EXHIBIT 99.1
EXECUTION COPY
FIRST AMENDMENT TO THE RIGHTS AGREEMENT
AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF
Pursuant to Section 27 of the Rights Agreement (the "Agreement") dated as
of September 21, 1993, between Cygnus Inc., a Delaware corporation (the
"Company" (formerly, Cygnus Therapeutic Systems, a California corporation)), and
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent" (successor to
Chemical Trust Company of California)), the Company and the Rights Agent hereby
amend the Agreement as of October 26, 1998 as provided below.
1. Certain Definitions. Section 1 of the Rights Agreement shall be
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amended as follows:
(a) Section 1(a): The phrase "(upon approval by a majority of the
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Continuing Directors (as such term is hereinafter defined))" shall be
deleted from the definition of Acquiring Person.
(b) Section 1(c)(ii)(2): The phrase ", upon the affirmative vote of a
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majority of the Continuing Directors," shall be deleted from the definition
of Beneficial Owner.
(c) Section 1(i): The definition of Continuing Director shall be deleted.
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2. Issue of Rights Certificates. Section 3(a)(ii) of the Rights Agreement
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shall be amended by deleting the phrase "(upon approval by a majority of the
Continuing Directors)".
3. Adjustment of Purchase Price, Number of Shares or Number of Rights.
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Section 11 shall be amended as follows:
(a) The phrase ", upon approval by a majority of the Continuing Directors,"
shall be deleted from each place it appears in the following subsections:
(a)(ii)(C)(2), (a)(iv), (b), (c), (d)(i) and (d)(ii).
(b) The phrase "at least a majority of the Continuing Directors" which
appears in Section 11(a)(iii)(B) shall be replaced with the phrase "the
Board of Directors of the Company".
4. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
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Section 13(d) shall be amended by deleting the phrase ", upon approval by a
majority of the Continuing Directors," from the second sentence.
5. Fractional Rights and Fractional Shares. Section 14(a) shall be
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amended by deleting the phrase ", upon approval by a majority of the Continuing
Directors," from the third and last sentences.
6. Issuance of New Rights Certificates. Section 22 shall be amended by
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deleting the phrase "upon approval by a majority of the Continuing Directors,"
from the first and second sentences of the Section.
7. Redemption. Section 23 shall be amended as follows:
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(a) The phrase ", upon approval by a majority of the Continuing
Directors," shall be deleted from the first and last sentences of Section
23(a).
(b) The phrase "a majority of the Continuing Directors" which appears twice
in Section 23(a)(ii) shall be replaced in each case with the phrase "the
Board of Directors of the Company".
8. Exchange. Section 24 shall be amended by deleting the phrase ", upon
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approval by a majority of the Continuing Directors," from the first sentence of
subsection (a) and each of the three places it appears in subsection (d).
9. Supplements and Amendments. Section 27 shall be amended by deleting
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the phrase ", upon approval by a majority of the Continuing Directors," from the
first, second and fourth sentences of the paragraph.
10. Determinations and Actions by the Board of Directors. Section 29
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shall be amended as follows:
(a) The phrase "(and, where specifically provided for herein, only upon
approval by a majority of the Continuing Directors)" shall be deleted from
the first sentence of Section 29.
(b) The phrase "(or, where specifically provided for herein, only upon
approval by a majority of the Continuing Directors)" shall be deleted from
the third sentence of Section 29.
(c) The phrase "or the Continuing Directors" shall be deleted from the last
sentence.
11. Severability. Section 31 shall be amended by deleting the phrase
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", upon approval by a majority of the Continuing Directors," from the Section.
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The undersigned officer of the Company, being an appropriate officer of the
Company and authorized to do so by resolution of the board of directors of the
Company dated as of October 26, 1998, hereby certifies to the Rights Agent that
these amendments are in compliance with the terms of Section 27 of the
Agreement.
CYGNUS, INC.
By /s/ Xxxx X. Xxxxxxx
_______________________________
Name: Xxxx X. Xxxxxxx
Title: President and CEO
Acknowledged and Agreed:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
By /s/ Xxx Xxxx
____________________________________
Name: Xxx Xxxx
Title: Assistant Vice President
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