Cardiac Control Systems, Inc.
With Albert’s death, the company that we knew as Intermedics, imploded. Russell Chambers was a lousy CEO and under his management style the company rapidly went from greatness to hell in a hand basket. Most old-timers stayed with the ship and watched it slowly sink while the rest of us left for other jobs or in my case retirement. I was physically and emotionally exhausted from the ordeal of building a company at Albert’s side and then wading through the trauma of developing new management. I had a barrel of stock certificates and I was in the right mood for leaving the world to its own designs. I was in the middle of an acrimonious divorce, which never helps any situation, and I thought the best thing for me was to become a beach bum. I had a beautiful beachfront condominium in Ormond Beach Florida. I moved into it, dug a hole in the world, crawled in and pulled it in after me. I literally became a hermit. I canceled my answering service, refused to have an answering machine on the telephone and would only answer the phone if I felt like it. I was severely chastised by my colleagues for my demeanor but it didn’t change me. For the next 18 months my life was idyllic. The days were warm and sunny and I would go down to the beach and fish the tides. I had several long surf poles, my buckets, knives and other paraphernalia and would spend the entire day on the beach. My habit was to bring a small bag of charcoal, catch a fish, clean it, wrap it in aluminum foil with some tomato, salt pepper and garlic and cook it over the coals. I would have lunch and dinner frequently on the beach. I have fond memories of days spent doing nothing but fishing, walking the beach, rolling around in the surf and living like Robinson Crusoe. I found my man Friday in the form of a lovely lady. Dorothy was a nurse at the local hospital and worked the emergency room from 3 to 11 every day. On her three days off each turn, should spend the days with me on the beach. She was loving, tender and affectionate. She was a calming and soothing influence in my life and I have great respect and regard for our time together. Too bad I wasn’t clever enough to stay that way.
I maintained a very quiet lifestyle for a year and a half and one day when the phone rang, for some reason or other I decided to answer it. It was Philip Beutel and he wanted to gather some of the old Intermedics execs for a meeting. I queried him as to what the purpose of the meeting would be. He told me he had arranged a weekend in Chicago and that he was sure that I would be interested. Because it was Philip making the request I could not refuse.
On a weekend in March 1981 I flew to Chicago and met with Philip, his brother-in-law Bill Peterson, Bob Brownlee and Simon Fuger. We occupied rooms at the Chicago Airport Hilton and spent 2 days discussing the merits of forming another pacemaker company. I was completely negative to the idea from the moment it was put on the table. As the weekend was coming to a close, Philip took me aside and said “Charlie, I want you to help me do this”. Once again, because it was Philip, I could not refuse. We formed a company with the members present as founders. We each committed a sum of money that I recall being $5,000, portioned off the share certificates and commissioned Simon to get the paperwork done so that the company would be properly incorporated. I remember us deep in discussion as to what the company should be called. Names were flying around the table and someone, I think it was either BB or Simon, came up with the name Cardiac Control Systems. It had a pure sound to it and I liked it from the beginning. So when we left Chicago, CCS was born and we were determined to grow it into a formidable company.
Bob Brownlee was charged with the development of a new pacemaker design, Simon Fuger was buried in all the paperwork and I was given responsibility for finding the proper location to rent facilities. Because Philip had roots in Texas, I first began to scout the state and soon became aware that (a) Texas real estate was expensive and (b) I didn’t like Texas at all. As a matter of fact, I was never fond of Texas while I worked at Intermedics and did not want to return.
On a weekend in March 1981 I flew to Chicago and met with Philip, his brother-in-law Bill Peterson, Bob Brownlee and Simon Fuger. We occupied rooms at the Chicago Airport Hilton and spent 2 days discussing the merits of forming another pacemaker company. I was completely negative to the idea from the moment it was put on the table. As the weekend was coming to a close, Philip took me aside and said “Charlie, I want you to help me do this”. Once again, because it was Philip, I could not refuse. We formed a company with the members present as founders. We each committed a sum of money that I recall being $5,000, portioned off the share certificates and commissioned Simon to get the paperwork done so that the company would be properly incorporated. I remember us deep in discussion as to what the company should be called. Names were flying around the table and someone, I think it was either BB or Simon, came up with the name Cardiac Control Systems. It had a pure sound to it and I liked it from the beginning. So when we left Chicago, CCS was born and we were determined to grow it into a formidable company.
