8-K

 
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                       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):  September 25, 1998


                             SYNBIOTICS CORPORATION
             (Exact name of registrant as specified in its charter)

                         Commission file number 0-11303


               California                          95-3737816
      (State or other jurisdiction              (I.R.S. Employer
            of incorporation)                  Identification No.)


           11011 Via Frontera
         San Diego, California                        92127
(Address of principal executive offices)            (Zip Code)

      Registrant's telephone number, including area code:  (619) 451-3771



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Item 5.  Other Events
         ------------

On September 25, 1998 the Board of Directors of Synbiotics Corporation (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of Common Stock (the "Common Stock") of the Company.
The dividend is payable on October 7, 1998 (the "Record Date") to the
shareholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one one-thousandth of a share (a "Unit;" i.e., 1000
Units equal one share) of Series A Junior Participating Preferred Stock (the
"Series A Preferred Stock") of the Company at a price of $10.00 per Unit (the
"Purchase Price"), subject to adjustment.  The description and terms of the
Rights are set forth in a Rights Agreement dated as of October 1, 1998 (the
"Rights Agreement") between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agent").

Until the earlier to occur of (i) a public announcement that a person or group
of affiliated or associated persons (an "Acquiring Person") have acquired
beneficial ownership of 20% or more of the outstanding Common Stock or (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of such outstanding Common Stock
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate with a copy
of this Summary of Rights attached thereto.

The Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with the Common Stock.  Until the Distribution Date
(or earlier redemption or expiration of the Rights), new Common Stock
certificates issued after the Record Date, upon transfer or new issuance of
Common Stock will contain a notation incorporating the Rights Agreement by
reference.  Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Stock,
outstanding as of the Record Date, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.  As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificate") will be mailed to holders of record
of the Common Stock as of the Close of Business on the Distribution Date and
such separate Rights Certificate alone will evidence the Rights.

The Rights are not exercisable until the Distribution Date.  The Rights will
expire at the close of business on October 7, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below.

The Purchase Price payable, and the number of Units of Preferred Stock or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Units of Preferred Stock of certain
rights or warrants to subscribe for or purchase Units of Preferred Stock at a
price, or securities convertible into Units of Preferred Stock with a conversion
price, less than the then current market price of the Units of Preferred Stock
or (iii) upon the distribution to holders of the Units of Preferred Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Units of
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).

The number of outstanding Rights and the number of Units of Preferred Stock
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Stock or a stock dividend on the Common Stock
payable in Common Stock or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, prior to the Distribution Date.

                                      -1-

 
Units of Preferred Stock purchasable upon exercise of the Rights will not be
redeemable.  Each Unit of Preferred Stock will be entitled to a dividend equal
to any dividend declared per share of Common Stock.  In the event of
liquidation, each Unit of Preferred Stock will be entitled to a payment equal to
any payment made per share of Common Stock. Each Unit of Preferred Stock will
have one vote, voting together with the Common Stock.  Finally, in the event of
any merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each Unit of Preferred Stock will be entitled to receive an
amount equal to the amount received per share of Common Stock.  These rights are
protected by customary antidilution provisions.

Because of the nature of the dividend, liquidation and voting rights, the value
of each Unit of Preferred Stock purchasable upon exercise of the Rights should
approximate the value of one share of Common Stock.

In the event that, after the Rights become exercisable, the Company is acquired
in a merger or other business combination transaction with an Acquiring Person
or an affiliate thereof, or 50% or more of its consolidated assets or earning
power are sold to an Acquiring Person or an affiliate thereof, proper provision
will be made so that each holder of a Right will thereafter have the right to
receive, upon exercise thereof at the then current exercise price of the Rights,
that number of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the exercise price
of the Rights.

In the event that any person or group of affiliated or associated persons
becomes the beneficial owner of 20% or more of the outstanding shares of Common
Stock proper provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be null
and void), will thereafter have the right to receive upon exercise that number
of shares of Common Stock or Units of Preferred Stock (or cash, other securities
or property) having a market value of two times the exercise price of the
Rights.

At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 20% or more of the outstanding
shares of Common Stock and prior to the acquisition by such person or group of
50% or more of the outstanding Common Stock, the Board of Directors of the
Company may exchange all or part of the Rights (other than Rights owned by such
person or group which have become void) for Units of Preferred Stock at an
exchange ratio of (subject to adjustment) which shall equal, subject to
adjustment to reflect stock splits, stock dividends and similar transactions
occurring after the date hereof, that number obtained by dividing the Purchase
Price by the then current per share market price per Unit of Preferred Stock on
the earlier of (i) the date on which any Person becomes an Acquiring Person and
(ii) the date on which a tender or exchange offer is announced by any Person, if
upon consummation thereof such Person would be the Beneficial Owner of 20% or
more of the shares of Company Common Stock then outstanding.

With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in such
Purchase Price.  No fractional shares of Preferred Stock will be issued (other
than fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts) and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Units of Preferred Stock on the last trading
day prior to the date of exercise.

At any time prior to the public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 20% or
more of the outstanding Common Stock, the Board of Directors of the Company may
redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the
"Redemption Price").  The redemption of the rights may be made effective at such
time on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.  Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.  The Rights are also
redeemable under other circumstances as specified in the Rights Agreement.

                                      -2-

 
The terms of the Rights may be amended by the Board of Directors of the Company
without the consent of the holders of the Rights except that from and after a
Distribution Date no such amendment may adversely affect the interests of the
holders of the Rights.

Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends.

