<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE 14A INFORMATION
(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
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))
[X]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
TRIKON TECHNOLOGIES, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Not Applicable
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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:
----------------------------------------------------------------------
2)Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
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:
----------------------------------------------------------------------
[_]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:
----------------------------------------------------------------------
2)Form, Schedule or Registration Statement No.:
----------------------------------------------------------------------
3)Filling Party:
----------------------------------------------------------------------
4)Date Filed:
----------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TRIKON TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 23, 1998
The 1997 Annual Meeting of Shareholders (the "Annual Meeting") of Trikon
Technologies, Inc. (the "Company") will be held at the Michelangelo Hotel
located at 152 West 51st Street, New York, New York 10019, on Friday, January
23, 1998 at 9:00 a.m. for the following purposes:
1. To elect five directors to the Board of Directors to serve until the
next Annual Meeting and until their successors have been elected and
qualified;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent public accountants for the fiscal year ending December 31,
1997; and
3. To act upon such other matters as may properly come before the meeting
or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The record date for determining those
shareholders who will be entitled to notice of, and to vote at, the meeting
and at any adjournment thereof is December 19, 1997. The stock transfer books
will not be closed between the record date and the date of the meeting. A list
of shareholders entitled to vote at the Annual Meeting will be available for
inspection at the offices of the Company.
Whether or not you plan to attend the meeting, please complete, date, sign,
and return the enclosed proxy promptly in the accompanying reply envelope.
Your proxy may be revoked at any time prior to the Annual Meeting. If you
decide to attend the Annual Meeting and wish to change your proxy vote, you
may do so automatically by voting in person at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Jeremy Linnert
Secretary
Newport, Gwent, United Kingdom
December 30, 1997
<PAGE>
TRIKON TECHNOLOGIES, INC.
DECEMBER 30, 1997
TO THE SHAREHOLDERS OF TRIKON TECHNOLOGIES, INC.:
You are invited to attend the 1997 Annual Meeting of Shareholders (the
"Annual Meeting") of Trikon Technologies, Inc. (the "Company") which will be
held at the Michelangelo Hotel located at 152 West 51st Street, New York, New
York 10019, on Friday, January 23, 1998 at 9:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.
Whether you do or do not plan to attend the Annual Meeting, it is important
that your shares are represented at the Annual Meeting. Please sign, date, and
return the enclosed proxy promptly in the accompanying reply envelope. If you
attend the Annual Meeting and wish to change your proxy vote, you may do so
automatically by voting in person at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Christopher D. Dobson
Chief Executive Officer and
Chairman of the Board
Newport, Gwent, United Kingdom
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE AND RETURN
IT IN THE ENCLOSED REPLY ENVELOPE (TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES).
<PAGE>
TRIKON TECHNOLOGIES, INC.
PROXY STATEMENT
FOR
1997 ANNUAL MEETING OF SHAREHOLDERS
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Trikon Technologies, Inc., a California
corporation (the "Company"), for the 1997 Annual Meeting of the Shareholders
(the "Annual Meeting") to be held at 9:00 a.m. on Friday, January 23, 1998, at
the Michelangelo Hotel located at 152 West 51st Street, New York, New York
10019 and at any adjournment or postponement of the Annual Meeting. These
proxy materials were first mailed to shareholders on or about December 31,
1997.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Shareholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION
VOTING
The Company's Common Stock and Series G Preferred Stock are the only types
of securities entitled to vote at the Annual Meeting. On December 19, 1997,
the record date for determination of shareholders entitled to vote at the
Annual Meeting, there were 15,139,271 shares of Common Stock and 2,962,032
shares of Series G Preferred Stock outstanding. Each shareholder of record on
December 19, 1997 is entitled to one vote for each share of Common Stock and
one vote for each share of Series G Preferred Stock held by such shareholder
on December 19, 1997. Abstentions and broker non-votes are counted as present
for the purpose of determining the presence of a quorum for the transaction of
business. In the election of directors, the five candidates receiving the
highest number of affirmative votes shall become directors at the conclusion
of the tabulation of the votes. Proposal 2 requires for approval (i) the
affirmative vote of a majority of those shares present and voting, and (ii)
the affirmative vote of a majority of the required quorum. Thus, abstentions
and broker non-votes can have the effect of preventing approval of a proposal
where the number of affirmative votes, though a majority of the votes cast,
does not constitute a majority of the required quorum.
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your
proxy when properly completed. In the event no directions are specified, such
proxies will be voted FOR Proposal No. 1--Election of Directors and FOR
Proposal No. 2--Ratification of Independent Public Accountants and, in the
discretion of the proxy holders, as to other matters that may properly come
before the Annual Meeting. You may revoke or change your proxy at any time
before the Annual Meeting. To do this, send a written notice of revocation or
another signed proxy with a later date to the Secretary of the Company at the
Company's principal executive offices before the beginning of the Annual
Meeting. You may also revoke your proxy by attending the Annual Meeting and
voting in person.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional soliciting material furnished to shareholders.
Copies of solicitation material will be furnished to brokerage houses,
fiduciaries, and custodians holding shares in their names that are
beneficially owned by others so that they may forward this solicitation
material to
<PAGE>
such beneficial owners. In addition, the Company may reimburse such persons
for their costs of forwarding the solicitation material to such beneficial
owners. The original solicitation of proxies by mail may be supplemented by
solicitation by telephone, telegram, or other means by directors, officers,
employees, or agents of the Company. In addition, the Company has retained
Morrow & Co., Inc. at an estimated cost of $4,000 plus reimbursement of
expenses, to assist in the solicitation of proxies from brokers, nominees,
institutions and individuals.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL
The currently authorized number of members of the Company's Board of
Directors is five. However, currently there is a vacancy on the Board of
Directors resulting in a Board of Directors with four members. At the Annual
Meeting, the Company is nominating five candidates for election to the Board
of Directors. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for five nominees. In the event that any nominee of
the Company is unable or declines to accept nomination of election, the
proxies will be voted for any nominee who shall be recommended by the present
Board of Directors. Management has no present knowledge that any of the
persons named will be unavailable or unwilling to serve. The terms of office
for each person elected as a director will continue until the next Annual
Meeting of Shareholders or until such director's successor has been elected
and qualified.
