statements...................2
Risk Factors.................................................................3
CONMED Corporation...........................................................8
Where You Can Find More Information..........................................9
Description of Capital Stock................................................10
Selling Shareholder.........................................................11
Shares Eligible for Future Sale.............................................12
Plan of Distribution........................................................12
Use of Proceeds.............................................................13
Validity of Common Stock....................................................13
Experts.....................................................................14
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Forward-Looking Statements Made in this Prospectus
In this prospectus, we make forward-looking statements about our financial
condition, results of operations and business. Forward-looking statements are
statements made by us concerning events that may or may not occur in the future.
These statements may be made directly in this document or may be "incorporated
by reference" from other documents. You can find many of these statements by
looking for words like "believes," "expects," "anticipates," "estimates" or
similar expressions.
Forward-Looking Statements are not Guarantees of Future Performance
Forward-looking statements involve known and unknown risks, uncertainties
and other factors, including those that may cause our actual results,
performance or achievements, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include those identified under
"Risk Factors" below and those set forth elsewhere and incorporated by reference
in this prospectus, among others, including the following:
o general economic and business conditions;
o changes in customer preferences;
o competition;
o changes in technology;
o the introduction of new products;
o the integration of any acquisition, including the integration of
transferred employees;
o changes in business strategy;
o the possibility that United States or foreign regulatory and/or
administrative agencies might initiate enforcement actions against
us or our distributors;
o our indebtedness;
o quality of our management and business abilities and the judgment of
our personnel;
o the availability, terms and deployment of capital;
o the risk of litigation, especially patent litigation as well as the
cost associated with patent and other litigation;
o changes in regulatory requirements; and
o various other factors referenced in this prospectus and our Form
10-K.
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See "Item 7: Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Item 1: Business" in our Form 10-K for a further
discussion of these factors. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. We do
not undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated events.
RISK FACTORS
An investment in the shares of common stock offered by this prospectus
involves a high degree of risk. You should carefully consider the following
factors, in addition to the other information contained in this prospectus, in
deciding whether to invest in our common stock. This prospectus and documents
incorporated by reference herein contain forward-looking statements that involve
risks and uncertainties. Our actual results may differ significantly from the
results discussed in the forward-looking statements. See "Cautionary Statement
Concerning Forward-Looking Statements" above. Factors that might cause such
differences include those discussed below.
Our financial performance is subject to the risk of business acquisitions,
including the effects of increased borrowing and the integration of businesses
A key element of our business strategy has been to expand through
acquisitions and we may seek to pursue additional acquisitions in the future.
Our success is dependent in part upon our ability to integrate acquired
companies or product lines into our existing operations. We may not have
sufficient management and other resources to accomplish the integration of our
past and future acquisitions, and implementing our acquisition strategy may
strain our relationship with customers, suppliers, distributors, manufacturing
personnel or others. There can be no assurance that we will be able to identify
and make acquisitions on acceptable terms or that we will be able to obtain
financing for such acquisitions on acceptable terms. In addition, while we are
generally entitled to customary indemnification from sellers of businesses for
any difficulties that may have arisen prior to our acquisition of each business,
acquisitions may involve exposure to unknown liabilities and the amount and time
for claiming under these indemnification provisions is often limited. As a
result, our financial performance is now and will continue to be subject to
various risks associated with the acquisition of businesses, including the
financial effects associated with any increased borrowing required to fund such
acquisitions or with the integration of such businesses.
We may not be able to keep pace with technological change or to successfully
develop new products which could cause us to lose business to competitors
The market for our products is characterized by rapidly changing
technology. Our future financial performance will in part be dependent on our
ability to develop and manufacture new products on a cost-effective basis, to
introduce them to the market on a timely basis and to have them accepted by
surgeons.
We may not be able to keep pace with technological change or to develop
viable new products. Factors which could cause delay in releasing new products
or even cancellation of our plans to produce and market these new products
include:
o research and development delays;
o delays in securing regulatory approvals; or
o changes in the competitive landscape, including the emergence of
alternative products or solutions which reduce or eliminate the
markets for pending products.
Failure to comply with regulatory requirements could result in recalls, fines or
materially adverse implications for our business
All of our products are classified as medical devices subject to
regulation by the Food and Drug Administration. As a manufacturer of medical
devices, our manufacturing processes and facilities are subject to on-site
inspection
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and continuing review by the FDA for compliance with the Quality System
Regulations. Manufacturing and sales of our products outside the United States
are also subject to foreign regulatory requirements that vary from country to
country. The time required to obtain approvals from foreign countries may be
longer or shorter than that required for FDA approval, and requirements for
foreign approvals may differ from FDA requirements. Failure to comply with
applicable domestic and/or foreign requirements can result in:
o fines or other enforcement actions;
o recall or seizure of products;
o total or partial suspension of production;
o withdrawal of existing product approvals or clearances;
o refusal to approve or clear new applications or notices;
o increased quality control costs; or
o criminal prosecution.
