<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PLASMA & MATERIALS TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF PLASMA & MATERIALS TECHNOLOGIES, INC.]
PLASMA & MATERIALS TECHNOLOGIES, INC.
9255 DEERING AVENUE
CHATSWORTH, CALIFORNIA 91311
October 1, 1996
Dear Shareholder:
On behalf of Plasma & Materials Technologies, Inc. ("PMT"), we have attached
a supplement (the "Supplement") to PMT's Proxy Statement dated September 11,
1996 (the "Proxy Statement"). The Supplement updates and supplements certain
matters that are described in the Proxy Statement.
An additional proxy card is included with the Supplement. The proxy card
relates to all matters set forth in the Proxy Statement. To be sure your vote
is counted, you may return the enclosed proxy card even if you already
returned a previous card. If you have already delivered a proxy card to PMT
and you wish to change any vote set forth therein, you must deliver the
enclosed proxy card, appropriately completed, to reflect your changed vote. If
you have any questions regarding the Supplement or the enclosed proxy card,
please contact PMT's proxy solicitor, MacKenzie Partners, Inc., at (800) 322-
2885.
The enclosed Supplement should be read in conjunction with the Proxy
Statement. Please give this information careful consideration.
Very truly yours,
/s/ Gregor A. Campbell
Dr. Gregor A. Campbell,
President and Chief Executive
Officer
<PAGE>
SUPPLEMENT
TO THE PROXY STATEMENT
DATED SEPTEMBER 11, 1996
OF
PLASMA & MATERIALS TECHNOLOGIES, INC.
October 1, 1996
The following information (the "Supplement") supplements the Proxy Statement
dated September 11, 1996 (the "Proxy Statement") of Plasma & Materials
Technologies, Inc., a California corporation (the "Company" or "PMT"). This
Supplement provides information regarding the final terms of the Company's
offering of 7 1/8% Convertible Subordinated Notes Due 2001, certain unaudited
pro forma financial information based on such final terms, certain additional
information related to transactions between PMT and certain of its
shareholders and the Company's engagement of a proxy solicitor. This
Supplement should be read in connection with the Proxy Statement.
CONVERTIBLE NOTE OFFERING
On October 1, 1996, the Company entered into a Purchase Agreement with
Salomon Brothers Inc and Unterberg Harris (the "Initial Purchasers") for the
issuance and sale by the Company of $75,000,000 principal amount of 7 1/8%
Convertible Subordinated Notes Due 2001 (the "Convertible Notes") with
proceeds to the Company of 96.25% of the principal amount. The Company also
granted to the Initial Purchasers a 30-day option to purchase up to
$11,250,000 principal amount of additional Convertible Notes on the same terms
to cover over-allotments, if any. The Convertible Notes are convertible,
commencing 90 days after issuance (or, if later, upon the Company's
acquisition of Electrotech, as described below) into PMT Common Stock at a
conversion price of $15.635 per share. The Convertible Notes are redeemable,
in whole or in part, at the option of the Company at any time on or after
October 15, 1999 at the redemption prices specified in the Indenture relating
thereto. The Notes are unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Debt (as defined in the
Indenture).
The proceeds from the sale of the Convertible Notes will be used to finance
a significant portion of the purchase price of the transactions contemplated
by the Share Purchase Agreement dated July 17, 1996, as amended through the
date hereof (the "Share Purchase Agreement"), entered into among the Company,
Electrotech Limited ("ET") and Electrotech Equipments Limited (ETE and
collectively with ET, "Electrotech"), Christopher D. Dobson and the other
shareholders of Electrotech and the transactions contemplated thereby (the
"Acquisition") pursuant to which PMT will acquire 100% of the outstanding
capital stock of Electrotech and, directly or indirectly, each subsidiary
thereof.
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information presented below should be read
in conjunction with the notes hereto and the separate financial statements of
PMT and Electrotech presented elsewhere in the Proxy Statement.
