APPLIED MAGNETICS CORPORATION
SUBSCRIPTION WARRANT FOR RIGHTS OFFERING
FOR HOLDERS OF RECORD ON __________, 1999
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Subscription Warrant Number Cusip Number
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Shares Eligible to Subscribe Rights Record Date Shares
Applied Magnetics Corporation (the "Company") is conducting a rights
offering (the "Rights Offering") which entitles the holders of shares of the
Company's common stock (the "Common Stock"), as of the close of business on
____________, 1999 (the "Record Date") to receive one transferable right (each,
a "Right") for each share of Common Stock held of record on the Record Date.
Holders of Rights are entitled to subscribe for and purchase one share of Common
Stock for every one Right (the "Basic Subscription Privilege") at a subscription
price of $______ per share. If any shares of Common Stock are not purchased by
holders of Rights pursuant to the Basic Subscription Privilege (the "Excess
Shares"), any holder purchasing all of the shares of Common Stock available to
that holer may purchase an additional number of Excess Shares at $________ per
share, a _____% discount to the Basic Subscription Privilege, if so specified in
the subscription documents, subject to proration. Set forth above is the number
of shares of Common Stock held by such holder, and the number of shares to which
each holder is entitled to subscribe pursuant to the Basic Subscription
Privilege.
For a more complete description of the terms and conditions of the Rights
Offering, please refer to the Prospectus dated ________, 1999 (the
"Prospectus"), which is incorporated herein by reference. Copies of the
Prospectus are available upon request from ChaseMellon Shareholder Services,
L.L.C. (toll free (▇▇▇) ▇▇▇-▇▇▇▇).
This Subscription Warrant (or a Notice of Guaranteed Delivery) must be
received by ChaseMellon Shareholder Services, L.L.C. together with payment in
full of the subscription price by 5:00 p.m. New York City time, on ________,
1999 (unless extended in the sole discretion of the Company) (as it may be
extended, the "Expiration Date"). Any Rights not exercised prior to the
Expiration Date will be null and void. Any subscription for shares of Common
Stock in the Rights Offering made hereby is irrevocable.
The Rights represented by this Subscription Warrant may be exercised by
duly completing Form 1; may be transferred, assigned, exercised or sold through
a bank or broker by duly completing Form 2; and may be sold through ChaseMellon
shareholder Services. L.L.C. by duly completing Form 3. Rights holders are
advised to review the Prospectus and instructions, copies of which are available
from ChaseMellon Shareholder Services, L.L.C., before exercising or selling
their Rights.
SUBSCRIPTION PRICE: $_____ PER SHARE
The registered owner whose name is inscribed hereon, or its assigns, is
entitled to subscribe for shares of Common Stock of the Company upon the terms
and subject to the conditions set forth in the Prospectus and the instructions
relating to the use hereof.
The Subscription Warrant is transferable, and may be combined or divided at
the office of ChaseMellon Shareholder Services, L.L.C.
Rights holders should be aware that if they choose to exercise or transfer
only part of their Rights, they may not receive a new Subscription Warrant in
sufficient time to exercise the remaining Rights evidenced thereby.
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FORM 1 (on reverse of Subscription Warrant)
EXERCISE AND SUBSCRIPTION: The undersigned hereby irrevocably exercises one
or more Rights to subscribe for shares of Common Stock as indicated below, on
the terms and subject to the conditions specified in the Prospectus, receipt
of which is hereby acknowledge.
(a) Number of shares subscribed for pursuant to the Basic Subscription
Privilege ____ X $____ = $____ payment.
(b) Number of shares subscribed for pursuant to the Oversubscription Privilege
____ X $____ = $____ payment.
(c) Total Subscription (sum of payment amounts on lines (a) and (b)) = $______
payment.*
METHOD OF PAYMENT (CHECK AND COMPLETE APPROPRIATE BOX(ES)):
[__] Check, bank draft, or U.S. postal money order payable to "ChaseMellon
Shareholder Services, L.L.C., as Subscription Agent" or
[__] Wire transfer directed to the Chase Manhattan Bank, New York, NY, ABA
No. ▇▇▇▇▇▇▇▇▇-Attention: ChaseMellon Shareholder Services Reorg.