The five nominees who receive the greatest number of votes cast for the
election of those directorships shall become directors at the conclusion of
the tabulation of votes. Upon the request of any person entitled to vote, each
holder of Common Stock voting in the election of directors may cumulate such
holder's votes and give one candidate a number of votes equal to the number of
directors to be elected multiplied by the number of shares of Common Stock
held by such holder, or distribute such holder's votes on the same principle
among as many candidates as the holder may select, provided that votes cannot
be cast for more than five candidates. However, no shareholder shall be
entitled to cumulate votes for any candidate unless, pursuant to the Bylaws of
the Company, the candidate's name has been placed in nomination prior to the
voting.
No arrangement or understanding exist between any of such five nominees and
any other person or persons pursuant to which any nominee was or is to be
selected as a director or nominee. None of the nominees has any family
relationship to any other nominee or to any executive officer of the Company.
INFORMATION CONCERNING NOMINEES AND INCUMBENT DIRECTORS
<TABLE>
<CAPTION>
NOMINEES AGE POSITIONS AND OFFICES HELD WITH THE COMPANY
- -------- --- -------------------------------------------
<S> <C> <C>
Richard M. Conn......... 53 Director Nominee
Christopher D. Dobson... 61 Director, Chairman of the Board and Chief Executive
Officer
Brian D. Jacobs(1)(2)... 35 Director
Kenneth Levy(1)(2)(3)... 55 Director
Jeremy Linnert.......... 53 Director Nominee, Secretary and Acting Chief Financial Officer
Nigel Wheeler........... 48 Director, President and Chief Operating Officer
</TABLE>
- --------
(1) Member of Audit Committee
(2) Member of Compensation Committee
(3) Not standing for reelection
Mr. Conn formed Business Development Consulting in early 1997 and serves as
a consultant in the semiconductor equipment industry. Prior to forming
Business Development Consulting, Mr. Conn was a Vice President of Sales at KLA
Instruments Corp. from 1984 until 1996. During his tenure at KLA Instruments
Corp.,
2
<PAGE>
Mr. Conn was a member of the boards of directors of KLA Instruments Corp.'s
subsidiaries in the United Kingdom, France and Germany. Mr. Conn has held
several other positions in the semiconductor industry at companies that
include Eaton Semiconductor Equipment, Applied Materials UK and ITT
Semiconductors.
Mr. Dobson joined the Company's board of directors as Chairman in November
1996 upon the Company's acquisition of Electrotech Limited and Electrotech
Equipment Limited (together "Electrotech"). Upon the resignation of Dr. Gregor
Campbell in December 1997, Mr. Dobson was appointed Chief Executive Officer of
the Company. Mr. Dobson was a co-founder of Electrotech and was the Chairman
of Electrotech's board of directors from 1971 to November 1996.
Mr. Jacobs has served as a director of the Company since March 1993. Mr.
Jacobs is currently an executive vice president of St. Paul Venture Capital,
which he joined in June 1992. From June 1989 to June 1992, Mr. Jacobs was a
senior associate with the Security Pacific Venture Capital Group. Mr. Jacobs
also serves as a director of several private corporations.
Mr. Levy has served as a director of Trikon since May 1997. Mr. Levy is
currently Chairman of the Board and Chief Executive Officer of KLA-Tencor
Corporation, a designer and manufacturer of yield management and process
monitoring systems for the semiconductor industry. In addition, Mr. Levy
currently serves on the boards of directors of Ultratech Stepper, Inc.,
Network Peripherals, Inc. and Integrated Process Equipment Corporation. Mr.
Levy is not standing for reeelction to the Board of Directors of the Company.
Mr. Linnert joined the Company in November 1996 upon the Company's
acquisition of Electrotech. In December 1997, Mr. Linnert was appointed
Secretary. He was appointed acting Chief Financial Officer of the Company in
December 1997. Mr. Linnert joined Electrotech in November 1988 as Management
Accountant and became Financial Controller and Company Secretary in December
1992. From November 1988 to December 1992, Mr. Linnert served as assistant to
the Financial Director of Electrotech.
Mr. Wheeler joined the Company as a director and the President and Chief
Operating Officer in November 1996 upon the Company's acquisition of
Electrotech. From July 1993 to November 1996, Mr. Wheeler served as
Electrotech's Chief Executive Officer. From July 1986 to July 1993, Mr.
Wheeler was the General Operations Director of Electrotech and had served in
other capacities with Electrotech since 1980.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1996, the Board of Directors held
six meetings. During this period, each of the directors attended or
participated in more than 75% of the aggregate of (i) the total number of
meetings of the Board of Directors and (ii) the total number of meetings held
by all Committees of the Board on which each such director served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee, which was established in 1990, reviews the results and
scope of the audit and other services provided by the Company's independent
auditors, reviews and evaluates the Company's internal control functions, and
monitors transactions between the Company and its employees, officers and
directors. The Compensation Committee administers the Company's stock option
plan and designates compensation levels for officers and directors of the
Company.
DIRECTOR COMPENSATION
The Company's directors do not currently receive any cash compensation for
service on the Board of Directors or any committee thereof, but outside
directors may be reimbursed for certain expenses in connection
3
<PAGE>
with attendance at Board and committee meetings and may receive grants of
options to purchase Common Stock upon their initial joining of the Board and
any reelection as a director thereafter.
In December 1997, the Company agreed to pay Jeremy Linnert (Pounds)20,000,
subject to his serving as a director until June 30, 1998, in consideration for
his agreement to stand for election as a director.
In April 1996, the Board, in connection with their election to the Board of
Directors, approved the grant to each of Charles Thompson and Dr. Hiroyuki
Mizuno, each a former director of the Company, of an option to purchase 12,500
shares of Common Stock at an exercise price of $14.75 per share, which price
represented the fair market value of a share of Common Stock on the date of
grant, which option vests in equal, annual increments of 25% over the four-
year period following their date of grant, subject to such individual's
continued service as a director of the Company.
In addition, in October 1996 the Compensation Committee, following their
reelection as directors, approved the grant to each of the then outside
directors, Messrs. Jones, Jacobs and Thompson and Dr. Mizuno, of an option to
purchase 2,500 shares of Common Stock at an exercise price of $14.00 per
share, which price represented the fair market value of a share of Common
Stock on the date of grant, which option vests in equal, annual increments of
25% over the four-year period following their date of grant, subject to such
individual's continued service as a director of the Company.
