Synthes-Stratec proposes changes to its capital structure at this year’s General Meeting of Shareholders
Oberdorf/Switzerland, March 26, 2004
Synthes-Stratec Inc. (SWX:SYST), today published its invitation for the Annual General Meeting (AGM) of shareholders to be held on April 22, 2004 in Basel (Switzerland).
In addition to the ordinary agenda points the Board of Directors proposes a name change, a stock split, the authorization to issue up to 1,000,000 shares of common stock and communicates a change of Group auditors for ratification.
Change of company name to Synthes
The Board of Directors proposes that the holders of common stock approve an amendment to the Certificate of Incorporation of Synthes-Stratec changing the company's name to Synthes, Inc. By changing its name, Synthes reinforces its identity as the pure-play global osteosynthesis company addressing musculoskeletal healthcare needs throughout the world by providing the highly recognized Synthes instruments and Synthes implants to the medical community.
Stock split 10 for 1
With a share price of around CHF 1200.-, the Synthes-Stratec stock has one of the highest per unit share prices of companies listed on the SWX Swiss Exchange. In order to create a more liquid stock whose price is in line with SWX listed companies, the Board of Directors therefore proposes that the holders of Common Stock effect a 10 for 1 split of the outstanding shares of Common Stock, by approving an amendment to the certificate of incorporation to change the number of authorized Common Shares. As a result of the stock split, each of the 11,478,463 issued and outstanding shares will be reclassified into ten new shares each, leading to a new total of 114,784,630 issued and outstanding shares of Common Stock. In the stock split, the existing par value of each Common Share will be reduced from CHF 0.01 to CHF 0.001 (one tenth of one centime) and the stated capital from CHF 5.00 per share to CHF 0.50 per share. This stock split is permitted under applicable Delaware law. Following approval by the shareholders, the effective date of the stock split is to be determined by the Board of Directors
Authorization of a one-time issuance of up to 1,000,000 new shares
The Board of Directors proposes that the holders of Common Stock authorize the Board to issue up to 1,000,000 new shares of Common Stock (or, if the stock split is approved, up to 10,000,000 new shares of Common Stock) in connection with (i) an equity offering to be conducted by the Company, or (ii) for use as shares underlying an issuance of convertible bonds or bonds with stock options or similar capital market instruments, on terms set by the Board of Directors of the Company.
The Board of Directors of the Company shall be authorized to eliminate or restrict the pre-emptive rights of existing shareholders on the issuance of such new shares, as well as the preferential subscription rights to acquire convertible bonds or bonds with stock options or similar capital market instruments, and to allot such rights to third parties if the newly issued shares, convertible bonds, bonds with stock options or similar capital market instruments are used for a public offering or a private placement on the Swiss or international capital markets in circumstances where the Board of Directors believes that the restriction or elimination of such pre-emptive rights or preferential subscription rights is in the best interest of the Company.
The subscription and purchase of newly issued shares as well as the subsequent transfer of any such shares shall be subject to the transfer restrictions and the voting restrictions set forth in the Company's certificate of incorporation and by-laws.
The Board of Directors is proposing such a motion in order to facilitate the company’s financial flexibility. A bolstering of the company's equity capital base may also be conducive to internal and external growth strategies, even though specific acquisition targets are not identified at this moment.
Proposal of elections to the Board of Directors
The Board of Directors proposes that Charles Hedgepeth, Amin Khoury and Dr. Rolf Soiron be re-elected to the Board of Directors as Class II Directors for a term of three years. At this General Meeting, the Board of Directors is not in a position to propose the election of Robert Mathys jr. to the Board as indicated at the Extraordinary Meeting of Shareholders on October 23, 2003 as the German merger control case for the Mathys acquisition is not yet closed.
Change of Group auditors – Ernst & Young proposed
The Board of Directors proposes that the stockholders ratify the Board's selection of Ernst & Young LLP, Philadelphia, PA as auditors of Synthes-Stratec, Inc. and as Group Auditors for 2004. Given the new global dimension of the Company and good corporate governance practice, the Board deemed it best to select new Group Auditors. The Board expresses its appreciation to Grant Thornton and its satisfaction with their services rendered over the past 5 years.
Admission cards to the AGM may be obtained from the depositary bank of the shareholder, the transfer agent or the Company. Please refer to the invitation published on the website www.synthes.com or in various Swiss newspapers for further details.
Synthes-Stratec, Inc.
Synthes-Stratec, Inc. is a leading global medical device company specializing in the development, manufacturing and marketing of orthopedic instruments and implants. Applications include surgical treatment of bone and maxillofacial trauma or deformities and a full range of products for spine surgery.
For further information please contact
Peter Fehlmann, Investor Relations, Synthes-Stratec, Inc.
Phone: +41 61 965 63 39, Fax: +41 61 965 66 06
e-mail: ir.info@synthes.com