The failure to comply with Quality System Regulations and applicable
foreign regulations could have a material adverse effect on our business,
financial condition or results of operations.
If we are not able to manufacture products in compliance with regulatory
standards, we may decide to cease manufacture of those products and may be
subject to product recall
In addition to the Quality System Regulations, many of our products are
also subject to industry-set standards. We may not be able to comply with these
regulations and standards due to deficiencies in component parts or our
manufacturing processes. If we are not able to comply with the Quality System
Regulations or industry-set standards, we may not be able to fill customer
orders and we may decide to cease production of non-compliant products. Failure
to produce products could affect our profit margins and could lead to loss of
customers.
Our products are subject to product recall and product recalls have been
made in the past. Although no recall has had a material adverse effect on our
business, financial condition or results of operations, we cannot assure you
that regulatory issues will not have a material adverse effect in the future or
that product recall will not harm our reputation and our relationships with our
customers.
The highly competitive market for our products may create adverse pricing
pressures
The market for our products is highly competitive and our customers have
numerous alternatives of supply. Many of our competitors offer a range of
products in areas other than those in which we compete, which may make such
competitors more attractive to surgeons, hospitals, group purchasing
organizations, or GPOs, and others. In addition, many of our competitors are
larger and have greater financial resources than we do and offer a range of
products broader than our range of products. Competitive pricing pressures or
the introduction of new products by our competitors could have an adverse effect
on our revenues. Because our customers are not bound by long-term supply
arrangements with us, we may not be able to shift our production to other
products following a loss of customers to our competitors, leading to an
accompanying adverse effect on our profitability. See "Business--Competition" in
our Form 10-K for a further discussion of these competitive forces.
Factors that could lead our customers to choose products offered by our
competitors include:
o changes in surgeon preferences;
o increases or decreases in health care spending related to medical
devices;
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o our inability to furnish products to them, such as a result of
product recall or back-order;
o the introduction by competitors of new products or new features to
existing products;
o the introduction by competitors of alternative surgical technology;
and
o advances in surgical procedures and discoveries or developments in
the health care industry.
Cost reduction efforts in the health care industry could put pressure on our
prices and margins
In recent years, the health care industry has undergone significant change
driven by various efforts to reduce costs, including efforts at national health
care reform, trends toward managed care, cuts in Medicare, consolidation of
health care distribution companies, and collective purchasing arrangements by
GPOs and integrated health networks, or IHNs. Demand and prices for our products
may be adversely affected by these trends.
Our new products may fail to achieve expected levels of market acceptance
Any new products we launch may fail to achieve market acceptance. The
degree of market acceptance of any of our products will depend on a number of
factors, including:
o our ability to develop and introduce new products and product
enhancements in the time frames we currently estimate;
o our ability to successfully implement new technologies;
o the market's readiness to accept new products, such as our
PowerPro(R)Battery System;
o having adequate financial and technological resources for future
product development and promotion;
o the efficacy of our products; and
o the prices of our products compared to the prices of our
competitors' products.
If our new products do not achieve market acceptance, we may be unable to
recoup our investments and may lose business to competitors.
In addition, some of the companies with which we now compete or may
compete in the future have or may have more extensive research, marketing and
manufacturing capabilities and significantly greater technical and personnel
resources than we do, and may be better positioned to continue to improve their
technology in order to compete in an evolving industry. See
"Business--Competition" in our Form 10-K for a further discussion of these
competitive forces.
Our credit agreement contains covenants that may limit our flexibility or
prevent us from taking actions to respond to changes in our business or the
competitive environment
Our credit agreement contains, and future credit facilities are expected
to contain, certain restrictive covenants which will affect, and in many
respects significantly limit or prohibit, among other things, our ability to:
o incur indebtedness;
o make prepayments of certain indebtedness;
o make investments;
o engage in transactions with affiliates;
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o pay dividends;
o sell assets; and
o pursue acquisitions.
These covenants may prevent us from pursuing acquisitions, significantly
limit our operating and financial flexibility, and limit our ability to respond
to changes in our business or competitive activities. Our ability to comply with
such provisions may be affected by events beyond our control. In the event of
any default under our credit agreement, the credit agreement lenders could elect
to declare all amounts borrowed under our credit agreement, together with
accrued interest, to be due and payable. If we were unable to repay such
borrowings, the credit agreement lenders could proceed against the collateral
securing the credit agreement, which consists of substantially all of our
property and assets, except for our accounts receivable and related rights which
are sold in connection with the accounts receivable sales agreement. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" in our Form 10-K for a discussion
of the credit agreement and the accounts receivable sales agreement.