In June 1995, Mr. John Rollwagen, a former director of the Company, agreed
to increase his duties as the Chairman of the Board of the Company to a half-
time basis. In consideration therefor, the Company agreed to pay Mr. Rollwagen
an annual salary of $144,000, as well as certain expenses. In November 1996,
upon the Company's acquisition of Electrotech, Mr. Rollwagen resigned as
Chairman of the Board, but not as a director. In consideration of the Board of
Directors' desire that Mr. Rollwagen remain a member of the Board following
his resignation, the Board approved the extension of Mr. Rollwagen's annual
salary through December 31, 1997, subject to his continued participation as a
director and senior advisor to the Company. The Board also approved at such
time the immediate vesting of all of Mr. Rollwagen's outstanding, unvested
options to purchase an aggregate of (i) 9,335 shares of Common Stock at an
exercise price of $1.05 per share and (ii) 53,333 shares of Common Stock at an
exercise price of $6.30 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") consisted of Messrs. Rollwagen, Jones and Robelen
from January 1, 1996 until April 24, 1996, at which time Mr. Robelen resigned
as a director of the Company and a member of the Compensation Committee and
Mr. Rollwagen resigned from the Compensation Committee. Simultaneously with
such resignations from the Compensation Committee, the Board of Directors
voted to reduce the number of members of the Compensation Committee from three
to two. On April 24, 1996, Charles Thompson was appointed by the Board to fill
the remaining vacancy on the Compensation Committee. From April 24, 1996
through the fiscal year ended December 31, 1996, the Compensation Committee
consisted of Messrs. Jones and Thompson. During the fiscal year ended December
31, 1997, Messrs. Jones and Thompson each resigned as a director of the
Company, and Mr. Jacobs and Mr. Kenneth Levy, a director of the Company who is
not standing for reelection, were appointed by the Board to fill the vacancies
on the Compensation Committee.
Other than Mr. Rollwagen, the Company's Chairman of the Board until November
1996, none of these individuals was at any time during the fiscal year ended
December 31, 1996 or at any other time an officer or employee of the Company.
No executive officer of the Company serves as a member of the Board or the
Compensation Committee of any other entity which has one or more executive
officers serving as a member of the Company's Board of Directors or
Compensation Committee.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote FOR the nominees listed herein.
4
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Ernst and Young LLP served as the Company's independent public accountants
for fiscal year 1996. At the Annual Meeting, the shareholders are being asked
to ratify the selection of Ernst & Young LLP as the Company's independent
public accountants for the fiscal year ending December 31, 1997.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm for such fiscal year if the Board of
Directors feels that such a change would be in the Company's and its
shareholders' best interests.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
ratification of the selection of Ernst & Young LLP to serve as the Company's
independent public accountants for the fiscal year ending December 31, 1997.
OWNERSHIP OF SECURITIES
To the extent known by the Company, the following table sets forth certain
information regarding beneficial ownership of Common Stock and Preferred Stock
as of December 1, 1997 by (i) each person (or group or affiliated persons) who
is known by the Company to own beneficially more than 5% of the Company's
outstanding Common Stock or Series G Preferred Stock, (ii) each of the
Company's directors and nominees for director, (iii) each of the Company's
named executive officers as defined in Item 402(a)(3) of Regulation S-K under
the Securities Act of 1933 (the "Securities Act") and the Securities Exchange
Act of 1934 (the "Exchange Act") for the fiscal year ended December 31, 1996
for the fiscal year ended December 31, 1996 and (iv) the Company's directors
and executive officers as a group. Except as indicated in the footnotes to
this table, the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock and Preferred Stock shown as
beneficially owned by them, subject to community property laws, where
applicable.
<TABLE>
<CAPTION>
SHARES OF
SHARES OF SERIES G PERCENT OF
COMMON STOCK PERCENT OF PREFERRED STOCK SERIES G
NAME AND ADDRESS BENEFICIALLY COMMON BENEFICIALLY PREFERRED
OF BENEFICIAL OWNER OWNED STOCK(1) OWNED STOCK(2)
------------------- ------------ ---------- --------------- ----------
<S> <C> <C> <C> <C>
Christopher D. Dobson...................... 4,853,334 32.1% -- --%
Ringland Way, Newport
Gwent, NP6 2TA, U.K.
Dawson-Samberg Capital Management, Inc..... 1,481,481(3)(4) 8.9 1,481,481(3) 50.0
354 Pequot Avenue
Southport, CT 06490
The Capital Group Companies, Inc........... 1,368,510(5) 9.1 -- --
333 South Hope Street, 52nd Floor
Los Angeles, CA 90071
SBIC Partners L.P.......................... 1,254,900(6) 8.1 296,296 10.0
201 Main Street, Suite 2302
Fort Worth, TX 76102
Travelers Group Inc........................ 1,093,280(7) 6.8 -- --
838 Greenwich Street
New York, NY 10013
St. Paul Fire & Marine Insurance Company... 1,040,235(8) 6.8 185,185 6.3
8500 Normandale Lake Boulevard, Ste. 1940
Bloomington, MN 55437
The DDJ Entities........................... 1,017,589(9) 6.3 -- --
141 Linden Street, Suite 4
Wellesley, MA 02181
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
SHARES OF SERIES G PERCENT OF
COMMON STOCK PERCENT OF PREFERRED STOCK SERIES G
NAME AND ADDRESS BENEFICIALLY COMMON BENEFICIALLY PREFERRED
OF BENEFICIAL OWNER OWNED STOCK(1) OWNED STOCK(2)
------------------- ------------ ---------- --------------- ----------
<S> <C> <C> <C> <C>
Thomas Unterberg and Affiliated Entities
c/o C.E. Unterberg, Towbin
10 East 50th Street
New York, NY 10022.......................... 350,923(10)(11) * 350,923(10) 11.8
P.A.W. Capital Partners, L.P.