UNAUDITED PRO FORMA BALANCE SHEET OF PMT AND ELECTROTECH
COMBINED AS OF JUNE 30, 1996
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PMT ELECTROTECH ADJUSTMENTS COMBINED
------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........ $ 8,475 $ 3,219 $ 75,000 $ 11,694
(75,000)
Short-term investments........... 15,099 -- (8,500) 6,599
Accounts receivable.............. 16,592 26,975 -- 43,567
Inventories...................... 12,885 27,029 -- 39,914
Demonstration inventory.......... 3,078 -- -- 3,078
Other current assets............. 586 5,099 -- 5,685
------- ------- -------- --------
Total current assets........... 56,715 62,322 (8,500) 110,537
Property, equipment and leasehold
improvements--net................. 8,640 14,265 1,000 23,905
Developed technology............... -- -- 45,900 45,900
In-process technology.............. -- -- 81,000 --
(81,000)
Assembled workforce................ -- -- 7,000 7,000
Covenant not to compete............ -- -- 500 500
Goodwill........................... -- -- 1,688 1,688
Other assets....................... 1,626 28 -- 1,654
------- ------- -------- --------
Total assets................... $66,981 $76,615 $ 47,588 $191,184
======= ======= ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Revolving line of credit and bank
overdrafts...................... $ -- $12,564 $ -- $ 12,564
Accounts payable and accrued
expenses........................ 8,888 7,237 -- 16,125
Warranty expense................. 694 1,716 -- 2,410
Customer deposits................ -- 4,307 -- 4,307
Accrued salaries and related
liabilities..................... 306 992 -- 1,298
Current portion of capital lease
obligations..................... 510 995 -- 1,505
Other accrued liabilities........ -- 6,301 -- 6,301
Income taxes payable............. -- 5,197 -- 5,197
------- ------- -------- --------
Total current liabilities...... 10,398 39,309 -- 49,707
Long-term debt and capital lease
obligations....................... 434 1,457 -- 1,891
Convertible subordinated notes..... -- -- 75,000 75,000
Deferred income taxes.............. -- 950 17,787 18,737
------- ------- -------- --------
Total liabilities.............. 10,832 41,716 92,787 145,335
Shareholders' equity:
Common stock:
PMT.............................. 61,090 -- 70,700 131,790
Electrotech...................... -- 17 (17) --
Retained earnings (accumulated def- (4,941) 34,882 (34,882) (85,941)
icit)............................. (81,000)
------- ------- -------- --------
Total shareholders' equity..... 56,149 34,899 (45,199) 45,849
------- ------- -------- --------
Total liabilities and share-
holders' equity............. $66,981 $76,615 $ 47,588 $191,184
======= ======= ======== ========
</TABLE>
2
<PAGE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS OF
PMT AND ELECTROTECH
FOR THE TWELVE MONTH PERIOD ENDED DECEMBER 31, 1995
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PMT ELECTROTECH ADJUSTMENTS COMBINED
------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Sales.............................. $20,890 $54,383 $ -- $75,273
License revenue.................... 400 -- -- 400
------- ------- -------- -------
Total revenues.................... 21,290 54,383 -- 75,673
Operating costs and expenses:
Costs of goods sold................ 11,144 26,063 -- 37,207
Research and development........... 4,567 8,402 -- 12,969
Sales, general and administrative.. 5,944 12,194 -- 18,138
Amortization of intangibles........ -- -- 5,817 5,817
------- ------- -------- -------
Total............................. 21,655 46,659 5,817 74,131
------- ------- -------- -------
Operating income (loss)............. (365) 7,724 (5,817) 1,542
Other income and expense:
Interest income.................... 777 294 (340) 731
Interest expense................... (293) (959) (5,343) (6,595)
Profit on disposal of business..... -- 7,812 -- 7,812
------- ------- -------- -------
484 7,147 (5,683) 1,948
------- ------- -------- -------
Income (loss) before income tax
provision.......................... 119 14,871 (11,500) 3,490