Our substantial leverage and debt service requirements may force us to adopt
alternative business strategies
We have indebtedness that is substantial in relation to our shareholders'
equity, as well as interest and debt service requirements that are significant
compared to our cash flow from operations. As of December 31, 2002, we had
approximately $257.4 million of debt outstanding, representing 40% of total
capitalization. This amount includes the current portion of our long-term debt,
but does not include the $37.0 million of receivables sold to a conduit
purchaser under the accounts receivable sales agreement described above, the
proceeds of which were used to repay indebtedness.
The degree to which we are leveraged could have important consequences to
investors, including but not limited to the following:
o a substantial portion of our cash flow from operations must be
dedicated to debt service and will not be available for operations,
capital expenditures, acquisitions, dividends and other purposes;
o our ability to renegotiate our revolving credit facility and obtain
additional financing in the future for working capital, capital
expenditures, acquisitions or general corporate purposes may be
limited or impaired, or may be at higher interest rates;
o we may be at a competitive disadvantage when compared to competitors
that are less leveraged;
o we may be hindered in our ability to adjust rapidly to market
conditions;
o our degree of leverage could make us more vulnerable in the event of
a downturn in general economic conditions or other adverse
circumstances applicable to us; and
o our interest expense could increase if interest rates in general
increase because some of our borrowings, including our borrowings
under our credit agreement, are and will continue to be at variable
rates of interest.
We may not be able to generate sufficient cash to service our indebtedness,
which could require us to reduce our expenditures, sell assets, restructure our
indebtedness or seek additional equity capital
Our ability to satisfy our obligations will depend upon our future
operating performance, which will be affected by prevailing economic conditions
and financial, business and other factors, many of which are beyond our control.
We may not have sufficient cash flow available to enable us to meet our
obligations. If we are unable to service our indebtedness, we will be forced to
adopt an alternative strategy that may include actions such as foregoing
acquisitions, reducing or delaying capital expenditures, selling assets,
restructuring or refinancing our indebtedness
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or seeking additional equity capital. We cannot assure you that any of these
strategies could be implemented on terms acceptable to us, if at all. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources" in our Form 10-K for a discussion
of our indebtedness and its implications.
We may be unable to continue to sell our accounts receivable, which could
require us to seek alternative sources of financing
Under our receivables agreement, there are certain statistical ratios
which must be maintained relating to the pool of receivables in order for us to
continue selling to the conduit purchaser. These ratios relate to sales dilution
and losses on accounts receivable. In addition, the conduit purchaser can cease
its purchase of our receivables. If new accounts receivable arising in the
normal course of business do not qualify for sale or the conduit purchaser
otherwise ceases its purchase of our receivables, we would need to access
alternative sources of working capital, which could be more expensive or
difficult to obtain.
The loss or invalidity of our patents may reduce our competitive advantage
Much of the technology used in the markets in which we compete is covered
by patents. We have numerous U.S. patents and corresponding foreign patents on
products expiring at various dates from 2003 through 2019 and have additional
patent applications pending. See "Business--Research and Development Activities"
in our Form 10-K for a further description of our patents. The loss of our
patents could reduce the value of the related products and any related
competitive advantage. Competitors may also be able to design around our patents
and to compete effectively with our products. Also, our competitors may allege
that our products infringe their patents, leading to voluntary or involuntary
loss of sales from those products. In addition, the cost to prosecute
infringements of our patents or the cost to defend our products against patent
infringement actions by others could be substantial. We cannot assure you that:
o pending patent applications will result in issued patents;
o patents issued to or licensed by us will not be challenged by
competitors;
o our patents will be found to be valid or sufficiently broad to
protect our technology or provide us with a competitive advantage;
and
o we will be successful in defending against pending or future patent
infringement claims asserted against our products.
Ordering patterns of our customers may change resulting in reductions in sales
Our hospital and surgery center customers purchase our products in
quantities sufficient to meet their anticipated demand. Likewise, our health
care distributor customers purchase our products for ultimate resale to health
care providers in quantities sufficient to meet the anticipated requirements of
the distributors' customers. Should inventories of our products owned by our
hospital, surgery center and distributor customers grow to levels higher than
their requirements, our customers may reduce the ordering of products from us.
This could cause a reduction in our sales in a financial accounting period.
Our significant international operations subject us to risks associated with
operating in foreign countries
A portion of our operations are conducted outside the United States.