10 Glenville Street
Greenwich, CT 06831......................... 340,740(12)(13) * 340,740(12) 11.5
Dr. Gregor A. Campbell....................... 87,500(14) * -- --
Nigel Wheeler................................ -- -- -- --
John A. Rollwagen............................ 159,618(15) 1.1 -- --
James F. Marshall(16)........................ -- -- -- --
John W. LaValle.............................. 16,667(17) * -- --
Harvey J. Frye............................... 19,500(18) * -- --
Brian D. Jacobs.............................. 1,040,235(8) 6.8 185,185 6.3
Kenneth Levy................................. -- -- -- --
Jeremy Linnert............................... -- -- -- --
All current directors and executive officers
as a group (11 persons)..................... 5,970,667(19) 38.7 185,185 6.3
</TABLE>
- --------
* Less than 1%.
(1) Percent ownership is based on the number of shares of Common Stock
outstanding as of December 1, 1997, which number was 15,109,317 shares,
plus any shares issuable pursuant to options, warrants, 7 1/8%
Convertible Subordinated Note due 2001 (the "Convertible Notes") or
shares of Series G Preferred Stock held by the person in question which
may be exercised or converted within 60 days after December 1, 1997.
Assumes the conversion of each share of Series G Preferred Stock into one
share of Common Stock.
(2) Percent ownership is based on the number of shares of Series G Preferred
Stock outstanding as of December 1, 1997, which number was 2,962,032.
(3) Dawson-Samberg Capital Management, Inc., an investment adviser registered
under the Investment Advisers Act of 1940, acts as an investment adviser
to certain investment funds and managed accounts, including Pequot
Partners Equity Fund, L.P., Pequot Offshore Private Equity Fund, Inc.,
Pequot Partners Fund, L.P. and Pequot International Fund, Inc., which
hold 690,650, 87,445, 351,693, and 351,693 shares of Series G Preferred
Stock, respectively.
(4) Includes 1,481,481 shares of Common Stock issuable upon conversion of
shares of Series G Preferred Stock. Excludes 444,445 shares of Common
Stock issuable under warrants which require 61 days notice prior to
exercise.
(5) The number of shares beneficially owned by The Capital Group Companies,
Inc. ("CGC") is based on the information contained in a Schedule 13G
filed by CGC and The Capital Guardian Trust Company ("CGTC") on February
11, 1997. CGTC, a bank as defined in Section 3(a)6 of the Exchange Act
and a wholly owned subsidiary of CGC, was the beneficial owner of 911,680
shares of Common Stock reported as beneficially owned by CGC. The
remaining shares of Common Stock reported as being beneficially owned by
CGC were beneficially owned by other subsidiaries of CGC, none of which
by itself owned 5% or more of the outstanding Common Stock.
(6) The number of shares beneficially owned by SBIC is based on the
information contained in a Schedule 13D filed by SBIC Partners, L.P.
("SBIC Partners"), Forrest Binkley & Brown L.P. ("FBB"), Forrest Binkley
& Brown Venture Co. ("Venture Co."), Gregory J. Forrest, Nicholas B.
Binkley and Jeffrey J. Brown on August 21, 1997. Messrs. Forrest, Binkley
and Brown are each executive officers, directors and shareholders of
Venture Co., which is the sole general partner of FBB, the managing
general partner of SBIC Partners. SBIC Partners, FBB and Venture Co. have
sole voting power with respect to the shares of
6
<PAGE>
the capital stock of the Company beneficially owned by SBIC Partners.
Messrs. Forrest, Binkley and Brown have shared voting power with respect
to such shares. Includes 958,604 shares of Common Stock and 296,296 shares
of Common Stock issuable upon the conversion of shares of Series G
Preferred Stock. Excludes 88,889 shares of Common Stock issuable under
warrants which require 61 days notice prior to exercise.
(7) The number of shares beneficially owned by Travelers Group Inc. ("TRV")
is based on information in a Schedule 13D filed by TRV on December 18,
1997. All shares of the Common Stock reported as beneficially owned by
TRV were directly beneficially owned by subsidiaries of TRV. Includes
1,078,990 shares of Common Stock issuable upon conversion of an aggregate
principal amount of $16,870,000 of the Company's Convertible Notes.
(8) Represents 782,138 shares of Common Stock held by St. Paul Fire & Marine
Insurance Company ("St. Paul"), and includes 68,954 shares of Common
Stock issuable under warrants held by St. Paul that are exercisable
within 60 days of December 1, 1997 and 185,185 shares of Common Stock
issuable upon conversion of shares of Series G Preferred Stock. Excludes
55,556 shares of Common Stock issuable under warrants held by St. Paul
which require 61 days notice prior to exercise. Also includes 3,958
shares of Common Stock issuable under stock options, held by Brian D.
Jacobs, exercisable within 60 days of December 1, 1997. Pursuant to an
agreement between Mr. Jacobs and St. Paul, ownership of the shares
underlying such options will be transferred to St. Paul upon their
exercise by Mr. Jacobs. Mr. Jacobs, a director of the Company, is an
executive vice president of St. Paul Venture Capital, Inc., an affiliate
of St. Paul. Mr. Jacobs disclaims beneficial ownership of the shares held
by St. Paul, except to the extent of his pecuniary interest therein.
(9) The number of shares beneficially owned by the DDJ Entities is based on
the information contained in a Schedule 13D filed by DDJ Capital
Management, LLC ("DDJ") on behalf of DDJ Capital III, LLC ("DDJ III"), B
III Capital Partners, L.P. (the "DDJ Fund") and itself on November 26,
1997. DDJ III is the general partner of, and DDJ is the investment
manager for, the DDJ Fund. All shares of Common Stock reported as
beneficially owned by the DDJ Entities were directly beneficially owned
by the DDJ Fund. Includes 1,017,589 shares of Common Stock issuable upon
conversion of an aggregate principal amount of $15,910,000 of the
Convertible Notes.
(10) Thomas Unterberg disclaims beneficial ownership of 29,628 shares of
Series of Series G Preferred Stock, which he holds for the benefit of two
adult daughters.
(11) Includes 350,923 shares of Common Stock issuable upon conversion of
shares of Series G Preferred Stock. Excludes 105,277 shares of Common
Stock issuable under warrants which require 61 days notice prior to
exercise.
(12) P.A.W. Capital Partners, L.P. is the General Partner of P.A.W. Partners,
L.P. and acts as an investment adviser to P.A.W. Partners, L.P. and
P.A.W. Partners Offshore Fund, L.P., which hold 192,592 and 148,148
shares of Series G Preferred Stock, respectively.
