ST. LOUIS, Sept. 2 /PRNewswire/ -- Mallinckrodt Inc. (NYSE: MKG) announced
today that its board of directors has amended its shareholder rights plan to
create a Three-Year Independent Director Evaluation (TIDE) plan. The board of
directors took this action in response to approval at the company's 1997
annual stockholders' meeting of a non-binding shareholder proposal, which
recommended that the board either redeem the existing rights plan or submit
the plan to a binding shareholder vote, and a similar purportedly binding
proposal that was submitted for the 1998 annual meeting, but subsequently
withdrawn.
"In adopting the TIDE plan amendments, the board carefully considered the
concerns expressed by our shareholders regarding Mallinckrodt's rights plan,"
said C. Ray Holman, chairman and chief executive officer. The board believes
the TIDE plan addresses the most serious shareholder concern -- that the
company's rights plan might be used to the detriment of shareholder interests
in the face of a bona fide offer to acquire the company. Holman added, "The
board believes that the responsiveness to shareholder sentiment reflected by
this action is in keeping with the company's sound corporate governance
policies."
The TIDE plan accomplishes this by charging a newly formed committee of
the board, the Independent Directors Committee, with the responsibility for
reviewing the company's rights plan at least every three years and upon the
occurrence of any event that could trigger the provisions of the rights plan.
Holman added that "the purpose of the review is to allow the company's
independent directors to determine periodically whether the rights plan
continues to be in the best interests of the company's shareholders. As
fiduciaries of the shareholders who are free from conflicts of interest that
arise from employment by the company, the Independent Directors Committee can
ensure that the rights plan is administered in the best interests of all the
company's shareholders and other relevant constituencies."
In addition to adopting the TIDE plan amendments, the board of directors
also announced the company had agreed that on or before the date of the
company's 1999 annual meeting, it will either redeem the rights outstanding
under the company's current rights plan or put the existing rights plan to a
binding shareholder vote. "The board continues to believe that the company's
rights plan is in the best interests of Mallinckrodt's shareholders, because
it enables the board to protect against takeover tactics that can be used to
deprive shareholders of the ability to get a full and fair price for their
shares in the event of a change-in-control transaction," Holman said. In
taking this additional action the board recognizes, however, that some of the
company's shareholders continue to call for the submission of the rights plan
to a shareholder vote. These shareholders include College Retirement Equities
Fund and Amalgamated Bank of New York, the latter of which submitted and,
based on the board's commitments to it described above, withdrew a shareholder
proposal regarding the rights plan to be brought before the company's 1998
annual meeting of shareholders.
Based in St. Louis, Mo., Mallinckrodt Inc. has three healthcare product
groups -- Imaging, Pharmaceuticals and Respiratory. The company operates in
more than 100 countries and had fiscal 1998 net sales of $2.37 billion. The
Mallinckrodt web site address is http://www.mallinckrodt.com.
SOURCE Mallinckrodt Inc.
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Related links:
http://www.mallinckrodt.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 440950
CONTACT:
Media, Barbara Abbett, 314-654-5230, or
E-mail, Communications@mkg.com, or Investor, Barbara Gould,
314-654-3190, or E-mail, Invest@mkg.com, both of Mallinckrodt
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