Bob Brownlee was charged with the development of a new pacemaker design, Simon Fuger was buried in all the paperwork and I was given responsibility for finding the proper location to rent facilities. Because Philip had roots in Texas, I first began to scout the state and soon became aware that (a) Texas real estate was expensive and (b) I didn’t like Texas at all. As a matter of fact, I was never fond of Texas while I worked at Intermedics and did not want to return.
Ormond Beach was my idea of living. I could not conceive of going back to Texas into another pacemaker buzz saw. At the time, Palm Coast Inc. was being developed north of Daytona Beach. It was an enormous enterprise typical of ITT, Harold Jeneen and his conglomerate corporate holdings. It was a tract of land in excess of 5000 acres upon which was to be developed housing on a scale not yet seen in that part of Florida. The land stretched from the beach to the inland waterway and beyond. The executive in charge of the entire plan was Al Smolen, a heavy hand at ITT. He wanted to develop an industrial park, so he built a 22,500 square foot spec building to anchor it. It was serendipitous that I met with him socially one evening and he waxed philosophic about the merits of locating in Palm Coast. I told him that I might be interested and would like to see the building and hear what he had to offer. Simon Fuger and I met with him one day and toured the facility. Calling a facility was a bit of a stretch. It was a concrete block building 150 x 150, on three acres, 18 feet tall, a flat roof, several windows, a dirt floor and it was hotter than the hammers of hell inside the building.
The offer was that we could have the building for a nominal price of $5,000, no real estate taxes in the first 10 years but we were to complete the construction of the building within two years. Sounded great except we had no money; Philip was funding all of the monthly costs for Bob Brownlee and his design team. The new pacemaker looked fabulous on paper; Brownlee outdid himself; there were more bells and whistles in the pacer than had ever been developed before. I recall that we had a design review meeting in Ormond Beach one day and then Bob, Simon and I drove up to Palm Coast to look the building over once again. Philip was not too happy about locating in Florida and I was adamant to do it. We walked around the interior of the building which resembled a large warehouse more than anything else. I remember the afternoon well because things began to unfold in a rather surreal fashion. The building was 18 feet tall from the dirt floor to the ceiling. I began to wonder if we could dig 5 feet out from the bottom, reinforce the foundation and thereby have a building 23 feet in height that could be made into a two-story facility.
Yes, it’s a little weird.
I went home and called a contractor friend of mine. The next day we met at the site and he told me that it could be done. We could dig up enough to reinforce the foundation and add 5 feet in height to the building. Granted, the front entrance would slope down a bit but by the time we finished designing we had a good-looking two-story building on the drawing board. Then we very quietly went to meet with Al Smolen. Not saying a word about our plan for the building, we signed the documents, took over the structure and then began the concern over where we would get the money.
The offer was that we could have the building for a nominal price of $5,000, no real estate taxes in the first 10 years but we were to complete the construction of the building within two years. Sounded great except we had no money; Philip was funding all of the monthly costs for Bob Brownlee and his design team. The new pacemaker looked fabulous on paper; Brownlee outdid himself; there were more bells and whistles in the pacer than had ever been developed before. I recall that we had a design review meeting in Ormond Beach one day and then Bob, Simon and I drove up to Palm Coast to look the building over once again. Philip was not too happy about locating in Florida and I was adamant to do it. We walked around the interior of the building which resembled a large warehouse more than anything else. I remember the afternoon well because things began to unfold in a rather surreal fashion. The building was 18 feet tall from the dirt floor to the ceiling. I began to wonder if we could dig 5 feet out from the bottom, reinforce the foundation and thereby have a building 23 feet in height that could be made into a two-story facility.
Yes, it’s a little weird.