Approximately 29.3% of our net sales in 2002 constituted foreign sales. As a
result of our international operations, we are subject to risks associated with
operating in foreign countries, including:
o devaluations and fluctuations in currency exchange rates;
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o imposition of limitations on conversions of foreign currencies into
dollars or remittance of dividends and other payments by foreign
subsidiaries;
o imposition or increase of withholding and other taxes on remittances
and other payments by foreign subsidiaries;
o trade barriers;
o political risks, including political instability;
o reliance on third parties to distribute our products;
o hyperinflation in certain foreign countries; and
o imposition or increase of investment and other restrictions by
foreign governments.
We cannot assure you that such risks will not have a material adverse
effect on our business and results of operations.
We can be sued for producing defective products and our insurance coverage may
be insufficient to cover the nature and amount of any product liability claims
The nature of our products as medical devices and today's litigious
environment should be regarded as potential risks that could significantly and
adversely affect our financial condition and results of operations. The
insurance we maintain to protect against claims associated with the use of our
products may not adequately cover the amount or nature of any claim asserted
against us, and we are exposed to the risk that our claims may be excluded and
that our insurers may become insolvent. See "Item 3: Legal Proceedings" in our
Form 10-K for a further discussion of the risk of product liability actions and
our insurance coverage.
Current geopolitical instability and any continuing threat of domestic and
international terrorist attacks may adversely impact our revenues.
International tensions contribute to an uncertain political and economic
climate, both in the United States and globally, which may affect our ability to
generate revenue on a predictable basis. In addition, recent international
terrorist attacks have contributed to continued international tensions and
uncertainty, while continued terrorist threats in the United States have fueled
economic uncertainty. In the event of future acts of violence, we cannot predict
the effect on our business and on the demand for our products. As we sell
products both in the United States and internationally, the threat of future
terrorist attacks may adversely affect our business. In addition, we cannot
determine how the current war in Iraq will influence our revenues. The potential
for depressed economic conditions and a loss of sales in connection with the war
may materially adversely affect our business, results of operations and
financial condition.
CONMED CORPORATION
CONMED is a medical technology company specializing in instruments,
implants and video equipment for arthroscopic sports medicine, and powered
surgical instruments, such as drills and saws, for orthopedic, ENT, neurosurgery
and other surgical specialties. We are also a leading developer, manufacturer
and supplier of advanced medical devices, including radio frequency
electrosurgery systems used in all types of surgery, ECG electrodes for heart
monitoring, and minimally invasive surgical devices. Our products are used in a
variety of clinical settings, such as operating rooms, surgery centers,
physicians' offices and critical care areas of hospitals.
We have used strategic business acquisitions to broaden our product
offerings, to increase our market share in certain product lines and to realize
economies of scale. Since 1998, we have completed nine significant business
acquisitions. Completed acquisitions, together with internal growth, have
resulted in a compound annual growth rate in net sales of 7.5% between 1998 and
2002.
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Our executive offices are located at 525 French Road, Utica, New York
13502-5994. Our telephone number is (315) 797-8375 and our internet address is
www.conmed.com. The information contained on our website is not part of this
prospectus.
WHERE YOU CAN FIND MORE INFORMATION
The Registration Statement
We have filed a registration statement with the SEC that registers the
shares offered by this prospectus.
The registration statement that we filed with the SEC, including the
attached exhibits and schedules, contains additional relevant information about
CONMED and its shares of common stock. The SEC allows us to omit some
information included in the registration statement from this prospectus. You
should read the entire registration statement in order to obtain this additional
information.
Filings with the SEC
In addition, we file quarterly and current reports, proxy statements and
other information with the SEC on a regular basis. You may read and copy any
document we file at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549. You may also obtain copies of this
information by mail from the Public Reference Section of the SEC at prescribed
rates. Further information on the operation of the SEC's Public Reference Room
in Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330.
The SEC also maintains an Internet world wide web site that contains
reports, proxy statements and other information about issuers, like CONMED, who
file electronically with the SEC. The address of that site is
http://www.sec.gov.
Documents Incorporated by Reference
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. This
information incorporated by reference is a part of this prospectus and should be
read with the same care.
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When we update the information contained in documents that have been
incorporated by reference by making future filings with the SEC, the information
incorporated by reference in this prospectus is considered to be automatically
updated and superseded. In other words, in case of a conflict or inconsistency
between information contained in this prospectus and information incorporated by
reference into this prospectus, you should rely on the information contained in
the document that was filed later.
