Cardiovascular Systems (CSII) DEFA14AAdditional proxy soliciting materials

1.         The following disclosures replace the disclosures that previously appeared in the second paragraph under the section of the Proxy Statement titled “Required Regulatory Approvals” beginning on page 8. The modified text is underlined (where added) and struck-through (where deleted) below.

“CSI and Abbott have agreed to use reasonable best efforts to obtain all regulatory approvals that may be or become necessary to consummate the Merger and the other transactions contemplated by the Merger Agreement, subject to certain limitations as set forth in the Merger Agreement, including the limitation that Abbott not be required to accept any Burdensome Condition. CSI and Abbott filed notification and report forms under the HSR Act with the Department of Justice Antitrust Division (“DOJ”) and the Federal Trade Commission (“FTC”) on March 13, 2023. At 11:59 p.m., Eastern Time, on April 12, 2023, the waiting period applicable to the Merger under the HSR Act expired. Accordingly, the condition relating to the expiration or termination of the waiting period under the HSR Act has been satisfied. The Merger continues to be subject to the remaining conditions set forth in the Merger Agreement.”

2.          The following disclosures replace the disclosures that previously appeared under the section of the Proxy Statement titled “Legal Proceedings Regarding the Merger” beginning on page 11. The modified text is underlined (where added) and struck-through (where deleted) below.

“As of March 23, 2023 the date of this Schedule 14A, a complaint has three complaints have been filed in federal court by a purported stockholder stockholders related to the Merger. Additionally, as of the date of this Schedule 14A, a fourth complaint by a purported stockholder has been delivered to CSI, but has not been filed with any court. The first complaint was filed on March 17, 2023, in the United States District Court for the Southern District of New York and is captioned O’Dell v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-02293 (the “Complaint”). The second complaint was filed on March 30, 2023, in the United States District Court for the Southern District of New York and is captioned Jenkins v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-02663. The third complaint was filed on March 30, 2023, in the United States District Court for the District of Delaware and is captioned Morgan v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-00366. The aforementioned four complaints are collectively referred to herein as the “Complaints”. The Complaint Complaints names name as defendants CSI and each member of the Board of Directors, which collectively with CSI, we refer to as the “CSI Defendants” in this proxy statement. The Complaint Complaints alleges allege violations of Section 14(a) of the Exchange Act against all CSI Defendants and alleges allege violations of Section 20(a) of the Exchange Act against the members of the Board of Directors in connection with the disclosures made by the CSI Defendants related to the Merger. The Complaint Complaints alleges allege that CSI’s preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023 and this proxy statement omitted or misrepresented material information therein. The Complaint Complaints collectively seeks seek (i) injunctive relief preventing the consummation of the Merger, unless and until certain information, as requested in the Complaint Complaints, is disclosed, (ii) rescission of the Merger Agreement, to the extent already implemented, or rescissory damages, (iii) direction of the CSI Defendants to account to the plaintiff for all damages purportedly suffered by plaintiff as a result of the CSI Defendants’ alleged wrongdoing, (iv) an award of plaintiff’s costs and disbursements of the action, including reasonable attorneys’ and expert fees and expenses, (v) an order directing the Board of Directors to file a proxy statement on Schedule 14A that does not contain any untrue statements of material fact, (vi) an order declaring that CSI Defendants violated Sections 14(a) and/or 20(a) of the Exchange Act, and (v) (vii) such other and further equitable relief as the court may deem just and proper.

In addition, as of March 23, 2023 the date of this Schedule 14A, CSI has received four six demand letters (the “Demand Letters”) from counsel to purported stockholders, which generally seek to have certain information allegedly omitted from the preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023 and this proxy statement be disclosed.

The CSI Defendants believe the allegations and claims asserted in the Complaint Complaints and the Demand Letters are without merit and that the disclosures in the preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023, and this proxy statement comply fully with applicable law. For more information, see the section of this proxy statement titled “The Merger—Legal Proceedings Regarding the Merger.””

3.          The following disclosures replace the disclosures that previously appeared as the answer to the question titled “When do you expect the Merger to be completed?” on page 13. The modified text is underlined (where added) and struck-through (where deleted) below.

