Class Action Suit Filed Against Circon Corp. and its Officers and Directors Alleging Misrepresentations and Insider Trading.

SANTA BARBARA, Calif.--(BUSINESS WIRE)--May 28, 1996--A class action has been commenced in the California Superior Court for Santa Barbara County by plaintiffs Bart Milano and Elizabeth Heaven on behalf of purchasers of Circon Corporation ("Circon") common stock during the period May 2, 1995 to Feb. 1, 1996.

The complaint alleges a violation of the Securities Act of 1933 and a scheme, conspiracy and course of business that operated as a fraud or deceit on purchasers of Circon stock in violation of California law, due to defendants' false and misleading statements, primarily about Circon's acquisition of Cabot Medical Corporation ("Cabot") by merger, the synergies and cost savings from that merger, the successful integration of the U.S. sales and marketing forces of Circon and Cabot after the merger and the favorable impact the merger was having on Circon's 1995 results.

These allegedly false and misleading statements drove Circon's stock from $15-1/2 to a Class Period high of $23-1/2 and enabled (i) Circon to complete an acquisition of Cabot, another medical company, in August 1995 in exchange for shares of its stock; and (ii) Circon's insiders to sell shares of their stock at artificially inflated prices as high as $22-1/2 (with five of the insiders selling 100% of their holdings), before it was revealed that, due to productivity problems with Circon's U.S. sales force, Circon's fourth quarter 1995 revenue and net income had fallen sharply and Circon's 1995 results would fall far short of the levels forecasted by and for Circon, causing its stock to collapse to $10-3/4 from $18-1/8, in just three trading days, on huge volume.

Plaintiffs who have sued seek to recover damages on behalf of all purchasers of Circon common stock during the Class Period (the "Class"). They are represented by several law firms, including Milberg Weiss Bershad Hynes & Lerach LLP, who have expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Milberg Weiss has been actively engaged in commercial litigation, emphasizing securities and antitrust class actions, for more than 20 years. The firm has offices in New York, San Diego, San Francisco and Los Angeles and is active in major litigations pending in federal and state courts throughout the United States.

The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to major positions in complex multi-district or consolidated litigations. Milberg Weiss has taken a lead role in numerous important actions on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffs' counsel, William Lerach of Milberg Weiss at 619/231-1058.

CONTACT: Milberg Weiss

William Lerach, 619/231-1058