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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)
November 20, 1998
VARIAN ASSOCIATES, INC.
_________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 1-7598 94-2359345
_________________ __________________ _______________________
(State of incorporation) (Commission File Number) (IRS Employer Identification
No.)
3050 Hansen Way
Palo Alto, CA 94304-1000
____________________________ ________________
(Address of principal (Zip Code)
executive offices)
(650) 493-4000
(Registrant's telephone number,
including area code)
Inapplicable
_____________________________________________________________________________
(Former name or former address, if change since last report)
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ITEM 5. OTHER EVENTS.
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On November 20, 1998, the Board of Directors of the Company approved a
stockholder rights plan and, pursuant to which, declared a dividend of one right
(a "Right") for each outstanding share of common stock, par value $1 per share
("Common Stock"), of the Company held of record at the close of business on
December 4, 1998, (the "Record Time"), or issued thereafter and prior to the
Separation Time (as hereinafter defined) and thereafter pursuant to options and
convertible or exchangeable securities outstanding at the Separation Time. The
Rights will be issued pursuant to a Rights Agreement, dated as of November 20,
1998 (the "Rights Agreement"), between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent"). Each Right entitles
its registered holder to purchase from the Company, after the Separation Time,
one one-thousandth of a share of Participating Preferred Stock, par value $1 per
share ("Preferred Stock"), for $180.00 (the "Exercise Price"), subject to
adjustment. The Preferred Stock is designed so that each one one-thousandth of a
share of Preferred Stock has economic and voting terms similar to those of one
share of Common Stock.
The Rights will be evidenced by the Common Stock certificates until
the close of business on the earlier of (either, the "Separation Time") (i) the
tenth business day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person (as
defined in the Rights Agreement) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person, as
defined below, and (ii) the first date (the "Flip-in Date") of public
announcement by the Company or an Acquiring Person that a Person has become an
Acquiring Person; provided that if the foregoing results in the Separation Time
--------
being prior to the Record Time, the Separation Time shall be the Record Time;
and provided further that if a tender or exchange offer referred to in clause
-------- -------
(i) is cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of stock pursuant thereto, such offer shall
be deemed never to have been made.
An Acquiring Person is any Person having Beneficial Ownership (as
defined in the Rights Agreement) of 15% or more of the outstanding shares of
Voting Stock, which term shall not include (i) the Company, any wholly-owned
subsidiary of the Company or any employee stock ownership or other employee
benefit plan of the Company or any wholly-owned subsidiary of the Company, (ii)
any person who is the Beneficial Owner of 15% or more of the outstanding Voting
Stock as of the date of the Rights Agreement or who shall become the Beneficial
Owner of 15% or more of the outstanding Voting Stock solely as a result of an
acquisition of Voting Stock by the Company, until such time as such Person
acquires additional Voting Stock, other than through a dividend or stock split,
or (iii) any Person who Beneficially Owns shares of Voting Stock consisting
solely of (A) shares of Voting Stock acquired pursuant to the grant or exercise
of an option granted by the Company in connection with an agreement to merge
with, or acquire, the Company at a time at which there is no Acquiring Person,
(B) shares of Voting Stock owned by such Person and its Affiliates and
Associates at the time of such grant and (C) shares of Voting Stock, amounting
to less than 1% of the outstanding Voting Stock, acquired by Affiliates and
Associates of such Person after the time of such grant. 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, has become such inadvertently, and such Person divests as
promptly as practicable a
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sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," as defined pursuant to such foregoing, then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of the
Rights Agreement. "Voting Stock" means shares of capital stock of the Company
entitled to vote generally in the election of directors.
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common Stock
certificates issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
contain a legend incorporating by reference the terms of the Rights Agreement
(as such may be amended from time to time). Notwithstanding the absence of the
legend, certificates evidencing shares of Common Stock outstanding at the Record
Time shall also evidence one Right for each share of Common Stock evidenced
thereby. Promptly following the Separation Time, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as defined
in the Rights Agreement) following the Separation Time. The Rights will expire
on the earliest of (i) the Exchange Time (as defined below), (ii) the close of
business on December 4, 2008, (iii) the date on which the Rights are redeemed as
described below and (iv) upon the merger of the Company into another corporation
pursuant to an agreement entered into when there is no Acquiring Person (in any
such case, the "Expiration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of a
Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
the Company shall take such action as shall be necessary to ensure and provide
that each Right (other than Rights Beneficially Owned by the Acquiring Person or
any affiliate or associate thereof, which Rights shall become void) shall
constitute the right to purchase from the Company, upon the exercise thereof in
accordance with the terms of the Rights Agreement, that number of shares of
Common Stock or Preferred Stock of the Company having an aggregate Market Price
(as defined in the Rights Agreement), on the date of the public announcement of
an Acquiring Person's becoming such (the "Stock Acquisition Date") that gave
rise to the Flip-in Date, equal to twice the Exercise Price for an amount in
cash equal to the then current Exercise Price.
