UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
_______________
Date of Report
(Date of earliest event reported):
October 21, 1998
CARRINGTON LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Commission file number: 0-11997
Texas 75-1435663
(State of incorporation) (I.R.S. employer identification number)
2001 Walnut Hill Lane
Irving, Texas 75038
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(972) 518-1300
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Item 5. Other Events.
On September 19, 1991, the Board of Directors of Carrington
Laboratories, Inc. (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of common
stock, par value $.01 per share (a "Common Share"), of the Company. The
dividend was paid on October 15, 1991 to holders of record of the Common
Shares on that date. The description and terms of the Rights are set
forth in a Rights Agreement dated September 19, 1991 (the "Rights
Agreement") between the Company and Ameritrust Company National
Association ("Ameritrust"), as Rights Agent, a copy of which was filed
with the Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K (Date of earliest event reported: September 19, 1991).
Subsequently, KeyCorp Shareholder Services ("KeyCorp"), as successor in
interest to Ameritrust, became the successor Rights Agent under the
Rights Agreement.
Effective October 21, 1998, the Company removed KeyCorp as the
Rights Agent and appointed American Stock Transfer & Trust Company
("AST"), the transfer agent of the Company's Common Stock, to serve as
successor Rights Agent under the Rights Agreement. The Company and AST,
as successor Rights Agent, then entered into Amendment No. 1 to Rights
Agreement, dated and effective as of October 21, 1998 (the "Amendment"),
which amended the Rights Agreement in the following respects:
(1) Section 1(a) of the Rights Agreement was amended to
provide that if the Company's Board of Directors determines in good
faith that a person who acquires more than 20% of the outstanding
Common Shares of the Company and thereby becomes an "Acquiring
Person" has done so inadvertently and such person promptly divests a
sufficient number of Common Shares to bring its ownership level
below 20%, such person will not be deemed an "Acquiring Person" for
purposes of the Rights Agreement.
(2) A new Section 7(e) was added to the Rights Agreement to
allow the Company to suspend the exercisability of the Rights for a
period of up to 90 days after the Distribution Date in order to
prepare, file and have declared effective a registration statement
under the Securities Act with respect to the Preferred Shares
issuable upon exercise of the Rights.
(3) A new Section 9(d) was added to the Rights Agreement to
provide procedures for compensating holders of Rights issued under
the Rights Agreement in the event that the number of authorized
Preferred Shares is not sufficient to permit the exercise of the
Rights as provided in the Rights Agreement and the Company is unable
to authorize additional Preferred Shares.
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(4) The portion of Section 21 of the Rights Agreement that
specifies the qualifications that a successor Rights Agent must meet
was amended to provide that a successor Rights Agent must be a
corporation organized and doing business under the laws of the
United States or any state of the United States, in good standing,
having an office or agency in any state of the United States,
authorized under such laws to exercise stock transfer or corporate
trust powers, subject to supervision or examination by federal or
state authority, and having at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million, except
that the principal transfer agent for the Company's Common Stock
shall be qualified to be Rights Agent notwithstanding the amount of
its combined capital and surplus.
The Amendment is filed herewith as Exhibit 4. The foregoing
description of the Amendment is qualified by reference to such Exhibit.
Certain capitalized terms used herein and not otherwise defined have the
meanings ascribed to them in the Rights Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Item Exhibit
4 Amendment No. 1 to Rights Agreement, dated as of
October 21, 1998, between Carrington Laboratories,
Inc. and American Stock Transfer & Trust Company, as
successor Rights Agent.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CARRINGTON LABORATORIES, INC.
Date: October 28, 1998 By: /s/ Carlton E. Turner
Carlton E. Turner, Ph.D., D.Sc.
President and Chief Executive Officer
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INDEX TO EXHIBITS
Item
Number Exhibit
4 Amendment No. 1 to Rights Agreement, dated as of
October 21, 1998, between Carrington Laboratories, Inc.
and American Stock Transfer & Trust Company, as
successor Rights Agent.