This prospectus incorporates by reference the documents listed below that
we have previously filed with the SEC. They contain important information about
CONMED and its financial condition.
o CONMED's Annual Report on Form 10-K for the year ended December 31,
2002 (our "Form 10-K").
o CONMED's Proxy Statement on Schedule 14A, as filed on April 9, 2003.
o The description of our common stock contained in our Registration
Statement on Form 8-A, dated August 5, 1987, filed with the SEC
under Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), including any amendment or reports
filed under the Exchange Act for the purpose of updating such
description.
This prospectus also incorporates by reference additional documents that
we may file with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act after the time of filing of the initial registration statement and
before effectiveness of the registration statement, and after the date of this
prospectus and before the termination of this offering. These documents include
annual reports, quarterly reports and other current reports, as well as proxy
statements.
You can obtain any of the documents incorporated by reference in this
document from us or from the SEC through the SEC's web site at the address
described above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless we specifically
incorporated by reference the exhibit in this prospectus. You can obtain these
documents from us by requesting them in writing or by telephone at the following
address or number:
Secretary
CONMED Corporation
525 French Road
Utica, New York 13502-5994
Telephone: (315) 624-3207
Other Information
We have not authorized anyone to give you any information about us or this
offering that is different from what we tell you in this prospectus or in any of
the materials that we have incorporated into this document. If anyone gives you
any other information about us, you should not rely on it. If you are in a
jurisdiction where offers to sell, or solicitations of offers to buy, the
securities offered by this document are unlawful, or if you are a person to whom
it is unlawful to direct these types of activities, then the offer presented in
this document does not extend to you. The information contained in this document
speaks only as of the date of this document unless the information specifically
indicates that another date applies.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock currently consists of 100,000,000 shares of
common stock, par value $0.01 per share, and 500,000 shares of preferred stock,
par value $0.01 per share.
Common Stock
As of March 31, 2003, there were 28,907,933 shares of our common stock
issued and outstanding held of record by 1,163 shareholders. As of March 31,
2003, an additional 4,074,172 shares of common stock were reserved for issuance
under our stock option plans.
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Subject to the preferences, limitations and relative rights of holders of
our preferred stock described below, the holders of our common stock are
entitled, among other things,
o to share ratably in dividends if, when, and as declared by our board
of directors out of funds legally available therefor,
o to one vote for each share held of record on all matters at all
meetings of shareholders, and
o in the event of our liquidation, dissolution or winding-up, to share
ratably in the distribution of assets remaining after payment of
debts and expenses.
Holders of shares of our common stock have no cumulative voting rights or
preemptive rights to subscribe for or purchase any additional shares of capital
stock issued by us. Our transfer agent and registrar is Registrar and Transfer
Company.
Under New York law, a corporation may declare and pay dividends or make
other distributions in cash or its bonds or its property on its outstanding
shares, except when the corporation is insolvent or would thereby be made
insolvent, or when the declaration, payment or distribution would be contrary to
any restriction contained in the certificate of incorporation. Our certificate
of incorporation contains no such restriction. In general, dividends may be
declared or paid and other distributions may be made out of surplus only, so
that the net assets of the corporation remaining after such declaration, payment
or distribution shall at least equal the amount of its stated capital.
Our board of directors presently intends to retain future earnings to
finance the development of our business and does not presently intend to declare
cash dividends. Should this policy change, the declaration of cash dividends
will be determined by our board of directors in the light of conditions then
existing, including our financial requirements and condition and provisions
affecting the declaration and payment of dividends contained in debt agreements.
Our credit facility prohibits the payment of cash dividends and further subjects
us to compliance with various financial covenants.
Preferred Stock
We are currently authorized to issue up to 500,000 shares of our preferred
stock, none of which is issued and outstanding. Our preferred stock may be
issued in one or more series by our board of directors without further action by
shareholders. Our board of directors is authorized to fix as to any such series
the dividend rate or rates, redemption prices, preferences on liquidation,
dissolution and winding-up, sinking fund terms, if any, conversion or exchange
rights, if any, voting rights and any other preferences or special rights and
qualifications.
Depending upon the rights of any preferred stock, its issuance could have
an adverse effect on holders of our common stock by delaying or preventing a
change in control, making removal of our present management more difficult or
resulting in restrictions upon the payment of dividends and other distributions
to the holders of our common stock.