In addition, the Board of Directors of the Company may, at its option,
at any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Voting Stock, elect to exchange all or part of the then outstanding Rights
(other than Rights Beneficially Owned by the Acquiring Person or any affiliate
or associate thereof, which Rights become void) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of the Separation Time (the "Exchange Ratio"). Immediately upon such
action by the Board of Directors (the
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"Exchange Time"), the right to exercise the Rights will terminate and each Right
will thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated to issue shares of Common
Stock upon exercise of or in exchange for Rights, the Company, at its option,
may substitute therefor shares of Preferred Stock, at a ratio of one one-
thousandth of a share of Preferred Stock for each share of Common Stock so
issuable.
In the event that prior to the Expiration Time the Company enters
into, consummates or permits to occur a transaction or series of transactions
after the time an Acquiring Person has become such in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
binding share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters into
an agreement with respect to such consolidation, merger or share exchange, the
Acquiring Person controls the Board of Directors of the Company, or (ii) the
Company shall sell or otherwise transfer (or one or more of its subsidiaries
shall sell or otherwise transfer) directly or by sale of stock, assets or
control of assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) as of the end of the most recently
completed fiscal year or (B) generating more than 50% of the operating income or
cash flow during the most recently completed fiscal year, of the Company and its
subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly owned subsidiaries) or to two or more such Persons
which are affiliated or otherwise acting in concert, if, at the time of such
sale or transfer of assets or at the time the Company (or any such subsidiary)
enters into an agreement with respect to such sale or transfer, the Acquiring
Person controls the Board of Directors of the Company, then any such
transactions or events shall constitute a "Flip-over Transaction or Event" under
the Rights Agreement.
The Company shall take such action as shall be necessary to ensure,
and shall not enter into, consummate or permit to occur, such Flip-over
Transaction or Event until it shall have duly entered into a binding and
enforceable supplemental agreement with the Person engaging in such Flip-over
Transaction or Event or the parent corporation thereof (the "Flip-over Entity"),
for the benefit of the holders of the Rights, providing, that upon consummation
or occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms of the Rights Agreement, that
number of shares of common stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Rights Agreement, but the Company's
obligations under the Rights Agreement will not be discharged and will continue
in full. For purposes of the foregoing description, the term "Acquiring Person"
shall include any Acquiring Person and its Affiliates and Associates and others
with whom it is acting in concert counted together as a single Person.
The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the Flip-in Date, redeem all (but not less
than all) the then outstanding
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Rights at a price of $0.001 per Right (the "Redemption Price"), as provided in
the Rights Agreement. Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption Price
in cash for each Right so held.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as stockholders of the Company, including without
limitation, the right to vote or to receive dividends.
The Rights have certain anti-takeover effects and can cause
substantial dilution to a person or group that acquires 15% of more of the
Common Stock on terms not approved by the Board of Directors of the Company.
The Rights should not, however, interfere with any merger or other business
combination that the Board finds to be in the best interests of the Company and
its stockholders because the Rights can be redeemed by the Board on or prior to
the close of business on the Flip-in Date, before the consummation of such
transaction.
As of November 19, 1998, there were approximately 29,892,426 shares of
Common Stock issued and outstanding. As long as the Rights are attached to the
Common Stock, the Company will issue one Right with each new share of Common
Stock so that all such shares will have Rights attached.
The foregoing description of the Rights is qualified in its entirety
by reference to the Rights Agreement and the other exhibits incorporated by
reference below.
ITEM 7. EXHIBITS.
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(4.1) Rights Agreement, dated as of November 20, 1998 (the "Rights
Agreement"), between Varian Associates, Inc. and First Chicago
Trust Company of New York, as Rights Agent, including the forms
of Rights Certificate and of Election to Exercise, included in
Exhibit A to the Rights Agreement and the form of Certificate of
Designation and Terms of Participating Preferred Stock of the
Company, included in Exhibit B to the Rights Agreement
(incorporated herein by reference to Exhibit (1) to the
Registrant's Registration Statement on Form 8-A dated November
23, 1998).
(99.1) Press release, dated November 20, 1998, issued by the Company.
(99.2) Form of Letter to Stockholders, together with Summary of Rights
Plan.
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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.
VARIAN ASSOCIATES, INC.
By: /s/ Joseph B. Phair
-------------------
Name: Joseph B. Phair
Title: Vice President, General Counsel
and Secretary
Dated: November 23, 1998
5
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
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(4.1) Rights Agreement, dated as of November 20, 1998 (the "Rights
Agreement"), between Varian Associates, Inc. and First
Chicago Trust Company of New York, as Rights Agent,
including the forms of Rights Certificate and of Election to
Exercise, included in Exhibit A to the Rights Agreement and
the form of Certificate of Designation and Terms of
Participating Preferred Stock of the Company, included in
Exhibit B to the Rights Agreement (incorporated herein by
reference to Exhibit (1) to Registrant's Registration
Statement on Form 8-A dated November 23, 1998).
