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Corindus Vascular Robotics, Inc. – ‘DEFM14A’ on 9/26/19

On:  Thursday, 9/26/19, at 8:00am ET   ·   Effective:  9/26/19   ·   Accession #:  1387131-19-7153   ·   File #:  1-37406

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 9/26/19  Corindus Vascular Robotics, Inc.  DEFM14A     9/26/19    1:1.8M                                   Quality EDGAR So… LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFM14A     Definitive Proxy Statement Relating to Merger or    HTML   1.27M 
                Acquisition                                                      

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

CORINDUS VASCULAR ROBOTICS, INC.

(Name of Registrant as Specified In Its Charter)

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 ☐

No fee required.

☐

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

September 26, 2019

Dear Fellow Stockholder:

On August 7, 2019, Corindus Vascular Robotics, Inc. (“Corindus”) entered into a definitive merger agreement to be acquired by Siemens Medical Solutions USA, Inc. (“SMS USA”). Pursuant to and subject to the terms and conditions of the merger agreement, a wholly owned subsidiary of SMS USA will be merged with and into Corindus and Corindus will survive the merger as a wholly owned subsidiary of SMS USA.

If the merger is completed, our stockholders will have the right to receive (i) $4.28 in cash, without interest, subject to any applicable withholding taxes (the “common stock consideration”), for each share of common stock, par value $0.0001 per share, of Corindus (“Corindus common stock”) and (ii) $85.60 in cash, without interest, subject to any applicable withholding taxes (the “preferred stock consideration”), for each share of Series A Convertible Preferred Stock, par value $0.0001 per share, of Corindus (the “Series A preferred stock”) and for each share of Series A-1 Convertible Preferred Stock, par value $0.0001 per share, of Corindus (the “Series A-1 preferred stock” and, together with the Series A preferred stock, the “Corindus preferred stock”), that they own immediately prior to the effective time of the merger (other than, in each of the foregoing clauses (i) and (ii), stockholders that have properly exercised and perfected and not lost or withdrawn their appraisal rights under Delaware law with respect to such shares).

You are cordially invited to attend a special meeting of our stockholders to be held in connection with the proposed merger on October 25, 2019 at 8:00 a.m., Eastern Time, at Grant Thornton’s offices at 75 State Street, 13^th Floor, Boston, Massachusetts 02109. At the special meeting, all stockholders will be asked to consider and vote on a proposal to adopt the merger agreement and approve the transactions contemplated thereby, including the merger (the “merger proposal”). Approval of the merger proposal requires the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Corindus common stock and Corindus preferred stock, voting together as a single class, with the holders of Corindus preferred stock entitled to cast a number of votes calculated by dividing the number of shares of Corindus preferred stock held by such stockholder by $1.29, in accordance with Corindus’ certificate of designation designating the Corindus preferred stock.

The Corindus board of directors (other than Mr. Nathan Harrington, who abstained from the Board vote on the merger) has determined that it is in the best interests of Corindus and Corindus’ stockholders that Corindus enter into the merger agreement and has approved and declared advisable the merger agreement and the merger. The Corindus board of directors (other than Mr. Harrington, who abstained) made its determination after consideration of a number of factors more fully described in this proxy statement. The Corindus board of directors (other than Mr. Harrington, who abstained from the Board vote on the merger) has unanimously recommended that you vote “FOR” the merger proposal.

The common stock consideration per share represents a 76.9% premium over the closing price of $2.42 per share of Corindus common stock on August 7, 2019, the last trading day prior to the public announcement of the proposed merger and a 49.7% premium over the 30-day volume-weighted average price of approximately $2.86 per share of Corindus common stock on August 7, 2019.

At the special meeting, Corindus’ stockholders will also be asked to vote on a proposal to approve, on a non-binding, advisory basis, certain compensation that will or may be paid to Corindus’ named executive officers by Corindus based on or otherwise relating to the merger, as required by the rules adopted by the Securities and Exchange Commission, and a proposal to approve an adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional votes for the approval of the merger proposal if there are insufficient votes to approve the merger proposal at the time of the special meeting. Corindus’ board of directors (other than Mr. Harrington, who abstained) has unanimously recommended that you vote “FOR” each of these proposals.

The merger cannot be completed unless Corindus’ stockholders holding a majority of the voting power of the outstanding shares of Corindus common stock and Corindus preferred stock, voting together as a single class, with the holders of Corindus preferred stock entitled to cast a number of votes calculated by dividing the number of shares of Corindus preferred stock held by such stockholder by $1.29, approve the merger proposal. Your vote is very important, regardless of the number of shares you own. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting. If you intend to attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. The failure to vote on the merger proposal will have the same effect as a vote “AGAINST” this proposal.

The obligations of Corindus and SMS USA to complete the merger are subject to the satisfaction or waiver of certain conditions. The accompanying proxy statement contains detailed information about SMS USA, the special meeting, the merger agreement and the merger.

Thank you for your confidence in Corindus.

Yours truly,

Mark J. Toland
President and Chief Executive Officer

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved of the merger, passed upon the merits of the merger agreement or the merger or determined if the accompanying proxy statement is accurate or complete. Any representation to the contrary is a criminal offense.

The accompanying proxy statement is dated September 26, 2019 and, together with the enclosed form of proxy, is first being mailed to Corindus’ stockholders on or about September 26, 2019.

Corindus Vascular Robotics, Inc.
309 Waverley Oaks Road, Suite 105

Waltham, Massachusetts 02452

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE SUBMIT A PROXY OVER THE INTERNET OR BY TELEPHONE PURSUANT TO THE INSTRUCTIONS CONTAINED IN THESE MATERIALS OR COMPLETE, DATE, SIGN AND RETURN A PROXY CARD AS PROMPTLY AS POSSIBLE. IF YOU RECEIVE MORE THAN ONE PROXY BECAUSE YOU OWN SHARES REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SUBMITTED. IF YOU DO NOT SUBMIT YOUR PROXY, OR DO NOT INSTRUCT YOUR BROKER HOW TO VOTE YOUR SHARES OR DO NOT VOTE IN PERSON AT THE SPECIAL MEETING ON THE MERGER PROPOSAL, THIS WILL HAVE THE SAME EFFECT AS A VOTE “AGAINST” THE MERGER PROPOSAL BUT WILL HAVE NO EFFECT ON THE NAMED EXECUTIVE OFFICER MERGER-RELATED COMPENSATION PROPOSAL OR THE ADJOURNMENT PROPOSAL.

Approval of the merger proposal requires the affirmative vote of the holders of a majority of the voting power of the shares of Corindus common stock and Corindus preferred stock outstanding at the close of business on the record date, voting together as a single class, with the holders of Corindus preferred stock entitled to cast a number of votes calculated by dividing the number of shares of Corindus preferred stock held by such stockholder by $1.29, in accordance with Corindus’ certificate of designation designating the Corindus preferred stock.

Approval of each of the named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of a majority of the votes cast, either affirmatively or negatively (meaning the number of shares voted “FOR” each respective proposal must exceed the number of shares voted “AGAINST” each respective proposal for it to be approved) (with the holders of Corindus preferred stock voting on the basis described in the preceding paragraph), at a meeting at which a quorum is present.

Your proxy may be revoked at any time before the vote at the special meeting by following the procedures outlined in the accompanying proxy statement.

If your shares are held by a broker, bank or other nominee and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. Please also bring to the special meeting your account statement evidencing your respective beneficial ownership of Corindus common stock or Corindus preferred stock as of the record date. All stockholders and proxy holders who attend the special meeting must also bring photo identification.

The proxy statement, of which this notice forms a part, provides a detailed description of the merger agreement and the merger. We urge you to read the proxy statement, including any documents incorporated by reference, and its annexes carefully and in their entirety. If you have any questions concerning the merger or the proxy statement, or would like additional copies of the proxy statement or need help voting your shares of Corindus common stock or Corindus preferred stock, please contact Corindus’ proxy solicitor, MacKenzie Partners, Inc.

By Order of the Board of Directors,  

David W. Long
Corporate Secretary

Waltham, Massachusetts
September 26, 2019

TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following are brief answers to certain questions that you may have regarding the merger, the special meeting and the proposals being considered at the special meeting. We urge you to carefully read the remainder of this proxy statement because the information in this section does not provide all the information that might be important to you with respect to the merger and the special meeting. Additional important information is also contained in the annexes attached to this proxy statement and the documents referred to or incorporated by reference into this proxy statement.

You do not need to attend the special meeting to vote your shares of Corindus capital stock. Shares represented by valid proxies, received in time for the special meeting and not revoked prior to the special meeting, will be voted at the special meeting.

Pursuant to the voting agreement, HealthCor has agreed to vote (or cause to be voted) all voting securities of Corindus held by HealthCor, representing in the aggregate 52,482,133 shares of Corindus common stock or approximately 25% of the outstanding voting power of Corindus capital stock entitled to vote at the special meeting, in favor of adoption of the merger agreement and approval of the merger.

Each holder of Corindus preferred stock has the right, at any time, at such holder’s option, to convert all or any portion of their shares of Corindus preferred stock into shares of Corindus common stock. Pursuant to the certificate of designation, each share of Corindus preferred stock shall then be converted into a number of shares of Corindus common stock determined in accordance with the preferred stock conversion ratio. Furthermore, if the Corindus common stock trading price exceeds $4.00 per share (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the date of the certificate of designation) for a 30 consecutive trading day period and Corindus, at its option, delivers a written notice to the holders of the Corindus preferred stock within 10 business days of the conclusion of such period, then each share of Corindus preferred stock outstanding shall be converted into a number of shares of Corindus common stock determined pursuant to the preferred stock conversion ratio. As of the record date, each share of Corindus preferred stock would, in effect, convert into 23,208,000 shares of Corindus common stock and, following such conversion, each such share of Corindus common stock would, in effect, be entitled to one vote per share, identical to all other shares of Corindus common stock.

Backup withholding may also apply to the cash payments made pursuant to the merger unless the holder or other payee provides a taxpayer identification number, certifies that such number is correct, and otherwise complies with the backup withholding rules. You are urged to read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96 of this proxy statement for a more detailed discussion of the U.S. federal income tax consequences of the merger. You are also urged to consult your tax advisor for a complete analysis of the Tax (as defined in the merger agreement) consequences of the merger to you in your particular circumstances.

Whether or not you plan to attend the meeting, we urge you to submit a proxy to vote to ensure your vote is counted. You may still attend the meeting and vote in person if you have already submitted a proxy. Please choose only one method to cast your vote by proxy. We encourage you to vote by submitting a proxy over the internet or by telephone, both of which are convenient, cost-effective and reliable alternatives to returning a proxy card by mail. If you return your signed proxy card to us or vote by submitting your proxy by telephone or over the internet before the special meeting, and you do not subsequently revoke your proxy, we will vote your shares as you direct in such proxy.

If you return an executed proxy and do not indicate how you wish to vote with regard to a particular proposal, your shares of Corindus capital stock will be voted in favor of such proposal.

If you are the beneficial owner of shares of Corindus capital stock held in “street name,” you will have to follow the instructions provided by your broker, bank or other nominee to change or revoke your voting instructions provided to such broker, bank or other nominee.

For the named executive officer merger-related compensation proposal and the adjournment proposal, you may vote “FOR,” “AGAINST” or “ABSTAIN.” Each of the named executive officer merger-related compensation proposal and the adjournment proposal requires for its approval the affirmative vote of a majority of the votes cast, either affirmatively or negatively (meaning the number of shares voted “FOR” each respective proposal must exceed the number of shares voted “AGAINST” each respective proposal for it to be approved) (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio), at a meeting at which a quorum is present. As a result, abstentions will be counted for purposes of determining whether a quorum is present, but will have no effect on the outcome of the named executive officer merger-related compensation proposal and the adjournment proposal. If you fail to vote (or submit voting instructions to your bank, broker or other nominee, in the case of “street name” shares), it will also have no effect on the outcome of the named executive officer merger-related compensation proposal and the adjournment proposal, and will not be counted for purposes of determining the presence of a quorum.

Each Corindus restricted stock unit award outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (i) the common stock consideration and (ii) the number of shares of Corindus common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law.

Each Corindus warrant outstanding and unexercised immediately prior to the effective time will be cancelled and converted into the right to receive a cash payment (without interest) equal to (i) the product of (a) the excess, if any, of (1) the common stock consideration over (2) the per share exercise price of such Corindus warrant, and (b) the number of shares of Corindus common stock subject to such Corindus warrant as of the effective time, less (ii) any applicable withholding taxes required to be withheld by applicable law.

MacKenzie Partners, Inc.
1407 Broadway, 27^th Floor
New York, NY 10018

Email: proxy@mackenziepartners.com

(212) 929-5500 (Call Collect)

or

Call Toll Free (800) 322-2885

or

Corindus Vascular Robotics, Inc.
Attention: Investor Relations
ir@corindus.com

If your broker, bank or other nominee holds your shares of Corindus capital stock, you should also call your broker, bank or other nominee for additional information.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement and the attached annexes contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. We intend for these forward-looking statements to be covered by the safe harbor provisions of the federal securities laws relating to forward-looking statements. These forward-looking statements include statements relating to the expected timing, completion and effects of the proposed merger, as well as other statements representing management’s beliefs about future events, transactions, strategies, operations and financial results, including, without limitation, our expectations with respect to the costs and other anticipated financial impacts of the proposed merger; future financial and operating results of Corindus; Corindus’ plans, objectives, expectations and intentions with respect to future operations and services; required approvals to complete the proposed merger by our stockholders and by governmental regulatory authorities, and the timing and conditions for such approvals; the stock price of Corindus common stock prior to the consummation of the proposed merger; the satisfaction of the closing conditions to the proposed merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; disruption of management’s attention from Corindus’ ongoing business operations due to the proposed merger; and the effect of the announcement of the proposed merger on the ability of Corindus to retain and hire key personnel and maintain relationships with its customers, suppliers and others with whom it does business, or on its operating results and business generally. These statements are generally accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “target,” “project,” “potential,” “continue,” “forecast,” “predict,” “plan,” “may,” “will,” “could,” “would,” “should,” “expect,” or the negative of such terms or other comparable terminology. Forward-looking statements are made based upon management’s current expectations and beliefs and are not guarantees of future performance. Such forward-looking statements involve numerous assumptions, risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. Our actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others, those risks and uncertainties described in any of our filings with the SEC. Certain other factors which may impact our business, financial condition or results of operations or which may cause actual results to differ from such forward-looking statements are discussed or included in our periodic reports filed with the SEC and are available on our website at www.corindus.com under “Investor Relations.” You are urged to carefully consider all such factors. Although it is believed that the expectations reflected in such forward-looking statements are reasonable and are expressed in good faith, such expectations may not prove to be correct and persons reading this proxy statement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only to expectations as of the date of this proxy statement. We do not undertake or plan to update or revise forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this proxy statement, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If we make any future public statements or disclosures which modify or impact any of the forward-looking statements contained in or accompanying this proxy statement, such statements or disclosures will be deemed to modify or supersede such statements in this proxy statement.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from those suggested by our forward-looking statements. These risks and uncertainties include (1) with respect to the merger, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, including in circumstances in which we would be required to pay a termination fee of $32.515 million; the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transactions contemplated by the merger agreement; risks related to disruption of management’s attention from Corindus’ ongoing business operations due to the transactions contemplated by the merger agreement; the effect of the announcement of the proposed merger on Corindus’ relationships with its customers, employees, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; risks that the proposed merger disrupts our current plans and operations or affects our ability to retain or recruit key employees; the risk that our stock price may decline significantly if the merger is not consummated; the fact that under the terms of the merger agreement, we are unable to solicit other Company Acquisition Proposals during the pendency of the merger; the nature, cost and outcome of any litigation and other legal proceedings, including any such proceedings related to the merger and instituted against us and others; the fact that receipt of the all-cash common stock consideration would be taxable to our stockholders that are treated as U.S. holders for United States federal income tax purposes; the fact that our stockholders would forgo the opportunity to realize the potential long-term value of the successful execution of our current strategy as an independent public company; and (2) our ability to expand our technology platform and achieve the advances necessary for tele-stenting and remote procedures, including in humans; our ability to expand our technology platform for use in other segments of the vascular intervention market, including neurointerventional and other more complex cardiac interventions; obtaining necessary regulatory approvals for the use on humans and marketing of our products in the United States and in other countries; the rate of adoption of our CorPath System and the rate of use of our cassettes; risks associated with market acceptance, including pricing and reimbursement; our ability to enforce our intellectual property rights; our need for additional funds to support our operations; our ability to manage expenses and cash flow; factors relating to engineering, regulatory, manufacturing, sales and customer service challenges; potential safety and regulatory issues that could slow or suspend our sales; and the effect of credit, financial and economic conditions on capital spending by our potential customers, competition from other similar businesses, market and general economic factors and other risks and uncertainties set forth in Corindus’ Annual Report on Form 10-K for fiscal year ended December 31, 2018 and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K under Item 1A “Risk Factors”.

THE PARTIES TO THE MERGER

Corindus Vascular Robotics, Inc.

Corindus Vascular Robotics, Inc.

309 Waverley Oaks Road, Suite 105

Waltham, Massachusetts 02452

(508) 653-3335

The Company is engaged in the design, manufacture and sales of precision vascular robotic-assisted systems for use in interventional vascular procedures. Our CorPath® platform is the first FDA-cleared medical device to bring robotic precision to percutaneous coronary and vascular procedures. CorPath GRX is the second-generation robotic-assisted technology offering enhancements to the platform by adding upgrades that increase precision, improve workflow, and extend the capabilities and range of procedures that can be performed robotically.

Corindus common stock is traded on NYSE American under the ticker symbol CVRS. Our headquarters are located at 309 Waverley Oaks Road, Suite 105, Waltham, Massachusetts 02452 and our telephone number is (508) 653-3335. Our corporate web address is www.corindus.com.

For additional information about Corindus included in documents incorporated by reference into this proxy statement, see the section entitled “Where You Can Find More Information” on page 100 of this proxy statement.

Siemens Medical Solutions USA, Inc.

Siemens Medical Solutions USA, Inc.
40 Liberty Boulevard
Malvern, Pennsylvania 19355
888-826-9702

SMS USA, a Delaware corporation, is an indirect wholly owned subsidiary of Healthineers, and is a primary U.S. operating subsidiary of Healthineers. SMS USA provides medical diagnostic equipment and healthcare technology to public and private customers in the United States.

A leader in medical technology, Healthineers is constantly innovating its portfolio of products and services in its core areas of diagnostic and therapeutic imaging and in laboratory diagnostics and molecular medicine. Healthineers enables and empowers healthcare providers worldwide to expand precision medicine, transform care delivery, improve patient experiences and digitalize healthcare. At the end of its most recent fiscal year on September 30, 2018, Healthineers generated revenue of €13.4 billion and adjusted profit of €2.3 billion and had approximately 50,000 employees worldwide.

For additional information, visit www.siemens-healthineers.com/en-us/. The information provided on the Healthineers or SMS USA websites are not part of this proxy statement and are not incorporated in this proxy statement by reference or by any other reference to the Healthineers or SMS USA websites provided in this proxy statement.

Merger Sub

Corpus Merger, Inc.
40 Liberty Boulevard
Malvern, Pennsylvania 19355
888-826-9702

Merger Sub is a Delaware corporation and a wholly owned subsidiary of SMS USA, with principal executive offices located at 40 Liberty Boulevard, Malvern, PA 19355, USA, telephone number 888-826-9702. It was formed for the purpose of engaging in the transactions contemplated by the merger agreement. Upon completion of the merger, Merger Sub will merge with and into Corindus, with Merger Sub ceasing to exist and Corindus continuing as the surviving corporation and a wholly owned subsidiary of SMS USA.

THE SPECIAL MEETING

This proxy statement is being provided to Corindus stockholders as part of a solicitation by the Board of proxies for use at the special meeting to be held at the time and place specified below, and at any properly convened meeting following an adjournment or postponement of the special meeting.

Date, Time and Place

The special meeting is scheduled to be held at Grant Thornton’s offices at 75 State Street, 13^th Floor, Boston, Massachusetts 02109 on October 25, 2019 at 8:00 a.m., Eastern Time.

Purpose of the Special Meeting

At the special meeting, Corindus stockholders will be asked to consider and vote on the following proposals:

Corindus stockholders must approve the merger proposal as a condition to the completion of the merger. If the Corindus stockholders fail to approve the merger proposal, the merger will not occur. The vote on the named executive officer merger-related compensation proposal is a vote separate and apart from the vote to approve the merger proposal. Accordingly, a stockholder may vote to approve the merger proposal and vote not to approve the named executive officer merger-related compensation proposal, and vice versa. Because the vote on the named executive officer merger-related compensation proposal is only advisory in nature, it will not be binding on Corindus, SMS USA, Merger Sub or the surviving corporation. Accordingly, because Corindus is contractually obligated to pay such merger-related compensation, such compensation will be payable, subject only to the conditions applicable thereto, if the merger proposal is approved and the closing occurs, regardless of the outcome of the advisory vote.

Recommendation of the Corindus Board of Directors

The Board (other than Mr. Harrington, who abstained from the Board vote on the merger) has determined that it is in the best interests of Corindus and the Corindus stockholders that Corindus enter into the merger agreement and has approved and declared advisable the merger agreement and the merger. A description of factors considered by the Board (other than Mr. Harrington) in reaching its decision to approve and declare advisable the merger agreement can be found in “The Merger – Recommendation of the Board and Reasons for the Merger” beginning on page 43 of this proxy statement.

The Board (other than Mr. Harrington, who abstained from the Board vote on the merger) unanimously recommends that the Corindus stockholders vote “FOR” the merger proposal, “FOR” the named executive officer merger-related compensation proposal and “FOR” the adjournment proposal.

The merger proposal must be approved as a condition for the merger to occur. If the Corindus stockholders fail to approve the merger proposal by the requisite vote, the merger will not occur.

Record Date; Stockholders Entitled to Vote

Only holders of Corindus common stock or Corindus preferred stock at the close of business on September 26, 2019, the record date for the special meeting, will be entitled to notice of, and to vote at, the special meeting or any adjournments or postponements of the special meeting. At the close of business on the record date (i) 208,685,413 shares of Corindus common stock were issued and outstanding and entitled to vote at the special meeting and (ii) 1,160,400 shares of Corindus preferred stock were issued and outstanding and entitled to vote at the special meeting. A list of stockholders entitled to vote at the special meeting will be available in our offices located at 309 Waverley Oaks Road, Suite 105, Waltham, Massachusetts 02452, during regular business hours for a period of at least 10 days before the special meeting and at the special meeting venue during the meeting.

Holders of Corindus common stock are entitled to one vote for each share of Corindus common stock they own at the close of business on the record date. Holders of Corindus preferred stock are entitled to vote each share of Corindus preferred stock they own at the close of business on the record date, and cast a number of votes per share of Corindus preferred stock determined in accordance with the preferred voting ratio.