SELLING SHAREHOLDER
Val Solutions, Inc. is offering 34,634 shares acquired in connection with
our acquisition of the business of development, manufacture, marketing and sale
of products and services for operating rooms carried on by its predecessor, Val
Med Corporation. The shares are subject to a 120-day lock-up restriction in
connection with any underwritten public offering of our common stock or
securities convertible into our common stock and certain other sale
restrictions, and Val Solutions has certain registration rights. The shares
issued to Val Solutions are being registered under the registration statement of
which this prospectus forms a part. Val Solutions owns no shares of common stock
of CONMED other than the shares offered by this prospectus. Since March 2001,
Val Med and CONMED were parties to a joint marketing agreement to provide
integrated operating room solutions to joint customers. Following the completion
of our acquisition of its business, Val Solutions no longer has any material
relationship with us other than in connection with the acquisition. In
connection with our acquisition of Val Med's business and as partial
consideration for its assets, we have agreed to make certain performance
payments to Val Solutions upon the achievement of specified performance targets
by CONMED Integrated Systems, the subsidiary we created to operate the Val Med
business we acquired. Darko Spoljaric, the former President of Val Med, has been
retained as President of CONMED Integrated Systems. Vesna Spoljaric Cain, the
former Regional Sales.
-11-
Director of Val Med, has been retained as a regional director for CONMED
Integrated Systems. In addition, Mr. Spoljaric and Ms. Cain remain as
shareholders of Val Solutions, have certain employment agreements with CONMED
and hold stock options relating to CONMED common stock.
SHARES ELIGIBLE FOR FUTURE SALE
As of March 31, 2003, we had outstanding 28,907,933 shares of common stock.
Of those outstanding shares of common stock, 2,531,057 are beneficially owned by
certain persons who may be deemed "affiliates" of the Company for purposes of
Rule 144 and Rule 145 under the Securities Act of 1933, as amended, are not
freely tradeable without restriction or further registration under the
Securities Act. All of these shares are eligible for sale in the open market in
accordance with Rule 144 or Rule 145 under the Securities Act.
In general, under Rule 144 as currently in effect, any person who has
beneficially owned shares for at least one year, including persons who may be
deemed an "affiliate" of ours, is entitled to sell within any three-month period
a number of shares of our common stock that does not exceed the greater of (i)
1% of the then outstanding shares of our common stock or (ii) the average weekly
trading volume in our common stock during the four calendar weeks preceding such
sale. Such sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and to the availability of our current public
information. In addition, any person who is not deemed our "affiliate," and who
has beneficially owned his or her shares for at least two years, is entitled to
sell such shares under Rule 144 without regard to the volume limitations, manner
of sale provisions or notice requirements.
While no predictions can be made of any effect that open market sales of
shares or the availability of shares for sale will have on the market price
prevailing from time to time, sales of substantial amounts of our common stock
in the public market, or the perception that such sales will occur, could
adversely affect market prices and trading activities in our common stock.
PLAN OF DISTRIBUTION
Methods of Distribution by Selling Shareholder
The selling shareholder has advised us that it proposes to offer any or
all of the shares for sale from time to time and in several different ways. For
example, it may make sales:
o on the Nasdaq Stock Market;
o on another interdealer quotation system or stock exchange on which
our common stock is quoted or listed at the time;
o through brokers in ordinary brokerage transactions;
o to underwriters or dealers in negotiated transactions; or
o by a combination of these methods of sale.
The selling shareholder may offer shares at various prices, including:
o at fixed prices;
o at market prices at the time of sale;
o at prices related to prevailing market prices; or
o at negotiated prices.
-12-
From time to time, the selling shareholder may offer shares through
brokers, dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions from the selling shareholder, agents
and/or the purchasers for whom they may act as agent.
Preparation of an Additional Prospectus to Describe the Method of Sale
If necessary, we will prepare another prospectus to describe the method of
sale in greater detail. As of the date of this prospectus, we do not know of any
arrangements by the selling shareholder to sell the shares, nor do we know which
brokerage firms the selling shareholder may select to sell the shares. In
addition, the selling shareholder may sell the shares without the aid of a
registration statement if it follows certain SEC rules.
Parties that May be Deemed Underwriters
The selling shareholder and any brokers, dealers or agents that
participate in the distribution of the shares may be considered "underwriters"
under the federal securities laws. If the selling shareholder is considered an
underwriter, any profits on the sale of shares by it and any associated
discounts, concessions or commissions may be considered underwriting
compensation under the federal securities laws. In addition, if the selling
shareholder is considered an underwriter, the selling shareholder may be subject
to some liabilities for misstatements and omissions in the registration
statement.
Regulation of Sales by Selling Shareholder
The selling shareholder and any other person participating in a sale or
distribution of shares will be subject to applicable provisions of the Exchange
Act, which is the federal statute regulating sales of securities. Some rules and
regulations issued by the SEC, including some limitations on activities during
securities offerings and anti-fraud provisions, may limit when the selling
shareholder, or any other person, may sell or purchase the shares.