(13) Includes 340,740 shares of Common Stock issuable upon conversion of
shares of Series G Preferred Stock. Excludes 102,221 shares of Common
Stock issuable under warrants which require 61 days notice prior to
exercise.
(14) Represents shares of Common Stock issuable under stock options
exercisable within 60 days of December 1, 1997. Dr. Campbell resigned
from the Company effective December 1, 1997.
(15) Includes 81,666 shares of Common Stock issuable under stock options
exercisable within 60 days of December 1, 1997. Mr. Rollwagen resigned
from the Company effective November 15, 1997.
(16) Mr. Marshall resigned from the Company effective December 31, 1996.
(17) Mr. LaValle resigned from the Company effective June 30, 1997.
(18) Represents shares of Common Stock issuable under stock options
exercisable within 60 days of December 1, 1997.
(19) Includes an aggregate of 5,970,667 shares of Common Stock that are
subject to options and warrants, and 185,185 shares of Common Stock
issuable upon conversion of shares of Series G Preferred Stock that are
exercisable or convertible within 60 days of December 1, 1997.
7
<PAGE>
COMPLIANCE WITH SEC REPORTING REQUIREMENTS
Section 16(a) of the Exchange Act ("Section 16(a)"), requires the Company's
directors and certain of its officers, and persons who own more than 10% of a
registered class of the Company's equity securities (collectively,
"Insiders"), to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission"). Insiders are required
by Commission regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5s were
required for those persons, the Company believes that its Insiders complied
with all applicable Section 16(a) filing requirements for 1996, on a timely
basis, with the exception of the following late filings by (i) Brian D.
Jacobs, a director of the Company, who filed a Form 5 in February 1997 to
report his indirect acquisition in November 1996 of a warrant to purchase
24,510 shares of Common Stock that was acquired by St. Paul Fire and Marine
Insurance Company ("St. Paul"), (ii) St. Paul, which filed a Form 5 in
February 1997 to report its acquisition in November 1996 of a warrant to
purchase 24,510 shares of Common Stock, (iii) David W. Chonette, John L.
Walecka and Roger C. Davisson, each of whom is a general partner of Brentwood
V Ventures, L.P., the sole general partner of Brentwood Associates V, L.P.
("Brentwood"), and each of whom filed a Form 5 in February 1997 to report each
of their indirect disposition of 300,000 shares of Common Stock as a result of
Brentwood's distribution (the "Brentwood Distribution") to its partners of
such shares in July 1996, (iv) Brentwood V Ventures, L.P., which filed a Form
5 in February 1997 to report its indirect disposition of 300,000 shares of
Common Stock pursuant to the Brentwood Distribution, (v) G. Bradford Jones, a
former director of the Company, who filed a Form 5 in February 1997 to report
his indirect acquisition in November 1996 of a warrant to purchase 49,020
shares of Common Stock that was acquired by Brentwood, and (vi) Charles
Thompson and Dr. Hiroyuki Mizuno, each of whom is a former director of the
Company and each of whom filed an amended Form 3 in February 1997 to reflect
each of their acquisition in April 1996 of an option to purchase 12,500 shares
of Common Stock, which was subject to shareholder approval of an amendment to
the Option Plan at the Annual Meeting, which approval was obtained.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee recommends to the Board of Directors general
compensation policies for the Company, oversees the Company's compensation
plans and specific compensation levels for executive officers, and administers
the Bonus Plan and the Option Plan.
The following is the Compensation Committee's report submitted to the Board
of Directors addressing the compensation of the Company's executive officers
for 1996.
COMPENSATION POLICY
The Company's executive compensation policy is designed to establish an
appropriate relationship between executive pay and the Company's annual
performance, long term growth objectives and ability to attract and retain
qualified executive officers. The Compensation Committee addresses this
objective by integrating competitive annual base salaries with (a) bonuses
based on annual corporate performance and the achievement of individual
performance objectives, through the Bonus Plan, and (b) stock option grants
under the Option Plan. The Compensation Committee believes that cash
compensation in the form of salary and bonus provides Company executives with
appropriate immediate rewards for success in current operations, while stock
option grants promote management stock ownership and thereby expand
management's stake in the long-term performance and success of the Company.
8
<PAGE>
For 1996, the Compensation Committee approved the base salaries of each of
the Company's executive officers. In determining such base salaries, the
Company examined salaries paid to executive officers of semiconductor
equipment companies and other high technology companies with sales comparable
to those of the Company. For 1996, the Compensation Committee set the base
salaries of the Company's executive officers generally at the median level of
the salaries paid to executives in comparable positions at semiconductor
equipment companies and other high technology companies of similar size as the
Company.
In 1996, the executive officers of the Company, including the President and
Chief Executive Officer, as well as six other key employees of the Company,
were each granted options under the Option Plan. The number of options that
each executive officer or employee was granted was based primarily on the
executive's or employee's ability to influence the Company's long-term growth
and profitability. The vesting provisions of the options granted under the
1991 Option Plan are designed to encourage longevity of employment with the
Company.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Compensation Committee believed that Dr. Campbell, the Company's
President and Chief Executive Officer, provided valuable services to the
Company, and that his compensation should therefore be competitive with that
paid to executives at comparable semiconductor equipment companies. In
addition, the Compensation Committee believed that the compensation of the
President and Chief Executive Officer should be heavily influenced by Company
performance. Therefore, although there has necessarily been some subjectivity
in setting Dr. Campbell's salary, major elements of his compensation package
are directly tied to Company performance.
For 1996, Dr. Campbell's salary was $210,000, an amount the Compensation
Committee deemed appropriate in light of the Company's stage of growth and
salaries paid to chief executive officers of other growth technology
companies.
INTERNAL REVENUE CODE SECTION 162(M)
Under Section 162 of the Internal Revenue Code, the amount of compensation
paid to certain executives that is deductible with respect to the Company's
corporate taxes is limited to $1,000,000 annually. It is the current policy of
the Compensation Committee to maximize, to the extent reasonably possible, the
Company's ability to obtain a corporate tax deduction for compensation paid to
executive officers of the Company to the extent consistent with the best
interests of the Company and its shareholders.
The foregoing report has been furnished by Messrs. Jones and Thompson.
9
<PAGE>
COMPANY PERFORMANCE
The following graph shows a comparison of total shareholder returns for the
Company, the Nasdaq Composite Index, the Hambrecht & Quist Semiconductor Index
and the Philadelphia Semiconductor Index for the period during which the
Company's Common Stock has been registered under Section 12 of the Securities
Exchange Act of 1934.
