Applied Materials Adopts New Stockholder Rights Plan to Replace Expired Plan
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 7, 1999--Applied Materials, Inc. today announced that it has adopted a new stockholder rights plan to replace the plan that expired last month. Like the expired plan, the new plan is designed to protect long-term value for stockholders by preventing or deterring coercive or unfair takeover tactics and strengthening the Board of Directors' ability to respond to an unsolicited takeover bid.
Consistent with the commitment made in Applied Materials' 1999
Annual Meeting proxy statement, the new plan includes a "Three-Year
Independent Director Evaluation" provision. Pursuant to this feature,
a newly created committee of the Board of Directors, composed only of
independent directors, will review the new plan at least every three
years. This committee will communicate its conclusions to the full
Board of Directors after each review, including any recommendation as
to whether the plan should be modified or the rights issued under the
plan should be redeemed.
The plan is similar to stockholder rights plans adopted by over
2,200 publicly held companies. The plan was not adopted in response to
any specific effort to acquire control of Applied Materials, and
Applied Materials is not aware of any such effort.
The issuance of rights under the plan has no dilutive effect and
will not affect reported earnings per share, will not be taxable to
the stockholders or to Applied Materials and will not change the way
in which stockholders can currently trade Applied Materials common
stock.
Under the new plan, if any person or group acquires 20 percent or
more of Applied Materials' outstanding common stock, other than
pursuant to a tender offer for all shares approved by the Board, each
right not owned by such person or group will entitle its holder to
purchase Applied Materials' common stock having a market value equal
to twice the exercise price of $375. In addition, if Applied Materials
is acquired through a merger or other business combination transaction
or sells more than 50 percent of its assets, in certain instances
after the rights have been triggered, rights that have not previously
been exercised (except rights held by the person or related parties
whose stock ownership triggered the rights) will entitle the holder to
purchase common shares of the acquiring company having a market value
equal to twice the exercise price.
In order to implement the new plan, the Board of Directors has
declared a dividend distribution of the rights. The distribution will
be payable to stockholders of record as of July 18, 1999. Applied
Materials may redeem the rights at $.01 per right at any time until
the tenth business day following the announcement that a 20 percent
position has been acquired. Unless earlier redeemed, the rights will
expire on July 6, 2009. A letter describing the rights will be mailed
to all Applied Materials stockholders shortly.
Separately, the Board of Directors amended Applied Materials'
bylaws to require that future amendment or repeal of bylaw provisions
by stockholders may be effected only by the affirmative vote of the
holders of a majority of the outstanding shares of Applied Materials
common stock. The same stockholder vote is required for stockholder
approval of changes to Applied Materials' certificate of
incorporation.
Applied Materials, Inc. is a Fortune 500 global growth company
and the world's largest supplier of wafer fabrication systems and
services to the global semiconductor industry. Applied Materials is
traded on the Nasdaq National Market under the symbol, "AMAT." Applied
Materials' website is http://www.appliedmaterials.com.
The Company assumes no obligation to update the information in
this press release.
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CONTACT: Applied Materials, Inc.
Carolyn Schwartz, 408/748-5227 (investment community)
Jeffrey Lettes, 408/563-5161 (editorial/media)
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED BANKING