In some jurisdictions, the state securities laws require that the shares
be offered or sold only through registered or licensed brokers or dealers. In
addition, in some jurisdictions the shares may not be offered or sold unless
they have been registered or qualified for sale in such jurisdictions or an
exemption from registration or qualification is available and is complied with.
Expenses
We will not receive any part of the proceeds from the sale of the shares.
We will bear expenses we incur in registering the shares with the SEC. We
estimate these expenses to be approximately $30,000. If and when we are required
to update this prospectus, we may incur additional expenses in excess of the
amount estimated above. The selling shareholder will pay its own expenses,
including brokerage commissions, legal fees or similar expenses, in offering and
selling the shares.
USE OF PROCEEDS
The shares may be sold by this prospectus by the selling shareholder. We
will not receive any proceeds from the sales of the shares, but we will bear
some of the expenses. See "Plan of Distribution--Expenses" for a description of
the payment of expenses.
VALIDITY OF COMMON STOCK
The validity of the shares offered hereunder has been passed upon for
CONMED by Daniel S. Jonas, its Vice President - Legal Affairs and General
Counsel. As of March 31, 2003, Mr. Jonas owned 93 shares of our common stock and
had options to acquire 58,029 shares of our common stock.
-13-
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31, 2002
have been so incorporated in reliance on the report of PricewaterhouseCoopers
LLP, independent accountants, given on the authority of said firm as experts in
accounting and auditing.
-14-
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth an itemization of all estimated expenses in
connection with the issuance and distribution of the securities being
registered, none of which are payable by the selling shareholder:
Registration Statement Filing Fee.............. $48
Legal Fees and Expenses........................ 15,000
Accounting Fees and Expenses................... 10,000
Miscellaneous Fees and Expenses................ 4,952
-------
Total....................................... $30,000
=======
Item 15. Indemnification of Directors and Officers
Section 722 of the New York Business Corporation Law (the "New York Law")
provides that a corporation may indemnify an officer or director, in the case of
third party actions, against judgments, fines, amounts paid in settlement and
reasonable expenses and, in the case of derivative actions, against amounts paid
in settlement and reasonable expenses, if the director or officer "acted, in
good faith, for a purpose which he reasonably believed to be in . . . the best
interests of the corporation" and, in the case of criminal actions, "had no
reasonable cause to believe that his conduct was unlawful." Statutory
indemnification may not be provided in derivative actions in respect of a
threatened action, or a pending action which is settled or otherwise disposed
of, or any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation, unless and only to the extent that the
court in which the action was brought, or, if no action was brought, any court
of competent jurisdiction, determines upon application that, in view of all of
the circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such portion of the settlement and expenses as the court deems
proper.
As contemplated by New York Law Section 721, CONMED's Bylaws, as amended
on December 26, 1990, provide a broader basis for indemnification in accordance
with and as permitted by New York Law Article 7.
Section 6.6 of CONMED's Bylaws provides as follows:
Section 6.6 Indemnification. The Corporation shall indemnify each
person made or threatened to be made a party to any action or proceeding,
whether civil or criminal, by reason of the fact that such person or such
person's testator or intestate is or was a director or officer of the
Corporation, or serves or served at the request of the Corporation, any
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise in any capacity, against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses, including
attorneys' fees, incurred in connection with such action or proceeding, or
any appeal therein, provided that no such indemnification shall be made if
a judgment or other final adjudication adverse to such person establishes
that his or her acts were committed in bad faith or were the result of
active and deliberate dishonesty and were material to the cause of action
so adjudicated, or that he or she personally gained in fact a financial
profit or other advantage to which he or she was not legally entitled, and
provided further that no such indemnification shall be required with
respect to any settlement or other nonadjudicated disposition of any
threatened or pending action or proceeding unless the Corporation has
given its prior consent to such settlement or other disposition.
The Corporation may advance or promptly reimburse upon request any
person entitled to indemnification hereunder for all expenses, including
attorneys' fees, reasonably incurred in defending any action or proceeding
in advance of the final disposition thereof upon receipt of an undertaking
by or on behalf of such person to repay such amount if such person is
ultimately found not to be entitled to indemnification or, where
indemnification is granted, to the extent the expenses so advanced or
reimbursed exceed the amount to which such person is entitled, provided,
however, that such person shall cooperate in good faith with any request
by the Corporation that common counsel be utilized by the parties to an
action or proceeding who are similarly
II-1
situated unless to do so would be inappropriate due to actual or potential
differing interests between or among such parties.