The presence at the special meeting, in person or by proxy, of the holders of a majority of the voting power of all of the shares of Corindus capital stock entitled to vote at the special meeting (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio), is necessary to constitute a quorum at the special meeting. There must be a quorum for business to be conducted at the special meeting. If no quorum is present at the special meeting, the chairman of the special meeting or the holders of a majority of the voting power of the shares entitled to vote who are present, in person or by proxy, may adjourn the special meeting to another place, date or time. The failure of a quorum to be present at the special meeting will necessitate an adjournment or postponement of the special meeting and may subject Corindus to additional expense.

If you submit a properly executed proxy card or submit your proxy over the internet or by telephone, even if you abstain from voting, your shares will be counted as present for purposes of determining whether a quorum exists at the special meeting. If you hold your shares in “street name,” the failure to instruct your bank, broker or other nominee on how to vote your shares of Corindus capital stock will result in such shares not being counted for purposes of determining the presence of a quorum.

Required Vote

The approval of the merger proposal requires the affirmative vote of the holders of a majority of the voting power of shares of Corindus capital stock (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio) outstanding at the close of business on the record date and entitled to vote thereon.

Approval of each of the named executive officer merger-related compensation proposal and the adjournment proposal requires the affirmative vote of a majority of the votes cast, either affirmatively or negatively (meaning the number of shares voted “FOR” each respective proposal must exceed the number of shares voted “AGAINST” each respective proposal for it to be approved) (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio), at a meeting at which a quorum is present.

The certificate of designation provides that each holder of Corindus preferred stock shall be entitled to a number of votes in respect of Corindus preferred stock owned of record by them equal to the number of shares of Corindus common stock determined by dividing the number of shares of Corindus preferred stock held by the holder by $1.29 as of the record date.

Each holder of Corindus preferred stock has the right, at any time, at such holder’s option, to convert all or any portion of such holder’s shares of Corindus preferred stock into shares of Corindus common stock. Pursuant to the certificate of designation, each share of Corindus preferred stock shall then be converted into such number of shares of Corindus common stock equal determined in accordance with the preferred stock conversion ratio. Furthermore, if the Corindus common stock trading price exceeds $4.00 per share (as equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the date of the certificate of designation) for a 30 consecutive trading day period and Corindus, at its option, delivers a written notice to the holders of the Corindus preferred stock within 10 business days of the conclusion of such period, then each share of Corindus preferred stock outstanding shall be converted into such number of shares of Corindus common stock determined pursuant to the preferred stock conversion ratio. As of the record date, each share of Corindus preferred stock would, in effect, convert into 23,208,000 shares of Corindus common stock and, following such conversion, each such share of Corindus common stock would, in effect, be entitled to one vote per share, identical to all other shares of Corindus common stock.

An abstention occurs when a stockholder attends a meeting, either in person or by proxy, but abstains from voting by marking “ABSTAIN” on such holder’s ballot or proxy.

Abstentions will not count as votes cast for or against the merger proposal, but will still count for the purpose of determining whether a quorum is present. However, the vote to approve the merger proposal is based on the total voting power of shares of Corindus capital stock outstanding on the record date. As a result, if you abstain, or if you fail to vote (or fail to submit voting instructions to your bank, broker or other nominee, in the case of “street name” shares), it will have the same effect as if you vote “AGAINST” the approval of the merger agreement.

Each of the named executive officer merger-related compensation proposal and the adjournment proposal requires for its approval the affirmative vote of a majority of the votes cast, either affirmatively or negatively (meaning the number of shares voted “FOR” each respective proposal must exceed the number of shares voted “AGAINST” each respective proposal for it to be approved) (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio), at a meeting at which a quorum is present. As a result, abstentions will be counted for purposes of determining whether a quorum is present and, assuming a quorum is present, will have no effect on the outcome of the named executive officer merger-related compensation proposal and the adjournment proposal.

If no instruction as to how to vote is given (including no instruction to abstain from voting) in an executed, duly returned and not revoked proxy, the proxy will be voted “FOR” (i) approval of the merger proposal, (ii) approval of the named executive officer merger-related compensation proposal and (iii) approval of the adjournment proposal.

Failure to Vote and Broker Non-Votes

If you are a stockholder of record and you do not sign and return your proxy card by mail or submit a proxy over the internet or by telephone or if you do not vote in person at the special meeting, your shares of Corindus capital stock will not be voted at the special meeting, will not be counted as present in person or by proxy at the special meeting and will not be counted as present for purposes of determining whether a quorum exists.

Broker non-votes are shares of Corindus capital stock held in “street name” by brokers, banks and other nominees that are present or represented by proxy at the special meeting, but with respect to which the broker, bank or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and such broker, bank or nominee does not have discretionary voting power on such proposal. Under NYSE American rules, brokers, banks and other nominees holding shares in “street name” do not have discretionary voting authority with respect to any of the three proposals described in this proxy statement. Accordingly, if a beneficial owner of shares of Corindus capital stock held in “street name” does not give voting instructions to the broker, bank or other nominee with respect to at least one of the three proposals, then those shares of Corindus capital stock will not be counted as present in person or by proxy at the special meeting. Because all three proposals are non-discretionary matters, it is not expected that there will be any broker non-votes at the special meeting; however, it is possible that a broker non-vote could occur with respect to one or more of the proposals to the extent that voting instructions are given to a broker, bank or other nominee with respect to at least one but less than all of the proposals. Because the vote to approve the merger proposal is based on the total voting power of all shares of Corindus capital stock outstanding on the record date, if you fail to issue voting instructions to your broker, bank or other nominee or if a broker non-vote occurs with respect to the merger proposal, it will have the same effect as a vote “AGAINST” the merger proposal but will have no effect on the named executive officer merger-related compensation proposal or the adjournment proposal.

To the extent that you fail to issue voting instructions to your broker, bank or other nominee or a broker non-vote occurs with respect to the named executive officer merger-related compensation proposal or the adjournment proposal, it will have no effect on the outcome of such proposals.

Voting by Corindus’ Directors and Executive Officers

Corindus’ directors and executive officers have informed us that they intend to vote their shares of Corindus capital stock in favor of the merger proposal and the other proposals to be considered at the special meeting, although none of Corindus’ directors and executive officers is obligated to do so (except as described in the following paragraph). At the close of business on the record date, directors and executive officers of Corindus either directly or through their affiliates, collectively, beneficially owned and were entitled to vote 75,531,729 shares of Corindus common stock, representing approximately 36.19% of the shares of Corindus common stock outstanding on that date, and 673,032 shares of Corindus preferred stock, representing approximately 58.00% of the shares of Corindus preferred stock outstanding on that date. Collectively, such directors and executive officers held approximately 36.29% of the aggregate voting power of the outstanding shares of Corindus capital stock.

In connection with the execution of the merger agreement, SMS USA entered into the voting agreement with HealthCor, which are funds affiliated with our Chairman, pursuant to which HealthCor has agreed to vote (or cause to be voted) all voting securities of Corindus held by HealthCor, representing in the aggregate 52,482,133 shares of Corindus common stock or approximately 25% of the outstanding voting power of Corindus capital stock entitled to vote at the special meeting, in favor of adoption of the merger agreement and approval of the merger.

Attendance and Voting at the Special Meeting

Stockholders who are entitled to vote at the special meeting may attend the special meeting. Beneficial owners who have not obtained a proxy from the holder of record but who wish to attend the special meeting should bring a copy of an account statement reflecting their ownership of Corindus capital stock as of the record date. All stockholders and proxyholders should bring photo identification.

If your shares of Corindus capital stock are registered directly in your name with our transfer agent (Manhattan Transfer Registrar Company), you are considered a “stockholder of record” and there are four methods by which you may vote your shares or have your shares voted at the special meeting. You may attend the special meeting and vote your shares in person, or you may cause your shares to be voted by authorizing the persons named as proxies on the proxy card to vote your shares at the special meeting by returning the executed proxy card by mail or by voting through the internet or by telephone. If you choose to submit a proxy to vote your shares over the internet or by telephone, there is no need for you to mail back your proxy card. Although Corindus offers four different voting methods, Corindus encourages you to submit a proxy to vote either over the internet or by telephone to ensure that your shares of Corindus capital stock are represented and voted at the special meeting.

If your shares of Corindus capital stock are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a vote instruction form from your broker, bank or other nominee seeking instruction from you as to how your shares of Corindus capital stock should be voted. If you are a beneficial owner and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting.

Revocation of Proxies

You can change or revoke your proxy at any time before the final vote at the special meeting. If you are the record holder of your shares of Corindus capital stock, you may revoke your proxy by:

Please note, however, that only your last-dated proxy will count. Attending the special meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to Corindus or by sending a written notice of revocation to Corindus, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by Corindus before the special meeting. Please note that to be effective, your new proxy card, Internet or telephonic voting instructions or written notice of revocation must be received by our Secretary prior to the special meeting and, in the case of Internet or telephonic voting instructions, must be received before 11:59 p.m., Eastern Time, on October 24, 2019.

If you are the beneficial owner of shares held in “street name,” you should contact your broker, bank or other nominee with questions about how to change or revoke your voting instructions.

Solicitation of Proxies

The Board is soliciting your proxy, and Corindus will bear the cost of soliciting proxies. MacKenzie has been retained to assist with the solicitation of proxies. MacKenzie will be paid approximately $15,000 and will be reimbursed for its reasonable out-of-pocket expenses for these and related services in connection with the special meeting. Solicitation initially will be made by mail. Forms of proxies and proxy materials may also be distributed through brokers, banks and other nominees to the beneficial owners of shares of Corindus capital stock, in which case these parties will be reimbursed for their reasonable out-of-pocket expenses. Proxies may also be solicited in person or by telephone, facsimile, electronic mail, or other electronic medium by MacKenzie or, without additional compensation, by certain of Corindus’ directors, officers and employees.

Adjournments and Postponements

In addition to the merger proposal and the named executive officer merger-related compensation proposal, Corindus stockholders are also being asked to approve the adjournment proposal, which will enable the adjournment of the special meeting for the purpose of soliciting additional votes in favor of the merger proposal if there are not sufficient votes at the time of the special meeting to approve the merger proposal. If no quorum is present at the special meeting, the chairman of the meeting or the holders of a majority of the voting power of the shares entitled to vote who are present, in person or by proxy, may adjourn the special meeting to another place, date or time. If a quorum is present, then the affirmative vote of a majority of the votes cast, either affirmatively or negatively (meaning the number of shares voted “FOR” the proposal must exceed the number of shares voted “AGAINST” the proposal for it to be approved) (with the holders of Corindus preferred stock having a number of votes per share determined in accordance with the preferred voting ratio) will be required to approve the adjournment proposal. In addition, the special meeting could be postponed before it commences. If the special meeting is adjourned or postponed for the purpose of soliciting additional votes, stockholders who have already submitted their proxies will be able to revoke them at any time prior to the final vote on the proposals. If you return a signed proxy and do not indicate how you wish to vote on the adjournment proposal, your shares will be voted in favor of the adjournment proposal. If the Board fixes a new record date for the adjourned meeting, or if the date of the adjourned meeting is more than 30 days after the date for which the meeting was originally noticed, a notice will be given of the place, if any, date, and time of the adjourned meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting.

The Board (other than Mr. Harrington, who abstained from the Board vote on the merger) unanimously recommends a vote “FOR” the adjournment proposal, if necessary or appropriate, to solicit additional proxies.

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting to be Held on October 25, 2019

The proxy statement is available at http://www.proxyvote.com.

If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please contact MacKenzie, our proxy solicitor, or Corindus:

MacKenzie Partners, Inc.
1407 Broadway, 27^th Floor
New York, NY 10018

Email: proxy@mackenziepartners.com

(212) 929-5500 (Call Collect)

or

Call Toll Free (800) 322-2885

or

Corindus Vascular Robotics, Inc.
Attention: Investor Relations
ir@corindus.com

If your broker, bank or other nominee holds your shares of Corindus capital stock, you should also call your broker, bank or other nominee for additional information.

THE MERGER

The discussion of the merger in this proxy statement is qualified in its entirety by reference to the merger agreement, a copy of which is attached to this proxy statement as Annex A and hereby incorporated by reference into this proxy statement.

Structure of the Merger

Subject to the terms and conditions of the merger agreement and in accordance with the DGCL, at the effective time, Merger Sub will merge with and into Corindus, the separate corporate existence of Merger Sub will cease and Corindus will survive the merger as a wholly owned subsidiary of SMS USA.

Merger Consideration - What Stockholders Will Receive in the Merger

Upon the terms and subject to the conditions of the merger agreement, at the effective time (i) each outstanding share of Corindus common stock will be automatically converted into the right to receive $4.28 in cash, without interest and less any applicable withholding taxes, and (ii) each share of (A) Series A preferred stock issued and outstanding immediately prior to the effective time and (B) Series A-1 preferred stock issued and outstanding immediately prior to the effective time and Series A-1 preferred stock that has accrued and accumulated on a daily basis until the effective time, in accordance with the provisions of the certificate of designation, but which is not otherwise issued or outstanding immediately prior to the effective time, will have the right to receive an amount in cash equal to $85.60 (in each of the foregoing clauses (i) and (ii), other than any shares of Corindus capital stock that may be held by Corindus as treasury stock or held directly by SMS USA or any subsidiary of SMS USA (including Merger Sub), and other than any shares of Corindus capital stock owned by any stockholder who has properly exercised and perfected such holder’s demand for appraisal rights under Section 262 of the DGCL and not effectively withdrawn or lost such holder’s rights to appraisal). After the merger is completed, holders of Corindus capital stock will have only the right to receive a cash payment of the applicable merger consideration in respect of their shares, and will no longer have any rights as holders of Corindus capital stock, including voting or other rights. Shares of Corindus capital stock held by us or by SMS USA, Merger Sub or any of Corindus’ or SMS USA’s other direct or indirect wholly owned subsidiaries will be cancelled at the effective time.

Treatment of Corindus Equity Awards

The merger agreement provides that outstanding equity-based awards issued under Corindus’ equity incentive plans will be treated as set forth below:

Options. Under the merger agreement, each option to purchase shares of Corindus common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (i) the excess, if any, of the common stock consideration over the per share exercise price of such option, and (ii) the number of shares of Corindus common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the common stock consideration will be cancelled without payment. Any consideration with respect to Corindus options will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Restricted Stock Unit Awards. The merger agreement also provides that each Corindus restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (i) the common stock consideration and (ii) the number of shares of Corindus common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Any consideration with respect to Corindus restricted stock unit awards will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Treatment of Corindus Warrants

The merger agreement provides that each Corindus warrant that is outstanding and unexercised immediately prior to the effective time will be cancelled and converted into the right to receive a cash payment (without interest) equal to (i) the product of (a) the excess, if any, of (1) the common stock consideration over (2) the per share exercise price of such Corindus warrant, and (b) the number of shares of Corindus common stock subject to such Corindus warrant as of the effective time, less (ii) any applicable withholding taxes required to be withheld by applicable law. Prior to or at the effective time, SMS USA will deposit, or cause to be deposited, with a paying agent (which shall be a nationally recognized financial institution) designated by SMS USA that is reasonably acceptable to Corindus, cash in immediately available funds in an amount sufficient to pay any consideration with respect to the Corindus warrants.

Effects on Corindus if the Merger Is Not Completed

If the merger proposal is not approved by Corindus stockholders or if the merger is not consummated for any other reason, Corindus stockholders will not receive any payment for their shares of Corindus capital stock in connection with the merger. Instead, Corindus will remain a public company, Corindus common stock will continue to be listed and traded on the NYSE American and registered under the Exchange Act, Corindus preferred stock will continue to be issued and outstanding, and we will continue to file periodic reports with the SEC. In addition, if the merger is not completed, Corindus expects that management will operate Corindus’ business in a manner similar to that in which it is being operated today and that Corindus stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including, without limitation, risks related to the highly competitive industry in which Corindus operates and adverse economic conditions.

Furthermore, if the merger is not consummated, and depending on the circumstances that would have caused the merger not to be consummated, it is likely that the price of Corindus common stock will decline significantly. If that were to occur, it is uncertain when, if ever, the price of Corindus common stock would return to the price at which it trades as of the date of this proxy statement.

Under specified circumstances, upon termination of the merger agreement, Corindus may be required to pay SMS USA a termination fee of $32.515 million, as described under “The Merger Agreement – Termination Fee” beginning on page 87 of this proxy statement.

Background of the Merger

As part of its long-term strategic planning process, the Board regularly reviews Corindus’ near-term and long-term strategy, performance, positioning, and operating prospects with a view toward enhancing stockholder value.  These reviews have included consideration, from time to time, of utilizing Corindus’ robotic technologies in new therapeutic areas, collaboration or partnering arrangements, financing transactions, and other strategic alternatives to enhance stockholder value.

Corindus had historically focused its efforts in developing and utilizing robotic-assisted systems in percutaneous coronary procedures and, more recently, also in peripheral vascular interventions. By the spring of 2018, Corindus had achieved significant internal technical milestones with respect to tele-robotics and believed these advancements, if further developed, would permit Corindus’ robotic systems to be operated on a remote basis. As a result, an interventional procedure could be performed by a physician in a physical location separate from the location of the robotic system and the patient (that is, with the physician performing the procedure from a control panel in a location remote from the physical robotic system and the patient, utilizing the internet).

Corindus’ senior leadership believed that these developments created an opportunity to utilize its robotic systems in neurovascular procedures, specifically in procedures to treat acute ischemic stroke, which Corindus considered to be a market with significant potential. In the spring of 2018, Corindus’ senior leadership conducted exploratory discussions with leading interventional neurologists to discuss this possibility, and in July 2018 established a Physician Steering Committee of eight leading interventional neurologists to further advance the development of robotic treatment into neurovascular care.

By the summer of 2018, the Board determined that Corindus should focus significant strategic efforts further developing and refining a neurovascular robotic system with advanced capabilities such as remote enablement and automation.  In light of the significant unmet need for fast ischemic stroke thrombectomy, Corindus’ senior leadership and the Board believed that the research, design, development, manufacture and distribution of a remote robotic neurovascular solution would be accelerated and optimized with an experienced medical device company or imaging system company which could bring significant scale and integrated technologies into the solution, as well as financial resources. 

In August 2018, Corindus interviewed several investment banks to assist it in identifying and negotiating a strategic collaboration agreement with a partner that could collaborate with Corindus in funding and jointly developing Corindus’ next generation robotic-assisted system, which was intended to be utilized in neurological procedures.  The Company engaged Citi as its exclusive lead financial adviser in connection with the strategic collaboration because of, among other reasons, Citi’s knowledge of and familiarity with the medical technology industry, its previous role as Stryker Corporation’s financial advisor in connection with Stryker’s acquisition of Mako Surgical Corp., in 2013, and its general experience as a financial advisor in strategic collaboration transactions and in mergers and acquisitions.

Throughout the late summer and fall of 2018, Corindus continued to have ordinary course business conversations with various companies that sell products and systems utilized in connection with the same interventional procedure markets, including the neurovascular market, in which Corindus participates or plans to participate. On October 5, 2018, Mark Toland, the Chief Executive Officer and President of Corindus, and Corindus’ senior leadership met at Corindus’ Waltham, Massachusetts headquarters with Healthineers personnel, including Dr. Rebecca Fahrig, the Head of Innovations within the Advanced Therapies Business Area of Healthineers (“Healthineers AT”), to provide a technology demonstration of Corindus’ robotic capabilities. 

In mid-October 2018, Citi, on behalf of Corindus, contacted nine medical technology companies, with market capitalizations ranging from approximately $5 billion to $360 billion, in order to assess the potential interest of such parties in a neuro-interventional strategic collaboration with Corindus. Corindus believed, based in part on advice from Citi, that these parties had the scale, technical expertise and potential interest in robotic-assisted vascular procedures to collaborate with Corindus and jointly develop and commercialize Corindus’ next generation vascular robotic-assisted system for use in neuro-interventional and remote procedures.

In November and December 2018, Citi, on behalf of Corindus, delivered a process letter for a strategic collaboration to develop the next generation robotic system to five potential strategic collaboration partners that had expressed interest in response to Corindus’ late summer and fall contacts and Citi’s October contacts, and which the Board believed were potentially suitable strategic collaboration partners. The process letter contained a summary of “key terms” that very generally outlined Corindus’ proposed terms for a collaboration, which contemplated an unspecified upfront cash investment in Corindus and unspecified future development milestone payments, and proposed that the potential strategic collaboration partner provide more specific terms on which it was prepared to collaborate. In January 2019 Citi, on behalf of Corindus, delivered the process letter to an additional potential strategic collaboration partner (one of the nine parties originally identified by Citi) and in February 2019 delivered the process letter to Koninklijke Philips N.V. (“Philips”) which had also been one of the nine parties originally identified, as further described below. 

After delivering the process letter, Corindus executed non-disclosure agreements (or agreed that previously entered non-disclosure agreements would govern the strategic collaboration process) with parties that remained interested in participating in the process.  The non-disclosure agreements did not contain standstill provisions. Ultimately Corindus provided technology demonstrations and a management presentation (which contained informal preliminary financial information, which had not been approved by the Board, and made assumptions, among other things, with respect to the size of the overall stroke market and potential rate of penetration by the next generation robotic system) to five parties. 

Following the October 2018 meeting with Dr. Fahrig, on November 13, 2018 Mr. Toland and Douglas Teany, the Chief Operating Officer of Corindus, met with Healthineers AT’s senior leadership in Forchheim, Germany, including Michel Therin, Head of Healthineers AT.  At the meeting, the management teams discussed their views of, and their respective strategies and goals in, the neurovascular procedure market and possible ways that the companies could effectively work together. 

Following the November 2018 meeting, in December 2018, before receiving the collaboration process letter, Healthineers AT submitted a non-binding letter of intent in which Healthineers stated its interest in entering into joint research and development activities with Corindus. The letter of intent became obsolete after the process letter was received.

In early December 2018, Nathan R. Harrington, the Head of Business Development for Philips’ Image Guided Therapies business group and a member of the Board, indicated that it was unlikely that Philips, which had been one of the nine strategic medical technology companies contacted by Corindus and Citi in mid-October 2018, would be interested in participating in the strategic collaboration process. Philips had been a significant investor in Corindus prior to Corindus’ 2015 initial public offering, and as of February 2019 continued to beneficially own approximately 12.8% of the Corindus common stock.  In addition, Mr. Harrington had been a member of the Board since June 2017 (and other Philips employees had been on the Board continuously since prior to Corindus’ initial public offering). In light of Philips’ historic relationship with Corindus, Jeffrey Lightcap, the Chairman of Corindus’ Board, contacted the Vice President, M&A and Business Development at Philips, and received confirmation that Philips was not interested in participating in the strategic collaboration process.