I went home and called a contractor friend of mine. The next day we met at the site and he told me that it could be done. We could dig up enough to reinforce the foundation and add 5 feet in height to the building. Granted, the front entrance would slope down a bit but by the time we finished designing we had a good-looking two-story building on the drawing board. Then we very quietly went to meet with Al Smolen. Not saying a word about our plan for the building, we signed the documents, took over the structure and then began the concern over where we would get the money.
Undaunted as ever, we felt that the experience we had raising money for Intermedics would serve us in this venture. We were offering shares at private placement to investors we had known in the past and soon had a nest egg of a little over $1 million. We made plans for private placement of $5.75 million at $7.50 a share. Simon Fuger made inroads into the British and Scottish trust funds and banking establishments so we took our dog and pony show over to London to see if we could squeeze some money from the complacent British and dour Scots, not an easy thing to do.
Simon and I spent a month in London and Scotland schmoozing with bankers and trust fund managers. It was quite an experience because I was unaccustomed to doing business in the British and Scottish style. The former was lavish, old and polished, accustomed to doing things based upon the given word. Contracts were important but they followed the given word which was sacrosanct. The motto above the door of the British stock exchange reads “Dictum Meum Pactum”, which translates to “My Word Is My Bond”. When dealing with the British you have to be very careful not to be overly American glib because they take the spoken word very seriously. We worked with some very fine British bankers, among them James Mennyl with Laurie, Millbank & Co. and Philip Stephens with Carolina Bank Limited, two old and respected British banking institution.
This was during the days prior to PowerPoint presentations and I learned early on to bring everything that I needed with me to every meeting. We traveled with a Kodak carousel projector and an attaché’ case filled with the slides I needed for the presentation. We made sure that we had everything with us down to the last pencil, paper clip and eraser. Using Laurie, Millbank & Co. as our hub, we were introduced to bankers and trust fund managers from other institutions. The typical day was to give a presentation at 9:30 a.m., then break for a sumptuous lunch provided by our hosts. British banking establishments are well-known for their executive dining rooms. I recall walking into one of the banks and saying to Simon that I detected the distinct odor of money in the room. It was in the air. Lunch was always delicious, culminating with coffee and cigars.
After lunch the real grilling began. We were looking for at least $1 million from each participant. The singular problem was that we had nothing to offer other than an idea. We meticulously went over the history of cardiac pacing, how we were instrumental in moving Intermedics Inc. to the second-largest pacemaker company in the world and how we saw the decline of that company after Albert’s death. Then we would describe the merits of the new pacemaker we had on the drawing board. They were bankers and they have a tight hold on money so they brought in medical experts to question us in regards the pacemaker. In so doing we became familiar with many of the top line pacemaker physicians in London. What we needed was the first bona fide placement, after that happened it seemed like the other banks did not want to be left out of what appeared to be a good investment. Private placements tend to go that way, once you get one others follow quickly. We place half of the issue in London and then went up to Scotland where the arena was 180° of separation from that of London.
The Scots have warehouses full of money, old money, very old money and the jokes you hear about the tightfisted Scots are very accurate. In contrast to the majestic banks in London, we were ushered from office to office, each one housing several bankers who had the authority to place millions of dollars at their discretion. The difference was in the appearance; in London the offices were padded in old polished wood with massive antique furniture, overstuffed leather chairs, usually a fireplace and the aura of elegant comfort. In Scotland, the offices were small and sparsely furnished with a desk that looked like it came out of an old schoolhouse. In one office, we were seated on folding chairs. The meetings followed much the same agenda; a presentation at 9:30 a.m. followed by questions, questions and more questions and then a break for lunch. We were usually taken to one of the local pubs and I must say that our hosts did pick up the tab. On one occasion we had lunch in the George Hotel dining room and that indeed was a superb afternoon, albeit a rarity.
Simon and I spent a month in London and Scotland schmoozing with bankers and trust fund managers. It was quite an experience because I was unaccustomed to doing business in the British and Scottish style. The former was lavish, old and polished, accustomed to doing things based upon the given word. Contracts were important but they followed the given word which was sacrosanct. The motto above the door of the British stock exchange reads “Dictum Meum Pactum”, which translates to “My Word Is My Bond”. When dealing with the British you have to be very careful not to be overly American glib because they take the spoken word very seriously. We worked with some very fine British bankers, among them James Mennyl with Laurie, Millbank & Co. and Philip Stephens with Carolina Bank Limited, two old and respected British banking institution.
