8-KMaterial AgreementsFinancial EventsCorporate Changes+2

INTUITIVE SURGICAL INC 8-K Report, Material Agreement (Mar 6, 2009)

Filed March 6, 2009For Securities:ISRG

Summary

Intuitive Surgical, Inc. (ISRG) announced on March 5, 2009, a significant capital allocation decision through the initiation of a $300 million share repurchase program, with an initial $150 million committed to an Accelerated Share Repurchase (ASR) program with Goldman, Sachs & Co. This move signals management's confidence in the company's valuation and its commitment to returning capital to shareholders. The ASR program is expected to be substantially completed within the first two weeks of March 2009, with the overall program anticipated to conclude by June 2009. In addition to the capital return initiative, the company also updated its bylaws to strengthen corporate governance and shareholder communication. Key changes include enhanced disclosure requirements for stockholder proposals and director nominations, particularly concerning ownership interests and the use of derivative instruments. The company has also eliminated the ability for shareholders to act by written consent or call a special meeting, while enabling remote communication for shareholder meetings.

Key Highlights

  • 1Intuitive Surgical authorized a $300 million share repurchase program.
  • 2An initial $150 million Accelerated Share Repurchase (ASR) program was entered into with Goldman, Sachs & Co.
  • 3The ASR program is expected to deliver a majority of shares within the first two weeks of March 2009.
  • 4The overall share repurchase program is anticipated to be completed by June 2009.
  • 5The number of shares repurchased in the ASR program will be based on volume-weighted average prices, subject to collar provisions.
  • 6Amended and Restated Bylaws were adopted to clarify advance notice provisions for stockholder proposals and director nominations.
  • 7New bylaws require enhanced disclosure of shareholder ownership, hedges, and economic incentives, especially regarding derivative instruments.

Frequently Asked Questions

The primary purpose of the ASR program is for Intuitive Surgical to repurchase $150 million of its common stock from Goldman, Sachs & Co. This is part of a larger $300 million share repurchase authorization by the board and is a way for the company to return capital to shareholders, signaling confidence in its stock valuation.

The exact number of shares to be repurchased will be based on the average daily volume-weighted average price of Intuitive's common stock during the term of the ASR agreement. The program includes collar provisions that establish minimum and maximum numbers of shares based on this average price over an initial hedge period, ensuring a degree of price certainty.

The Amended and Restated Bylaws introduce enhanced disclosure requirements for stockholders submitting proposals or nominating directors. These include detailed disclosures of ownership interests, hedges, and economic incentives, especially concerning derivative instruments. Additionally, the bylaws now prohibit shareholders from acting by written consent or calling special meetings, while allowing for meetings to be held by remote communication.

Intuitive Surgical expects the Accelerated Share Repurchase (ASR) program to be substantially completed within the first two weeks of March 2009, with the overall share repurchase program anticipated to be finished by June 2009. However, the completion date for the ASR program could be accelerated at Goldman Sachs' option.