On January 23, 2019, Mr. Lightcap, Mr. Toland and Corindus’ senior leadership met with senior leadership of Healthineers AT, including Mr. Therin, at Corindus’ headquarters in Waltham, Massachusetts.  At this meeting, Corindus’ senior leadership delivered a management presentation with respect to the potential strategic collaboration.

On February 11, 2019, Mr. Toland spoke by telephone with Mr. Therin about potential development milestone events that would trigger cash payments by Healthineers to Corindus under a collaboration structure with Healthineers, should Healthineers propose one to Corindus, in accordance with Corindus’ process letter.

Notwithstanding its earlier decision not to participate in Corindus’ strategic collaboration process, in February 2019 Mr. Harrington indicated that Philips had conducted an internal review of its strategy in neurology and was now interested in becoming Corindus’ strategic collaboration partner. On February 11, 2019, Mr. Lightcap confirmed Philips’ interest with Philips’ Executive Vice President and Chief Business Leader of the Image Guided Therapy Group. As a result, on February 12, 2019, Citi, on behalf of Corindus, delivered the process letter to Philips.  On February 13, 2019, Philips executed a non-disclosure agreement with Corindus. On February 15, 2019, Corindus’ senior leadership delivered the management presentation to Philips at Corindus’ headquarters.

On March 8, 2019, Healthineers submitted an initial non-binding letter of intent relating to a potential strategic collaboration, which contemplated an upfront investment by Healthineers of $28 million in exchange for Series A preferred stock, and future potential milestone payments of up to $22 million tied generally to the development by Corindus of the technology and intellectual property required for a suitable next generation robotic system, a commercialization agreement relating to the sale, distribution and marketing of the next generation robotic system when developed, and certain governance rights. 

On March 14, 2019, Philips amended its existing Schedule 13D, as amended. The amendment noted that Corindus had indicated that it was pursuing partnership discussions to co-develop a neurovascular robotic platform with remote capabilities, and stated that Philips might potentially make a proposal to Corindus to provide additional capital and/or strategic commercial collaboration. Also in mid-March, Mr. Harrington called Mr. Lightcap to confirm that Philips was preparing to submit a proposal.

On March 15, 2019, Corindus completed a private placement of Corindus common stock to institutional investors at a price of $1.3796 per share.

On March 25, 2019, Corindus retained Cadwalader, Wickersham & Taft LLP (“Cadwalader”) to represent it in connection with the negotiation of term sheets and definitive documentation with respect to a strategic collaboration.

On March 27, 2019, Mr. Lightcap, Mr. Toland and Corindus’ senior leadership met at Corindus’ headquarters with Mr. Therin and Michael Geiger, the Head of an M&A Team at Healthineers, to discuss and negotiate the terms of Healthineers’ proposed letter of intent. Hanno Herrmann, Head of Business Development for the Interventional Radiology Business Line (“IR”) of Healthineers AT, and Michael Scheuering, Executive Vice President IR, participated by telephone.

In late March or early April 2019, Mr. Harrington notified Mr. Lightcap that Philips would not, after all, be submitting a proposal with respect to the strategic collaboration at that time, but that Philips might be interested in a collaboration at some point in the future.  Because Corindus was in an ongoing process of discussing potential strategic collaborations with medical device companies and imaging companies that competed in the same markets as Philips, Mr. Lightcap and the other Board members became concerned that Mr. Harrington’s continued involvement in Board discussions relating to a collaboration might cause a potential partner to be less forthcoming about their future strategic plans, which the Board viewed as potentially impairing Corindus’ ability to successfully complete a collaboration agreement.  In light of these developments, in April Mr. Lightcap, at the request of the Board, suggested to Mr. Harrington that, as a result of the competitive dynamic between Philips and the parties that Corindus believed would be suitable strategic collaboration partners, the importance to Corindus of completing a collaboration agreement, Philips’ ongoing interest in a strategic collaboration notwithstanding its decision not to submit a strategic collaboration proposal at this time, and the potential conflict to which Mr. Harrington was subject as both a director of Corindus and as an executive of Philips, Mr. Harrington should consider recusing himself from future Board discussions relating to the strategic collaboration and other strategic discussions with companies participating in the same markets as Philips.  Mr. Harrington agreed that recusal was appropriate under the circumstances. Thereafter, until and including August 6, 2019 and with Mr. Harrington’s consent, Mr. Harrington was not given notice of, and did not participate in, meetings of the Board relating to the proposed strategic collaboration and other strategic discussions, including discussion relating to any proposed transactions with Healthineers.

On April 8, 2019, Mr. Toland and Mr. Teany had dinner in Boston with Bernd Montag, the Chief Executive of Healthineers, David Pacitti, the President of SMS USA and Head of Siemens Healthineers North America, and Christian Eusemann, Vice President, Head of NAM Collaborations for Healthineers, to further discuss the prospects of a strategic collaboration and Healthineers’ long-term vision in neurovascular procedures and how a strategic collaboration with Corindus could potentially fit within that vision.

On April 29, 2019, Healthineers submitted a revised non-binding term sheet regarding its collaboration proposal, which contemplated an upfront investment by Healthineers of approximately $45 million in exchange for a newly-issued class of convertible preferred stock with terms substantially similar to the terms of Corindus’ Series A preferred stock, future secured loans of up to $45 million tied generally to the development by Corindus of the required technology and intellectual property required for a suitable next generation robotic system (which loans would be converted into co-ownership of intellectual property developed during the term of the collaboration), certain revenue shares with respect to equipment sales, consumables and service fees generated in connection with the sale of the robotic systems, and exclusive distribution rights for neurovascular applications.  In addition, Healthineers’ proposal contained the condition that from and after execution of a definitive strategic collaboration agreement, no direct competitors of Healthineers would be represented on the Board (which would have required Mr. Harrington to resign from service on the Board).

On May 2 and May 3, 2019, the Board held a regularly scheduled in-person meeting to discuss, among other things, a financial update and review of Corindus’ performance and other regular business. Members of Corindus’ senior leadership participated in the meeting. Mr. Toland updated the Board, among other things, with respect to the April meeting with Healthineers and the terms for the strategic collaboration proposed by Healthineers at end of April, and the Board directed Corindus’ senior leadership to continue discussions with Healthineers and with other potential partners. No other potential party had submitted a written proposal for a strategic collaboration in response to the process letter by this time (other than Healthineers). Consistent with the Board’s direction, Corindus’ senior leadership continued to discuss a strategic collaboration with other interested parties during the months of May and June, but ultimately no other party submitted a written proposal for a strategic collaboration by August 7, 2019, the date on which Corindus executed the merger agreement.

On May 8, 2019, Mr. Lightcap, Mr. Toland, Corindus’ senior leadership and representatives of Cadwalader and Citi met at Corindus’ headquarters with Mr. Geiger and Britton Richardson, Head of M&A and Corporate Legal Services for Healthineers North America, to discuss and negotiate the terms of Healthineers’ proposed term sheet.  Mr. Therin participated by telephone. Mr. Herrmann and a representative of Healthineers financial advisor, UBS Investment Bank, were also present at the meeting.

On May 14, 2019, Corindus provided representatives of Healthineers and its outside legal counsel and advisors with access to an online data room. From May 14, 2019 through August 7, 2019, Corindus continued to populate this online data room with materials in response to supplemental due diligence requests from Healthineers and responded to over 600 specific requests for information and/or documents from Healthineers.

On May 20, 2019, Corindus delivered to Healthineers drafts of the primary legal documents relating to the proposed collaboration, including a draft Development Agreement with respect to the next generation robotic system, a draft Subscription Agreement, and a draft Stockholder Agreement.

On May 22, 2019, Mr. Toland and Mr. Therin met at the EuroPCR Conference in Paris, France to further discuss the terms of the proposed collaboration. The EuroPCR Conference is the annual meeting of the European Association of Percutaneous Cardiovascular Interventions, which in 2019 hosted more than 11,000 participants. As part of the conference, an interventional cardiologist used Corindus’ robotic-assisted system to successfully perform a live, complex robotic–assisted percutaneous coronary intervention, which was broadcast live to EuroPCR attendees, and which Mr. Toland and Mr. Therin observed from the conference. Corindus believed that this live demonstration reinforced the potential positive impact of Corindus’ robotic technologies could have on the coronary interventional procedures market in the future.

On May 25, 2019, Corindus delivered to Healthineers a draft Distribution Agreement relating to Corindus’ existing CorPath GRX System and a draft Distribution Agreement relating to Corindus’ proposed next generation robotic system.

On June 4, 2019, Healthineers delivered to Corindus an issues list with respect to the draft Development Agreement and Distribution Agreements.  On June 6, 2019, Healthineers delivered to Corindus an issues list with respect to the draft Subscription Agreement and Stockholder Agreement.  During the period from June 4 through June 7, 2019, multiple telephone conferences were held between Mr. Lightcap, Mr. Toland, Corindus’ senior leadership and representatives of Cadwalader and Citi, on the one hand, and Mr. Therin, Mr. Geiger, Mr. Richardson and representatives of Blank Rome LLP (“Blank Rome”), Healthineers outside counsel, with a view towards identifying significant issues to be resolved at an in person meeting of principals the following week.

On June 12 and June 13, 2019, Mr. Lightcap, Mr. Toland, Corindus’ senior leadership and representatives of Cadwalader met in Munich, Germany with Mr. Therin, Mr. Geiger, Mr. Richardson, Healthineers’ senior leadership and representatives of Blank Rome to negotiate the terms of the collaboration documents.  The parties tentatively agreed, subject to agreement on other transaction issues, that Healthineers would make an upfront investment of approximately $90 million in common stock or preferred stock, or a combination thereof, in lieu of the previously proposed secured loan structure.

On June 20 and June 21, 2019, the respective research and development teams of Corindus and Healthineers met in Boston, Massachusetts to discuss the technical aspects of the collaboration, including which parts of the overall development plan were to be the responsibility of Corindus and which parts of the development plan were to be the responsibility of Healthineers.

On June 23, 2019, Healthineers delivered its written comments on the proposed Development Agreement and one of the proposed Distribution Agreements, which reflected significant differences between the parties on both business and legal issues.  On June 25, 2019, representatives from Cadwalader and Blank Rome met by telephone to attempt to resolve certain legal documentation issues.  In light of the significant issues between the parties, Mr. Lightcap determined to call a special Board meeting to discuss the status of negotiations and to get the views and direction of the Board with respect to how to proceed.

On June 26, 2019, the Board held a telephonic special meeting to review the status of the collaboration discussions.  Members of Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Management presented an overview of the primary issues on which the parties had not been able to agree, and representatives of Cadwalader reviewed those issues in detail with the Board.  Among other items, the parties had been unable to agree on the ownership of intellectual property expected to be developed solely by Corindus during the term of the Development Agreement, on the parties’ respective exclusivity obligations, and whether the scope of the collaboration would be limited to neurovascular applications (as was Corindus’ position) or whether Healthineers would also have distribution rights in non-neuro applications.  After discussion, the Board concluded that the level of control that Healthineers sought with respect to the collaboration and the scope of the rights Healthineers sought were inconsistent with scale of the economic investment that Healthineers proposed make as part of the transaction. As a result, the Board instructed Mr. Lightcap and Corindus’ senior leadership to inform Healthineers that while it continued to believe a collaboration was in the interests of both parties, the Board was not willing to enter into the collaboration on the terms then being proposed.

On June 27, 2019, Mr. Toland discussed with Mr. Therin the views of the Board and provided Mr. Therin with a detailed issues list identifying the significant business issues in the Development Agreement and the Distribution Agreement on which the parties had thus far in the negotiation been unable to agree.  The parties and their respective advisors were scheduled to meet in-person in Boston, Massachusetts on July 2 and July 3, 2019, and Mr. Toland proposed that Corindus’ issues list be the basis for those discussions.

On June 29, 2019, Mr. Therin called Mr. Lightcap to notify him that Healthineers was preparing a confidential proposal to buy 100% of the outstanding shares of Corindus, which he indicated would be submitted to the Board in writing.  On June 29, 2019, Healthineers submitted to the Board a written confidential non-binding indication of interest to acquire 100% of the outstanding shares of Corindus at a price per share of Corindus common stock equal to $3.65 in cash, subject to the negotiation of definitive transaction documents and completion of due diligence. In connection with its non-binding indication of interest, Healthineers also requested a four-week exclusivity agreement with Corindus with respect to the negotiation of a definitive transaction. The closing price per share of Corindus common stock on June 27, 2019, the last trading day prior to the receipt of Mr. Therin’s notification of Healthineers’ pending non-binding indication of interest, was $3.00 per share.

On July 1, 2019, the Board held a telephonic special meeting to discuss the non-binding indication of interest from Healthineers and the exclusivity request. Members of Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Lightcap described his brief conversation with Mr. Therin and notified the Board that he had responded to Mr. Therin by email, at Mr. Therin’s request, and confirmed receipt of the non-binding indication of interest.  Representatives of Cadwalader then reviewed with the directors their fiduciary duties under applicable law in connection with evaluation of a potential sale transaction. Representatives of Citi reviewed with the Board a preliminary summary of Healthineers’ proposal.  The Board then discussed with members of Corindus’ senior leadership and representatives of Cadwalader and Citi the terms of the indication of interest and the benefits and risks associated with the proposal, including the potential risk that Healthineers might no longer be interested in a strategic collaboration transaction if a sale of Corindus could not be successfully negotiated, and the possibility that the proposed purchase price could be increased if Corindus could more fully explain the value of its percutaneous coronary and peripheral vascular business and its potential in oncology (Healthineers having had focused primarily in its diligence to date on neuro-interventions, as that was the proposed scope of the collaboration, and accordingly potentially did not fully understand the value of Corindus’ other businesses).  The Board also considered the benefits and risks attendant to attempting to solicit competing proposals from other potential bidders. The Board discussed whether a competing proposal was likely at this time given the responses of the solicited parties to the strategic collaboration process, and the possibility that Healthineers might withdraw its proposal if Corindus reached out to other potential strategic parties regarding a sale.  The Board then further discussed the scope of Mr. Harrington’s previous recusal from Corindus’ strategic discussions with companies participating in the same markets as Philips, Mr. Harrington’s duties to Corindus and to his employer, and the concern that attempting to contact Philips or other potentially interested parties might cause Healthineers to withdraw its indication of interest. The Board also discussed the ability of another party to make a bid for Corindus after the execution of a potential merger agreement containing customary provisions.  The Board also discussed Healthineers request for exclusivity and the benefits and risks of granting exclusivity.  After the discussion, the Board determined to respond to Healthineers that the Board was willing, consistent with its fiduciary duties, to consider a transaction to sell Corindus, but that the Board did not believe that Healthineers had appropriately considered the value in the percutaneous coronary and peripheral vascular businesses and the potential of an oncology business.  As a result, under these circumstances, the Board did not believe granting exclusivity at this time was in Corindus’ and its stockholders’ best interests.

On July 3, 2019, Mr. Lightcap and Mr. Toland had a conference call with Mr. Therin, Mr. Geiger and Marco Stuelpner, Head of M&A at Healthineers, to provide the Board’s response to Healthineers’ non-binding indication of interest.  During the call, Mr. Toland stated that Corindus believed Healthineers proposal did not reflect the potential of Corindus’ percutaneous coronary and peripheral vascular businesses or its future potential in oncology.  Mr. Toland also emphasized the potentially substantial impact on Healthineers’ medical imaging suite sales that could result from Healthineers’ ability to potentially offer robotic-assisted functionality, particularly because medical imaging suite sales were often long-term commitments by hospitals, and that the promise of integration of medical imaging technology with robotics in future years would positively influence medical imaging suite sales in the near term.

On July 5, 2019, Mr. Toland made a telephone presentation to Mr. Therin and other senior business leaders of Healthineers AT, updating them with respect to the cardiovascular, peripheral and oncology segments of the business that Mr. Toland believed were critical to Corindus’ value proposition.  Mr. Therin indicated that Healthineers would discuss the information internally and respond to Corindus during the following week.

Also on July 5, 2019, the Board held a telephonic special meeting to discuss recent developments with Healthineers. Board members Campbell Rogers and James Tobin did not attend the meeting. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting.  Mr. Lightcap reported on recent discussions with Healthineers and Mr. Toland updated the Board with respect to his presentation to Healthineers earlier in the day.

During the week of July 8, 2019, at the instruction of the Board, Corindus’ senior leadership prepared financial projections for the period 2019 through 2024. 

On July 8, 2019, in light of Healthineers’ proposal, at Corindus’ senior leadership request, Citi provided the company with information describing potential for growth of the industry and summarizing recent financing and mergers and acquisitions activity in the medical robotics space. Mr. Lightcap forwarded the information to the Board for its review.  Also on July 8, 2019, Healthineers’ financial advisor, UBS Investment Bank, contacted Citi and indicated that Healthineers would likely present a revised proposal later in the week.

On July 9, 2019, Mr. Lightcap forwarded to Mr. Therin, Mr. Geiger and Mr. Stuelpner the information prepared by Citi describing the potential for growth of the industry and summarizing recent financing and mergers and acquisitions activity in the medical robotics space.

On July 10, 2019, Healthineers submitted to the Board a revised written confidential non-binding indication of interest to acquire 100% of the outstanding shares of Corindus at a price per share of Corindus common stock equal to $4.05 per in cash, subject to the negotiation of definitive transaction documents and completion of due diligence. In connection with its revised non-binding indication of interest, Healthineers again requested a four-week exclusivity agreement with Corindus with respect to the negotiation of a definitive transaction. The closing price per share of Corindus common stock on July 9, 2019, the last trading day prior to the receipt of Healthineers’ revised non-binding indication of interest, was $3.11 per share.

On July 12, 2019, the Board held a telephonic special meeting to discuss Healthineers’ revised non-binding indication of interest. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Lightcap updated the Board with respect to the status of discussions with Healthineers, including the receipt of Healthineers revised non-binding indication of interest at $4.05 per share, which had been distributed to directors in connection with the meeting. The Board engaged in extensive discussion with respect to the revised proposal, including the likelihood that Healthineers would continue to discuss a strategic collaboration in the event that the parties were unable to come to terms on the proposed merger.  In response to a question from the Board, representatives of Cadwalader and the directors discussed several options for conducting a market check, including soliciting bids prior to signing any merger agreement, a post-signing “go-shop” provision in the negotiated merger agreement, and a “fiduciary out” provision in a negotiated merger agreement that would permit a seller to accept an unsolicited superior offer after announcing a transaction but prior to a stockholder vote.  The Board discussed these matters, Healthineers’ consistent focus on confidentiality, exclusivity and competitive concerns, and the fact that soliciting other bids at this time risked losing Healthineers’ proposal.  Citi then reviewed preliminary financial analysis with respect to Healthineers’ revised proposal, which had been distributed to directors in connection with the meeting.  After further discussion, the Board resolved to appoint Mr. Lightcap, Mr. Toland and Mr. Douglas L. Braunstein to a Strategic Transaction Committee for the purposes of further negotiating the terms of a potential sale of Corindus to Healthineers.   

On July 13, 2019, Corindus’ senior leadership distributed to the Board Corindus’ financial projections for the period from 2019 through 2024 (which we refer to as the “Financial Projections”).

On July 14, 2019, the Board held a telephonic special meeting to review and discuss the Financial Projections. See the subsection of this proxy statement captioned “The Merger – Financial Projections” beginning on page 55. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Toland presented the Financial Projections and the key assumptions underlying them, including that the Financial Projections assumed a collaboration partner on neurovascular interventions had been secured beginning at the start of the first quarter of 2020, that Corindus had developed, gained regulatory approval and commercialized remote capabilities for its next generation robotic system by 2022, and that the Financial Projections had been appropriately risk adjusted, in management’s judgement, to reflect the difficulty of clearing a new product with regulatory authorities and gaining market acceptance, particularly with respect to a product with remote capabilities and related technologies unlike other products on the market.  The Board engaged in an extended discussion with Mr. Toland regarding the assumptions underlying the Financial Projections, the differences between the Financial Projections and the earlier informal, preliminary financial information (which had not been approved by the Board) that had been part of the management presentation and used in connection with soliciting strategic collaboration partners earlier in the year, and management’s assessment of the relative likelihood of achieving the results indicated by the Financial Projections. During the discussion, Mr. Toland discussed with the Board long-term risks concerning the performance of the business, including, among other things, the potential difficulties in gaining regulatory approval for a new product with remote capabilities, particularly in light of Corindus’ relatively modest scale, and the related risk of regulatory delay, as well as the impact on the Financial Projections if an appropriate strategic collaboration partner could not be secured. After further discussion, the Board approved the Financial Projections. The Financial Projections were subsequently shared with Healthineers.

Representatives of Citi then presented their preliminary financial analysis of Corindus and the proposed transaction, which had been distributed to directors in connection with the meeting. The Board discussed with Citi the appropriateness of various assumptions made by Citi in their preliminary financial analysis.  The Board members then discussed their views on Healthineers’ proposal to purchase Corindus at $4.05 per share, in light of Citi’s analysis and their respective views of the opportunities and risks of the business.  The directors discussed, among other things, that Corindus had raised equity financing at $1.30 per share of Corindus common stock in March 2019, and that the proposed price of $4.05 per share represented a very significant premium over that amount, as well as a significant premium to the $2.88 per share at which the stock closed on July 12, 2019, the last trading day prior to the Board meeting.  The Board further discussed the potential risks to Corindus’ Financial Projections if it were not able to satisfy regulatory concerns and commercialize the next generation product by 2022, and the concern that the Financial Projections assumed that a collaboration partnership had been successfully completed at the start of the first quarter of 2020. The Board also discussed Healthineers’ repeated request for exclusivity and the risks relating to rejecting that request. After further discussion, the Board authorized the Strategic Transactions Committee to engage in further negotiations with Healthineers in an attempt to further increase the proposed price.

On July 16, 2019, Mr. Lightcap had a telephonic conference call with Mr. Therin, Mr. Stuelpner and Mr. Geiger and indicated that the Board was not willing to transact at $4.05 per share or to grant Healthineers exclusivity at that price, but that the Board remained interested in further discussing a potential transaction and had instructed management to continue to provide diligence material to Healthineers with a view to enabling Healthineers to increase its price. On this call Mr. Lightcap also asked Healthineers to increase its price to $4.75 per share of Corindus common stock.

On July 22, 2019, Healthineers submitted to the Board a written confidential, best and final, non-binding indication of interest to acquire 100% of the outstanding shares of Corindus at a price per share of Corindus common stock equal to $4.28 in cash, subject to the negotiation of definitive transaction documents and completion of due diligence. In connection with its revised, best and final non-binding indication of interest, Healthineers also again requested a four-week exclusivity agreement with Corindus with respect to the negotiation of a definitive transaction. The $4.28 proposed price represented a 60% premium to the closing price per share of Corindus common stock on July 19, 2019, the last trading day prior to the receipt of Corindus’ best and final non-binding indication of interest, of $2.67 per share.  Healthineers noted in its proposal that the premium it was offering to Corindus stockholders exceeded the premiums of the transactions included in Citi’s presentation highlighting the growth potential of the industry and summarizing recent financing and mergers and acquisitions activity in the medical robotics space that Mr. Lightcap had delivered to Mr. Therin on July 9, 2019.  

