Collagen Corp. adopts stockholder rights plan.

PALO ALTO, Calif.--(BUSINESS WIRE)--Nov. 28, 1994--Collagen Corp. (NASDAQ:CGEN) Monday announced that its board of directors adopted a stockholder rights plan effective today.

Commenting on its adoption, Howard D. Palefsky, president and chief executive officer stated, ``The rights are designed to protect and maximize the value of stockholders' interest in Collagen. We believe that the rights plan, while not intended to prevent a fair acquisition of the company, will provide protection to our stockholders from the abusive and coercive tactics that are often prevalent in attempted takeovers.'' Collagen noted that it was not aware of any proposed acquisition of the company but was aware of, and responding to, increased levels of acquisition activity in the healthcare industry.

The company indicated that the rights will initially trade with shares of the company's common stock and have no impact on the way in which its shares are traded. The distribution of the rights will be payable to stockholders of record on Dec. 14, 1994. The rights will expire on Nov. 28, 2004.

The rights are not exercisable until 10 days after a person or group announces acquisition of 20% or more of Collagen's outstanding common stock or the commencement of a tender offer which would result in ownership by the person or group of 20% or more of the outstanding common stock. Each right will entitle stockholders to buy one one-thousandth of a share of the company's Series A Participating Preferred Stock at an exercise price of $110. The company will be entitled to redeem the rights at $0.01 per right at any time on or before the tenth day following acquisition by a person or group of 20% or more of the company's common stock.

If a person or group acquires 20% or more of Collagen's common stock prior to redemption of the rights, the rights will entitle stockholders other than the potential acquiror to purchase, at the then current exercise price, that number of shares of Collagen's common stock (or, in certain circumstances as determined by the board, cash, other property or other securities) having a market value at that time of twice the exercise price. If, after the tenth day following acquisition by a person or group of 20% or more of the company's common stock, the company sells more than 50% of its assets or earning power or is acquired in a merger or other business combination transaction, the acquiror must assume the obligations under the rights, and the rights will become exercisable to acquire common stock of the acquiror at the discounted price. Under certain circumstances the Collagen board of directors may also exchange the rights (other than those owned by the acquiror or its affiliates) for its common stock at an exchange ratio of one share of common stock per right. Collagen indicated that further details of the rights are contained in a letter that will be mailed to all stockholders shortly.

Collagen Corp. is a technology-based company that develops, manufactures and markets biomedical devices for the treatment of defective, diseased, traumatized or aging human tissues.

CONTACT: Collagen Corp., Palo Alto

             David Foster, 415/856-0200
             Edelman Public Relations
             Matthew Harrington, 415/433-5381