(99.1) Press Release, dated November 20, 1998, issued by the
Company
(99.2) Form of Letter to Stockholders, together with Summary of
Rights Plan
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EXHIBIT 99.1
FOR INFORMATION CONTACT;
Gary Simpson (650) 424-5782
[email protected]
FOR IMMEDIATE RELEASE
November 20, 1998
VARIAN ASSOCIATES ADOPTS STOCKHOLDER RIGHTS PLAN
Palo Alto, Calif. Varian Associates, Inc. (NYSE/VAR), today announced that
its Board of Directors has adopted a Stockholder Rights Plan under which the
company has declared a dividend of one right for each outstanding share of
Varian common stock, payable to shareholders of record as of the close of
business on December 4, 1998. The plan is similar to stockholder rights plans
adopted by many other public companies, and to an earlier Varian plan which
lapsed in 1996.
According to Vice President and General Counsel Joseph B. Phair, the plan
is a proactive step intended to protect Varian and its stockholders against
unfair or coercive takeover tactics and offers that may not provide adequate
value. Varian is currently in a period of transition due to its proposed
reorganization providing for the split of its core businesses into three public
companies in early 1999.
"The plan provides the Board of Directors with an increased ability to
protect stockholder interests during this critical period," said Phair. "It
also offers added protection for the company to pursue its business strategies
following the reorganization. In essence, it provides the Board with the
leverage and flexibility necessary to respond to an unfavorable takeover bid."
The rights will trade automatically with the company's common stock and
would not be exercisable until triggered by a person or group acquiring 15% or
more of Varian's stock, or commencing a tender offer for such shares. Once
triggered, the rights would become exercisable and trade separately from the
common stock.
If any person or group crosses the 15% ownership threshold, all other
rightsholders would be entitled to acquire additional shares of Varian common
stock at a 50% discount while the rights held by the acquirer would become void.
"The prospect of the significant economic dilution should preclude even the most
aggressive acquirer from crossing the threshold," said Phair. "And it should
encourage all prospective acquirers to pursue negotiations with Varian's Board
of Directors or to communicate directly with Varian's shareholders without first
acquiring a significant ownership position."
According to Phair, the rights should not interfere with a transaction that
the board determines is in the best interests of Varian and its stockholders
because the rights may be redeemed by the board for $0.001 per share at any time
prior to a person or group becoming a 15% holder of the company's shares. He
added that the rights agreement does not in any way weaken Varian's financial
strength or interfere with its business plans. The issuance of the rights
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has no dilutive effect, will not affect reported earnings per share, is not
taxable to Varian or its stockholders, and will not change the way in which
the Company's shares are traded.
A letter providing additional details of the rights plan will be mailed to
stockholders in early December.
###
Palo Alto-based Varian Associates, Inc., is a diversified $1.4 billion, high-
technology company with core businesses in health care systems, semiconductor
equipment, and analytical instruments that provide products and services to
worldwide markets.
Press announcements and other information about Varian are available on the
World Wide Web at the URL http://www.varian.com
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EXHIBIT 99.2
December 4, 1998
To our Stockholders:
As previously announced, Varian's Board of Directors has adopted a
Stockholder Rights Plan. The Plan provides for a dividend distribution to
stockholders of record on December 4, 1998 of Rights to purchase shares of a new
series of Preferred Stock (or, in certain circumstances, Common Stock or other
consideration), exercisable upon the occurrence of certain takeover events. A
summary description outlining the principal terms of the Plan, which I urge you
to read carefully, is enclosed.
The plan is intended to protect Varian and its stockholders against
unfair or coercive takeover tactics and offers that may not provide adequate
value to the stockholders. Varian is currently in a period of transition due to
its proposed reorganization providing for the split of its core businesses into
three public companies. The plan provides the Board with an increased ability to
protect stockholder interests during this critical period. It also offers added
protection for the company to pursue its business strategies following this
reorganization, and provides the Board with the leverage and flexibility
necessary to respond to an unfavorable takeover bid.
More than 2,500 other U.S. corporations have considered it prudent to
adopt stockholder protection plans similar to the Plan adopted by Varian's
Board. The Plan is not intended to prevent an acquisition of Varian on terms
that are favorable and fair to all stockholders and will not be used for that
purpose. The Plan is designed to deal with the very serious problem of
unilateral actions by hostile acquirers that are calculated to deprive Varian's
Board and its stockholders of their ability to determine the destiny of the
Company. However, the mere declaration of the Rights dividend should not affect
any prospective offeror willing to make an all cash offer at a full and fair
price, or to negotiate with Varian's Board. The Plan certainly will not
interfere with a merger or other business combination transaction that Varian's
Board approves as fair and as constituting a recognition of full value to the
stockholders.