On July 23, 2019, the Board held a telephonic special meeting to discuss the status of the transaction. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Lightcap updated the Board with respect to the status of discussions with Healthineers, including the receipt of the revised best and final non-binding indication of interest at $4.28 per share, which had been distributed to directors in connection with the meeting.  Mr. Lightcap described a conversation he had had earlier that day with Mr. Therin, Mr. Stuelpner and Mr. Geiger, where Mr. Therin, in response to Mr. Lightcap’s suggestion of a further increase in price, emphasized that Healthineers’ latest proposal should be presented to the Board as Healthineers’ best and final offer, and that Healthineers would not again increase its bid.  Mr. Toland then updated the Board on a separate conversation he had had with Mr. Therin, Mr. Stuelpner and Mr. Geiger later in the day, in which Mr. Therin reiterated that the proposal was best and final.  Citi then reviewed preliminary financial analysis with respect to Healthineers’ revised best and final proposal, which had been distributed to the directors in connection with the meeting. The Board then discussed Corindus’ current direction and operations, and risks and benefits of Corindus continuing as a stand-alone public company, including the risk that a company of Corindus’ size might not be able to quickly gain regulatory approval for a remote technology on the time frame contemplated by the Financial Projections, even if Corindus were able to secure a strategic collaboration partner by the start of the first quarter of 2020.

The directors then discussed, among other things, that the proposed price of $4.28 per share represented a significant premium over the historical trading price of Corindus common stock, as well as a significant premium to the $2.79 per share at which the Corindus common stock closed on July 22, 2019, the last trading day prior to the Board meeting. 

The Board then discussed with representatives of Cadwalader and Citi potential responses to Healthineers in light of the foregoing, and the Board determined that it would be in the best interest of Corindus for the parties to proceed promptly if the Board desired to attempt to negotiate the transaction documents on the terms proposed, both in an effort to contain the risk to Corindus’ business and relationship with its employees of a potential leak, and because Corindus had previously announced its quarterly earnings call would be held on August 8, 2019. On that call Corindus’ senior leadership expected to be questioned in detail about the progress of its strategic collaboration discussions, the completion of which Corindus had indicated in its prior earnings call was one of Corindus’ primary 2019 goals. The Board expressed the concern that the responses to these questions would be difficult and subject to legal risk if the merger transaction was nearly fully negotiated but not announced prior to such call, and believed this period provided sufficient time to negotiate the merger agreement. The Board also again discussed Mr. Harrington’s recusal from strategic discussions with companies participating in the same markets as Philips. Mr. Lightcap reported that he had had a further discussion with Mr. Harrington with respect to Corindus’ upcoming August 2, 2019 regularly scheduled in-person Board meeting, and that Mr. Harrington had agreed to attend that meeting but once again agreed to recuse himself from the portions of the meeting relating to the status of Corindus’ strategic discussions with companies participating in the same markets as Philips. The Board confirmed its view that Mr. Harrington should not at that time be informed of the merger discussions for the reasons previously discussed. In connection with those discussions, the Board also concluded that it would be reasonable to accept Healthineers’ request for exclusivity, in light of the risk that Healthineers would withdraw its proposal if exclusivity was not granted, and the fact that the Board expected any definitive merger agreement would provide the Board with a termination right in the event Corindus received a superior proposal from a competing bidder. The Board further discussed the terms of the proposed exclusivity agreement that Healthineers proposed and suggested limiting the exclusivity period as described below.

The Board then discussed Citi’s prior relationships with Corindus and information provided by Citi regarding its prior relationships with Corindus and Siemens AG and its affiliates, which had been provided to the Board in connection with the meeting. After discussion with Cadwalader, the Board determined that such relationships did not impair Citi’s ability to provide the Board with objective financial advice regarding a potential transaction with Healthineers and other strategic alternatives available to Corindus. Following further discussion, the Board determined that it would be willing to proceed with a potential transaction with Healthineers on the basis of an increased transaction consideration of $4.28 per share of Corindus common stock, in cash, and otherwise as proposed by Healthineers in its revised best and final non-binding indication of interest, including the execution of an acceptable exclusivity agreement. In light of Corindus’ interest in proceeding promptly as a result of the issues described above, the Board instructed the Strategic Transactions Committee to provide for exclusivity through August 7, 2019, the date prior to Corindus’ scheduled earnings announcement, and for Cadwalader to prepare and deliver to Healthineers a form of merger agreement structured to reflect that Corindus had not engaged in a pre-signing market check (but without providing for a go-shop provision).

On July 24, 2019, Mr. Toland notified Mr. Therin, Mr. Stuelpner and Mr. Geiger that the Board was amenable to entering into an acceptable exclusivity agreement with Healthineers through August 7, 2019, and was prepared to move forward to seek to finalize due diligence and definitive agreements at an increased offer price of $4.28 in cash per share of Corindus common stock.

Also on July 24, 2019, representatives of Cadwalader delivered comments on the draft exclusivity agreement to Blank Rome.  In addition, on July 24, 2019 Cadwalader delivered an initial draft of the merger agreement to Blank Rome. The draft merger agreement provided, among other things, for a “hell or high water” antitrust covenant potentially requiring Healthineers to divest certain assets if required by antitrust authorities in order to approve the transaction; a “fiduciary out” provision potentially enabling Corindus to terminate the merger agreement in response to an unsolicited third party proposal that the Board determined to be superior or in response to an “intervening event” of which the Board was not aware as of the date of the merger agreement; a termination fee of 1.25% of the equity value of the transaction, potentially payable by Corindus to Healthineers in the event that Corindus terminated the merger agreement in order to enter into a superior proposal; and no ability of Healthineers to match the terms of a third party superior proposal (“matching rights”).

On July 25, 2019, Blank Rome delivered comments on the draft exclusivity agreement to Cadwalader, which the parties negotiated and executed on July 26, 2019.  From July 26, 2019 through August 7, 2019, Corindus continued to populate the online data room with materials in response to supplemental due diligence requests from Healthineers. In addition, during this period, members of Corindus’ senior leadership participated in several diligence calls with representatives of Healthineers, its financial advisors and outside legal counsel.

On July 28, 2019, Blank Rome delivered comments on the draft merger agreement to Cadwalader.  Healthineers’ comments to the draft merger agreement, among other items, deleted the “hell or high water” provision, and included additional closing conditions outside of the control of the parties, including the receipt of third party contractual consents and requiring that no governmental proceedings had been instituted that “challenged” or “imposed limitations” on the merger. The comments to the draft merger agreement also contained a requirement that all officers, directors and Corindus preferred stockholders enter into voting agreements in support of the transaction; a proposed termination fee of 4.5% of the equity value of the transaction; a requirement that Corindus hold a stockholder meeting to approve the transaction even if the Board no longer recommended the transaction; broad “matching rights” with respect to any, each and every competing proposal the Board determined to be a superior proposal; no customary fiduciary out for “intervening events”; and an obligation of Corindus to reimburse Healthineers for its expenses upon a termination of the merger agreement if Corindus stockholders did not approve the proposed transaction in the absence of any competing proposal.

On July 29, 2019, Cadwalader discussed these matters with the Strategic Transactions Committee. Also on July 29, 2019, Blank Rome submitted an initial draft voting and support agreement, which generally provided that any stockholder executing the agreement would vote in favor of and support the merger; and provided that a stockholder’s obligations contained in the voting and support agreement would terminate if the Board changed its recommendation with respect to the merger. 

On July 30, 2019, representatives of Cadwalader and Blank Rome participated in a conference call to discuss the primary open issues in the merger agreement. Later on July 30, 2019, Cadwalader provided comments on the draft merger agreement to Blank Rome. The comments to the merger agreement, among other things, re-instated the “hell or high water” provision and deleted the additional proposed closing conditions described above.  The comments to the draft merger agreement also deleted the requirement that voting agreements would be entered by officers, directors and Corindus preferred stockholders; proposed a termination fee of 1.75% of the equity value of the transaction; deleted the provisions requiring the meeting of stockholders to be held even if the Board no longer recommended the transaction; deleted “matching rights”; reinstated a customary fiduciary out for “intervening events”; and deleted the proposed expense reimbursement.

On July 31, 2019, Cadwalader and Blank Rome participated in another conference call to negotiate the provisions of the merger agreement.

On August 2, 2019, the Board held a regularly scheduled in-person meeting to discuss, among other things, a financial update and review of Corindus’ performance and other regular business. Mr. Harrington participated in the meeting, as did Corindus’ senior leadership and representatives of Cadwalader and Citi. The Board subsequently met in executive session, from which Mr. Harrington recused himself, to discuss the status of negotiations with Healthineers, including the outstanding issues with respect to deal certainty and the fiduciary matters summarized above.   

On August 3, 2019, Blank Rome provided comments on the draft merger agreement to Cadwalader. Blank Rome informed Cadwalader that Healthineers proposed, among other things, that SMS USA, a primary US operating company of Healthineers (and not Healthineers itself), would be the acquiring entity under the merger agreement; no “hell or high water” provision; a closing condition that no pending proceeding in US district court by any governmental authority challenging the merger existed; that voting and support agreements would be executed by all of Corindus’ preferred stockholders and by investment funds affiliated with HealthCor Partners Management LP, or HealthCor, of which Mr. Lightcap was Senior Managing Director; a termination fee of 3.0% of the equity value of the transaction; and, in lieu of “matching rights”, a repeating “last-look” right that would require Corindus to give Healthineers two business days’ prior written notice prior to Corindus entering into any superior transaction (without any limitation on the number of times that Corindus would be required to provide Healthineers such “last look” right).

On August 4, 2019, Mr. Lightcap and Mr. Toland held a conference call with Mr. Therin, Mr. Stuelpner, Mr. Geiger and Mr. Richardson.  The business principals further negotiated the merger terms. The parties agreed that SMS USA would be Corindus’ counterparty on the merger agreement, provided that Healthineers would satisfy Corindus’ concern with respect to the certainty of financing of the transaction either by providing a balance sheet of SMS USA reasonably acceptable to Corindus, or a written guarantee by Healthineers of SMS USA’s obligations under the merger agreement. The parties also agreed, with respect to conditionality, that the merger agreement would not include a “hell or high water” provision; would include an express closing condition that Corindus’ warrants and preferred stock would not survive closing (consistent with the operative provisions of the merger agreement); and would not include a closing condition with respect to any pending proceeding “challenging” the merger.  With respect to fiduciary matters, the parties agreed that HealthCor, which owned approximately 25% of the combined voting power of the Corindus common stock and preferred stock, voting together as a class, would execute a voting and support agreement (but that no other officers, directors or preferred stock holders would be required to do so), which voting agreement would terminate if the Board changed its recommendation with respect to the merger; and that Corindus would not be permitted to execute a superior proposal with a third party until having given SMS USA two business days’ prior written notice (provided that Corindus would not be required to negotiate with SMS USA or Healthineers during such period, and in any event would be required to give such notice only a single time prior to executing a superior proposal, and not on a repeating basis).  Healthineers continued to insist on a termination fee of 3.0% of the equity value of the transaction; Corindus was willing to agree to 2.75%. Accordingly, this term remained unresolved.

On August 4, 2019, Cadwalader submitted an initial draft of Corindus’ disclosure schedules to the merger agreement.  From August 4 until August 7, 2019, the day the merger agreement was executed, the parties negotiated and agreed upon the final form of the schedules. 

On August 5, 2019, Cadwalader delivered a revised draft of the merger agreement to Blank Rome reflecting the results of the principals call on August 4.  Cadwalader and Blank Rome continued to negotiate the other provisions of the merger agreement.

Also on August 5, 2019, the Board held a telephonic special meeting to discuss the status of the transaction. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Lightcap reviewed for the Board developments in the negotiations with Healthineers since the Board had last met on August 2, 2019, including the results of the August 4, 2019 negotiating session among the principals. Mr. Lightcap informed the Board that, as directed by the Board, the Strategic Transaction Committee had been focused on ensuring that there were no significant impediments to a third party making a competing proposal to buy Corindus after the merger had been announced, Mr. Lightcap noted that the Strategic Transaction Committee considered “matching rights” or significant “last look” rights as more problematic, on a relative basis, than the amount of the termination fee, because “matching” and “last look” rights were more likely to discourage a potential competing bidder from doing the work required to make a competing proposal than the amount of a customary termination fee.  Representatives of Cadwalader reviewed with the Board the relevant provisions of the merger agreement that remained unresolved. The Board discussed the remaining open issues, including the amount of the termination fee and the terms of the guarantee by Healthineers of the obligations of SMS USA under the merger agreement, which Healthineers had stated would take the form of a customary “support letter” governed by German law but which had not yet been provided.

Later on August 5, 2019, Blank Rome delivered a form of the Healthineers’ support letter and a revised draft of the merger agreement, which included a closing condition that each holder of preferred stock would deliver an acknowledgement at closing that provided, among other things and assuming closing occurred, that the preferred stock and warrants held by such person would be terminated at closing. The draft merger agreement also provided that Healthineers was considering Corindus’ latest proposal, made in connection with the ongoing negotiations with respect to the terms of the support letter, of a termination fee of 2.95% of the equity value of the transaction, which amount was subsequently confirmed by Healthineers as agreed.   

On August 6, 2019, Healthineers delivered certain balance sheet information with respect to SMS USA to Corindus.  Also on August 6, 2019, Cadwalader and Blank Rome negotiated the form of the support letter and, with input from HealthCor’s outside counsel, the voting and support agreement. 

Also on August 6, 2019, the Board held a telephonic special meeting to further discuss the status of the transaction. Corindus’ senior leadership and representatives of Cadwalader and Citi participated in the meeting. Mr. Lightcap reviewed for the Board developments in the negotiations, including the proposed terms of the support letter and the termination fee. Representatives of Cadwalader then reviewed with the Board in detail the terms of the draft merger agreement, which was in close to final form, including the “fiduciary out” provisions, termination provisions, and deal certainty provisions, among others. The Board discussed with representatives of Cadwalader, among other things, the state of negotiations with respect to the support letter.

On August 7, 2019, Mr. Lightcap had a telephone conference with Mr. Stuelpner, Mr. Geiger and Mr. Richardson to further discuss SMS USA’s balance sheet and the Healthineers’ support letter and to finalize the terms of the merger agreement and related documents, subject to Board approval. 

On August 7, 2019, Mr. Lightcap and representatives of Cadwalader contacted Mr. Harrington and notified him with respect to the merger discussions that had been ongoing and that the Board would meet later in the day to consider approving the merger agreement with SMS USA. Mr. Lightcap invited Mr. Harrington to attend the Board meeting and described generally the negotiations with Healthineers. Cadwalader delivered to Mr. Harrington the draft of the merger agreement and related documents, a presentation by Cadwalader with respect to the terms of the merger agreement and the Board’s fiduciary duties, and a presentation by Citi with respect to the financial analysis of Corindus and the transaction, each of which had been distributed to directors in connection with the meeting and was expected to be discussed at the Board meeting later that day.

Later on August 7, 2019, the Board held a telephonic special meeting to discuss and consider the merger agreement and the transaction with SMS USA. Mr. Harrington participated in this meeting, as did Corindus’ senior leadership and representatives of Cadwalader and Citi. Representatives of Cadwalader reviewed the proposed final terms of the merger agreement, including changes that had been negotiated since the August 6, 2019 Board meeting.  Representatives of Cadwalader then again reviewed with the members of the Board their fiduciary duties under applicable law. Representatives of Citi reviewed with the Board their financial analysis relating to the fairness to the holders of Corindus common stock of the merger consideration to be received in the proposed merger by the holders of Corindus common stock, and Citi then rendered its oral opinion, which was subsequently confirmed in writing, to the Corindus board to the effect that, as of August 7, 2019 and based on and subject to the assumptions made, procedures followed, matters considered and other limitations and qualifications set forth in Citi’s written opinion, the merger consideration to be paid to the holders of Corindus common stock in the merger was fair, from a financial point of view, to such holders. For more information, see the section entitled “The Merger – Opinion of Citigroup Global Markets Inc.” beginning on page 49 of this proxy statement. Following discussion, the Board (other than Mr. Harrington, who abstained) unanimously determined that it was in the best interest of Corindus and Corindus stockholders that Corindus enter into the merger agreement, approved and declared advisable the merger and the merger agreement, resolved that the merger agreement be submitted for consideration by Corindus stockholders at a special meeting of stockholders and recommended that Corindus stockholders adopt the merger agreement and approve the transactions contemplated thereby.  Mr. Lightcap then advised the Board that the compensation committee had earlier in the day approved a transaction bonus award in the amount of $2.5 million to Mr. Toland, to recognize Mr. Toland’s performance prior to and during the merger agreement process.  After discussion, the Board (other than Mr. Harrington, who abstained) approved the transaction bonus award, subject to the occurrence of the effective time of the merger and Mr. Toland’s continued employment with Corindus through such time.

In the evening of August 7, 2019, Corindus and SMS USA finalized and executed the merger agreement, Corindus and Healthineers finalized and executed the support letter, and HealthCor and SMS USA executed the voting and support agreement.

In the morning of August 8, 2019, each of Corindus and Healthineers issued press releases announcing the execution of the merger agreement.

Recommendation of the Board and Reasons for the Merger

The Board recommends that the Corindus stockholders vote “FOR” the merger proposal.

At a meeting of the Board held on August 7, 2019, the Board (other than Mr. Harrington, who abstained) (i) determined that it was advisable and in the best interests of Corindus and the Corindus stockholders that Corindus enter into the merger agreement, (ii) approved and declared advisable the merger and the merger agreement, (iii) resolved that the adoption of the merger agreement be submitted for consideration by the Corindus stockholders at a special meeting of the Corindus stockholders and (iv) recommended that the Corindus stockholders adopt the merger agreement and approve the transactions contemplated thereby.

When you consider the Board’s recommendation, you should be aware that Corindus’ executive officers and directors may have interests in the merger that may be different from, or in addition to, the interests of Corindus stockholders generally. These interests are described in “The Merger – Interests of Corindus’ Executive Officers and Directors in the Merger” beginning on page 57 of this proxy statement.

Factors Considered Supporting Approval of the Merger.

In evaluating the merger agreement and the transactions contemplated thereby and reaching its determinations in connection therewith, the Board consulted with Corindus’ senior leadership and the Board’s financial and legal advisors, and considered a number of factors that it believed supported its decision, including the following (which are not necessarily presented in order of relative importance):

The merger consideration represents a significant premium to the trading price of the Corindus common stock across a number of measuring periods. The Board considered that the merger consideration of $4.28 per share in cash was attractive value for the shares of Corindus common stock and represented a:

Strategic alternatives to a sale of Corindus. The Board considered the potential values, benefits, risks and uncertainties facing Corindus’ stockholders associated with possible strategic alternatives to the merger (including the potential stockholder value based on Corindus’ business plan that could be expected to be generated from remaining an independent public company, the possibility of being acquired by other companies, the possibility of acquisitions or mergers with other companies, the possible consummation of a strategic collaboration transaction or other possible transactions, as well as the potential benefits, risks and uncertainties associated with such alternatives), and the timing and likelihood of accomplishing such alternatives (including, with respect to a strategic collaboration, the fact that Corindus’ process had not yielded any potential partner (other than Healthineers) that submitted a written strategic collaboration proposal, and the potential risk that a strategic collaboration might not be completed with Healthineers). The Board considered these alternatives as compared to the risks and benefits of the proposed merger.

Risks relating to remaining a stand-alone company. The Board evaluated Corindus’ long-term strategic plan were it to remain an independent public company, as well as the significant risks associated with executing such plan. This evaluation included the Board’s review of Corindus’ business, operations, assets, operating results, financial condition, prospects, business strategy, competitive position, and industry, including the potential impact (which cannot be quantified numerically) of those factors on the trading price of Corindus common stock, to assess the prospects and risks associated with remaining an independent public company. The Board believed that the certainty provided by the acquisition of Corindus by SMS USA for $4.28 per share in cash was more favorable to Corindus stockholders than the potential risk-weighted value of remaining an independent public company, after accounting for the risks and uncertainties associated with achieving and executing upon Corindus’ business and financial plans in the short- and long-term. Such risks include:

Process and Negotiations with Healthineers and SMS USA. The Board considered the strategic process that Corindus undertook, with the assistance of its financial advisor at the Board’s direction, to evaluate its alternatives in connection with a potential strategic collaboration. In October 2018, Corindus and its financial advisors engaged in a broad outreach to pursue a strategic collaboration arrangement to fully realize the potential of a neurovascular solution for Corindus. As a result of this outreach, Corindus engaged numerous with interested parties but ultimately Healthineers was the only party that submitted a written proposal to enter into a strategic collaboration with Corindus. The Board considered numerous aspects of the process, including the fact that none of the other companies identified in Citi’s outreach submitted a written strategic collaboration proposal to Corindus.

The Board considered the extensive negotiations Corindus and its legal counsel had with Healthineers and SMS USA and their legal counsel, including throughout the period of time from June 29, 2019, which was the day Healthineers first submitted a written indication of interest with respect to a collaboration arrangement, to the date on which the merger agreement was executed on August 7, 2019. In this regard the Board considered that Healthineers first expressed an interest in acquiring all of the outstanding capital stock of Corindus and submitted a written indication of such on June 29, 2019 and increased its proposed price per share from $3.65 per share to $4.05 per share and ultimately to $4.28 per share, which Healthineers indicated, and confirmed after further inquiry by the Board, was the highest price per share that Healthineers was willing to pay for the Corindus common stock. The Board also considered the extensive due diligence conducted by Healthineers over the course of several months and the negotiations between the parties, and that the negotiations with Healthineers had resulted in the highest price reasonably available to Corindus under the circumstances. The Board also considered that during the course of negotiations, Healthineers made several requests for exclusivity. The Board was concerned that Healthineers would rescind its proposal if Corindus contacted any third parties in an attempt to generate competing proposals and determined it was advisable to enter into exclusive arrangements with SMS USA given the Board’s belief that negotiations with Healthineers had resulted in the highest price reasonably available to Corindus under the circumstances and the provisions of the merger agreement permitted the emergence of a competing bid.

As a result of factors such as the processes conducted by Corindus with the assistance of its financial advisor at the Board’s direction, the Board believed that the merger was a superior alternative to the other potential strategic alternatives to Corindus, including alternative stand-alone operating strategies and other potential strategic partnerships, in each case, considering the potential stockholder value that might result from such alternatives, as well as the feasibility of such alternatives and the risks and uncertainties associated with pursuing such alternatives. The Board noted that prior to engaging in discussions with respect to a merger, the previously discussed strategic collaboration arrangement and the viability of a successful partnership were principal components to Corindus’ long-term strategic plan. The Board considered, in this regard, the risk to Corindus if a strategic collaboration transaction did not occur on a timely basis or at all.