Anything in these bylaws to the contrary notwithstanding, no
elimination of this bylaw, and no amendment of this bylaw adversely
affecting the right of any person to indemnification or advancement of
expenses hereunder, shall be effective until the 60th day following notice
to such person of such action, and no elimination of or amendment to this
bylaw shall deprive any person of his or her rights hereunder arising out
of alleged or actual occurrences, acts or failures to act prior to such
60th day.
The Corporation shall not, except by elimination or amendment of
this bylaw in a manner consistent with the preceding paragraph, take any
corporate action or enter into any agreement which prohibits, or otherwise
limits the rights of any person to, indemnification in accordance with the
provisions of this bylaw. The indemnification of any person provided by
this bylaw shall continue after such person has ceased to be a director,
officer or employee of the Corporation and shall inure to the benefit of
such person's heirs, executors, administrators and legal representatives.
The Corporation is authorized to enter into agreements with any of
its directors, officers or employees extending rights to indemnification
and advancement of expenses to such person to the fullest extent permitted
by applicable law as it currently exists, but the failure to enter into
any such agreement shall not affect or limit the rights of such person
pursuant to this bylaw, it being expressly recognized hereby that all
directors, officers and employees of the Corporation, by serving as such
after the adoption hereof, are acting in reliance hereon and that the
Corporation is estopped to contend otherwise.
In case any provision in this bylaw shall be determined at any time
to be unenforceable in any respect, the other provisions shall not in any
way be affected or impaired thereby, and the affected provision shall be
given the fullest possible enforcement in the circumstances, it being the
intention of the Corporation to afford indemnification and advancement of
expenses to its directors, officers and employees, acting in such
capacities or in the other capacities mentioned herein, to the fullest
extent permitted by law.
For purposes of this bylaw, the Corporation shall be deemed to have
requested a person to serve an employee benefit plan where the performance
by such person of his or her duties to the Corporation also imposes duties
on, or otherwise involves services by, such person to the plan or
participants or beneficiaries of the plan, and excise taxes assessed on a
person with respect to an employee benefit plan pursuant to applicable law
shall be considered indemnifiable expenses. For purposes of this bylaw,
the term "Corporation" shall include any legal successor to the
Corporation, including any corporation which acquires all or substantially
all of the assets of the Corporation in one or more transactions.
Item 16. Exhibits and Financial Statement Schedules
Exhibit No. Description
----------- -----------
5.1 Opinion of Daniel S. Jonas as to the validity of the common
stock.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Daniel S. Jonas (Included in Exhibit 5.1).
24.1 Power of Attorney (Included in the Registration Statement
under the heading "Signatures").
II-2
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (as amended, and together with the rules
and regulations thereunder, the "Securities Act");
(b) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(c) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 (as amended, and together with the
rules and regulations thereunder, the "Securities Exchange Act") that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of the registration statement as of the time it was declared
effective.
(6) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
II-3
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(7) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise (other than pursuant to insurance), the Registrant has been
advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and may,
therefore, be unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or proceeding
and other than insurance payments) is asserted by such director, officer
or controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Utica and the State of New York, on the 11th day
of April, 2003.
CONMED Corporation
By: /s/ JOSEPH J. CORASANTI
--------------------------------------
Joseph J. Corasanti
President & Chief Operating Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Joseph J. Corasanti and Daniel S.
Jonas, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities indicated on the 11th day of April, 2003.
Signature Title
--------- -----
/s/ EUGENE R. CORASANTI Chairman of the Board
---------------------------------- Chief Executive Officer and Director
Eugene R. Corasanti
/s/ ROBERT D. SHALLISH, JR. Vice President-Finance
---------------------------------- and Chief Financial Officer
Robert D. Shallish, Jr. (Principal Financial Officer)
/s/ JOSEPH J. CORASANTI President, Chief Operating Officer
---------------------------------- and Director
Joseph J. Corasanti
/s/ LUKE A. POMILIO Vice President - Corporate Controller
---------------------------------- (Principal Accounting Officer)
Luke A. Pomilio
/s/ BRUCE F. DANIELS Director
----------------------------------
Bruce F. Daniels
II-5
Signature Title
--------- -----
/s/ ROBERT E. REMMELL Director
-----------------------------------
Robert E. Remmell
/s/ WILLIAM D. MATTHEWS Director
-----------------------------------
William D. Matthews
/s/ STUART J. SCHWARTZ Director
-----------------------------------
Stuart J. Schwartz
/s/ STEPHEN M. MANDIA Director
-----------------------------------
Stephen M. Mandia
II-6
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
5.1 Opinion of Daniel S. Jonas as to the validity of the common
stock.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Daniel S. Jonas (Included in Exhibit 5.1).
24.1 Power of Attorney (Included in the Registration Statement
under the heading "Signatures").