Issuance of the Rights will not weaken Varian's financial strength,
will not affect its reported earnings per share, is not taxable to you or the
Company and will not change the way in which the Company's shares are traded.
As described in the attached summary, the Rights will only become exercisable if
and when an event arises which triggers their effectiveness. They will then
operate to protect stockholders against being deprived of their right to share
in the full measure of Varian's long-term potential.
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In declaring the Rights dividend, Varian's Board has expressed its
confidence in your Company's future and our determination that you, our
stockholders, be given every opportunity to participate fully in that future.
On behalf of the Board of Directors,
_____________________________
J. Tracy O'Rourke
Chairman of the Board
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VARIAN ASSOCIATES, INC.
SUMMARY OF RIGHTS PLAN
The following Summary is not complete and is qualified in its entirety by
reference to the Rights Agreement, a copy of which may be obtained without
charge from Varian Associates, Inc., Corporate Communications,3050 Hansen Way,
Palo Alto, California 94304-1000.
ISSUANCE AND
TRANSFER OF RIGHTS;
RIGHTS CERTIFICATES: The Board declares a dividend of one Right for each
share of Common Stock outstanding. Prior to the
Separation Time referred to below, the Rights are
evidenced by and trade with the Common Stock and are not
exercisable. After the Separation Time, the Company will
mail Rights Certificates to stockholders, together with
instructions regarding exercise of the Rights and other
appropriate information, and the Rights will become
transferable apart from the Common Stock.
SEPARATION TIME: Rights separate from the Common Stock and become
exercisable following the earlier of (i) the date of the
Flip-in trigger referred to below or (ii) the tenth
business day (or such later date as the Board may
decide) after any person (a broadly defined term)
announces its intention to commence a tender or exchange
offer that would result in such person acquiring
beneficial ownership (a broadly defined term) of a total
of 15% or more of the Company's Common Stock.
EXERCISE OF RIGHTS: After the Separation Time, each Right entitles the
holder to purchase, for the Exercise Price referred to
below, one one-thousandth of a share of Participating
Preferred Stock. (The Participating Preferred Stock is
designed so that each one one-thousandth of a share has
economic and voting terms similar to those of one share
of Common Stock.)
The exercise price is initially set at $180 and will be
subject to certain customary antidilution provisions
(the "Exercise Price").
"FLIP-IN" TRIGGER: If any person acquires beneficial ownership of 15% or
more of the outstanding Common Stock (an "Acquiring
Person"), then on that date (or such other date as the
Board may decide):
(i) Rights owned by the Acquiring Person or transferees
thereof will automatically be void; and
(ii) each other Right will automatically become a right
(in addition to any other rights provided for in
the Rights agreement) to buy, for the Exercise
Price, that number of shares of Common Stock or
Participating Preferred Stock having a market value
of twice the Exercise Price.
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EXCLUDED PERSONS: Excluded from the definition of Acquiring Person are the
Company, any subsidiary of the Company and any of their
employee plans. The Board also has the discretion to
exclude a person who becomes an Acquiring Person
inadvertently if such person promptly divests enough
Common Stock to drop below the percentage threshold.
EXCHANGE OPTION: If an Acquiring Person acquires beneficial ownership of
between 15% and 50% of the outstanding Common Stock, the
Board may, at is option, require any outstanding Rights
(other than those owned by the Acquiring Person) to be
exchanged for one share of Common Stock or one one-
thousandth of a share of Participating Preferred Stock
in lieu of allowing such Rights to be exercised.
"FLIP-OVER" TRIGGER: After any person or group becomes an Acquiring Person,
the Company may not consolidate or merge with, or sell
or otherwise transfer 50% or more of its assets or
earning power to any person if at the time the Acquiring
Person controls the Board, unless provision is duly made
so that each outstanding Right would thereafter become a
right to buy, for the Exercise Price, that number of
shares of common stock of such other person having a
market value of twice the Exercise Price.
REDEMPTION: The Rights may be redeemed by the Board, at any time
until a "Flip-in" trigger has occurred, at a Redemption
Price of $0.001 per Right.
POWER TO AMEND: The Board may amend the Plan in any respect until a
"Flip-in" trigger has occurred. Thereafter, the Board
may amend the Plan in any respect not adversely
affecting the interests of the Rights holders.
DIVIDEND OR
VOTING RIGHTS: Rights will not have any dividend, voting or other
rights of stockholders.
EXPIRATION: The rights will expire ten years from the date of their
issuance, unless sooner redeemed, exchanged or
exercised.