EXHIBIT 4
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO RIGHTS AGREEMENT ("AMENDMENT NO. 1"), dated
as of October 21, 1998, between CARRINGTON LABORATORIES, INC., a Texas
corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, as successor Rights Agent (the "Rights Agent"),
WITNESSETH:
WHEREAS, the Company and AMERITRUST COMPANY NATIONAL ASSOCIATION
("Ameritrust"), as Rights Agent, entered into a Rights Agreement dated as
of September 19, 1991 (the "Rights Agreement"); and
WHEREAS, pursuant to Section 19 of the Rights Agreement, KeyCorp
Shareholder Services, as successor in interest to Ameritrust, became the
successor Rights Agent under the Rights Agreement; and
WHEREAS, pursuant to Section 21 of the Rights Agreement, the Company
removed KeyCorp Shareholder Services as the successor Rights Agent under
the Rights Agreement, effective October 21, 1998; and
WHEREAS, pursuant to Sections 21 and 28 of the Rights Agreement,
the Company has appointed AMERICAN STOCK TRANSFER & TRUST COMPANY to
serve as successor Rights Agent under the Rights Agreement, effective
October 21, 1998; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
desires to amend the Rights Agreement as set forth below;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
Section 1. Amendment of Section 1. Section 1(a) of the Rights
Agreement is amended by adding to the end of such section the following
sentence:
"Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions
of this definition, has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares of the Company so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this definition, then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement."
<PAGE>
Section 2. Amendment of Section 7. Section 7 of the Rights
Agreement is amended by adding thereto the following subsection (e):
"(e) The Company may temporarily suspend, for a period of time
not to exceed 90 calendar days after the Distribution Date, the
exercisability of the Rights in order to prepare and file a
Registration Statement under the Securities Act, on an appropriate
form, with respect to the Preferred Shares purchasable upon exercise
of the Rights and permit such Registration Statement to become
effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by
the Company or any other Person become exercisable immediately upon,
the effectiveness of such Registration Statement. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended and
shall issue a further public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
herein to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification under the Blue Sky or
securities laws of such jurisdiction shall not have been obtained or
the exercise of the Rights shall not be permitted under applicable
law."
<PAGE>
Section 3. Amendment of Section 9. Section 9 of the Rights
Agreement is amended by adding thereto the following subsection (d):
"(d) In the event that there shall not be sufficient Preferred
Shares issued but not outstanding or authorized but unissued to permit
the exercise or exchange of Rights in accordance with Section 11 or 24
hereof, as the case may be, the Company covenants and agrees that it
will take all such action as may be necessary to authorize additional
Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11 or 24 hereof, as the case may be; provided,
however, that if the Company is unable to cause the authorization of
additional Preferred Shares, then the Company shall, or in lieu of
seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or
instruments in effect prior to the Distribution Date to which it is a
party, (i) upon surrender of a Right, pay cash equal to the Purchase
Price in lieu of issuing Preferred Shares and requiring payment
therefor, (ii) upon due exercise of a Right and payment of the
Purchase Price for each Preferred Share as to which such Right is
exercised, issue equity securities having a value equal to the value
of the Preferred Shares that otherwise would have been issuable
pursuant to Section 11 or 24 hereof, which value shall be determined
by a nationally recognized investment banking firm selected by the
Board of Directors of the Company, or (iii) upon due exercise of a
Right and payment of the Purchase Price for each Preferred Share as to
which such Right is exercised, distribute a combination of Preferred
Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares that
otherwise would have been issuable pursuant to Section 11 or 24
hereof, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company. To the extent that any legal or contractual restrictions
(pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is a party) prevent the Company from
paying the full amount payable in accordance with the foregoing
sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts that are not then restricted
on a pro rata basis as such payments become permissible under such
legal or contractual restrictions until such payments have been paid
in full."
Section 4. Amendment of Section 21. The fifth sentence of Section
21 of the Rights Agreement is amended to read in its entirety as follows:
"Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business
under the laws of the United States or any state of the United States,
in good standing, having an office or agency in any state of the
United States, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $50 million; provided, however, that the principal transfer
agent for the Common Shares shall be qualified to be the Rights Agent
notwithstanding the amount of its combined capital and surplus."
<PAGE>
Section 5. Effectiveness. This AMENDMENT NO. 1 shall be deemed
effective as of October 21, 1998, as if executed by both parties hereto
on such date. Except as amended hereby, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.
Section 6. Miscellaneous. This AMENDMENT NO. 1 shall be deemed to
be a contract made under the laws of the State of Texas and for all
purposes shall be governed by and construed in accordance with the laws
of such state applicable to contracts to be made and performed entirely
within such state. This AMENDMENT NO. 1 may be executed in any number of
counterparts, each of which shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and
the same instrument. If any term, provision, covenant, or restriction of
this AMENDMENT NO.1 is held by a court of competent jurisdiction or other
authority to be invalid, illegal, or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this AMENDMENT NO. 1
shall remain in full force and effect and shall in no way be affected,
impaired, or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT NO.
1 to be duly executed as of the date first set forth above.
CARRINGTON LABORATORIES, INC. AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Carlton E. Turner By: /s/ Herbert J. Lemmer
Carlton E. Turner, Ph.D., D.Sc. Herbert J. Lemmer
President and Chief Executive Officer Vice President & General Counsel