Cash consideration. The Board considered the fact that the merger consideration would be paid solely in cash, which, compared to non-cash consideration, provides certainty of value and immediate liquidity to Corindus’ stockholders upon the consummation of the merger, in comparison to the risks and uncertainty that would be inherent in remaining an independent public company or engaging in a transaction in which all or a portion of the consideration is payable in stock. The Board weighed the certainty of realizing a compelling value for shares of Corindus common stock by virtue of the merger against the uncertain prospect that the trading value for the Corindus common stock would approach the merger consideration in the foreseeable future, as well as the risks and uncertainties associated with Corindus’ business.

Anti-trust regulatory approvals. The Board considered that it believed that there would be limited antitrust impediments to the consummation of the merger, and the Board considered SMS USA’s obligation under the merger agreement to use its reasonable best efforts to obtain all necessary actions or non-actions, consents and approvals necessary in connection with the consummation of the transactions contemplated by the merger agreement, subject to certain limitations specified in the merger agreement.

No Financing Condition. The Board considered that the merger is not subject to a financing condition, that SMS USA represented to Corindus in the merger agreement that SMS USA or its direct parent, Healthineers, has available and will continue to have available through the closing, unencumbered cash or cash equivalents, lines of credit or other sources of immediately available funds sufficient to pay the aggregate merger consideration and to consummate the merger. The Board also considered that Healthineers delivered the letter of support pursuant to which Healthineers agreed, guaranteed and committed to the complete payment and discharge of all monetary obligations and liabilities of SMS USA to Corindus arising from the merger agreement (other than the indemnification obligations owed to directors and officers of Corindus).

Fairness opinion. The oral opinion rendered by Citi, which was confirmed by delivery of a written opinion, to the Board to the effect that, as of August 7, 2019 and based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in Citi’s written opinion, the merger consideration to be received in the proposed merger by the holders of Corindus common stock was fair, from a financial point of view, to such holders. For more information, see the section entitled “The Merger – Opinion of Citigroup Global Markets Inc.” beginning on page 49 of this proxy statement.

Merger agreement. The Board considered the terms and conditions of the merger agreement, including the structure of the transaction, the all-cash form of the merger consideration, the limited conditions to closing, the customary nature of the representations, warranties, and the covenants and agreements of the parties. The Board further considered the course and nature of negotiations with SMS USA, which were conducted at arm’s length and during which the Board was advised by independent legal and financial advisors on a regular basis. The Board took into account the terms of the merger agreement, including terms that the Board believed would permit other potentially interested parties to submit a competing proposal, if they so desired, during the significant period between the announcement of the execution of the merger agreement and the stockholder vote to approve the merger, including:

The Board also considered other terms of the merger agreement, including the right of Corindus to seek an injunction, specific performance and other equitable remedies if needed in order to prevent breaches of the merger agreement by SMS USA.

SMS USA’s capabilities. The Board considered that SMS USA is a creditworthy entity with substantial assets, and considered SMS USA’s reputation in the imaging and medical device industry, its financial capacity to complete an acquisition of this size and its affiliates prior track record of completing acquisitions, and the terms of the letter of support from Healthineers, which the Board believed supported the conclusion that a transaction with SMS USA could be completed relatively quickly and in an orderly manner.

Board’s independence and comprehensive review process. The Board considered the fact that the Board consisted of a majority of independent directors who approved the transaction following extensive discussions with Corindus’ management team, representatives of financial advisers and outside legal counsel, and also took into consideration the financial expertise and prior industry experience held by a number of directors.

Stockholders’ ability to reject the merger. The Board considered the fact that the merger is subject to approval by the holders of a majority of voting power Corindus capital stock, and that stockholders would be able to reject the merger.

Appraisal rights. The Board considered the fact that stockholders who do not vote for the adoption of the merger agreement and who follow certain prescribed procedures will have the right to dissent from the merger and demand appraisal of the fair value of their shares under the DGCL.

Other Factors Considered by the Board.

In the course of reaching its decision, the Board also considered and balanced against the potential benefits of the merger a number of potentially adverse factors concerning the merger, including the following:

No further stockholder participation in future gains. The Board considered the fact that Corindus would no longer exist as an independent public company following the merger and that Corindus stockholders would forgo any future increase in Corindus’ value following the merger that might result from Corindus’ earnings or possible growth as an independent company. The Board concluded that there were a number of significant risks associated with remaining an independent company (including as described in more detail herein) that in many cases were difficult to quantify and that the premium reflected in the merger consideration constituted fair compensation for the loss of the potential stockholder benefits that could reasonably be expected to be realized by Corindus’ strategic plan, particularly on a risk-adjusted basis.

Regulatory risk. The Board considered the risk that necessary regulatory approvals may be delayed, conditioned or denied, and the risk that the applicable governmental agencies may seek to impose unfavorable terms or conditions, or otherwise fail to grant, such approvals.

Risks associated with announcement and pendency of the merger. The Board considered the risk that the announcement and pendency of the merger may cause substantial harm to relationships with Corindus’ employees, vendors, distributors, sales representatives, customers or strategic partners or may divert management and employee attention away from the day-to-day operation of Corindus’ business. The Board also considered Corindus’ ability to attract and retain key personnel while the proposed transaction is pending and the potential adverse effects on Corindus’ financial results as a result of that disruption, as well as the possibility of any suit, action or proceeding in respect of the merger agreement or the transactions contemplated thereby.

Risks associated with a failure to consummate the merger. The Board considered the fact that there can be no assurance that all conditions to the parties’ obligations to consummate the merger will be satisfied, and as a result there can be no assurance that the merger will be completed, even if the merger is approved by Corindus’ stockholders. The Board noted the fact that, if the merger is not completed, (i) Corindus will have incurred significant risk, transaction expenses and opportunity costs, including the possibility of disruption to Corindus’ operations, diversion of management and employee attention, employee attrition and a potentially negative effect on Corindus’ business and customer relationships, (ii) depending on the circumstances that caused the merger not to be completed, the price of the Corindus common stock could decline, potentially significantly, and (iii) the market’s perception of Corindus’ prospects could be adversely affected.

Restrictions on the operation of Corindus’ business. The Board considered the restrictions on the conduct of Corindus’ business prior to the completion of the merger, which could delay or prevent Corindus from realizing certain business opportunities or taking certain actions with respect to its operations that it might otherwise take absent the pending merger.

Inability to solicit acquisition proposals. The Board considered the fact that the merger agreement precludes Corindus from actively soliciting alternative proposals. The Board further considered the possibility that the termination fee payable to SMS USA if the merger agreement is terminated under certain circumstances might have the effect of discouraging alternative acquisition proposals or reducing the price of such proposals. However, the Board also considered that the structure of the transaction as a merger would result in detailed public disclosure and substantial time prior to consummation of the merger during which an unsolicited superior proposal could be submitted. In addition, the Board considered the “fiduciary out” provisions of the merger agreement, which, subject to the terms and conditions thereof, permit Corindus to furnish information to and conduct negotiations with third parties that make unsolicited acquisition proposals, and permit the Board to change its recommendation to Corindus stockholders regarding the merger agreement and to terminate the merger agreement in order to enter into a definitive agreement with respect to a superior proposal, subject to payment of a termination fee to SMS USA.

Absence of a competitive bid process with respect to a merger proposal. The Board considered the fact that it decided not to engage in a competitive bid process with respect to the merger, which decision by the Board was informed by (i) the price and premium valuation proposed by SMS USA, (ii) the fact that the Board was concerned that SMS USA would rescind its proposal if Corindus attempted to generate competing proposals, (iii) the Board’s concern regarding increased risk of leaks if Corindus contacted third parties regarding a potential transaction, (iv) the limited likelihood (based in part on the strategic collaboration process) that another strategic buyer would be interested in pursuing a strategic transaction with Corindus at this time and the fact that it was unlikely that a financial buyer would be interested in making a fully-financed, non-contingent offer to acquire Corindus at a price per share greater than $4.28 (particularly in light of the substantial investments that would be required to execute on Corindus’ strategic plan), and (v) the fact that, because the transaction is structured as a merger, potentially interested parties could submit a superior proposal during the significant period of time between the announcement of the execution of the merger agreement and the stockholder vote to approve the merger.

Tax treatment. The Board considered the fact that an all cash transaction would be taxable to Corindus’ stockholders that are U.S. holders for U.S. federal income tax purposes.

Limited remedies. The Board considered the fact that if it believed SMS USA breached the merger agreement and Corindus was unable to obtain specific performance to compel SMS USA to perform its obligations under the merger agreement, then Corindus’ only remedy is the right, in certain circumstances, to terminate the merger agreement and seek monetary damages.

Transaction costs. The Board considered the fact that Corindus has incurred and will continue to incur significant transaction costs and expenses in connection with the merger, regardless of whether the merger is consummated.

Potential differing interests of directors and officers. The Board considered that, aside from their interests as Corindus stockholders, Corindus’ directors and executive officers have interests in the merger that are different from, or in addition to, the interests of other Corindus stockholders generally. See “The Merger – Interests of Corindus’ Executive Officers and Directors in the Merger” beginning on page 57 of this proxy statement.

While the Board considered potentially positive and potentially negative factors, the Board concluded that, overall, the potentially positive factors outweighed the potentially negative factors. Accordingly, the Board determined that the merger agreement and the merger are advisable and fair to, and in the best interest of, Corindus and its stockholders.

The foregoing discussion is not intended to be an exhaustive list of the information and factors considered by the Board in its consideration of the merger, but includes the material positive factors and material negative factors considered by the Board in that regard. In view of the number and variety of factors and the amount of information considered, the Board did not find it practicable to, and did not make specific assessments of, quantify, or otherwise assign relative weights to, the specific factors considered in reaching its determination. In addition, individual members of the Board may have given different weights to different factors. Based on the totality of the information presented, the Board collectively reached the decision to approve and declare advisable the merger agreement and the merger in light of the factors described above and other factors that the members of the Board felt were appropriate.

Portions of this explanation of Corindus’ reasons for the merger and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23 of this proxy statement.

Opinion of Citigroup Global Markets Inc.

Corindus retained Citi as its exclusive financial advisor in connection with a possible transaction involving the Company. In connection with Citi’s engagement, Corindus requested that Citi evaluate the fairness, from a financial point of view, of the merger consideration to be received in the proposed merger by holders of shares of Corindus common stock pursuant to the terms and subject to the conditions set forth in the merger agreement. On August 7, 2019, at a meeting of the Board held to evaluate the proposed merger and at which the merger agreement was approved, Citi rendered to the Board an oral opinion, confirmed by delivery of a written opinion, dated August 7, 2019, to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi as set forth in its written opinion, the merger consideration to be received in the proposed merger by holders of Corindus common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders.

The full text of Citi’s written opinion, dated August 7, 2019, to the Board, which sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Citi in rendering its opinion, is attached to this proxy statement as Annex B and is incorporated herein by reference in its entirety. The summary of Citi’s opinion set forth below is qualified in its entirety by reference to the full text of Citi’s opinion. Citi’s opinion was rendered to the Board (in its capacity as such) in connection with its evaluation of the proposed merger and was limited to the fairness, from a financial point of view, as of the date of the opinion, to the holders of Corindus common stock of their merger consideration. Citi’s opinion did not address any other aspects or implications of the proposed merger or the merger agreement. Citi’s opinion is not intended to be and does not constitute a recommendation to any stockholder as to how such stockholder should vote or act on any matters relating to the proposed merger or otherwise. 

In arriving at its opinion, Citi:

The issuance of Citi’s opinion was authorized by Citi’s fairness opinion committee.

In rendering its opinion, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the management of Corindus that they were not aware of any relevant information that was omitted or that remained undisclosed to Citi. With respect to forecasts and other information and data relating to Corindus provided to or otherwise reviewed by or discussed with Citi, Citi was advised by the management of Corindus and Citi assumed, with the consent of the Board, that such forecasts and other information and data were reasonably prepared on bases reflecting the best then currently available estimates and judgments of the management of Corindus as to, and were a reasonable basis upon which to evaluate, the future financial performance of Corindus and assumed, with the consent of the Board, that the financial results reflected in such forecasts would be realized in the amounts and at the times projected. Citi expressed no view or opinion as to any financial forecasts or other information or data (or underlying assumptions on which any such financial forecasts and other information or data were based) provided to or otherwise reviewed by or discussed with Citi.

Citi assumed, with the Board, that the proposed merger will be consummated in accordance with its terms, without waiver, modification or amendment of any material term, condition or agreement and that, in the course of obtaining the necessary regulatory or third party approvals, consents and releases for the proposed merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on Corindus or the merger that would be in any way meaningful to Citi’s analysis. Representatives of Corindus advised Citi, and Citi further assumed, that the final terms of the merger agreement would not vary in any material respect from those set forth in the execution version reviewed by Citi. Citi did not make and was not provided with an independent evaluation or appraisal of the assets or liabilities (contingent or otherwise) of Corindus nor did Citi make any physical inspection of the properties or assets of Corindus. Citi was not requested to, and Citi did not, solicit third party indications of interest in the possible acquisition of all of Corindus, nor was Citi requested to consider, and Citi’s opinion did not address the underlying business decision of Corindus to effect the merger, the relative merits of the proposed merger as compared to any alternative business strategies that may have existed for Corindus or the effect of any other transaction in which Corindus might have engaged. Citi also expressed no view as to, and Citi’s opinion did not address, the fairness (financial or otherwise) of the consideration to be received by the holders of the Corindus preferred stock pursuant to the merger agreement or of the amount or nature or any other aspect of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration. Citi’s opinion was necessarily based upon information available to Citi, and financial, stock market and other conditions and circumstances existing, as of the date of its opinion. Although subsequent developments may affect Citi’s opinion, Citi has no obligation to update, revise or reaffirm its opinion.

In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to partial analysis or summary description. Citi arrived at its opinion based on the results of all analyses undertaken by it and factors assessed as a whole, and it did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion.

The estimates used by Citi for purposes of its analyses and the valuation ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, Citi’s analyses are inherently subject to substantial uncertainty.

Citi was not requested to, and it did not, recommend or determine the specific consideration payable in the merger. The type and amount of consideration payable in the proposed merger was determined through negotiations between Corindus and SMS USA and Corindus’ decision to enter into the merger agreement was solely that of the Board. Citi’s opinion was only one of many factors considered by the Board in its evaluation of the merger and should not be viewed as determinative of the views of the Board or the management of Corindus with respect to the proposed merger, merger consideration or any other aspect of the transactions contemplated by the merger agreement.

Financial Analyses

The following is a summary of the material financial analyses prepared and reviewed with the Board in connection with Citi’s opinion, dated August 7, 2019, to the Board. The summary set forth below does not purport to be a complete description of the financial analyses performed by, and underlying the opinion of, Citi, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Citi. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary as the tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the financial analyses, could create a misleading or incomplete view of such financial analyses. Future results may be different from those described and such differences may be material. Financial data utilized for Corindus in the financial analyses described below, to the extent based on internal financial forecasts and estimates of management, were based on certain financial forecasts and other information and data relating to Corindus provided to or discussed with Citi and approved for Citi’s use by the management of Corindus and as further summarized in the section entitled “The Merger – Financial Projections” beginning on page 55, and which are referred to collectively as the Financial Projections. The Financial Projections reflected a potential third party development and commercialization partnership between Corindus and a third party, beginning January 1, 2020, in connection with which the third party was assumed to have made a $90 million investment in Corindus in exchange for 30 million newly-issued shares of Corindus common stock. The approximate implied equity value per share reference ranges reflected in the summaries of the financial analyses described below were calculated giving effect to this assumed third-party investment (the “Assumed Cash Investment”) and assumed new share issuance (the “Assumed Share Issuance”). In addition, the approximate implied equity value per share ranges reflected in the summaries of the financial analyses described below were rounded to the nearest $0.05, except the 52–Week Trading Range. Approximate implied firm values reference ranges reflected in the summaries of the financial analyses described below were rounded to nearest $5 million.

Selected Companies Analysis

Citi reviewed certain financial information and public market multiples for the following publicly traded corporations in the medical technology industry.

Although none of the selected companies listed above is directly comparable to Corindus, the companies included were chosen because they have operations that, for purposes of Citi’s analysis and based on its experience and professional judgment, may be considered similar to certain operations of Corindus based on business sector participation, operational characteristics and financial metrics. The quantitative information used in this analysis, to the extent that it is based on market data, was based on market data as of August 6, 2019.

Citi calculated and reviewed, among other information, firm values for the selected companies (calculated as the market value of the relevant company’s common stock on a diluted basis, plus debt (treating financing leases as debt), minority interest and preferred equity, less cash and cash equivalents and other relevant adjustments for the particular company) as a multiple of calendar years 2020 and 2021 estimated revenues.

The median multiples of firm value to calendar years 2020 and 2021 estimated revenues calculated by Citi for the selected companies were as follows:

Financial data for the selected companies were based on FactSet data and publicly available Wall Street research analysts’ estimates and other publicly available information and calendarized when necessary.

Based on its professional judgment and experience, and taking into consideration the observed multiples for the selected companies, Citi identified illustrative ranges of multiples of firm value to calendar years 2020 and 2021 estimated revenue of 4.9x to 11.8x and 5.0x to 9.8x, respectively. Citi then multiplied these illustrative ranges of multiples by the estimated revenue for Corindus for calendar years 2020 and 2021, respectively, as reflected in the Financial Projections to derive implied firm value reference ranges for Corindus of $395 million to $940 million and $635 million to $1,235 million, respectively. By adding to these implied firm value reference ranges for Corindus an assumed net cash position for Corindus of $107 million as of June 30, 2019 (calculated by adding the Assumed Cash Investment of $90 million to Corindus’ net cash position of $17 million as of June 30, 2019) and dividing the result by the diluted share count of Corindus, calculated using the treasury stock method, based on equity information as of August 5, 2019 as provided by Corindus management and taking into account the Assumed Share Issuance, Citi derived implied per share equity value reference ranges for the Corindus common stock of $1.85 to $3.65 and $2.65 to $4.65, respectively. Citi compared these implied per share equity value reference ranges to the merger consideration of $4.28 per share of Corindus common stock.

Selected Transactions Analysis

Citi analyzed certain publicly available information relating to the selected transactions listed below in the medical technology industry since September 2013.

Although none of the target companies involved in the selected transactions is directly comparable to Corindus, these transactions were selected, among other reasons and based on Citi’s experience and professional judgment, because the target companies involved in these transactions share similar business characteristics to Corindus based on business sector participation, operational characteristics and financial metrics.

For each of the selected transactions, Citi calculated and compared firm value of the target company (calculated as the implied value of the applicable target company’s common stock on a diluted basis based on the consideration paid in the applicable transaction, plus debt, minority interest and preferred equity, less cash and cash equivalents and other relevant adjustments for the particular target company, as of the end of last fiscal quarter of the target company prior to the announcement of the applicable transaction) as a multiple of the target company’s revenue for the last 12 months (“LTM”), as most recently disclosed at the time of the announcement of the transaction (“FV/LTM Revenue Multiple”) and as a multiple of the target company’s estimated revenue for the next 12 months (“NTM”) based on publicly available Wall Street research analysts’ estimates (“FV/NTM Revenue Multiple”). The median FV/LTM Revenue Multiple and the median FV/NTM Revenue Multiple calculated by Citi for the selected transactions were as follows:

Based on its professional judgment and experience, and taking into consideration the observed multiples for the selected transactions listed above, Citi identified an illustrative range for FV/LTM Revenue Multiples of 6.5x to 23.4x and an illustrative range for FV/NTM Revenue Multiples of 5.9x to 20.6x. Citi then multiplied these illustrative ranges of multiples by Corindus’ revenue for the 12 months ended June 30, 2019 as reflected in Corindus’ public filings and by Corindus estimated revenue for 2020 as reflected in the Financial Projections, respectively, to derive implied firm value reference ranges for Corindus of $100 million to $355 million and $470 million to $1,640 million, respectively.

By adding to the FV/LTM Revenue Multiples implied firm value reference range for Corindus an assumed net cash position for Corindus of $17 million as of June 30, 2019, and by adding to the FV/NTM Revenue Multiples implied firm value reference range for Corindus an assumed net cash position for Corindus of $107 million as of June 30, 2019 (calculated by adding the Assumed Cash Investment of $90 million to Corindus’ net cash position of $17 million as of June 30, 2019), and dividing the result by the diluted share count of Corindus, calculated using the treasury stock method, based on equity information as of August 5, 2019 provided by Corindus management and taking into account the Assumed Share Issuance for the FV/NTM Revenue Multiples implied equity value range only, Citi derived implied per share equity value reference ranges for the Corindus common stock of $0.50 to $1.55 and $2.10 to $6.00, respectively. Citi compared these implied per share equity value reference ranges to the merger consideration of $4.28 per share of Corindus common stock.

Discounted Cash Flow Analysis

Citi conducted a discounted cash flow analysis for Corindus, which is an analysis designed to estimate an implied value of a company by calculating the present value of the estimated future unlevered after-tax free cash flows of that company over a projection period and a terminal value for that company at the end of the projection period.

Citi conducted this analysis for Corindus using estimates of the unlevered free cash flows that Corindus is expected to generate during the period from July 1, 2019 through December 31, 2024, that were calculated by Citi based upon the Financial Projections by taking net operating profit after tax, adding depreciation and amortization, adjusting for changes in net working capital, subtracting capital expenditures and treating stock-based compensation as a cash expense. Citi also calculated a range of terminal values for Corindus by applying perpetuity growth rates ranging from 5.0% to 6.0% to a terminal year estimate of unlevered free cash flow. The unlevered free cash flows of the period from July 1, 2019 through December 31, 2024 and the range of terminal values were then discounted to present values, as of June 30, 2019, using mid-period discounting convention and discount rates ranging from 10.9% to 13.0%, to derive an implied firm value reference range for Corindus of $795 million to $1,425 million. The discount rate range of 10.9% to 13.0% was chosen by Citi based upon an analysis of the weighted average cost of capital of Corindus.

By adding to the implied firm value reference ranges for Corindus an assumed net cash position for Corindus of $107 million as of June 30, 2019 (calculated by adding the Assumed Cash Investment of $90 million to Corindus’ net cash position of $17 million as of June 30, 2019) and the present value, as of June 30, 2019, of the benefits estimated to be realized from Corindus’ net operating losses based on the Financial Projections (derived applying a discount rate of 11.9%) and dividing the result by diluted share counts of Corindus calculated using the treasury stock method, based on equity information as of August 5, 2019 as provided by Corindus management and taking into account the Assumed Share Issuance, Citi derived an implied per share equity value reference range for the Corindus common stock of $3.30 to $5.45. Citi compared these ranges to the merger consideration of $4.28 per share of Corindus common stock.