Income tax provision................ 1 5,966 (1,831) 4,136
------- ------- -------- -------
Net income (loss)................... $ 118 $ 8,905 $ (9,669) $ (646)
======= ======= ======== =======
Net income (loss) per PMT share..... $ 0.02 $ (0.05)
======= =======
Number of shares outstanding, in
thousands.......................... 6,593 5,600 12,193
</TABLE>
3
<PAGE>
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS OF
PMT AND ELECTROTECH
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1996
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
PMT ELECTROTECH ADJUSTMENTS COMBINED
------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Product sales..................... $17,946 $47,348 $ -- $65,294
Contract revenue.................. 849 -- -- 849
------- ------- ------- -------
18,795 47,348 -- 66,143
Operating costs and expenses:
Cost of sales..................... 9,127 22,456 -- 31,583
Research and development.......... 3,560 5,660 -- 9,220
Sales, general and administrative. 4,267 7,239 -- 11,506
Amortization of intangibles....... -- -- 2,909 2,909
------- ------- ------- -------
Total........................... 16,954 35,355 2,909 55,218
------- ------- ------- -------
Operating income.................... 1,841 11,993 (2,909) 10,925
Other income and expense:
Interest income................... 884 299 (170) 1,013
Interest expense.................. (91) (927) (2,672) (3,690)
------- ------- ------- -------
793 (628) (2,842) (2,677)
Income before income taxes.......... 2,634 11,365 (5,751) 8,248
Provision for income taxes.......... 13 4,274 (915) 3,372
------- ------- ------- -------
Net income.......................... $ 2,621 $ 7,091 $(4,836) $ 4,876
======= ======= ======= =======
Net income per PMT share............ $ 0.29 $ 0.33
======= =======
Number of shares outstanding, in
thousands.......................... 9,131 5,600 14,731
</TABLE>
The accompanying unaudited pro forma financial statements include
adjustments for the allocation of the purchase price to the underlying assets
and liabilities as discussed below, the issuance of Common Stock, the
elimination of Electrotech's equity in combination of the two companies,
depreciation and amortization of the amounts allocated to various assets and
liabilities acquired and a reduction of interest income and increase in
interest expense associated with the reduction of cash and the issuance of the
Convertible Notes in connection with the Acquisition.
The unaudited pro forma financial information presented above combines the
June 30, 1996 balance sheets of PMT and Electrotech and the statements of
operations for the twelve month period ended December 31, 1995 and the six
month period ended June 30, 1996 on a pro forma basis. This pro forma
combination gives effect to the following assumptions:
. That the Acquisition occurred on June 30, 1996 for the unaudited pro
forma balance sheet.
. That the Acquisition occurred as of the beginning of each statement of
operations presentation with the allocation of the purchase price
estimated based on the June 30, 1996 unaudited combined balance sheet of
Electrotech.
. That the Acquisition would be accounted for as a purchase.
. That the purchase price paid by PMT to acquire Electrotech would be
approximately $154.2 million, consisting of $75 million in cash, 5.6
million shares of Common Stock valued at $12.625 per share, and that the
estimated transaction and financing costs would be $8.5 million. The
valuation of Common Stock is based on the $12.625 per share closing price
of Common Stock on July 17, 1996, the last day prior to the public
announcement of the parties' agreement to acquisition terms.
4
<PAGE>
. That $75 million of cash required to consummate the Acquisition would be
financed through the issuance of Convertible Notes, which will bear
interest at 7.125% per annum. Depending upon whether the over-allotment
option granted to the Initial Purchase is exercised, the actual amount
financed may differ from the amount used in the pro forma financial
statements.
. That the excess of the purchase price including the estimated transaction
and financing costs, over the net shareholders' equity of Electrotech
would be allocated to the following assets and liabilities and that the
amounts allocated would be amortized over the following time periods:
<TABLE>
<CAPTION>
AMOUNT
ITEM ($000) AMORTIZATION PERIOD
---- ------- -------------------
<S> <C> <C>
Fixed assets
. Land and buildings........... $ 1,000 Twelve years for buildings
Intangible assets
. Developed technology......... 45,900 Ten years
. Assembled workforce.......... 7,000 Eight years
. In-process technology........ 81,000 100% immediately following
the Acquisition
. Covenant not to compete...... 500 Three years
. Goodwill..................... 1,688 Ten years
Deferred tax liability.......... 17,787 As utilized based on the above lives
</TABLE>
. The preliminary allocation of the purchase price among identifiable
tangible and intangible assets and liabilities, as reflected in the
accompanying pro forma financial statements, is based on an analysis of
the estimated fair value of those assets and liabilities as of June 30,
1996. The estimated fair market value of the assets acquired may vary
significantly between June 30, 1996 and the consummation of the
Acquisition.
Purchased in-process technology was analyzed through interviews and
analysis of data concerning each of Electrotech's projects in development
(i.e. Forcefill(TM) and Flowfill(TM)). Expected future cash flows of the
developmental projects were discounted to present value taking into
account risks associated with the inherent difficulties and uncertainties
in completing the projects, and thereby achieving technological
feasibility, and the risks related to potential changes in future target
markets. PMT's expected post-acquisition business strategies were
considered as they relate to Electrotech's current products and projects
in development. Considerable efforts are being applied by Electrotech to
its Forcefill(TM) and Flowfill(TM) projects to attain product
functionality and reliability levels acceptable to their intended target
market.
The write-off of purchased in-process technology is not reflected in the
accompanying unaudited statements of operations as it is a non-recurring
charge. It will be included, however, in the actual consolidated statement
of operations of PMT for the first fiscal quarter in which the Acquisition
occurs.
Using the methodology that was used for in-process technology, expected
future cash flows of the developed technology were discounted taking into
account risks related to the characteristics and application of each
product, existing and future markets, and assessments of the life cycle
stage of each product. This analysis resulted in an estimated value of
$45.9 million for developed technology, which has reached technological
feasibility and therefore would be capitalized.
. For United States income tax purposes, the tax basis of the underlying
assets and liabilities is not adjusted. Accordingly, a deferred tax
liability has been included in the purchase price allocation which
represents the tax effect of the difference in the basis for financial
reporting and tax purposes of the assets, except goodwill, and
liabilities acquired, after considering the effects of the purchase price
allocation. The portion of the tax credit associated with the
amortization of the excess of the recorded basis of the assets is
reflected as a tax benefit in the accompanying pro forma statements of
operations.
5
<PAGE>
. The number of shares used in the computation of earnings per share has
been adjusted to reflect the issuance of 5,600,000 shares of Common Stock
in connection with the Acquisition as if it had occurred at the beginning
of the year presented. Fully dilutive earnings per share data has not
been presented because such data would be anti-dilutive. See note 1 to
the audited Financial Statements of PMT for the year ended December 31,
1995.
It should be noted that the unaudited pro forma financial information:
. Uses a pro forma allocation of the purchase price paid for Electrotech as
shown above; both the allocation of the actual purchase price and the
amortization periods for these amounts are preliminary and subject to
refinement pursuant to completion and updating of valuation studies at
the time of closing of the Acquisition.
. Does not give effect to any costs of combining the companies or to any
efficiencies in operations that could be achieved by combining the
companies.
. Does not purport to be indicative either of the results of operations
that would have occurred had the Acquisition been consummated at the
dates indicated, or of the future combined results of operations of the
companies.
. The financial data of PMT for the year ended December 31, 1995 used to
develop the unaudited pro forma combining statement of operations is
derived from the historical audited financial statements of PMT.
. All interim financial data of PMT and Electrotech, and the financial data
of Electrotech for the twelve month period ended December 31, 1995 used
to develop the unaudited pro forma combining balance sheet and statements
of operations is derived from historical unaudited financial statements
of PMT and Electrotech, but in the opinions of management of PMT and
Electrotech, respectively, reflect all adjustments necessary (consisting
only of normal recurring entries) for a fair presentation thereof. The
interim financial data and the financial data for the twelve month period
ended December 31, 1995 for Electrotech have been adjusted to conform
with U.S. generally accepted accounting principles and have been
converted to U.S. dollars using the following U.S. dollar conversion
rates per (Pounds)1 sterling: June 30, 1996--$1.53 and December 31,
1995--$1.55.
6
<PAGE>
MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As disclosed elsewhere in the Proxy Statement, on March 29, 1996, PMT
entered into a number of agreements with PMT CVD Partners, L.P. (the "CVD
Partnership") and the limited partners thereof (the "Limited Partners"). The
CVD Partnership was sponsored by PMT to fund research and development costs
and expenses for an intermetal dielectic CVD system based on PMT's MORI(TM)
source technology. An aggregate of approximately $5,350,000 was invested by
Limited Partners in the CVD Partnership to fund such research and development
efforts, which are being performed by PMT under an agreement with the CVD
Partnership.
PMT is paid for such services in an amount equal to its actual direct costs,
as defined, plus a stated percentage of such costs. During the six months
ended June 30, 1996, the amount of such research and development payments to
PMT by the CVD Partnership was approximately $849,000. PMT will be obligated
to pay percentage royalties, based upon the net sales price and depending upon
the year and location of sale, to the CVD Partnership on sales of developed
CVD products. There is no provision for royalty payments to the CVD
Partnership in fiscal 1996. The CVD Partnership owns the rights to the
developed technology, and has granted to PMT an exclusive, worldwide and
royalty-bearing license under such technology which terminates on March 29,
2001 (concurrent with the expiration of PMT's option described below (the
"Option") to acquire all of the Limited Partners' interests in the CVD
Partnership).
The Limited Partners
The Limited Partners of the CVD Partnership include SBIC Partners, L.P.
("SBIC Partners") and NorWest Equity Partners, V ("NorWest"). Each of SBIC
Partners and NorWest invested $2,500,000 in the CVD Partnership. As of October
1, 1996 SBIC Partners held 638,604 shares of Common Stock, or 7.3% of the
shares of Common Stock presently outstanding, and NorWest and its affiliates
held 603,898 shares of Common Stock, or 6.9% of the shares of Common Stock
presently outstanding.
The Option
In connection with the formation of the CVD Partnership, PMT entered into
option agreements (the "Option Agreements") with the Limited Partners, setting
forth the terms and conditions of the Option. Pursuant to the Option
Agreements, PMT has a presently exercisable option, expiring March 29, 2001,
to acquire all of the Limited Partners' interest in the CVD Partnership and
thereby effectively acquire full ownership of the developed technology and
terminate further royalty obligations. The option price formula (the "Option
Price") is determined by multiplying each Limited Partner's invested capital
in the CVD Partnership by a 40% compounded annual rate of return, provided
that, regardless of the date of exercise, the minimum Option Price shall equal
at least two times each Limited Partner's invested capital. The Option Price
may be paid in cash, shares of PMT's Common Stock (based on 90% of the fair
market value of such shares) or any combination thereof, in the sole
discretion of PMT. PMT may exercise the Option at its sole discretion.
Warrants
In connection with the formation of the CVD Partnership, the Limited
Partners received warrants (the "Warrants") to purchase an aggregate of
277,662 shares of PMT's Common Stock at a purchase price of $12.75 per share.
The Warrants become exercisable for a one-year period following exercise of
the Option, but only if the Option is actually exercised by PMT. In connection
with their investment in the CVD Partnership, each of SBIC Partners and
NorWest received a Warrant to purchase 130,726 shares of Common Stock.
ENGAGEMENT OF PROXY SOLICITOR
The Company has retained MacKenzie Partners, Inc. for proxy solicitation
services in connection with the meeting. MacKenzie Partners, Inc. will receive
a fee estimated at $6,000 in connection with the performance of its services,
in addition to the reimbursement of its expenses.
7