The Rights have certain anti-takeover effects.  The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors, except pursuant to an
offer conditioned on a substantial number of rights being acquired.  The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors because the Rights may be redeemed by the Company at the
Redemption Price prior to the occurrence of a Distribution Date.

The Rights Agreement, dated as of October 1, 1998, between the Company and the
Rights Agent, specifying the terms of the Rights, is attached hereto as an
exhibit and is incorporated herein by reference.  The foregoing description of
the Rights is qualified in its entirety by reference to such exhibit.  The
Certificate of Designation for the Series A Junior Participating Preferred Stock
is attached hereto as an exhibit.  The foregoing description of the Series A
Junior Participating Preferred Stock is qualified in its entirety by reference
to such exhibit.


Item 7.   Financial Statements and Exhibits
          ---------------------------------

     a)   Financial statements of businesses acquired
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          Not applicable.

     b)   Pro forma financial information
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          Not applicable.

     c)   Exhibits
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          4.1  Rights Agreement, dated as of October 1, 1998, between the
               Company and ChaseMellon Shareholder Services, L.L.C., which
               includes the form of Certificate of Determination for the Series
               A Junior Participating Preferred Stock as Exhibit A, the form of
               Rights Certificate as Exhibit B and the Summary of Rights to
               Purchase Series A Preferred Shares as Exhibit C. Pursuant to the
               Rights Agreement, printed Right Certificates will not be mailed
               until as soon as practicable after the earlier of (i) the close
               of business on the first date of a public announcement that a
               person or group has acquired beneficial ownership of 20% or more
               of the shares of Common Stock or (ii) the tenth (10th) business
               day (or such later date as may be determined by action of the
               Board of Directors) after a person commences, or announces its
               intention to commence, a tender offer or exchange offer the
               consummation of which would result in the beneficial ownership by
               a person or group of 20% or more of the shares of Common
               Stock./(1)/

          20.1 Form of Letter to Shareholders of Synbiotics Corporation
               regarding the adoption of the Rights Plan pursuant to the Rights
               Agreement.

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(1)  Incorporated herein by reference to Exhibit 1 to the Registrant's Form 8-A
     dated October 7, 1998.

                                      -3-

 
                                  SIGNATURES

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 hereunto duly authorized.

                                         SYNBIOTICS CORPORATION


Date:  October 7, 1998                   /s/ Michael K. Green
                                         -----------------------------
                                         Michael K. Green
                                         Vice President of Finance and 
                                         Chief Financial Officer

                                      -4-

 
                      SECURITIES AND EXCHANGE COMMISSION

                               WASHINGTON, D.C.


                                   EXHIBITS

                                      TO

                                   FORM 8-K

                                     UNDER

                        SECURITIES EXCHANGE ACT OF 1934

                            SYNBIOTICS CORPORATION

 
                                 EXHIBIT INDEX

Exhibit No.    Exhibit
- -----------    -------

 4.1           Rights Agreement, dated as of October 1, 1998, between the
               Company and ChaseMellon Shareholder Services, L.L.C., which
               includes the form of Certificate of Determination for the Series
               A Junior Participating Preferred Stock as Exhibit A, the form of
               Rights Certificate as Exhibit B and the Summary of Rights to
               Purchase Series A Preferred Shares as Exhibit C. Pursuant to the
               Rights Agreement, printed Right Certificates will not be mailed
               until as soon as practicable after the earlier of (i) the close
               of business on the first date of a public announcement that a
               person or group has acquired beneficial ownership of 20% or more
               of the shares of Common Stock or (ii) the tenth (10th) business
               day (or such later date as may be determined by action of the
               Board of Directors) after a person commences, or announces its
               intention to commence, a tender offer or exchange offer the
               consummation of which would result in the beneficial ownership by
               a person or group of 20% or more of the shares of Common
               Stock./(1)/

20.1           Form of Letter to Shareholders of Synbiotics Corporation
               regarding the adoption of the Rights Plan pursuant to the Rights
               Agreement.

____________________

(1)  Incorporated herein by reference to the Registrant's Form 8-A dated October
     7, 1998.

EX-20.1

 
                                                                    Exhibit 20.1
                                                                    ------------



October 7, 1998


Dear Synbiotics Shareholder:

The Board of Directors of the Company has adopted a Shareholder Rights Plan.
Along with this letter, we are sending you a summary describing the Plan.  The
adoption of this Plan requires no action on your part.

The purpose of the Plan is to assure that shareholders are treated fairly by
anyone who might seek to obtain control of the Company.  The corporate takeover
environment remains very active and hostile bidders still have available a
variety of coercive takeover tactics.  The Board believes that a Shareholder
Rights Plan is an important tool to enable the Board to represent effectively
the interests of all shareholders in the event of an unsolicited takeover
attempt.

The Plan was not adopted because of any current effort by another party to
acquire the Company.  The Plan is not unique; over 2,000 corporations throughout
the country, including a majority of the companies in the Standard & Poor's 500
Index, have adopted similar plans (which are sometimes referred to as "poison
pill" plans).

The Plan does not in any way alter the financial strength of the Company or
interfere with its business plans.  The adoption of the Plan is not dilutive,
does not affect reported earnings per share, and is not taxable to you or the
Company.

The Board and management are enthusiastic about the potential of the Company to
build long-term shareholder value and are committed to serving the best
interests of its shareholders, its employees, and the communities in which it
operates. We believe that the Plan will help protect the value of your
investment in Synbiotics Corporation.


Very truly yours,



Kenneth M. Cohen
President and Chief Executive Officer