Other Information

Citi noted that the 52-week trading range, equity research analyst price targets and implied premia analyses below with respect to Corindus are not valuation methodologies and were presented for reference only.

52–Week Trading Range

Citi reviewed the historical intra-day share prices of Corindus common stock for the 52-week period ended August 6, 2019. Citi noted that the low and high closing share prices during this period were $0.78 and $3.49 per share of Corindus common stock, respectively.

Equity Research Analyst Price Targets

Citi reviewed the most recent publicly available research analysts’ one-year forward price targets for the Corindus common stock prepared and published by selected research analysts. Citi noted that as of August 6, 2019 such price targets ranged from $2.00 to $4.00. Citi also noted that this range of price targets, discounted one year at a 11.6% cost of equity, was $1.80 to $3.60.

Implied Premia Paid

Citi calculated, using publicly available information, the 25^th percentile, median and 75^th percentile one-day unaffected stock price premia paid for selected transactions in the medical technology industry occurring since 2014 that Citi deemed appropriate in its professional judgment. The analysis indicated a relevant range of one-day unaffected stock premia of 20% to 54%. Citi then calculated, based on this range of premia, an illustrative range of prices per share of Corindus common stock of $3.05 to $3.90.

Miscellaneous

Corindus has agreed to pay Citi for its services in connection with the merger an aggregate fee of approximately $23.6 million, $3 million of which became payable upon delivery of Citi’s opinion to the Board, and the remainder of which is payable contingent upon the consummation of the proposed merger. In addition, Corindus agreed to reimburse Citi for expenses incurred by Citi in performing its services, and to indemnify Citi and related parties against certain liabilities, including liabilities under federal securities laws, arising out of Citi’s engagement.

As the Board also was aware, Citi and its affiliates in the past have provided and in the future may provide certain investment banking, commercial banking and other financial services to Siemens AG, the majority shareholder of Healthineers, and affiliates of Siemens AG unrelated to the proposed merger, for which services Citi and its affiliates have received and expect to receive compensation, including, during the two-year period prior to the date of Citi’s opinion, having acted or acting as joint bookrunner in connection with the initial public offering of Healthineers by Siemens AG; and as lead arranger, administrative agent and/or bookrunner in connection with certain investment grade loans and investment grade bond issuances of Siemens AG. For the services described above for Corindus, Citi and its affiliates received during the two-year period prior to the date of Citi’s opinion aggregate fees of approximately $12 million. In the ordinary course of Citi’s business, Citi and its affiliates may actively trade or hold the securities of Corindus, Healthineers, Siemens AG and their respective affiliates for its own account or for the account of its customers and, accordingly, may at any time hold a long or short position in such securities. In addition, Citi and its affiliates (including Citigroup Inc. and its affiliates) may maintain relationships with Corindus, Healthineers, Siemens AG and their respective affiliates.

Corindus selected Citi as a financial advisor in connection with the merger based on Citi’s reputation, experience and familiarity with Corindus and its business. Citi is an internationally recognized investment banking firm that regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions and other purposes.

Financial Projections

Corindus management maintains longer range financial projections for internal budgeting and planning purposes, which Corindus management reviews with the Board from time to time. However, Corindus does not in the ordinary course make public projections as to future performance, earnings or other results and is especially cautious of making financial forecasts for extended periods because of the unpredictability of the underlying assumptions and estimates. However, in connection with the Board’s evaluation of the proposed merger, our management prepared certain, unaudited, stand-alone, financial forecasts regarding our anticipated future operations, for fiscal years 2019 through 2024 which we refer to as “Financial Projections,” described below.

Our management provided the Financial Projections to the Board for their review in connection with the Board’s evaluation of the proposed merger, and to Citi, our financial advisor in connection with the proposed merger. Our management also provided the Financial Projections to SMS USA. The Company advised the recipients of the Financial Projections that its internal financial forecasts upon which the Financial Projections were based are subjective in many respects. The Financial Projections reflected numerous assumptions with respect to company performance, industry performance, general business, economic, market and financial conditions, competitive and regulatory conditions, and other matters, many of which are difficult or impossible to predict accurately, are subject to significant economic, regulatory and competitive uncertainties and are beyond the Company’s control. The Financial Projections also reflect assumptions as to certain business decisions that are subject to change. As a result, there could be no assurance that the Financial Projections will be realized or that actual results will not be significantly higher or lower than projected.

The Financial Projections were developed for internal use and for use by our financial advisor with respect to their due diligence investigation of the Company, and were not prepared with a view toward public disclosure and do not necessarily comply with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts or U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Our independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the Financial Projections, and does not express an opinion or any form of assurance related thereto. Such non-U.S. GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP, and such non- U.S. GAAP financial measures as used by Corindus may not be comparable to similarly titled amounts used by other companies. The Financial Projections and summaries of the Financial Projections are not being included in this proxy statement to influence any Corindus stockholder’s decision whether to vote for the merger, but are being included because they were made available to the Board and our financial advisor for their respective evaluation of the proposed merger. The Financial Projections are not intended to be considered as public guidance of our financial performance or to be an assurance of the achievement of future results.

The Financial Projections, while presented with numerical specificity, necessarily were based on numerous estimates, variables and assumptions that are inherently uncertain and many of which are beyond our control. Because the Financial Projections cover multiple years, by their nature, they become subject to greater uncertainty with each successive year. Furthermore, the Financial Projections do not take into account any circumstances or events occurring after the date they were prepared, including the announcement of the potential acquisition of Corindus by SMS USA pursuant to the merger agreement or our compliance with our covenants under the merger agreement. Important factors that may affect actual results and result in the Financial Projections not being achieved include, but are not limited to, the risk factors described in our annual report on Form 10-K for the fiscal year ended December 31, 2018, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, the Financial Projections may be affected by our ability to achieve strategic goals, objectives and targets over the applicable period.

The Financial Projections are forward-looking statements. Financial Projections of this type are based on estimates and assumptions that are inherently subject to factors such as company performance, industry performance, general business, economic, regulatory, market and financial conditions, as well as changes to the business, financial condition or results of operations of the Company, including the factors described in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” beginning on page 23 of this proxy statement. Such factors may cause the Financial Projections or the underlying assumptions to be inaccurate.

Accordingly, there can be no assurance that the Financial Projections will be realized, and actual results may vary materially from those shown. The inclusion of the Financial Projections in this proxy statement should not be regarded as an indication that we or any of our affiliates, advisors, including Citi, or representatives considered or consider the Financial Projections to be predictive of actual future events, and they should not be relied upon as such. Neither we nor any of our affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the Financial Projections and none of them undertakes any obligation to update or otherwise revise or reconcile the Financial Projections to reflect circumstances existing after the respective dates on which they were prepared or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the Financial Projections are shown to be in error. We do not intend to make publicly available any update or other revision to the Financial Projections, except as otherwise required by law.

The following table sets forth a summary of the Financial Projections and certain historical financial information for comparison purposes:

⁽¹⁾       Assumes commercial partnership beginning January 1, 2020.

Readers of this proxy statement are cautioned not to place undue reliance on the specific portions of the Financial Projections set forth above. Neither we nor any of our affiliates, advisors, officers, directors or representatives has made or makes any representation to any Corindus stockholder or other person regarding our ultimate performance compared to the information contained in the Financial Projections or that the Financial Projections will be achieved, or otherwise regarding the information included in the Financial Projections. We have made no representation to SMS USA in the merger agreement or otherwise concerning the accuracy or reliability of the Financial Projections.

Interests of Corindus’ Executive Officers and Directors in the Merger

When considering the recommendation of the Board that you vote to approve the merger proposal, you should be aware that, aside from their interests as Corindus stockholders, Corindus’ directors and executive officers have interests in the merger that are different from, or in addition to, the interests of Corindus stockholders generally. This includes, for instance, payments that our directors and executive officers are entitled to receive in respect of Corindus stock options and restricted stock units, severance payments and benefits that our executive officers may become entitled to receive in connection with certain terminations, and, in the case of Mark J. Toland, a one-time transaction bonus, each as described more fully below.

With regard to our directors serving on the Board (other than Mark J. Toland, whose interest is as an executive officer), these interests relate to the impact of the transaction on the directors’ outstanding equity awards (which consist of restricted stock units and stock options) and the provision of indemnification and insurance arrangements pursuant to the merger agreement and Corindus’ certificate of incorporation and bylaws, which reflect that such directors may be subject to claims arising from their service on the Board.

With regard to our executive officers, these interests include coverage under indemnification and insurance arrangements, and the possible receipt of the following types of payments and benefits that may be triggered by or otherwise relate to the merger, assuming the merger occurred on October 29, 2019 and, where applicable, the executive officers’ employment was terminated by us without “cause” or, if applicable, by the executive officer for “good reason” (each as defined below) on October 29, 2019:

Treatment of Director and Executive Officer Common Stock and Preferred Stock

Corindus’ directors and executive officers will receive the same merger consideration as other stockholders of (i) common stock consideration for each share of Corindus common stock that they own at the effective time and (ii) the preferred stock consideration for each share of Corindus preferred stock that they own.

For information regarding beneficial ownership of Corindus common stock and Corindus preferred stock by each of Corindus’ current directors, Corindus’ named executive officers and all directors and executive officers as a group, see the section entitled “Security Ownership of Certain Beneficial Owners and Management” beginning on page 93 of this proxy statement.

Treatment of Director and Executive Officer Equity Awards

As described under “The Merger Agreement – Treatment of Corindus Equity Awards” beginning on page 70 of this proxy statement, the merger agreement provides that each option to purchase shares of Corindus common stock and each Corindus restricted stock unit award will be treated as set forth below. Only our non-employee directors, but not our executive officers, hold restricted stock units.

Treatment of Stock Options

Each option to purchase shares of Corindus common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the excess, if any, of the common stock consideration over the per share exercise price of such option, and (B) the number of shares of Corindus common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the common stock consideration will be cancelled without payment.

Treatment of Restricted Stock Unit Awards

Each Corindus restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (A) the common stock consideration and (B) the number of shares of Corindus common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law.

The table below shows the outstanding options (both vested and unvested) held by our executive officers assuming that the merger closes on October 29, 2019 and, for illustrative purposes, the value our executive officers would receive in respect of these outstanding options in connection with the merger (assuming that no additional stock options were granted to any such executive officer after the date of this proxy statement and prior to the merger closing, and that no executive officer exercised any stock options within such period).

The table below shows the outstanding options (both vested and unvested) and restricted stock units held by our directors assuming that the merger closes on October 29, 2019 and, for illustrative purposes, the value our directors would receive in respect of these outstanding options and restricted stock units in connection with the merger (assuming that no additional equity awards were granted to any such director after the date of this proxy statement and prior to the merger closing, and that no director exercised any stock options within such period).

Change in Control Severance Payments and Other Benefits

Each executive officer (other than Mr. Teany) will receive certain severance payments and other benefits if terminated upon or following the merger. The below payment estimates quantify such benefits, assuming that a merger occurs on October 29, 2019 and depicting a payment scenario in 2019. The amounts quantified below are generally due only upon a qualifying termination of employment, as described in further detail below under “The Merger – Interests of Corindus’ Executive Officers and Directors in the Merger - Employment Agreements.”

Employment Agreements

Corindus has employment agreements with each of its named executive officers that provide for, among other things, severance payments and other benefits in cases of certain employment termination scenarios, including certain terminations in connection with a “change in control” (which the merger will constitute). Under the employment agreements, except in the case of Mr. Teany, if (i) the executive’s employment is terminated by us without “cause,” as described below or (ii) the executive resigns for “good reason,” as described below, in each case within 12 months following a “change in control” (which the merger will constitute), then Corindus will pay or provide the executive officers (subject to execution of a release of claims):

Mr. Teany’s employment agreement does not provide any severance payments or benefits upon termination. Under Mr. Toland’s and Mr. Long’s employment agreements, the severance payments and benefits are substantially similar to those described above upon a termination without “cause” or a resignation for “good reason” absent a “change in control,” except that, in such case, Mr. Toland would receive payment of the portion of his annual bonus accrued on the Company’s books and records as of the immediately preceding calendar quarter for a period of 12 months in lieu of the target bonus payment described above.

The executive officers would additionally receive any accrued but unpaid base salary and unreimbursed business expenses through the termination date; any annual bonus (if any), earned in respect of the calendar year completed prior to the date of termination; and any benefits provided under any of the Company’s fringe benefit programs in accordance with their terms.

Under the employment agreements, the executive officers are subject to a perpetual confidentiality covenant and covenants of non-competition and non-solicitation of Corindus’ employees and independent contractors for the period of their employment and for 12 months (18 months, in the case of Mr. Long) thereafter.

With respect to the foregoing employment agreements for Messrs. Toland and Long, “cause”, “change in control” and “good reason” are defined as follows.

“Cause” means:

To terminate Mr. Toland for “cause,” the Board must provide him a reasonable opportunity to cure the event(s) constituting “cause.”

“Change in control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

“Good reason” means any of the following:

To resign for “good reason,” Mr. Toland or Mr. Long are required to provide 30 days’ prior written notice within a reasonable period of time (not to exceed, except in the case of a continuing breach, 90 days) after the event giving rise to “good reason,” and such event must be uncured after a cure period of at least 30 days.

Toland Transaction Bonus

Corindus has entered into a transaction bonus letter agreement with Mr. Toland pursuant to which Mr. Toland is entitled to receive a one-time, lump-sum cash transaction bonus of $2.5 million, payable promptly following, and subject to Mr. Toland’s continued employment through, the effective time.

Directors’ and Officers’ Indemnification and Insurance

From and after the effective time through the sixth anniversary of the date on which the effective time occurs, SMS USA and the surviving corporation will jointly and severally indemnify and hold harmless each D&O indemnified party with respect to all claims, liabilities, losses, damages, judgments, fines, penalties, costs (including amounts paid in settlement or compromise) and expenses (including fees and expenses of legal counsel) in connection with any proceeding, whenever asserted, based on or arising out of, in whole or in part, (i) the fact that a D&O indemnified party was a director, officer, employee or agent of Corindus or any of its subsidiaries, or (ii) acts or omissions by such D&O indemnified party in the D&O indemnified party’s capacity as a director, officer, employee or agent of Corindus or a subsidiary of Corindus or taken at the request of Corindus or a subsidiary of Corindus (including in connection with serving at the request of the Corindus or such subsidiary as a director, officer, employee agent, trustee or fiduciary of another person), in each case under the foregoing clauses (i) or (ii), at, or at any time before, the effective time (including any proceeding relating in whole or in part to the merger or the enforcement of this provision or any other indemnification or advancement right of any D&O indemnified party), to the fullest extent permitted or required by applicable law. In no event will SMS USA have any obligations or liabilities to a D&O indemnified party pursuant to the provisions described in this paragraph, other than those obligations or liabilities that the surviving corporation will have to D&O indemnified parties pursuant to the provisions described in this paragraph.

All rights to indemnification and exculpation from liabilities, including advancement of expenses, for acts or omissions occurring at or prior to the effective time now existing in favor of the D&O indemnified parties as provided in Corindus’ certificate of incorporation, bylaws, or any indemnification contract between such D&O indemnified parties and Corindus (and disclosed to SMS USA) will survive the merger and will continue in full force and effect. Without limiting the foregoing, for a period of six years from the effective time, the surviving corporation shall, and SMS USA shall cause the surviving corporation to, maintain in effect the exculpation, indemnification and advancement of expenses provisions equivalent to the provisions of Corindus’ certificate of incorporation and bylaws as in effect immediately prior to the effective time solely with respect to acts or omissions occurring prior to the effective time and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any D&O indemnified party; provided, however, that all rights to indemnification in respect of any action pending or asserted or any claim made for indemnification within such period will continue until the disposition of such action or resolution of such claim. From and after the effective time, SMS USA shall guarantee and stand surety for, and shall cause the surviving corporation to honor, in accordance with their respective terms, each of the covenants contained in certain provisions of the merger agreement relating to directors’ and officers’ indemnification. In addition, for six years from the effective time, SMS USA will, and will cause the surviving corporation to, advance any expenses (including fees and expenses of legal counsel) of any D&O indemnified party (including in connection with enforcing the indemnity) as incurred to the fullest extent permitted under applicable law, provided that the individual to whom expenses are advanced provides an undertaking to repay such advances if it is determined that such person is not entitled to be so indemnified.

Prior to the effective time, Corindus is required to or, if Corindus is unable to, SMS USA will cause the surviving corporation as of or after the effective time to, purchase a six-year prepaid “tail” policy with reputable insurers, with terms, conditions, retentions and limits of liability that are no less favorable than the coverage provided under Corindus’ existing policies of directors’ and officers’ liability insurance and fiduciary liability insurance, with respect to matters arising on or before the effective time (including in connection with the merger agreement and the transactions or actions contemplated by the merger agreement), subject to certain limitations. If Corindus or the surviving corporation for any reason fails to obtain such “tail” insurance policies prior to, as of or after the effective time, SMS USA is required to, for a period of six years from the effective time, cause the surviving corporation to maintain in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by Corindus with respect to matters arising on or before the effective time, subject to certain limitations.

Other Interests

As of the date of this proxy statement, other than the arrangements discussed in this proxy statement, none of our executive officers has entered into any agreement with SMS USA regarding employment with, or compensation from, the surviving corporation or SMS USA on a going-forward basis following the completion of the merger. However, SMS USA (or its representatives) and some or all of our executive officers may have discussions from time to time with respect to such arrangements.

Quantification of Potential Merger-Related Payments to Named Executive Officers

The following table, “Golden Parachute Compensation,” along with its footnotes, shows the disclosure required by Item 402(t) of Regulation S-K regarding the amounts of payments and benefits payable to Corindus’ named executive officers that are based on or otherwise relate to the merger. The amounts detailed below assume that the merger occurred on October 29, 2019 and, where applicable, the named executive officer’s employment was terminated by Corindus without “cause” or by the named executive officer for “good reason” on October 29, 2019. The table below takes into account each named executive officer’s outstanding unvested stock options assuming that the merger closes on October 29, 2019 (assuming that no additional stock options were granted to any such executive officer after the date of this proxy statement and prior to the merger closing). The actual amounts payable will depend on the effective time of the merger and the date of such termination, as applicable. More detail on the payments and benefits are set forth above in this section of this proxy statement.

The information contained in the following table and accompanying footnotes are subject to a non-binding, advisory vote of Corindus’ stockholders, as described under the section titled “Advisory Vote on Named Executive Officer Merger-Related Compensation Proposal (Proposal 2)” beginning on page 91 of this proxy statement.

Golden Parachute Compensation

The cash severance arrangements described above are “double-trigger” (i.e., they become payable only in connection with a qualifying termination, rather than solely as a result of a change in control (i.e., “single-trigger”)). The one-time, lump-sum transaction bonus for Mr. Toland is “single-trigger.”

Financing of the Merger

The consummation of the merger is not subject to any financing conditions. We anticipate that the total amount of funds necessary to consummate the merger and the related transactions, not including fees and expenses, will be approximately $1.1 billion, including the estimated funds needed to (i) pay holders of Corindus common and preferred stock their respective common stock consideration or preferred stock consideration due to them under the merger agreement; (ii) make payments in respect of outstanding Corindus stock options and Corindus restricted stock unit awards pursuant to the merger agreement; (iii) make payments in respect of outstanding Corindus warrants pursuant to the merger agreement; and (iv) pay the outstanding net indebtedness of Corindus. SMS USA expects to use cash, lines of credit or other sources of immediately available funds in order to fund the merger.

In connection with the execution of the merger agreement, on August 7, 2019, Healthineers delivered the letter of support which was accepted by Corindus, pursuant to which, Healthineers has agreed, guaranteed and committed to the complete payment and discharge of all monetary obligations and liabilities of SMS USA to Corindus in accordance with, and arising from, the merger agreement (other than the indemnification obligations of SMS USA owed to directors and officers of Corindus pursuant to the merger agreement). If SMS USA defaults in the due and punctual payment of such obligations under the merger agreement, Corindus shall be entitled to seek satisfaction and payment of such obligations directly against Healthineers up to the Aggregate Merger Consideration after Corindus has first made written demand for satisfaction and payment of the relevant obligations to SMS USA and the expiry of a grace period of 30 days.

Regulatory Clearances and Approvals Required for the Merger

U.S. Antitrust

Under the HSR Act, we cannot complete the merger until we have given notification and furnished information to the FTC and the DOJ, and until the applicable waiting period has expired or has been terminated. On August 23, 2019, Corindus and SMS USA each filed a premerger notification and report form under the HSR Act. On August 30, 2019, the FTC notified Corindus that early termination of the applicable waiting period under the HSR Act was granted, effective immediately, with respect to the merger. The early termination of the waiting period under the HSR Act satisfies one of the conditions to the closing of the merger. The closing of the merger remains subject to the satisfaction or waiver of the remaining conditions to the merger, as further described in “The Merger Agreement – Conditions to the Merger” beginning on page 85 of this proxy statement.

Foreign Antitrust

No foreign antirust approvals or merger control approvals are required in connection with the merger.

Under the merger agreement, Corindus, SMS USA and Merger Sub have agreed to use reasonable best efforts to consummate and make effective the transactions contemplated by the merger agreement and to cause the conditions to the merger to be satisfied, including obtaining all necessary actions or non-actions, consents and approvals from governmental authorities or other third parties necessary in connection with the merger and making all necessary registrations and filings, including under the HSR Act, provided, however, that no party shall be required to make concessions in connection with seeking or obtaining consent to the merger, including any obligation to divest, hold separate or otherwise take action that limits such party’s freedom of action.

While we have no reason to believe it will not be possible to obtain regulatory approvals in a timely manner, there is no certainty that these approvals will be obtained within the period of time contemplated by the merger agreement, if at all.

The approval of any regulatory application or completion of regulatory review merely implies the satisfaction of certain regulatory criteria, which do not include review of the merger from the standpoint of the adequacy of the applicable merger consideration to be received by Corindus stockholders. Further, regulatory approvals or reviews do not constitute an endorsement or recommendation of the merger.

Material U.S. Federal Income Tax Consequences of the Merger

The exchange of Corindus common stock for cash in the merger will be a taxable transaction for U.S. federal income tax purposes and may also be taxable under state and local and other tax laws. In general, a U.S. holder (as defined in the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96 of this proxy statement) whose shares of Corindus common stock are converted into the right to receive cash in the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received with respect to such shares and the U.S. holder’s adjusted tax basis in such shares.

You should read the section entitled “Material U.S. Federal Income Tax Consequences of the Merger” beginning on page 96 of this proxy statement and consult your tax advisors regarding the U.S. federal income tax consequences of the merger to you in your particular circumstances, as well as tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

Delisting and Deregistration of Corindus Common Stock

As promptly as practicable following the completion of the merger, the Corindus common stock currently listed on the NYSE American will cease to be listed on the NYSE American and will be deregistered under the Exchange Act.

