This Release Agreement involves
Title: FOR IMMEDIATE RELEASE
Industry: Biotechnology and Drugs Sector: Healthcare
FOR IMMEDIATE RELEASE
SURMODICS AND RAMIUS REACH
REGARDING 2011 ANNUAL MEETING OF SHAREHOLDERS
Jeffrey C. Smith and David Dantzker, M.D. Appointed to SurModics’ Board of Directors;
Board Forms Special Committee to
Oversee Previously Announced Review of
Strategic Alternatives for Pharmaceuticals Business;
Ramius Agrees to Support SurModics Director Nominees at 2011 Annual Meeting of Shareholders
EDEN PRAIRIE, MINN., January 5, 2011 — SurModics, Inc. (Nasdaq: SRDX) (“the Company”), a leading provider of drug delivery and surface modification technologies to the healthcare industry, today announced that it has reached an agreement with Ramius LLC and its affiliates (“Ramius”) relating to the Company’s 2011 Annual Meeting of Shareholders. Ramius beneficially owns approximately 12.0% of the outstanding shares of SurModics’ common stock and is the Company’s largest shareholder.
Under the terms of the agreement, Jeffrey C. Smith, Ramius Partner Managing Director and Chief Investment Officer of the Ramius Value and Opportunity Master Fund, and David Dantzker, M.D., Partner of Wheatley Partners L.P., have been appointed to SurModics’ Board of Directors, effective immediately. Mr. Smith joins SurModics’ Board as a Class III Director to be elected for a three-year term at the 2011 Annual Meeting and Dr. Dantzker joins as a Class I Director.
Pursuant to the Company’s retirement policy for directors, John A. Meslow will retire from the Board effective at the conclusion of the 2011 Annual Meeting. Likewise, Kenneth H. Keller, Ph.D. will serve until and not stand for election at the 2011 Annual Meeting. Mr. Meslow and Dr. Keller have served as directors of the Company since 2000 and 1997, respectively. Upon completion of the 2011 Annual Meeting, SurModics’ Board of Directors will be comprised of ten directors, nine of whom are independent and Gary R. Marahaj, the Company’s newly appointed President and Chief Executive Officer.
In connection with the agreement, Ramius has withdrawn its nomination of director candidates to SurModics’ Board and has agreed to vote its shares in favor of each of the Board’s nominees at the 2011 Annual Meting.
SurModics also announced today that its Board has formed a Special Committee to oversee the ongoing exploration of strategic alternatives for the SurModics Pharmaceuticals business, which was previously announced on December 14, 2010. The Special Committee will be comprised of four independent directors, including: Mr. Smith (Committee Chairman), Dr. Dantzker, John W. Benson and Susan E. Knight. The Committee will work with Piper Jaffray & Co., the Company’s financial advisor in connection with this process.
“We are pleased to have reached this agreement with Ramius, which we believe is in the best interest of the Company and all SurModics shareholders,” said Robert C. Buhrmaster, chairman of the SurModics Board of Directors. “Through this agreement with our largest shareholder, we will be able to dedicate our full efforts and resources to enhancing value for all SurModics shareholders. Our Board and management team are committed to continuing to work hard on
behalf of all SurModics shareholders and look forward to benefitting from the collective experience of our two new directors to build an even stronger future for SurModics.”
“Our Board of Directors and management team have been intently focused on returning the Company to profitable growth,” added Mr. Buhrmaster. “We have recently taken a number of important and decisive actions with the goal of enhancing shareholder value, including: appointing Gary Maharaj as SurModics’ new President and Chief Executive Officer; initiating a process of exploring strategic alternatives, including a potential sale, for our SurModics Pharmaceuticals business; reducing the Company’s cost structure to bring it more in line with customer demand and expected revenue; and putting in place a new organizational structure to provide enhanced accountability, improved efficiency and more effective resource deployment. We are committed to continuing to create value for all SurModics shareholders.”
“On behalf of SurModics’ Board, I would like to thank John Meslow and Dr. Kenneth Keller for their years of dedicated service to SurModics,” said Mr. Buhrmaster. “We are deeply appreciative of their numerous contributions and wish them both the best in the future endeavors.”
Ramius Partner Managing Director Jeffrey C. Smith, said, “We are pleased to have worked constructively with SurModics to reach this settlement. Dr. Dantzker and I look forward to working diligently and constructively with our fellow Board members to enhance value for all SurModics shareholders and we are confident that our collective experience will prove valuable to the Company. We support the Board’s ongoing efforts to explore strategic alternatives, including a potential sale, for the Company’s Pharmaceuticals business and look forward to helping see this process through to a successful conclusion.”
The Company’s 2011 Annual Meeting will be held on February 7, 2011. Further details regarding the 2011 Annual Meeting, including time, date, location and record date f