“We are working toward completing the Merger as promptly as possible. In order to complete the Merger, we must obtain the Stockholder Approval described in this proxy statement, and the other conditions to closing under the Merger Agreement must be satisfied or waived. The conditions to closing include the expiration or termination of the waiting period under the HSR Act applicable to the Merger and the other transactions contemplated by the Merger Agreement (or any extension thereof, including the expiration or termination of any timing agreement entered into with any governmental authority) and the receipt of all consents, approvals or authorizations of, declarations or filings with or notices to any governmental authority pursuant to any other applicable competition law or foreign investment law in connection with the consummation of the Merger and the transactions contemplated by the Merger Agreement, as reasonably determined by Abbott to be applicable to the Merger and the other transactions contemplated by the Merger Agreement, in each case, without the imposition of any Burdensome Condition (as defined in the section of this proxy statement titled “Proposal 1: Adoption of the Merger Agreement—Regulatory Filings”). CSI and Abbott filed notification and report forms under the HSR Act with the DOJ and the FTC on March 13, 2023. Since the Merger is subject to a number of At 11:59 p.m., Eastern Time, on April 12, 2023, the waiting period applicable to the Merger under the HSR Act expired. Accordingly, the condition relating to the expiration or termination of the waiting period under the HSR Act has been satisfied. The Merger continues to be subject to the remaining conditions, set forth in the Merger Agreement, and therefore the exact timing of the Merger cannot be determined at this time. For more information, please see the sections of this proxy titled “The Merger—Required Regulatory Approvals,” “Proposal 1: Adoption of the Merger Agreement—Regulatory Filings” and “Proposal 1: Adoption of the Merger Agreement—Conditions to the Closing of the Merger.”

4.          The following disclosures replace the disclosures that previously appeared in the third paragraph under the section of the Proxy Statement titled “Background of the Merger” beginning on page 26. The modified text is underlined (where added) and struck-through (where deleted) below.

“Between October 2020 and May 2022, we were approached by five parties, either directly or through their representatives, who expressed an initial interest in learning more about CSI for the purpose of potentially considering an acquisition of CSI. Four of these parties were larger companies in the medical technology industry, and one was a private equity firm. None of these parties ultimately submitted any firm proposal to acquire us. In each case, we engaged in preliminary discussions with the party through a management presentation and, in the case of three of the parties, provision of certain confidential information pursuant to a confidentiality agreement. However, each of these five parties declined to pursue further discussions to acquire us following the initial meetings, and we did not at any point commence a sale process. The last of these declinations occurred in August 2022. In addition, during this period, Scott Ward, our Chairman, Chief Executive Officer and President was informed by an investment banking contact who he has known for several years that two other parties informed him that they were looking at CSI as a potential acquisition target, but neither of these parties engaged in any discussions with us, or, to our knowledge, this investment banking contact regarding an acquisition of CSI. Abbott was not one of these seven parties. In addition to these inquiries, Mr. Ward has periodically received inquiries from two similarly sized peer companies about a potential merger of equals at a future time. However, neither of those companies has made any proposal and no discussions commenced. One of the confidentiality agreements with a potentially interested party, entered into in 2022, included a standstill provision that had not expired at the time Abbott contacted CSI in November 2022. The standstill provision contained in that confidentiality agreement prohibited such party, for an agreed-upon period from the date of such confidentiality agreement, from offering to acquire or acquiring CSI and from taking certain other actions, including soliciting proxies, without the prior consent of CSI.  This agreement did not include a so-called “don’t ask, don’t waive” provision and provided the potentially interested party the right to make certain confidential proposals to CSI.  It also provided for certain customary “fall-away provisions” to the standstill, including, among other things, in the event CSI entered into a definitive agreement with any third party for a change of control transaction such as the Merger. Pursuant to the foregoing provisions, the standstill restrictions in this confidentiality agreement automatically terminated upon CSI’s entry into the Merger Agreement.”

5.          The following table is added as additional disclosure directly below the third paragraph under the section of the Proxy Statement titled “Public Trading Multiples” beginning on page 43.

6.          The following table is added as additional disclosure below the third paragraph under the section of the Proxy Statement titled “Selected Transaction Multiples Analysis” beginning on page 44.

7.          The following disclosures replace the disclosures that previously appeared under the section of the Proxy Statement titled “Arrangements with Abbott” beginning on page 46. The modified text is underlined (where added) and struck-through (where deleted) below.