Litigation Related to the Merger

Following the announcement of the execution of the merger agreement, three shareholder actions have been filed against Corindus, members of its board of directors, and certain of its officers in the United States District Court for the Southern District of New York and in the United States District Court for the District of Delaware: Bruso v. Corindus Vascular Robotics, Inc., et al., 19-cv-08536 (S.D.N.Y.) (filed Sept. 13, 2019), Sabatini v. Corindus Vascular Robotics, Inc., et al., 19-cv-01752 (D. Del.) (filed Sept. 18, 2019), and Shea v. Corindus Vascular Robotics, Inc., et al., 19-cv-08918 (S.D.N.Y.) (filed Sept. 25, 2019). The plaintiffs in the Sabatini and Shea actions purport to bring the actions on behalf of a class consisting of public stockholders of Corindus, but excluding the defendants in the action and any person, firm, trust, corporation, or other entity related to or affiliated with the defendants. The complaints in all three actions allege generally, among other things, that defendants violated Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder in connection with allegedly misleading statements and omissions in Corindus’ preliminary proxy statement, filed with the Securities and Exchange Commission on August 30, 2019, concerning the financial projections and analyses performed by Corindus’ advisor in connection with the proposed merger, as well as purported conflicts of interest of certain executives of Corindus and Corindus’ financial advisor. The complaints seek, among others things, injunctive relief, including enjoining the proposed transaction, rescission or rescissory damages in the event the proposed transaction is consummated, and unspecified attorneys’ and other fees and costs. Although the complaints request injunctive relief, neither plaintiff has filed a motion asking the court to enjoin the merger at this time.

One of the conditions to the closing of the merger is that no governmental authority of competent jurisdiction issuing or entering any order, including any injunction, after August 7, 2019, that is then in effect and has the effect of restraining, enjoining or otherwise prohibiting the consummation of the merger or the other transactions contemplated by the merger agreement.  As such, if the plaintiffs in any of the actions are successful in obtaining an injunction prohibiting the defendants from completing the merger on the agreed-upon terms, then such injunction may prevent the merger from becoming effective, or from becoming effective within the expected timeframe.

We believe the claims asserted in these complaints are without merit and intend to vigorously contest such claims.

Appraisal Rights

If the merger is completed, Corindus stockholders will be entitled to appraisal rights under Section 262 of the DGCL, provided that they comply with the conditions and requirements established therein.

Under Section 262 of the DGCL, Corindus stockholders of record who do not wish to accept the common stock consideration in respect of their shares of Corindus common stock or the preferred stock consideration in respect of their shares of Corindus preferred stock, respectively, have the right to demand appraisal of their respective shares of Corindus capital stock and to receive payment in cash of the fair value of their shares of Corindus capital stock as of the effective time of the merger, exclusive of any element of value arising from the accomplishment or expectation of the merger, as determined by the Delaware Court of Chancery, together with interest, if any, to be paid upon the amount determined to be such fair value (or, in certain circumstances described below, on the difference between the amount determined to be the fair value and the amount paid to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding), provided that they comply with the conditions and requirements established in Section 262 of the DGCL. The “fair value” per share of your shares of Corindus capital stock as determined by the Delaware Court of Chancery in an appraisal proceeding may be more or less than, or the same as, the applicable merger consideration that you are otherwise entitled to receive under the terms of the merger agreement for each share of your Corindus capital stock. Corindus stockholders who do not vote in favor of the merger proposal who properly demand appraisal for their shares Corindus capital stock in compliance with the provisions of Section 262 of the DGCL, who do not withdraw such demand or otherwise waive or lose their right to appraisal and who comply with the other requirements to exercise appraisal rights under the DGCL will be entitled to appraisal rights under the DGCL. Strict compliance with the statutory procedures in Section 262 of the DGCL is required. Failure to follow precisely any of the statutory requirements may result in the loss of your appraisal rights.

This section is intended only as a brief summary of certain provisions of the Delaware statutory procedures that a stockholder must follow in order to seek and perfect appraisal rights. This summary, however, is not a complete statement of all applicable requirements and the law pertaining to appraisal rights under the DGCL, and is qualified in its entirety by reference to Section 262 of the DGCL, the full text of which is attached to this proxy statement as Annex C, in its entirety. The following summary does not constitute any legal or other advice, nor does it constitute a recommendation that stockholders exercise their appraisal rights under Section 262 of the DGCL.

Under Section 262 of the DGCL where a merger agreement is to be submitted for adoption at a meeting of stockholders, Corindus must notify the stockholders who were stockholders of record on the record date for notice of such meeting with respect to shares for which appraisal rights are available, not less than 20 days before the meeting to vote on the merger, that appraisal rights will be available. A copy of Section 262 of the DGCL must be included with such notice. This proxy statement constitutes Corindus’ notice to our stockholders that appraisal rights are available in connection with the merger and the full text of Section 262 of the DGCL is attached to this proxy statement as Annex C, in compliance with the requirements of Section 262 of the DGCL. If you wish to consider exercising your appraisal rights, you should carefully review the text of Section 262 of the DGCL contained in Annex C. Failure to comply timely and properly with the requirements of Section 262 of the DGCL may result in the loss of your appraisal rights under the DGCL. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of Corindus capital stock, Corindus believes that if a stockholder is considering exercising such rights, such stockholder should seek the advice of legal counsel.

If you wish to demand appraisal of your shares of Corindus capital stock, you must satisfy each of the following conditions:

If you fail to comply with any of the requirements under Section 262 of the DGCL to perfect your appraisal rights and the merger is completed, your respective shares of Corindus capital stock will be converted into the right to receive payment of the applicable merger consideration for your shares of Corindus capital stock as provided for in the merger agreement and you will lose your appraisal rights with respect to your shares of Corindus capital stock.

A holder of shares of Corindus capital stock wishing to exercise appraisal rights must hold of record the shares of Corindus capital stock on the date the written demand for appraisal is made and must continue to hold the shares of Corindus capital stock of record through the effective time of the merger. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted “FOR” the merger proposal, and it will result in the loss of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must either submit a proxy containing instructions to vote “AGAINST” the merger proposal or abstain from voting on the merger proposal. Voting against or failing to vote for the merger proposal by itself does not constitute a demand for appraisal within the meaning of Section 262 of the DGCL. The written demand for appraisal must be in addition to and separate from any proxy or vote on the merger proposal.

All demands for appraisal should be addressed to Corindus Vascular Robotics, Inc., Attention: Chief Financial Officer, 309 Waverley Oaks Road, Suite 105, Waltham, Massachusetts 02452, and must be delivered to Corindus before the vote is taken to approve merger proposal at the special meeting, and must be executed by, or on behalf of, the record holder of the shares of Corindus capital stock for which appraisal is demanded. The demand must reasonably inform Corindus of the identity of the stockholder and the intention of the stockholder to demand appraisal of his, her or its shares of Corindus capital stock in connection with the merger. A stockholder’s failure to deliver to Corindus the written demand for appraisal prior to the taking of the vote on the merger proposal at the special meeting of stockholders will result in the loss of appraisal rights.

Only a holder of record of shares of Corindus capital stock is entitled to demand an appraisal of the shares registered in that holder’s name. Accordingly, to be effective, a demand for appraisal by a stockholder of Corindus capital stock must be made by, or on behalf of, the record stockholder. The demand should set forth, fully and correctly, the record stockholder’s name as it appears on the stockholder’s stock certificate(s) or in the transfer agent’s records, in the case of uncertificated shares, should specify the stockholder’s mailing address and the number of shares of Corindus capital stock registered in the stockholder’s name. The demand must state that the person intends thereby to demand appraisal of the stockholder’s shares Corindus capital stock in connection with the merger. The demand cannot be made by the beneficial owner if he or she does not also hold the shares of Corindus capital stock of record. The beneficial holder must, in such cases, have the registered owner, such as a bank, brokerage firm or other nominee, submit the required demand in respect of those shares of Corindus capital stock. If you hold your shares of Corindus capital stock through a bank, brokerage firm or other nominee and you wish to exercise appraisal rights, you should consult with your bank, brokerage firm or the other nominee to determine the appropriate procedures for the making of a demand for appraisal by the nominee and obtaining notice of the effective date of the merger.

If shares of Corindus capital stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, execution of a demand for appraisal must be made in that capacity. If the shares of Corindus capital stock are owned of record by more than one person, as in a joint tenancy or tenancy in common, the demand must be executed by or for all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute the demand for appraisal for a stockholder of record; however, the agent must identify the record owner or owners and expressly disclose the fact that, in executing the demand, he or she is acting as agent for the record owner or owners. A record owner, such as a bank, brokerage firm or other nominee, who holds shares of Corindus capital stock as a nominee for others, may exercise his, her or its right of appraisal with respect to the shares of Corindus capital stock held for one or more beneficial owners, while not exercising this right for other beneficial owners. In that case, the written demand should state the number of shares of Corindus capital stock as to which appraisal is sought. Where no number of shares of Corindus capital stock is expressly mentioned, the demand will be presumed to cover all shares of Corindus capital stock held in the name of the record owner. If a stockholder holds shares of Corindus capital stock through a broker who in turn holds the shares through a central securities depository nominee such as Cede & Co., a demand for appraisal of such shares of Corindus capital stock must be made by or on behalf of the depository nominee and must identify the depository nominee as record owner.

Within 10 days after the effective time of the merger, the surviving corporation in the merger must give notice of the date that the merger became effective to each of Corindus’ record stockholders who has demanded appraisal in accordance with Section 262 of the DGCL and who did not vote in favor of the merger proposal. At any time within 60 days after the effective time of the merger, any stockholder who has not commenced an appraisal proceeding or joined a proceeding as a named party may withdraw the stockholder’s demand and accept the applicable merger consideration specified by the merger agreement for that stockholder’s shares of Corindus capital stock by delivering to the surviving corporation a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the effective time of the merger will require written approval of the surviving corporation. No appraisal proceeding in the Delaware Court of Chancery will be dismissed as to any stockholder without the approval of the Delaware Court of Chancery, with such approval conditioned upon such terms as the Delaware Court of Chancery deems just; provided, however that any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party may withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the merger within 60 days after the effective date of the merger. If the surviving corporation does not approve a request to withdraw a demand for appraisal when that approval is required, or, if the Delaware Court of Chancery does not approve the dismissal of an appraisal proceeding, the stockholder will be entitled to receive only the appraised value of his, her or its shares of Corindus capital stock determined in any such appraisal proceeding, plus interest, if any, which value could be less than, equal to or more than the applicable merger consideration offered pursuant to the merger agreement.

Within 120 days after the effective time of the merger, but not thereafter, either the surviving corporation or any stockholder who has complied with the requirements of Section 262 of the DGCL and is entitled to appraisal rights under Section 262 of the DGCL may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery demanding a determination of the fair value of the respective shares of Corindus capital stock held by all such stockholders. Upon the filing of the petition by a stockholder, service of a copy of such petition shall be made upon the surviving corporation. The surviving corporation has no obligation to file such a petition, has no present intention to file a petition and holders should not assume that the surviving corporation will file a petition. Accordingly, it is the obligation of the respective holders of Corindus capital stock to initiate all necessary petitions to perfect their appraisal rights in respect of shares of Corindus capital stock within the time prescribed in Section 262 of the DGCL and the failure of a stockholder to file such a petition within the period specified in Section 262 of the DGCL could nullify the stockholder’s previous written demand for appraisal. In addition, within 120 days after the effective time of the merger, any stockholder who has properly complied with the requirements of Section 262 of the DGCL and who did not vote in favor of the merger proposal, will be entitled to receive from the surviving corporation, upon written request, a statement setting forth the aggregate number of shares of Corindus capital stock not voted in favor of the merger proposal and with respect to which demands for appraisal have been received and the aggregate number of holders of such shares of Corindus capital stock. The statement must be mailed within 10 days after such written request has been received by the surviving corporation or within 10 days after the expiration of the period for delivery of demands for appraisal, whichever is later. A person who is the beneficial owner of shares of Corindus capital stock held either in a voting trust or by a nominee on behalf of such person for which appraisal has been properly demanded may, in such person’s own name, file a petition for appraisal or request from the surviving corporation such statement.

If a petition for appraisal is duly filed by a stockholder and a copy of the petition is delivered to the surviving corporation, then the surviving corporation will be obligated, within 20 days after receiving service of a copy of the petition, to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded an appraisal of their respective shares of Corindus capital stock and with whom agreements as to the value of their shares of Corindus capital stock have not been reached. After notice to stockholders who have demanded appraisal from the Register in Chancery, if such notice is ordered by the Delaware Court of Chancery, the Delaware Court of Chancery will conduct a hearing upon the petition and determine those stockholders who have become entitled to the appraisal rights provided by Section 262 of the DGCL. The Delaware Court of Chancery may require stockholders who have demanded appraisal of their shares of Corindus capital stock to submit their stock certificates to the Register in Chancery for notation of the pendency of the appraisal proceedings; and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to that stockholder.

After determination of the stockholders entitled to appraisal of their respective shares of Corindus capital stock, the Delaware Court of Chancery will appraise the shares of Corindus capital stock, determining their fair value as of the effective time of the merger after taking into account all relevant factors exclusive of any element of value arising from the accomplishment or expectation of the merger, together with interest, if any, to be paid upon the amount determined to be the fair value (or, in certain circumstances described below, on the difference between the amount determined to be the fair value and the amount paid to each stockholder entitled to appraisal prior to the entry of judgment in the appraisal proceeding). When the fair value has been determined, the Delaware Court of Chancery will direct the payment of such value (with interest, if any), in the case of holders of uncertificated stock forthwith, and in the case of holders of shares represented by certificates upon surrender by those stockholders of the certificates representing their shares of Corindus capital stock. Unless the Delaware Court of Chancery in its discretion determines otherwise for good cause shown, interest from the effective date of the merger through the date of payment of the judgment shall be compounded quarterly and shall accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the effective time of the merger and the date of payment of the judgment. At any time before the entry of judgment in the proceedings, the surviving company may pay to each stockholder entitled to appraisal an amount in cash, in which case interest shall accrue thereafter as described herein only upon the sum of (i) the difference, if any, between the amount so paid and the fair value of the shares of Corindus capital stock as determined by the Delaware Court of Chancery, and (ii) interest theretofore accrued, unless paid at that time.

You should be aware that an investment banking opinion as to the fairness from a financial point of view of the consideration to be received in a sale transaction, such as the merger, is not an opinion as to fair value under Section 262 of the DGCL. Although we believe that the applicable per share merger consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the applicable per share merger consideration. Moreover, we do not anticipate offering more than the applicable per share merger consideration to any stockholder exercising appraisal rights and reserve the right to assert, in any appraisal proceeding, that, for purposes of Section 262 of the DGCL, the “fair value” of a share of Corindus capital stock is less than the applicable per share merger consideration. In determining “fair value,” the Delaware Court of Chancery is required to take into account all relevant factors. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.”

In determining the “fair value” of the shares, a Delaware Court is required to take into account all relevant factors. In Weinberger v. UOP, Inc., the Delaware Supreme Court discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court has stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other factors that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 of the DGCL provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc., the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger, the Delaware Supreme Court construed Section 262 of the DGCL to mean that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Costs of the appraisal proceeding (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and imposed upon the surviving corporation and the stockholders participating in the appraisal proceeding by the Delaware Court of Chancery, as it deems equitable in the circumstances. Upon the application of a stockholder, the Delaware Court of Chancery may order all or a portion of the expenses incurred by any stockholder in connection with the appraisal proceeding, including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts used in the appraisal proceeding, to be charged pro rata against the value of all shares of Corindus capital stock entitled to appraisal. Any stockholder who demanded appraisal rights will not, after the effective time of the merger, be entitled to vote shares of Corindus capital stock subject to that demand for any purpose or to receive payments of dividends or any other distribution with respect to those shares of Corindus capital stock, other than with respect to payment as of a record date prior to the effective time of the merger. If no petition for appraisal is filed within 120 days after the effective time of the merger, or if the stockholder otherwise fails to perfect, successfully withdraws or loses such holder’s right to appraisal, then the right of that stockholder to appraisal will cease and that stockholder’s shares of Corindus capital stock will be deemed to have been converted at the effective time of the merger into the right to receive the applicable merger consideration (without interest) for his, her or its shares of Corindus capital stock pursuant to the merger agreement.

Failure to comply strictly with all of the procedures set forth in Section 262 of the DGCL may result in the loss of a stockholder’s appraisal rights.

In view of the complexity of Section 262 of the DGCL, Corindus stockholders who may wish to pursue appraisal rights should consult their legal and financial advisors.

THE MERGER AGREEMENT

The following discussion sets forth the principal terms of the merger agreement, a copy of which is attached as Annex A to this proxy statement and is incorporated by reference herein. The rights and obligations of the parties are governed by the express terms and conditions of the merger agreement and not by this discussion, which is summary by nature. This discussion is not complete and is qualified in its entirety by reference to the complete text of the merger agreement. You are encouraged to read the merger agreement carefully in its entirety, as well as this proxy statement and any documents incorporated by reference herein, before making any decisions regarding the merger.

Explanatory Note Regarding the Merger Agreement

The merger agreement and this summary of its terms have been included to provide you with information regarding the terms of the merger agreement. Factual disclosures about Corindus contained in this proxy statement or in Corindus’ public reports filed with the SEC may supplement, update or modify the factual disclosures about Corindus contained in the merger agreement and described in this summary. The representations, warranties and covenants made in the merger agreement by Corindus, SMS USA and Merger Sub were qualified and subject to important limitations agreed to by Corindus, SMS USA and Merger Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue, due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, and were not intended by the parties to the merger agreement to be a characterization of the actual state of facts or condition of Corindus, SMS USA or Merger Sub, except as expressly stated in the merger agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with or furnished to the SEC, and in some cases were qualified by disclosures that were made by each party to the other, which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement and subsequent developments or new information qualifying a representation or warranty may have been included in this proxy statement or in the respective public filings made by each of Corindus or SMS USA with the SEC.

Additional information about Corindus may be found elsewhere in this proxy statement and Corindus’ other public filings. See the section entitled “Where You Can Find More Information” beginning on page 100 of this proxy statement.

When the Merger Becomes Effective

The closing of the merger will take place at the offices of Blank Rome, 1271 Avenue of the Americas, New York, NY 10020, or by the electronic transmission of signature pages, at 10:00 a.m. (local time) on a date to be specified by the parties, but no later than the second business day after the satisfaction or (to the extent permitted by law) waiver of the conditions set forth in the merger agreement (other than those conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or (to the extent permitted by law) waiver of such conditions), unless another time, date or place is agreed to in writing by Corindus, Merger Sub and SMS USA.

Concurrently with the closing, Corindus will cause to be filed an appropriate, executed certificate of merger with respect to the merger with the Delaware Secretary of State as provided under the DGCL. The merger will become effective upon the filing of such certificate of merger, or at such later date and time as is agreed by SMS USA and Corindus and specified in such certificate of merger.

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

Upon the terms and conditions of the merger agreement, at the effective time, Merger Sub will merge with and into Corindus and the separate corporate existence of Merger Sub will cease, with Corindus continuing as the surviving corporation and a wholly owned subsidiary of SMS USA. At the effective time, the certificate of incorporation of Corindus will, by virtue of the merger, be amended and restated in its entirety as set forth in Exhibit B to the merger agreement and the amended and restated certificate of incorporation will be the certificate of incorporation of the surviving corporation until thereafter amended. At the effective time, the bylaws of Merger Sub, as in effect immediately before the effective time, will by virtue of the merger, be amended and restated in its entirety as set forth in Exhibit C to the merger agreement and such amended and restated bylaws will be the bylaws of the surviving corporation until thereafter amended. From and after the effective time, the directors of Merger Sub immediately before the effective time will be the initial directors of the surviving corporation, and the officers of the surviving corporation will be designated by SMS USA immediately prior to the effective time, and, in each case, will hold office until their respective successors are duly elected, designated or qualified, or until their earlier death, resignation or removal, in accordance with the surviving corporation’s certificate of incorporation and bylaws.

Effect of the Merger on Corindus Common Stock and Corindus Preferred Stock

At the effective time, each share of (i) Corindus common stock issued and outstanding immediately prior to the effective time (other than canceled shares and dissenting shares) will be converted into the right to receive the common stock consideration, without interest and (ii) (A) Series A preferred stock issued and outstanding immediately prior to the effective time and (B) Series A-1 preferred stock issued and outstanding prior to the effective time and Series A-1 preferred stock that has accrued and accumulated on a daily basis until the effective time, in accordance with the provisions of the certificate of designation, but which is not otherwise issued or outstanding immediately prior to the effective time, in each case other than canceled shares and dissenting shares, shall be converted into the right to receive an amount in cash equal to the preferred stock consideration, without interest.

Each share of Corindus capital stock converted into the right to receive the applicable merger consideration, as described above, will no longer be outstanding and will be automatically canceled and will cease to exist, and each holder of certificates or book-entry shares, which immediately prior to the effective time represented such Corindus capital stock, will cease to have any rights with respect thereto, except the right to receive, upon surrender of such certificates or book-entry shares, the applicable merger consideration.

The applicable merger consideration will be adjusted appropriately to reflect the effect of any reclassification, recapitalization, exchange, stock split (including reverse stock split) or combination or readjustment of shares or any similar event or any stock dividend or stock distribution with a record date occurring on or after the date of the merger agreement and prior to the effective time, in order to provide the same economic effect as contemplated by the merger agreement prior to such event.

Treatment of Corindus Equity Awards

Options. Each option to purchase shares of Corindus common stock that is outstanding and unexercised immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (i) the excess, if any, of the common stock consideration over the per share exercise price of such option, and (ii) the number of shares of Corindus common stock subject to such option as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Options with a per share exercise price equal to or exceeding the common stock consideration will be cancelled without payment. Any consideration with respect to Corindus options will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Restricted Stock Unit Awards. Each Corindus restricted stock unit award that is outstanding immediately prior to the effective time, whether vested or unvested, will be cancelled and converted into the right to receive a cash payment (without interest) equal to the product of (i) the common stock consideration and (ii) the number of shares of Corindus common stock underlying the award as of the effective time, net of any applicable withholding taxes required to be withheld by applicable law. Any consideration with respect to Corindus restricted stock unit awards will be paid by the surviving corporation as soon as reasonably practicable following the effective time, and in any event no later than 10 business days after the closing date.

Payment for Corindus Capital Stock

Prior to or at the effective time, SMS USA will deposit, or cause to be deposited, with a paying agent (which shall be a nationally recognized financial institution) designated by SMS USA that is reasonably acceptable to Corindus, cash in immediately available funds in an amount sufficient to pay the Aggregate Merger Consideration and the consideration in respect of the cancelled Corindus warrants.

