| HBS Case Collection
(Revised December 2003)
In 1996, U.S. Surgical launched a hostile takeover bid against Circon Corp. After building the company for 20 years, CEO Richard Auhll takes a defensive stand that includes inviting an old HBS friend (George Cloutier) to join the fight as a director of Circon. A "poison pill" and a staggered board serve as primary defense measures, leading to the longest-running takeover battle in U.S. corporate history. Issues of loyalty to a friend, executive incentives, executive entrenchment, and duty to shareholders collide as Cloutier realizes crucial corporate governance decisions have to be made.
Keywords: Motivation and Incentives;
Medical Devices and Supplies Industry;
Hall, Brian J., Guhan Subramanian, and Christopher A Rose. "Circon (A)". Harvard Business School Case 801-403, March 2001. (Revised December 2003.)