COMPARISON OF 3-YEAR CUMULATIVE TOTAL RETURN
AMONG TRIKON TECHNOLOGIES INC., HAMBRECHT & QUIST SEMICONDUCTOR
PHILADELPHIA SEMICONDUCTOR AND NASDAQ STOCK MARKET
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Trikon Hambrecht & NASDAQ
Measurement Period Technologies Quist Semi- Philadelphia Stock
(Fiscal Year Covered) Inc. conductor Semiconductor Market
- --------------------- ------------ ----------- ------------- ------
<S> <C> <C> <C> <C>
Measurement Pt-08/25/95 $100.00 $100.00 $100.00 $100.00
FYE 12/95 $ 50.00 $ 72.00 $ 72.00 $104.00
FYE 12/96 $ 52.00 $ 93.00 $ 87.00 $128.00
</TABLE>
LOGO
The chart above assumes $100.00 was invested on August 25, 1995 in the
Company's Common Stock, the Nasdaq Composite Index, the Hambrecht & Quist
Semiconductor Index and the Philadelphia Semiconductor Index. Total returns
for the Nasdaq Composite Index, the Hambrecht & Quist Semiconductor Index and
the Philadelphia Semiconductor Index are weighted based on market
capitalization.
- --------
* Total return assumes reinvestment of dividends, except in the case of the
Philadelphia Semiconductor Index. The Company has learned that certain
securities included in the Philadelphia Semiconductor Index issue
dividends. The issuance of dividends for these securities is not accurately
reflected in the Philadelphia Semiconductor Index. The Company believes
that the Hambrecht & Quist Index provides a more accurate comparison to the
Company's performance.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act or the Exchange Act that might
incorporate future filings made by the Company under those statutes, the
preceding Report of the Compensation Committee of the Board of Directors on
Executive Compensation and the Company stock performance graph will not be
incorporated by reference into any of those prior filings, nor will such
report or graph be incorporated by reference into any future filings made by
the Company under those statutes.
10
<PAGE>
SUMMARY COMPENSATION TABLE
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION.
The following table sets forth all compensation received for services
rendered to the Company in all capacities for the years ended December 31, 1996
and 1995 and the ten months ended December 31, 1994, by (i) the Company's Chief
Executive Officer and (ii) each of the other four most highly compensated
executive officers of the Company who were serving as executive officers at
December 31, 1996 and whose total compensation exceeded $100,000 (collectively,
the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
--------------------------- --------------------------------------
NAME AND PRINCIPAL POSITION FISCAL SALARY SECURITIES UNDERLYING ALL OTHER
(1) YEAR (2) ($) BONUS ($) STOCK OPTIONS (#) COMPENSATION ($)
- --------------------------- ------- -------- --------- --------------------- ----------------
<S> <C> <C> <C> <C> <C>
Dr. Gregor A. Campbell (4).... 1996 $210,000 $ -- 43,000 $2,895(3)
Chief Executive Officer 1995 160,000 36,708 96,666 779(3)
1994 135,383 25,000 185(3)
John A. Rollwagen (5)......... 1996 144,000 -- -- --
Director 1995 100,000 -- 73,333 --
1994 44,000 -- -- --
James F. Marshall (6)......... 1996 170,000 -- 12,000 4,691(3)
Executive Vice President and 1995 140,001 339 30,000 174(3)
Chief Operating Officer 1994 118,462 25,000 -- 119(3)
John W. LaValle (7)........... 1996 130,000 -- 32,000 320(3)
Senior Vice President, Chief 1995 120,000 173 20,000 66(3)
Financial Officer & Secretary 1994 11,538 -- 36,667 --
Harvey J. Frye................ 1996 150,001 -- 7,000 6,278(8)
Vice President 1995 140,000 256 30,000 35,802(9)
Sales & Marketing 1994 82,385 10,000 45,000 10,760(10)
</TABLE>
- --------
(1) Each of Christopher D. Dobson, the Chairman of the Board and Chief
Executive Officer, and Nigel Wheeler, a director and the President, Chief
Operating Officer and Secretary of the Company, joined the Company in
November 1996 upon the Company's acquisition of Electrotech. During 1996,
Mr. Dobson received cash compensation of approximately $300,000 annually
and Mr. Wheeler, pursuant to an employment contract discussed below, paid
an annual base salary of $250,000 (net of any U.S. taxes or other
assessments so long as he is not a U.S. citizen) and received in
connection with the execution of such agreement an option to purchase
200,000 shares of Common Stock. See Footnote 1 to the following "Option
Grants in Last Fiscal Year" table. Because neither of their total
compensation exceeded $100,000 for the fiscal year ended December 31,
1996, they are not listed in the above table.
(2) During 1994, the Company changed its fiscal year end from the last day of
February to December 31. Consequently, compensation information presented
in this table for 1994 is for a ten-month period only.
(3) This amount represents premiums paid by the Company for life insurance of
which the officer's designee is the beneficiary.
(4) Dr. Campbell resigned from the Company effective December 1, 1997.
(5) In June 1995, Mr. Rollwagen agreed to increase his duties as Chairman of
the Board to a half-time basis, and in exchange therefor, the Company
agreed to pay him an annual salary of $144,000 as well as to pay for
certain expenses. Mr. Rollwagen resigned as Chairman of the Board, but not
as a director, in November 1996 upon the Company's acquisition of
Electrotech. In consideration of the Board of Directors' desire that Mr.
Rollwagen remain a member of the Board following his resignation, the
Board approved the extension of Mr. Rollwagen's annual salary through
December 31, 1997, subject to his continued participation as a
11
<PAGE>
director and senior advisor to the Company. The Board also approved at such
time the immediate vesting of all of Mr. Rollwagen's outstanding, unvested
options to purchase an aggregate of (i) 9,335 shares of Common Stock at an
exercise price of $1.05 per share and (ii) 53,333 shares of Common Stock at
an exercise price of $6.30 per share. Mr. Rollwagen resigned as a director
of the Company effective November 15, 1997.
(6) Mr. Marshall resigned from the Company effective December 31, 1996.
(7) Mr. LaValle resigned from the Company effective June 30, 1997.