As promptly as reasonably practicable after the effective time (and in any event within five business days after the effective time), SMS USA will cause the paying agent to mail to each holder of record of certificates that immediately prior to the effective time represented outstanding shares of Corindus capital stock (i) a letter of transmittal, which will specify that delivery of certificates will be effected, and risk of loss and title to the certificates will pass only upon proper delivery of the certificates (or affidavits of loss in lieu thereof) to the paying agent and will be in a form and have such other customary provisions as reasonably specified by SMS USA, and (ii) instructions for effecting the surrender of the certificates in exchange for cash in an amount equal to the applicable merger consideration multiplied by the number of shares of Corindus capital stock previously represented by such certificates.

Upon surrender of a certificate (or an affidavit of loss in lieu thereof) for cancellation to the paying agent, together with such letter of transmittal duly completed and validly executed in accordance with the instructions thereto, and such other documents as may be reasonably required by the paying agent, the holder of such certificate will be entitled to receive in exchange therefor as promptly as reasonably practicable cash in an amount equal to the applicable merger consideration multiplied by the number of shares of Corindus capital stock previously represented by such certificate and the certificate (or affidavit of loss in lieu thereof) so surrendered will be cancelled. Each book-entry share representing shares of Corindus capital stock will automatically upon the effective time be entitled to receive, and SMS USA will cause the paying agent to pay and deliver in exchange therefor as promptly as reasonably practicable after the effective time, cash in an amount equal to the applicable merger consideration multiplied by the number of shares of Corindus capital stock previously represented by such book-entry share. The paying agent will accept such certificates (or affidavits of loss in lieu thereof) and make such payments and deliveries with respect to book-entry shares upon compliance with such reasonable terms and conditions as the paying agent may impose to effect an orderly exchange thereof in accordance with customary exchange practices. No interest will be paid or accrued for the benefit of holders of the certificates or book-entry shares on the cash amounts payable upon the surrender or delivery thereof.

Representations and Warranties

The merger agreement contains representations and warranties of each of Corindus, SMS USA and Merger Sub, subject to certain qualifications or exceptions in the merger agreement and the disclosure letter delivered in connection with the merger agreement, as to, among other things:

The merger agreement also contains representations and warranties of Corindus, subject to certain qualifications or exceptions in the merger agreement and the disclosure letter delivered in connection with the merger agreement, as to, among other things:

The merger agreement also contains representations and warranties of SMS USA and Merger Sub, subject to certain qualifications or exceptions in the merger agreement as to, among other things:

Some of the representations and warranties in the merger agreement are qualified by materiality qualifications or a “Company Material Adverse Effect” or “Parent Material Adverse Effect” clause.

For purposes of the merger agreement, a “Company Material Adverse Effect” means any effect, change, development, event, circumstance, occurrence, condition, fact or state of facts that has a material adverse effect, individually or in the aggregate:

provided, further, however, that in the cases of the first, second, fifth and sixth sub-bullets above, to the extent Corindus and its subsidiaries, taken as a whole, are disproportionately affected thereby in relation to other companies in the medical device industry, such effects, changes, developments, events, circumstances, occurrences, conditions, facts or states of facts may be taken into account in determining whether a Company Material Adverse Effect has occurred to the extent of such disproportionate impact; or

For purposes of the merger agreement, a “Parent Material Adverse Effect” means the impairment in any material respect of the ability of SMS USA or Merger Sub, as the case may be, to perform its obligations under the merger agreement or to consummate the merger and pay the Aggregate Merger Consideration and other amounts required to be paid by SMS USA and Merger Sub under the merger agreement, or otherwise prevent, materially delay or materially impair the consummation of the merger and the other transactions contemplated by the merger agreement.

Conduct of Business Pending the Merger

The merger agreement provides that, subject to certain exceptions in the disclosure letter delivered by Corindus in connection with the merger agreement, and except as may be expressly required by the merger agreement, required by law or as consented to by SMS USA in writing (such consent not to be unreasonably withheld, conditioned or delayed), as required by the terms of certain material contracts of Corindus in effect as of the date of the merger agreement, during the period from the date of the merger agreement to the effective time (or the date, if any, on which the merger agreement is terminated by its terms), (i) Corindus will, and will cause each of its subsidiaries to conduct its business, in all material respects in the ordinary course of business and in a manner consistent with past practice and, to the extent consistent therewith, use commercially reasonable efforts to preserve its assets and business organization intact in all material respects and maintain its existing business relations and goodwill with customers, suppliers, licensors, distributors, governmental authorities, employees and business partners, in each case whose business relationships are material to Corindus and its subsidiaries, taken as a whole, and (ii) Corindus will not, and will cause each of its subsidiaries not to, directly or indirectly:

Notwithstanding the above, nothing contained in the merger agreement gives SMS USA or Merger Sub or any of their respective affiliates the right to control or direct Corindus’ or its subsidiaries’ operations prior to the effective time.

Other Covenants and Agreements

Access and Information

Subject to certain exceptions and limitations, from August 7, 2019 until the earlier of the effective time and the date, if any, on which the merger agreement is terminated, Corindus will, and will cause its subsidiaries to, afford SMS USA and Merger Sub and their respective representatives reasonable access, to be coordinated through Corindus or its designated representatives in accordance with such reasonable procedures as they may establish, during normal business hours and upon reasonable notice, to the officers, employees, agents, properties, books, contracts and records of Corindus and its subsidiaries. In addition, during such same period and subject to certain exceptions and limitations, Corindus will, and will cause its subsidiaries to, reasonably promptly furnish all other information concerning the business, properties and personnel of Corindus and its subsidiaries as SMS USA or Merger Sub may reasonably request.

No Solicitation; Company Acquisition Proposals

From and after the date of the merger agreement until the earlier of the effective time or the date, if any, on which the merger agreement is terminated by its terms, except as expressly permitted in connection with a Company Acquisition Proposal or Company Superior Proposal, Corindus may not (and will not permit its subsidiaries and its and their respective affiliates and representatives to): (i) initiate, seek, solicit, facilitate or knowingly encourage, or knowingly induce the making, submission or announcement of, any Company Acquisition Proposal, (ii) enter into, continue or otherwise participate in any negotiations or discussions with, or furnish or cause to be furnished any non-public information or data to, or furnish access to Corindus’ (or any of its subsidiaries’) properties with respect to, any third party (other than SMS USA or any of its affiliates or representatives) relating to any Company Acquisition Proposal or any inquiry, proposal or offer that would reasonably be expected to lead to any Company Acquisition Proposal (other than informing any persons of the non-solicitation provisions in the merger agreement), or grant any waiver or release under (or terminate, amend or modify any provision of) any confidentiality agreement to which Corindus is a party except to the extent to allow an applicable party to make a Company Acquisition Proposal, (iii) execute or enter into any binding or non-binding letter of intent, agreement in principle, memorandum of understanding, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other agreement, commitment, arrangement or understanding relating to or in connection with, or that is intended to lead to, any Company Acquisition Proposal (each, an “Alternative Acquisition Agreement”), (iv) submit any Company Acquisition Proposal or Company Superior Proposal to the Corindus stockholders for their approval, or (v) resolve to do, or agree or publicly announce an intention to do, any of the foregoing.

Notwithstanding the restrictions described in the foregoing paragraph, if Corindus or any of its subsidiaries receive, at any time following August 7, 2019, and prior to obtaining the Company Stockholder Approval, a bona fide written Company Acquisition Proposal from a third party that did not result from a breach of the non-solicitation and related provisions of the merger agreement then Corindus may contact such third party to clarify the terms and conditions of such Company Acquisition Proposal and, further, if the Board (or a duly authorized committee thereof) determines in good faith, after consultation with Corindus’ financial advisors and outside legal counsel, that (i) such Company Acquisition Proposal constitutes or could reasonably be expected to lead to or result in a Company Superior Proposal and (ii) the failure to take the action described in the immediately following clause (x) or (y) would be reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law, then Corindus may (x) furnish information concerning its business, properties or assets to the third party making such Company Acquisition Proposal pursuant to a customary confidentiality agreement that (1) does not contain any provision prohibiting or otherwise restricting Corindus’ ability to comply with any of the terms of the merger agreement and (2) contains provisions that are no less favorable in the aggregate to Corindus, or less restrictive to the party making such Company Acquisition Proposal in the aggregate (in comparison to SMS USA), than those contained in the confidentiality agreement between Corindus and SMS USA (provided, however, that such agreement need not contain any standstill agreement or similar obligation) and (y) negotiate and participate in discussions and negotiations with such third party concerning the Company Acquisition Proposal.

Corindus will provide SMS USA (i) prompt notice (and in any event within 48 hours) of the receipt of any Company Acquisition Proposal (including, if applicable, a complete, unredacted copy of such Company Acquisition Proposal), (ii) prompt notice (and in any event within 48 hours) of any inquiries, proposals or offers received by Corindus, or any of its subsidiaries or any of its or their respective representatives concerning a Company Acquisition Proposal, or proposal that is reasonably likely to constitute or lead to or result in a Company Acquisition Proposal, and disclose the identity of the other party (or parties) and, if applicable, the material terms (including any amendments thereto) of such inquiry, offer or proposal, and (iii) promptly (and in any event within 48 hours) all information, including copies of all written materials, provided by Corindus or any of its subsidiaries or its or their respective representatives to such third party but not previously provided to SMS USA. Corindus will keep SMS USA reasonably informed on a reasonably prompt basis (and, in any case, within 48 hours) of any significant development, discussions or negotiations (including amendments and proposed amendments) relating to any such Company Acquisition Proposal or any material change to the financial or other material terms of any such Company Acquisition Proposal or such other inquiry, offer or proposal (including by providing copies of all required proposals related thereto that have not already been provided pursuant to the provisions of the merger agreement described in clauses (i) and (ii) above).

Except as expressly permitted by the merger agreement in respect of a Company Superior Proposal or an Company Intervening Event, neither the Board nor any committee thereof shall (i) withdraw, qualify or modify in a manner adverse to SMS USA, or publicly propose to withdraw, qualify or modify in a manner adverse to SMS USA, the Company Recommendation (as defined below), (ii) approve, authorize, declare advisable, endorse or recommend (or publicly propose to approve, authorize, declare advisable, endorse or recommend) any Company Acquisition Proposal, (iii) fail to include in this proxy statement the Company Recommendation, (iv) fail to recommend against any Company Acquisition Proposal that is a tender or exchange offer subject to Regulation 14D under the Exchange Act in a Solicitation/Recommendation Statement on Schedule 14D-9 within ten business days after the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of such tender or exchange offer (any action described in clauses (i) through (iv) of this sentence being referred to as a “Company Adverse Recommendation Change”), or (v) adopt or approve, or propose to adopt or approve, or allow Corindus or any of its subsidiaries to execute or enter into, any Alternative Acquisition Agreement.

Notwithstanding anything in the merger agreement to the contrary, if at any time prior to receipt of the Company Stockholder Approval, Corindus or the Board receives a Company Superior Proposal, the Board may authorize and cause Corindus to effect a Company Adverse Recommendation Change and/or terminate the merger agreement while concurrently entering into a definitive agreement providing for such Company Superior Proposal (subject to satisfaction of Corindus’ termination fee obligations described below), if (i) the Board determines in good faith, after consultation with Corindus’ outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law, (ii) Corindus has notified SMS USA in writing that it intends to take such action, (iii) Corindus has provided SMS USA a copy of the proposed definitive agreements (and any related agreements) relating to such Company Superior Proposal (and has informed SMS USA of the identity of the third party making such Company Superior Proposal), and (iv) if prior to 11:59 p.m., New York City time, on the second business day following the notice delivered pursuant to clause (ii) of this sentence, Corindus and its representatives shall have received a written proposal made by SMS USA to amend the merger agreement or enter into an alternative transaction with Corindus, the Board shall have determined in good faith (after consultation with Corindus’ financial advisor and outside legal counsel), after considering and taking into account the terms of any proposed amendment or modification to the merger agreement or a possible alternative transaction made by SMS USA in writing solely during such period, that (1) the Company Acquisition Proposal that is the subject of the notice described in clause (ii) of this sentence still constitutes a Company Superior Proposal and (2) the failure to take such action would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law.

For purposes of the merger agreement, “Company Acquisition Proposal” means:

For purposes of the merger agreement, “Company Recommendation” means:

For purposes of the merger agreement, “Company Stockholder Approval” means:

For purposes of the merger agreement, “Company Superior Proposal” means:

Notwithstanding anything in the merger agreement to the contrary, other than in connection with a Company Superior Proposal (which is addressed above), prior to obtaining the Company Stockholder Approval, the Board may, in response to a Company Intervening Event (as defined below), effect a Company Adverse Recommendation Change if (i) the Board determines in good faith, after consultation with Corindus’ outside legal counsel, that the failure to take such action would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law; and (ii) Corindus has notified SMS USA in writing that it intends to effect such a Company Adverse Recommendation Change (which notice shall reasonably specify the facts and circumstances providing the basis of the Company Intervening Event and for the Board’s determination to effect the Company Adverse Recommendation Change).

For purposes of the merger agreement, “Company Intervening Event” means:

The merger agreement provides that nothing therein will prohibit Corindus or the Board from (i) taking and disclosing to Corindus stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, or from issuing a “stop, look and listen” statement pending disclosure of its position thereunder or (ii) making any disclosure to its stockholders if the Board has determined in good faith, after consultation with Corindus’ outside legal counsel, that the failure to do so would reasonably be expected to be inconsistent with the Board’s fiduciary duties under applicable law; provided, however, that (1) in no event will the foregoing clause permit Corindus or the Board to make a Company Adverse Recommendation Change except as otherwise permitted as described above in respect of a Company Superior Proposal or Company Intervening Event, (2) in no event shall this provision affect, modify or supplement the definition of Company Adverse Recommendation Change (or to the consequences thereof in accordance with the merger agreement), and (3) any such disclosure (other than issuance by Corindus of a “stop, look and listen” communication of the type contemplated by Rule 14d-9(f) under the Exchange Act) that addresses or relates to the approval, recommendation or declaration of advisability by the Board with respect to the merger agreement or a Company Acquisition Proposal shall be deemed to be a Company Adverse Recommendation Change unless the Board in connection with such communication publicly states that its recommendation with respect to the merger agreement has not changed or refers to the prior recommendation of the Board, without disclosing any Company Adverse Recommendation Change; provided, further that any factually accurate public statement that describes Corindus’ receipt of a Company Acquisition Proposal and the operation of the merger agreement with respect thereto shall not be deemed to be a Company Adverse Recommendation Change.

Company Stockholder Meeting and Related Actions

Subject to the Board not having effected a Company Adverse Recommendation Change or earlier termination of the merger agreement, Corindus (i) is required to duly call, give notice of, convene and hold, as promptly as practicable after the SEC clearance of this proxy statement, a special meeting of the Corindus stockholders, in accordance with applicable law, its constituent documents and the rules of the NYSE American, for the purpose of considering and voting on the adoption of the merger agreement, the merger and other transactions contemplated by the merger agreement and shall submit such proposal to such holders at the special meeting, (ii) except for a proposal to adjourn the special meeting, if there are insufficient affirmative votes represented at the special meeting to obtain the Company Stockholder Approval, will not submit any other proposal to such stockholders without SMS USA’s prior written consent (which consent shall not be unreasonably conditioned, withheld or delayed), and (iii) may not adjourn or otherwise postpone or delay the special meeting without SMS USA’s prior written consent; however, Corindus may adjourn or postpone the special meeting without SMS USA’s prior written consent (A) to the extent necessary to ensure that any required supplement or amendment to this proxy statement is provided to the Corindus stockholders, provided, that Corindus has reasonably consulted with SMS USA prior to such adjournment or postponement, (B) if as of the time for which the special meeting is originally scheduled (as set forth in this proxy statement) there are insufficient shares of Corindus common stock and Corindus preferred stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the special meeting, or (C) in order to solicit additional proxies if necessary to obtain the Company Stockholder Approval. Subject to the Board not having effected a Company Adverse Recommendation Change, Corindus will, through the Board, make the Company Recommendation, include the Company Recommendation in this proxy statement and use its reasonable efforts to solicit from its stockholders proxies in favor of the adoption of the merger agreement.

Employee Matters

For a period of no less than 12 months following the effective time, SMS USA or the surviving corporation (or one of their affiliates) will provide to each continuing employee:

If the closing occurs prior to December 31, 2019 or after December 31, 2019 but before the payment of bonuses for the 2019 fiscal year, SMS USA or its subsidiaries will pay an annual bonus for 2019 to each eligible employee of Corindus based on actual performance levels as of August 7, 2019, extrapolated through December 31, 2019, which payment will be made at the same time as such bonuses would ordinarily be paid to eligible employees by Corindus pursuant to the terms of its bonus plans. If the closing occurs during the 2020 fiscal year, SMS USA or its subsidiaries will pay a pro-rated annual bonus under the applicable Corindus bonus plans in respect of the portion of the 2020 fiscal year that occurs prior to the closing date to each eligible employee of Corindus based on target level performance through the closing date, which payment will be made within 30 days following the closing date.

As of the effective time and thereafter, SMS USA will provide (or will cause the surviving corporation to provide) that periods of employment with Corindus or any of its subsidiaries prior to the merger will be taken into account for purposes of determining the eligibility for participation and vesting and benefit accrual of any continuing employee under employee benefit plans, programs and policies maintained by SMS USA, the surviving corporation or their affiliates in which such continuing employees become participants (excluding any defined benefit pension plan or employer subsidized retiree medical benefits).

With respect to each health or welfare benefit plan maintained by SMS USA, the surviving corporation or any of their respective affiliates for the benefit of continuing employees (including any medical, dental, pharmaceutical or vision benefit plans), SMS USA will (i) cause to be waived any eligibility waiting periods, any evidence of insurability requirements or required physical examinations, actively-at-work requirements and the application of any pre-existing condition limitations under such plan to the extent such were waived or satisfied under the comparable health or welfare benefit plan of Corindus or any of its subsidiaries immediately prior to the effective time; and (ii) cause each continuing employee to be given credit under such plan for all amounts paid (or otherwise deemed paid) by such continuing employee under any similar benefit plan for the plan year that includes the effective time for purposes of applying deductibles, co-payments and out-of-pocket maximums as though such amounts had been paid in accordance with the terms and conditions of the plans maintained by SMS USA, the surviving corporation or any of their respective affiliates, as applicable, for the plan year in which the effective time occurs.

If requested in writing by SMS USA, Corindus will terminate, effective as of immediately prior to the closing, any and all benefit plans intended to include a 401(k) arrangement. SMS USA shall, or shall cause one of its subsidiaries or affiliates to, cause a 401(k) arrangement sponsored by SMS USA (or such subsidiary or affiliate) to permit each continuing employee participating in a terminated 401(k) arrangement to elect to rollover his or her account balances in such terminated 401(k) arrangement into the applicable SMS USA (or its subsidiary’s or affiliate’s) plan.

Efforts to Consummate the Merger

Corindus, SMS USA and Merger Sub will each use its reasonable best efforts to consummate and make effective the transactions contemplated by the merger agreement and to cause the conditions to the merger to be satisfied, including using reasonable best efforts to accomplish the following: (i) the obtaining of all necessary actions or non-actions, consents and approvals from governmental authorities or other third parties necessary in connection with the consummation of the transactions contemplated by the merger agreement, including the merger, and (ii) the making of all necessary registrations and filings and the taking of all reasonable steps as may be necessary to obtain approval from, or to avoid a proceeding by, any governmental authority or other persons necessary in connection with the consummation of the transactions contemplated by the merger agreement, including the merger.

Corindus, SMS USA and Merger Sub will each as promptly as reasonably practicable after August 7, 2019, upon a date to be mutually agreed upon by them, make its respective filings under the HSR Act.

Corindus, SMS USA and Merger Sub will each furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with the preparation of any required governmental filings or submissions and will cooperate in responding to any investigation or other inquiry from a governmental authority or in connection with any proceeding initiated by a private party, in each case, under any applicable antitrust laws, including (i) promptly informing the other party of such inquiry or proceeding; (ii) consulting in advance before making any presentations or submissions to a governmental authority, or in connection with any such proceeding, to any other party, and supplying each other with copies of all material correspondence, filings or communications between either party and any governmental authority, or in connection with any such proceeding, between either party and any other party with respect to the merger agreement; and (iii) providing the other party with a reasonable advance opportunity to review and comment upon and consider in good faith the views of the other party in connection with all written communications between either party and any governmental authority, or in connection with any such proceeding. In addition, Corindus, SMS USA and Merger Sub will each give reasonable notice to and consult with the other party in advance of any meeting or substantive telephone call or conference with any governmental authority, or in connection with any such proceeding, with any other party, and to the extent permitted by the governmental authority, give the other party the opportunity to attend and participate in such meeting, telephone call or conference.

Notwithstanding anything in the merger agreement to the contrary, none of SMS USA or any of its affiliates will be required to enter into one or more agreements prior to the closing of the merger with respect to any transaction to divest, hold separate or otherwise take any action that limits SMS USA’s or any of its affiliates’ (including, following the closing, Corindus’ or any of its subsidiaries’) freedom of action, ownership or control with respect to, or their ability to retain or hold, directly or indirectly, any of their respective businesses, assets, equity interests, product lines or properties (referred to as a “Divestiture Action”); or take any Divestiture Action or otherwise agree to or proffer to sell, divest, hold separate, lease, license, transfer, dispose of or otherwise encumber or impair or take any other action with respect to SMS USA’s or any of its affiliates’ ability to own or operate any assets, properties, businesses or product lines of SMS USA or any of its affiliates (including, following the closing, any assets, properties, businesses or product lines of Corindus or its subsidiaries) and none of SMS USA or any of its affiliates will be required to take any such action in connection with any action or proceeding by a third party other than a governmental authority and Corindus will not, and will not permit any of its subsidiaries to, unless requested by SMS USA, commit to or effect any action contemplated by this paragraph.

Miscellaneous Covenants

The merger agreement contains additional agreements among Corindus, SMS USA and Merger Sub relating to, among other matters:

Conditions to the Merger

The obligations of each of Corindus, SMS USA and Merger Sub to consummate the merger and the other transactions contemplated by the merger agreement are subject to the satisfaction or (to the extent permitted by law) waiver by Corindus and SMS USA at or prior to the effective time of the following conditions:

The respective obligations of SMS USA and Merger Sub to effect the merger and the other transactions contemplated by the merger agreement are also subject to the satisfaction or (to the extent permitted by law) waiver by SMS USA at or prior to the effective time of the following conditions:

The obligations of Corindus to effect the merger and the other transactions contemplated by the merger agreement are also subject to the satisfaction or (to the extent permitted by law) waiver by Corindus at or prior to the effective time of the following conditions:

The merger agreement may be terminated at any time before the effective time, whether before or after the Company Stockholder Approval is obtained (except as otherwise expressly noted), as follows:

Termination Fee

Corindus must pay to SMS USA a termination fee of $32.515 million in the event that: