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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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<TABLE>
<S> <C>
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</TABLE>
APPLIED MATERIALS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[APPLIED MATERIALS, INC. LETTERHEAD]
March 26, 1999
Dear Applied Materials Stockholder:
By now, you have received considerable information concerning the State of
Wisconsin Investment Board's proposal to amend our Company's bylaws. Since the
purpose of your voting guidelines is to assist you in making voting decisions
that maximize stockholder value, we ask that you make your decision concerning
this proposal based upon the following specific circumstances regarding our
Company:
o Our stockholder rights plan is our most effective defense against an
unsolicited, lowball or unfair offer.
o We believe that the Company's excellent financial performance to date
establishes our Board of Directors' commitment to maximizing value for
our stockholders. A FORTUNE magazine survey of Fortune 500 companies
for the ten year period from 1987 through 1997 ranked the Company
FIRST based on growth in earnings per share and TENTH based on highest
total return to investors.
o As we have for many years, our Board will ensure that independent,
outside directors continue to represent a majority of the Board.
Qualified independent directors like ours are free of any conflicts of
interest which might preclude them from acting in the best interest of
stockholders in the face of a takeover bid.
o If we extend our existing rights plan or adopt a new plan, we intend
to include "shareholder friendly" Three-Year Independent Director
Evaluation ("TIDE") provisions. The increased and active role which
our independent directors would play as to any rights plan with TIDE
provisions addresses stockholder concerns that the plan could be used
improperly to entrench management or block an offer which is in the
stockholders' best interest.
o We believe that stockholder approval requirements, chewable provisions
and referendum mechanisms undermine two important advantages a
stockholder rights plan like ours provides:
- First, rights plans like ours encourage a would-be acquiror to
negotiate with the board of directors. Through such negotiations,
the board has the opportunity to obtain the highest possible price
for the company should the company be sold to this acquiror or
someone else.
- Second, rights plans like ours enable the board of directors to
develop and implement alternatives to a takeover bid which maximize
value for stockholders.
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o Additionally, a requirement for a stockholder vote on a rights plan or
a takeover bid would impair the Board's ability to maximize
stockholder value by:
- Giving the hostile raider no reason to negotiate an offer, no matter
how lowball or coercive or inadequate;
- Encouraging stockholders -- especially short term speculative
investors who buy stocks in companies "in play" -- to favor the
hostile raider's first offer; and
- Restricting your Board's ability and limiting its time to develop
alternatives before a vote is taken.
o Lastly, your Board believes, based upon the opinion of the Company's
counsel, that the proposed binding bylaw amendment would be invalid
under Delaware law.
* * * * * * * *
The real issue raised by SWIB's proposal is: what is the best way to
maximize value for all Applied Materials stockholders in the event we receive a
takeover bid?
IN THIS REGARD, WE FAVOR A NEW RIGHTS PLAN
WITH TIDE PROVISIONS. WE HOPE YOU AGREE.
PLEASE VOTE AGAINST THE STOCKHOLDER PROPOSAL.
Sincerely,
James C. Morgan