(8) Of this amount, (i) $5,904 represents a car allowance and (ii) $374
represents premiums paid by the Company for life insurance of which the
officer is the beneficiary.
(9) Of this amount, (i) $30,000 represents reimbursement for relocation
expenses, (ii) $102 represents premiums paid by the Company for life
insurance of which the officer is the beneficiary and (iii) $5,700
represents a car allowance.
(10) Of this amount, (i) $7,170 represents reimbursement of relocation
expenses, (ii) $82 represents premiums paid by the Company for life
insurance of which the officer is the beneficiary and (iii) $3,508
represents a car allowance.
The Company currently has no employment contracts with any of the Named
Executive Officers. However, the Company does have an employment contract with
Nigel Wheeler, a director and the President, Chief Operating Officer and
Secretary of the Company, dated November 15, 1996, pursuant to which Mr.
Wheeler is to be nominated as a director and to act as the President and Chief
Operating Officer for the three-year term of the agreement. The agreement
renews annually unless terminated by either party. Under the agreement, Mr.
Wheeler is paid a base salary of $250,000 per year, net of any U.S. taxes or
other assessments so long as he is not a U.S. citizen. The base salary is
subject to certain annual, upward adjustments by the Company. In addition, Mr.
Wheeler is eligible to receive an annual performance bonus for each year of
service. Mr. Wheeler was also granted, in connection with entering into such
agreement, options to acquire 200,000 shares of Common Stock at an exercise
price of $11.625 per share, the fair market value of a share of Common Stock
on the date of grant. The employment agreement further provides certain
customary insurance, vacation benefits and termination provisions.
12
<PAGE>
STOCK OPTIONS
The following table sets forth each grant of stock options made during the
year ended December 31, 1996 to each of the Named Executive Officers. No stock
appreciation rights ("SARs") have ever been granted by the Company.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF PERCENT OF VALUE AT
SECURITIES TOTAL ASSUMED ANNUAL
UNDERLYING OPTIONS GRANTED EXERCISE RATES OF STOCK PRICE
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION APPRECIATION
NAME (1) GRANTED (#) PERIOD (%) (S/SH)(2) DATE FOR OPTION TERM(3)
-------- ----------- --------------- --------- ---------- ---------------------
5% 10%
<S> <C> <C> <C> <C> <C> <C>
Dr. Gregor A. Campbell(4)..... 18,000(5) 4.73% $8.87 01/17/06 $ 100,476 $ 254,646
25,000(6) 6.56 14.00 10/23/06 220,150 557,900
John A. Rollwagen(7).......... -- -- -- -- -- --
James F. Marshall(8).......... 12,000 3.15 8.87 04/30/97 66,984 169,764
John W. LaValle(9)............ 7,000(5) 1.84 8.87 01/17/06 39,074 99,029
25,000(6) 6.56 14.00 10/23/06 220,150 557,900
Harvey J. Frye................ 7,000(5) 1.84 8.87 01/17/06 39,074 99,029
</TABLE>
- --------
(1) Nigel Wheeler, a director and the President, Chief Operating Officer and
Secretary of the Company, was granted an option to purchase 200,000 shares
of Common Stock at an exercise price of $11.625 per share, representing
the fair market value of a share of Common Stock on the date of grant, in
connection with his entering the above-described employment agreement with
the Company upon the Company's acquisition of Electrotech in November
1996. Such option vests in equal, annual increments of 25% over the four-
year period following its date of grant. Because Mr. Wheeler is not a
Named Executive Officer, his option holdings are not listed in this table.
See Footnote 1 to the preceding "Summary Compensation Table."
(2) Represents the fair market value of the underlying shares of Common Stock
at the time of grant.
(3) Represents the value of the shares of Common Stock issuable upon the
exercise of the option, assuming the stated rates of price appreciation
for ten years, compounded annually, with the aggregate exercise price
deducted from the final appreciated value. Such annual rates of
appreciation are for illustrative purposes only, are based on requirements
of the Securities and Exchange Commission and do not reflect the Company's
estimate of future stock appreciation. No assurance can be given that such
rates of appreciation, or any appreciation, will be achieved.
(4) Dr. Campbell resigned from the Company effective December 1, 1997.
Pursuant to their terms, Dr. Campbell's unexercised options will expire 60
days after such resignation.
(5) Represents stock options that vest in equal, annual increments of 25% over
the four-year period following their date of grant, January 17, 1996.
(6) Represents stock options that vest in equal, annual increments of 25% over
the four-year period following their date of grant, October 23, 1996.
(7) In November 1996, in connection with Mr. Rollwagen's resignation as
Chairman, the Board of Directors approved the acceleration of the vesting
of all of Mr. Rollwagen's outstanding, unvested options to purchase an
aggregate of 62,668 shares of Common Stock. See Footnote 5 to the
preceding "Summary Compensation Table." Mr. Rollwagen resigned as a
director effective November 15, 1997.
(8) Mr. Marshall resigned from the Company effective December 31, 1996. All of
Mr. Marshall's unexercised options to purchase Common Stock terminated on
April 30, 1997.
(9) Mr. LaValle resigned from the Company effective June 30, 1997.
13
<PAGE>
STOCK OPTION EXERCISES AND YEAR-END HOLDINGS
AGGREGATED STOCK OPTION EXERCISES IN FISCAL YEAR 1996 AND FISCAL YEAR-END
OPTION VALUES
The following table sets forth the number and value of shares acquired by the
Named Executive Officers upon exercise of stock options during the Company's
fiscal year ended December 31, 1996 and of the exercisable and unexercisable
options held by each of the Named Executive Officers at December 31, 1996.
<TABLE>
<CAPTION>
SHARES NUMBER OF VALUE OF UNEXERCISED IN-
ACQUIRED ON VALUE UNEXERCISED OPTIONS AT THE-MONEY OPTIONS AT
VALUE REALIZED FISCAL YEAR-END (#) FISCAL YEAR-END (2)
NAME (1) EXERCISE (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------- ------------ -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Dr. Gregor A. Campbell (3)..... -- $ -- 70,111/69,556 245,855/332,730
John A. Rollwagen (4).......... -- -- 96,666/0 649,328/0
James F. Marshall (5).......... 10,000 147,000 43,332/43,333 413,449/402,867
John W. LaValle (6)............ 16,667 157,666 25,000/39,667 0/313,665
Harvey J. Frye................. -- -- 29,334/52,666 263,670/447,955
</TABLE>
- --------
(1) See Footnote 1 to the preceding "Option Grants in Last Fiscal Year" table
concerning the grant of an option to purchase 200,000 shares of Common
Stock to Mr. Wheeler, a director and the President, Chief Operating Officer
and Secretary of the Company.
