|AT THE COMPANY||AT THE FINANCIAL RELATIONS BOARD|
|Robert V. Toni, President & CEO
Benny Ward, CFO
CLOSURE Medical Corporation
|For General Info: : Paula Schwartz
For Analyst Info: Julie Tu (212) 661-8030
For Media Info: Judith Sylk-Siegel (212) 661-8030
FOR IMMEDIATE RELEASE: July 30, 2001
CLOSURE MEDICAL ADOPTS STOCKHOLDER RIGHTS PLAN
Raleigh, NC, July 30, 2001 -- CLOSURE Medical Corporation (the "Company") (Nasdaq: CLSR), a medical tissue adhesive products company, announced today that its Board of Directors has approved a Stockholder Rights Plan (the "Plan") that is designed to ensure that all stockholders of the Company receive fair value for their Common Shares in the event of any proposed takeover of the Company and to guard against the use of partial tender offers or other coercive tactics to gain control of the Company without offering fair value to the Company's stockholders.
Robert V. Toni, President and Chief Executive Officer of the Company, said, "We believe that this Plan protects stockholder interests in the event that the Company is confronted with coercive or unfair takeover tactics, including offers that do not treat all stockholder interests fairly or do not maximize the value of the Company."
Mr. Toni noted, "The Plan is not intended, nor will it operate, to prevent an acquisition of the Company on terms that are favorable and fair to all stockholders. The Plan is designed to deal with the very serious problem of unilateral actions by hostile acquirors that are calculated to deprive the Board and stockholders of their ability to pursue the Company's business strategies and otherwise to seek to maximize long-term value for all stockholders. Since 1984, over 2,200 public companies have adopted stockholder rights plans similar to the one that the Company has adopted."
Under the terms of the Plan, the Board of Directors approved a distribution on its shares of Common Stock (the "Common Shares") of rights to purchase shares of preferred stock (the "Rights") at the rate of one Right for each Common Share held as of the close of business on July 30, 2001. Stockholders will not actually receive certificates for the Rights at this time, but the Rights will become part of each Common Share. The number of Rights outstanding is subject to adjustment under certain circumstances, and all Rights will expire on July 30, 2011.
Each Right will entitle the holder to buy 1/1000 of a share of Series A Junior Participating Preferred Shares of the Company (the "Preferred Shares") at an exercise price of $140.00. Each Preferred Share fraction is designed to be equivalent in voting and dividend rights to one Common Share. The Rights will be exercisable and will trade separately from the Common Shares only if a person or group, other than certain Grandfathered Shareholders, acquires beneficial ownership of 15% or more of the Company's Common Shares or commences a tender or exchange offer that would result in such a person or group owning 15% or more of the Common Shares. Only when one or more of these events occur will stockholders receive certificates for the Rights.
If any person actually acquires 15% or more of Common Shares -- other than through a tender or exchange offer for all Common Shares that provides a fair price and other terms for such shares -- or if a 15%-or-more stockholder engages in certain "self-dealing" transactions or engages in a merger or other business combination in which the Company survives and its Common Shares remain outstanding, the other stockholders will be able to exercise the Rights and buy Common Shares of the Company having approximately twice the value of the exercise price of the Rights. Additionally, if the Company is involved in certain other mergers where its shares are exchanged or certain major sales of its assets occur, stockholders will be able to purchase the other party's common shares in an amount equal to approximately twice the value of the exercise price of the Rights. Upon the occurrence of any of these events, the Rights will no longer be exercisable into Preferred Shares.
The Company will be entitled to redeem the Rights at $0.01 per Right at any time until the tenth day following public announcement that a person has acquired a 15% ownership position in Common Shares of the Company. The Company in its discretion may extend the period during which it can redeem the Rights.
About Closure Medical
CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina, develops, manufactures, and commercializes medical tissue adhesive products based on its proprietary cyanoacrylate technology. CLOSURE's proprietary technology has customized the physical and chemical properties of cyanoacrylates to develop medical adhesive formulations to close and seal topical skin wounds and incisions, as well as formulations to close or seal internal wounds. In addition to its products discussed herein, CLOSURE is also developing internal adhesives for the possible treatment of emphysema, as well as developing liquid occlusive dressings for the treatment of a variety of partial thickness wounds, including pressure ulcers and skin tears.
DERMABOND Topical Skin Adhesive is a topical tissue adhesive used to close wounds from skin lacerations and incisions, minimally invasive surgery and plastic surgery. DERMABOND adhesive can be used as a replacement for topical sutures or staples and is marketed and distributed by Ethicon, Inc., a division of Johnson & Johnson, the world leader in wound closure products.
LIQUIDERM™ adhesive is the first and only cyanoacrylate medical device approved by the FDA for the over-the-counter ("OTC") adhesive bandage market. LIQUIDERM™ adhesive is painted on the wound, sealing it from dirt and germs, and creating a healing environment which allows natural healing to take place quickly. As the wound heals, the adhesive sloughs off naturally. CLOSURE recently signed a worldwide supply, distribution and development rights agreement with Johnson & Johnson Consumer Products Company which includes rights to its LIQUIDERM™ adhesive and its overall OTC wound care platform, including distribution rights to all present and future products, except for SOOTHE-N-SEAL™ adhesive. Distribution of LIQUIDERM™ adhesive by Johnson & Johnson Consumer Products Company is expected to begin in early 2002.
SOOTHE-N-SEAL™ adhesive is indicated for the treatment of oral ulcers and mouth sores. It forms a protective barrier that shields oral ulcers from irritation due to eating and drinking while providing immediate and long-term pain relief. SOOTHE-N-SEAL™ adhesive is in the early stages of the product launch to the professional and consumer markets by Colgate Oral Pharmaceuticals, Inc.
The NEXABAND® liquid adhesive line consists of two products used in veterinary wound closure and wound care. The adhesives are used in cat declaw procedures as well as spay and neuter procedures. In July 2001, the Company entered into an agreement providing Abbott Laboratories ("Abbott") with worldwide supply, distribution and development rights to the NEXABAND® product line. In accordance with the agreement, Abbott has been granted immediate worldwide distribution rights to NEXABAND® adhesives excluding the United States and Canada. Upon the expiration of the Company's prior distribution arrangement in the second quarter of 2002, Abbott can begin the distribution of NEXABAND® products in the United States and Canada.
DERMABOND adhesive is a registered trademark of Ethicon, Inc.; SOOTHE-N- SEAL™ is a licensed trademark of Colgate Oral Pharmaceuticals, Inc.; LIQUIDERM™ is a trademark of CLOSURE Medical Corporation; and NEXABAND® is a registered trademark of CLOSURE Medical Corporation.
To receive CLOSURE's latest news release and other corporate documents via fax, at no cost, call 1-800-PRO-INFO, use the Company's symbol CLSR. Or visit the Financial Relations Board's website at www.frbinc.com.
This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to the early stage of commercialization of the Company products; the progress of its research and development programs for future products; the need for regulatory approval and effects of governmental regulation; technological uncertainties; the satisfactory conclusion of negotiations with, and dependence on marketing partners, and dependence on patents and trade secrets, as well as those detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 filed with the Securities and Exchange Commission.