“As of the date of this proxy statement Schedule 14A, none of our directors or executive officers has entered into any agreement with Abbott regarding employment with, or compensation to be received from, Abbott or the surviving corporation on a going-forward basis following the consummation of the Merger, and there have been no discussions of any such arrangements between Abbott and any of our directors or executive officers. None of Abbott’s proposals or indications of interest proposed or contemplated that our directors or officers would enter into agreements with Abbott regarding employment with, or compensation to be received from, Abbott or the surviving corporation following the consummation of the Merger, nor did any such proposals or indications of interest propose, contemplate, or obligate our directors or officers to purchase or participate in the equity of the surviving corporation. Prior to and following the Closing, however, certain of our executive officers may have discussions, and following the Closing, may enter into agreements with Abbott or the surviving corporation, or their respective affiliates regarding employment with, or the right to purchase or participate in the equity of, Abbott, the surviving corporation or one or more of their affiliates.”

8.          The following disclosures replace the disclosures that previously appeared in the first paragraph under the section of the Proxy Statement titled “Required Regulatory Approvals” beginning on page 63. The modified text is underlined (where added) and struck-through (where deleted) below.

“The Merger is subject to the provisions of the HSR Act and cannot be completed until each of CSI and Abbott file a notification and report form with the DOJ and the FTC under the HSR Act and the waiting period under the HSR Act applicable to the Merger and the other transactions contemplated by the Merger Agreement (or any extension thereof including the expiration or termination of any timing agreement entered into with any governmental authority) has expired or been terminated. CSI and Abbott filed notification and report forms under the HSR Act with the DOJ and the FTC on March 13, 2023. Under the HSR Act, certain acquisitions may not be completed until information has been furnished to the DOJ and the FTC and the applicable HSR Act waiting period requirements have been satisfied. The waiting period under the HSR Act applicable to the Merger is 30 calendar days, unless the waiting period is terminated earlier (provided, however, that the FTC has temporarily suspended granting early termination other than in narrow circumstances that do not apply during the initial 30 day waiting period), extended by a request for additional information and documentary materials (which we refer to as a “Second Request”), or restarted if Abbott voluntarily withdraws and refiles, which commences a new 30 calendar day waiting period. If the DOJ or FTC issues a Second Request, the parties must observe a separate 30-day waiting period, which would begin to run only after both parties have substantially complied with such Second Request, unless the waiting period is terminated earlier or the parties agree to extend the waiting period (or commit not to consummate the transaction for a specified period of time) At 11:59 p.m., Eastern Time, on April 12, 2023, the waiting period applicable to the Merger under the HSR Act expired. Accordingly, the condition relating to the expiration or termination of the waiting period under the HSR Act has been satisfied. The Merger continues to be subject to the remaining conditions set forth in the Merger Agreement.”

9.          The following disclosures replace the disclosures that previously appeared under the section of the Proxy Statement titled “Legal Proceedings Regarding the Merger” beginning on page 64. The modified text is underlined (where added) and struck-through (where deleted) below.

“As of March 23, 2023 the date of this Schedule 14A, a complaint has three complaints have been filed in federal court by a purported stockholder stockholders related to the Merger. Additionally, as of the date of this Schedule 14A, a fourth complaint by a purported stockholder has been delivered to CSI, but has not been filed with any court. The first complaint was filed on March 17, 2023, in the United States District Court for the Southern District of New York and is captioned O’Dell v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-02293 (the “Complaint”). The second complaint was filed on March 30, 2023, in the United States District Court for the Southern District of New York and is captioned Jenkins v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-02663. The third complaint was filed on March 30, 2023, in the United States District Court for the District of Delaware and is captioned Morgan v. Cardiovascular Systems, Inc., et al., Case No. 1:23-cv-00366. The aforementioned four complaints are collectively referred to herein as the “Complaints”. The Complaint Complaints names name as defendants CSI and each member of the Board of Directors, which collectively with CSI, we refer to as the “CSI Defendants” in this proxy statement. The Complaint Complaints alleges allege violations of Section 14(a) of the Exchange Act against all CSI Defendants and alleges allege violations of Section 20(a) of the Exchange Act against the members of the Board of Directors in connection with the disclosures made by the CSI Defendants related to the Merger. The Complaint Complaints alleges allege that CSI’s preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023 and this proxy statement omitted or misrepresented material information therein. The Complaint Complaints collectively seeks seek (i) injunctive relief preventing the consummation of the Merger, unless and until certain information, as requested in the Complaint Complaints, is disclosed, (ii) rescission of the Merger Agreement, to the extent already implemented, or rescissory damages, (iii) direction of the CSI Defendants to account to the plaintiff for all damages purportedly suffered by plaintiff as a result of the CSI Defendants’ alleged wrongdoing, (iv) an award of plaintiff’s costs and disbursements of the action, including reasonable attorneys’ and expert fees and expenses, (v) an order directing the Board of Directors to file a proxy statement on Schedule 14A that does not contain any untrue statements of material fact, (vi) an order declaring that CSI Defendants violated Sections 14(a) and/or 20(a) of the Exchange Act, and (v) (vii) such other and further equitable relief as the court may deem just and proper.