This was during the days prior to PowerPoint presentations and I learned early on to bring everything that I needed with me to every meeting. We traveled with a Kodak carousel projector and an attaché’ case filled with the slides I needed for the presentation. We made sure that we had everything with us down to the last pencil, paper clip and eraser. Using Laurie, Millbank & Co. as our hub, we were introduced to bankers and trust fund managers from other institutions. The typical day was to give a presentation at 9:30 a.m., then break for a sumptuous lunch provided by our hosts. British banking establishments are well-known for their executive dining rooms. I recall walking into one of the banks and saying to Simon that I detected the distinct odor of money in the room. It was in the air. Lunch was always delicious, culminating with coffee and cigars.
After lunch the real grilling began. We were looking for at least $1 million from each participant. The singular problem was that we had nothing to offer other than an idea. We meticulously went over the history of cardiac pacing, how we were instrumental in moving Intermedics Inc. to the second-largest pacemaker company in the world and how we saw the decline of that company after Albert’s death. Then we would describe the merits of the new pacemaker we had on the drawing board. They were bankers and they have a tight hold on money so they brought in medical experts to question us in regards the pacemaker. In so doing we became familiar with many of the top line pacemaker physicians in London. What we needed was the first bona fide placement, after that happened it seemed like the other banks did not want to be left out of what appeared to be a good investment. Private placements tend to go that way, once you get one others follow quickly. We place half of the issue in London and then went up to Scotland where the arena was 180° of separation from that of London.
The Scots have warehouses full of money, old money, very old money and the jokes you hear about the tightfisted Scots are very accurate. In contrast to the majestic banks in London, we were ushered from office to office, each one housing several bankers who had the authority to place millions of dollars at their discretion. The difference was in the appearance; in London the offices were padded in old polished wood with massive antique furniture, overstuffed leather chairs, usually a fireplace and the aura of elegant comfort. In Scotland, the offices were small and sparsely furnished with a desk that looked like it came out of an old schoolhouse. In one office, we were seated on folding chairs. The meetings followed much the same agenda; a presentation at 9:30 a.m. followed by questions, questions and more questions and then a break for lunch. We were usually taken to one of the local pubs and I must say that our hosts did pick up the tab. On one occasion we had lunch in the George Hotel dining room and that indeed was a superb afternoon, albeit a rarity.
Bob Brownlee Charlie Del Marco Simmon Fuger
On our trips to Scotland we were accompanied by our London bankers, more to keep us in line and guide us through the intricacies of the Scottish ways. As we approached one office Philip Stephens took me aside and cautioned me “Charles, one of the men you are going to meet this morning has a very prominent hooter; whatever you do, do not, repeat, do not look at his nose.” Well that was like telling me not to think of an elephant because when he walked into the office is nose preceded him by a full 15 seconds. He made Cyrano de Bergerac’s nose look insignificant. He had the largest nose I’ve ever seen and I struggled not to look at it. I realized that all eyes were on me to be sure that I diverted my gaze from his beak.
The presentation began and with a darkened room and a slide projector behind me, I breezed through all the points to be made. The questioning began and Basil, with a long nose, (not his real name) grilled me incessantly. He picked on one aspect of pacemaker timing and kept going over it and over it and over it. Each time I answered him in a different manner and tried to explain what the timing system was and how necessary it was to the function of the pacemaker. It was like talking to the wall. He kept asking the same question over and finally, exasperated, I looked at him full in the face, stared at his nose, and said, “Basil, why are you making it so difficult, it’s as plain as…………..”
The room went dead silent and I knew I was for it. There was a pause that felt like an eternity and I continued with “As plain as……. as plain as…, it can possibly be”. There was a collective exhalation from the men in the room and everyone began to breathe again.
I was resigned to do without any money from that group. As it turned out, they bought into the issue and were instrumental in closing the placement. To this day I can still see his nose pointing at me when I almost blew it (pun surely intended).
