Gen. Victor Krulak: in the heat of a takeover battle, 'The Brute' answers the call to board duty.

Author:Porter, Martin
 
FREE EXCERPT

In the heat of a takeover battle, `The Brute' answers the call to board duty.

In his book First to Fight, former U.S. Marine Corps Lieutenant General Victor Krulak -- famously known in military circles as "The Brute" -- describes a major challenge he faced as one of the nation's top military leaders during the Vietnam War. "Serving in the joint Staff as the focal point in counterinsurgency operations and training," he writes, "I learned something of the complex nature of the conflict there. The problem of seeking out and destroying guerrillas was easy enough to comprehend, but winning the loyalty of the people, why it was so important and how to do it, took longer to understand."

More than 30 years later, Krulak finds himself in the midst of another complex war -- a corporate battle between two medical products manufacturing rivals, $1 billion U.S. Surgical Corp. and $158 million Circon Corp. In 1996, U.S. Surgical made a hostile bid for Circon. As part of its still ongoing pursuit of its target, U.S. Surgical won the right to add two directors to Circon's board. One of them is The Brute.

Gen. Krulak is not your typical director. He is a 30-year Marine Corps veteran who has had a 30-year business career following his military service and, at 83 years old, is well past the retirement age prevalent at most public company boards. However, the circumstances that landed him on Circon's board are also not typical. Along with Stetson University law professor Charles Elson, Krulak won his board seat in a July 1997 proxy fight which unseated two incumbent directors of Circon, including President and CEO Richard A. Auhll. Commenting on the victory, Leon C. Hirsch, founder and chairman of U.S. Surgical, stated, "Circon's stockholders have voted by a substantial majority to elect our nominees and approve our `Maximize Value Resolution.' By doing so, they are instructing the Circon board to promptly take concrete action aimed at seeking the sale of Circon."

Within days after U.S. Surgical's election victory, however, the Circon board reappointed Auhll as a director, over the objection of Krulak and Elson. That action, outraging U.S. Surgical and Circon shareholders and many in the governance community, is now the subject of Delaware Court litigation.

What interest would a company involved in an intricate corporate control battle like this have in an 83-year-old former military officer? "Krulak has shown in the past to be able to get things done," says a...

To continue reading

FREE SIGN UP