Account __________-(Applied Magnetics Corporation).
(d) If the Rights being exercised pursuant to the Basic Subscription Privilege
do not constitute all of the Rights represented by the Subscription Warrants
(check only one):
[__] Deliver to the undersigned a new Subscription Warrant evidencing the
remaining Rights to which the undersigned is entitled.
[__] Deliver a new Subscription Warrant in accordance with the
undersigned's form 2 instructions (which include any required signature
guarantees).
[__] Sell the remaining unexercised Rights in accordance with the
undersigned's Form 3 instructions.
[__] Do not deliver any new Subscription Warrants to me.
(e) [__] Check here if Rights are being exercised pursuant to the Notice of
Guaranteed Delivery delivered to the Subscription Agent prior to the date hereof
and complete the following:
Name(s) of Registered Holder(s) __________________________________
Window Ticket Number (if any) ____________________________________
Date of Execution of Notice of Guaranteed Delivery _______________
Name of Institution Which Guaranteed Delivery ____________________
* If the aggregate Subscription Price enclosed or transmitted is insufficient
to purchase the total number of shares included in lines (a) and (b), or if the
number of shares being subscribed for is not specified, the Rights holder
exercising this Subscription Warrant shall be deemed to have subscribed for the
maximum amount of shares that could be subscribed for upon payment of such
amount. If the number of shares to be subscribed for pursuant to the
Oversubscription Privilege is not specified and the amount enclosed or
transmitted exceeds in aggregate Subscription Price for all shares represented
by this Subscription Warrant (the "Subscription Excess"), the Rights holder
exercising this Subscription Warrant shall be deemed to have exercised the
Oversubscription Privilege to purchase, to the extent available, that number of
shares of Common Stock equal to the quotient obtained by dividing the
Subscription Excess by the Subscription Price, subject to proration as described
in the Prospectus. To the extent any portion of the aggregate Subscription
Price enclosed or transmitted remains after the foregoing procedures, such funds
shall be mailed to the subscriber without interest or deduction as soon as
practicable.
Subscriber's Signature _________________ Telephone No. (___) __________
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FORM 2 (on reverse of Subscription Warrant)
TO TRANSFER YOUR SUBSCRIPTION WARRANT OR SOME OR ALL OF YOUR RIGHTS, OR TO
EXERCISE OR SELL RIGHTS THROUGH YOUR BANK OR BROKER: For value received, Rights
represented by this Subscription Warrant are hereby assigned to (please print in
full name and address and Taxpayer Identification Number of Social Security
Number of transferee):
Name:
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Address:
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Signature(s) of Transferee(s)
Signatures Guaranteed by:
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Proceeds from the sale of Rights may be subject to withholding of U.S. taxes
unless the Seller's certified U.S. taxpayer identification number (or
certificate regarding foreign status) is on file with the Subscription Agent
and the seller is not otherwise subject to U.S. backup withholding.
FORM 3 (on reverse of Subscription Warrant)
TO SELL SOME OR ALL OF YOUR UNEXERCISED RIGHTS THROUGH THE SUBSCRIPTION AGENT:
The undersigned hereby authorizes the Subscription Agent to sell ______________
Rights represented by this Subscription Warrant but not exercised hereby and to
deliver to the undersigned a check for the proceeds, if any, from the sale
thereof, less any applicable brokerage commissions, taxes or other direct
expenses of sale. The Subscription Agent's obligation to execute orders is
subject to its ability to find buyers for the Rights.
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Subscriber's Signature
In order to sell Rights through the Subscription Agent, you must complete and
sign the substitute Form W-9 as provided in Section 8 of the instructions.
FORM 4 (on reverse of Subscription Warrant)
DELIVERY INSTRUCTIONS: Address for mailing of stock or new Subscription Warrant
or any cash payment in accordance with the Prospectus, if different from the
address shown on the face of this Subscription Warrant.
Name:
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Address:
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