In addition, as of March 23, 2023 the date of this Schedule 14A, CSI has received four six demand letters (the “Demand Letters”) from counsel to purported stockholders, which generally seek to have certain information allegedly omitted from the preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023 and this proxy statement be disclosed.

The CSI Defendants believe the allegations and claims asserted in the Complaint Complaints and the Demand Letters are without merit and that the disclosures in the preliminary proxy statement on Schedule 14A filed with the SEC on March 13, 2023, and this proxy statement comply fully with applicable law. We cannot predict the outcome of, or estimate the possible loss or range of loss from, these matters. It is possible that additional or similar complaints or demand letters may be filed against, or received by, CSI, the Board of Directors, or Abbott. If such additional complaints are filed or demand letters received, absent new or different allegations that are material, we will not necessarily announce such additional complaints or demand letters.”

This filing has been prepared in respect of the Merger, and may be deemed to be soliciting material relating to the Merger. In connection with the Merger, CSI has filed with the SEC preliminary and definitive proxy statements relating to the Merger Agreement, the Merger, and the other transactions contemplated thereby, and other relevant documents. The Proxy Statement was sent by CSI commencing on March 23, 2023 to its stockholders as of the close of business on March 14, 2023, the record date established for voting on the Merger Agreement, the Merger, and the other transactions contemplated thereby, and any other matters to be voted on at the Special Meeting as detailed in the Proxy Statement. BEFORE MAKING ANY VOTING DECISIONS, STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT, ANY AMENDMENTS OR SUPPLEMENTS THERETO, ANY OTHER SOLICITING MATERIALS, ANY DOCUMENTS WHICH ARE INCORPORATED BY REFERENCE IN THE PROXY STATEMENT, AND ANY OTHER DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN, OR WILL CONTAIN, IMPORTANT INFORMATION ABOUT CSI, ABBOTT, THE MERGER AGREEMENT, THE MERGER, AND RELATED MATTERS. Stockholders are or will be able to obtain a copy of the Proxy Statement, as well as other filings containing information about the Merger Agreement, the Merger, and the other transactions contemplated thereby that are filed by CSI with the SEC, free of charge on EDGAR at www.sec.gov or on the investor relations page of CSI’s website at www.investors.csi360.com.

CSI and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of CSI in respect of the Merger. Information about CSI’s directors and executive officers is set forth in the proxy statement for CSI’s 2022 Annual  Meeting of Stockholders, as revised, which was filed with the SEC on October 26, 2022, and its Annual Report on Form 10-K for the fiscal year ended June 30, 2022, which was filed with the SEC on August 18, 2022.

Other information regarding the participants in the proxy solicitation in connection with the Merger and a description of their interests, which may, in some cases, be different than those of CSI’s stockholders generally, is contained in the Proxy Statement and other relevant materials to be filed with the SEC in respect of the Merger Agreement, the Merger, and the other transactions contemplated thereby, when they become available.

This Schedule 14A contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to the Merger and the financial condition, results of operations and businesses of CSI. Some of these statements can be identified by terms and phrases such as “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. CSI cautions readers of this Schedule 14A that such “forward looking statements,” wherever they occur in this Schedule 14A or in other statements attributable to CSI, are necessarily estimates reflecting the judgment of CSI’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.”

Factors that could cause CSI’s actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the risks detailed in CSI’s filings with the SEC, including in its most recent filings on Forms 10-K and 10-Q, factors and matters described or incorporated by reference in this Schedule 14A, and the following factors:

Additional factors that could cause CSI’s actual outcomes or results to differ materially from those described in the forward-looking statements can be found in the “Risk Factors” sections of CSI’s Annual Report on Form 10-K for the period ended June 30, 2022 and Quarterly Reports on Form 10-Q for the periods ended September 30, 2022 and December 31, 2022, as such factors may be further updated from time to time in CSI’s other filings with the SEC. These reports are or will be accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in CSI’s filings with the SEC.

Except as required by applicable law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. Our stockholders are advised, however, to consult any future disclosures we make on related subjects as may be detailed in our other filings made from time to time with the SEC.