(2) These values are calculated using the December 31, 1996 closing price of
Common Stock on Nasdaq of $11.75 per share, less the exercise price of the
options, multiplied by the number of shares to which the options relate.
(3) Dr. Campbell resigned from the Company effective December 1, 1997.
(4) See Footnote 5 to the preceding "Summary Compensation Table" for
information concerning the acceleration of the vesting of all of Mr.
Rollwagen's outstanding, unvested options. Mr. Rollwagen resigned as a
director effective November 15, 1997.
(5) Mr. Marshall resigned from the Company effective December 31, 1996.
(6) Mr. LaValle resigned from the Company effective June 30, 1997.
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
JOHN ROLLWAGEN
Mr. Rollwagen resigned as Chairman of the Board, but not as a director, in
November 1996 upon the Company's acquisition of Electrotech. In consideration
of the Board of Directors' desire that Mr. Rollwagen remain a member of the
Board following his resignation, the Board approved the extension of Mr.
Rollwagen's annual salary of $144,000 through December 31, 1997, subject to
his continued participation as a director and senior advisor to the Company.
The Board also approved at such time the immediate vesting of all of Mr.
Rollwagen's outstanding, unvested options to purchase an aggregate of (i)
9,335 shares of Common Stock at an exercise price of $1.05 per share and (ii)
53,333 shares of Common Stock at an exercise price of $6.30 per share.
CVD PARTNERSHIP
On March 29, 1996, the Company, as a limited partner, entered into an
Agreement of Limited Partnership of PMT CVD Partners, L.P. (the "CVD
Partnership") with CVD Inc., as general partner, and SBIC Partners, NorWest
Equity V ("NorWest") and R&M Partners/CVD, G.P., each as a limited partner
(collectively, the limited partners are referred to as the "Limited
Partners"). The CVD Partnership was sponsored by the Company to fund research
and development costs and expenses relating to CVD technology and applications
using MORI(TM) source technology. An aggregate of $5,350,000 was invested by
the Limited Partners in the CVD Partnership to fund such research and
development efforts, which were to be performed by the Company under an
agreement with the CVD Partnership. In connection with the formation of the
CVD Partnership, the Company entered into option agreements (the "CVD Option
Agreements") with the Limited Partners. Pursuant to the CVD Option Agreements,
the Company had an exercisable option (the "CVD 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. In addition, the Limited Partners
received warrants (the "CVD Warrants") to purchase an aggregate of 277,662
shares of the Company's Common Stock at a purchase price of $12.75 per share.
The CVD Warrants would have become exercisable for a one-year period following
exercise of the CVD Option, but only if the CVD Option had been actually
exercised by the Company. In connection with their investment in the CVD
Partnership, each of SBIC Partners and NorWest received a CVD Warrant to
purchase 130,726 shares of Common Stock.
The Company was paid for such services in an amount equal to its actual
direct costs, as defined, plus a stated percentage of such costs. During the
year ended December 31, 1996 and during the nine months ended September 30,
1997, the amount of such research and development payments to Trikon by the
CVD Partnership was $2,841,427 and $0, respectively. Under the applicable
agreement, the Company would have been obligated to pay royalties to the CVD
Partnership on sales of developed CVD products. Each of SBIC Partners and
NorWest invested $2,500,000 in the CVD Partnership. As of March 31, 1996, SBIC
Partners beneficially owned 638,604 shares of Common Stock, or approximately
7.4% of the shares of Common Stock then outstanding, and NorWest and its
affiliates beneficially owned 603,898 shares of Common Stock, or approximately
7.0% of the shares of Common Stock then outstanding.
In connection with the Flowfill(TM) CVD Development, the Company announced
that it would henceforth focus all of its CVD resources to further evaluate
and develop products based on the Flowfill(TM) technology. In that regard, the
Company advised the Limited Partners that it had decided to discontinue the
research and development efforts of the CVD Partnership. Certain of the
Limited Partners asserted that such action was inconsistent with the terms of
the research and development agreement entered into between the Company and
the CVD Partnership and that, accordingly, a settlement of any and all claims
that the Limited Partners may have in connection with such discontinuation was
appropriate.
Effective June 30, 1997, the Company acquired all the outstanding limited
partnership interests of the CVD Partnership and all of the share interests in
the CVD Partnership's corporate general partner in consideration of the
Company's issuance of an aggregate of 679,680 shares of Common Stock of the
Company pro rata to the Limited Partners, excluding the Company (the "CVD
Partnership Shares"), pursuant to the terms of a purchase
15
<PAGE>
agreement (the "CVD Purchase Agreement"). As a result of the CVD Acquisition,
all CVD technology which had been developed by the CVD Partnership prior to
such discontinuation, together with approximately $2,020,000 of unspent funds
of the CVD Partnership, are owned solely by the Company, and any and all
claims that the Limited Partners may have had in connection with the
termination of the research and development project thereunder, the CVD
Options, the CVD Warrants or otherwise relating to the CVD Partnership have
been released and discharged.
In connection with the purchase of all of the outstanding interests in the
Limited Partnership and its corporate general partner, the Company agreed to
cause a registration statement covering the CVD Partnership Shares to be filed
under the Securities Act and to become effective on or prior to September 1,
1997 (the "Registration Statement"). The Company has not filed a registration
statement covering the CVD Partnership Shares, and as a result, the Company
has become obligated, pursuant to the original terms of the CVD Purchase
Agreement, to pay the holders of CVD Partnership Shares liquidated damages
comprised of a one-time fee of $75,000, and an amount equal to $2,500 per day
for each day after September 1, 1997 and prior to the effective date of the
Registration Statement.
In December 1997, the Company and the holders of the CVD Partnership Shares
amended the CVD Purchase Agreement to provide for (i) the immediate payment of
liquidated damages accrued through November 1, 1997 of $225,000, (ii) no
further incurrence of liquidated damages should the Registration Statement be
effective by March 15, 1998, (iii) in the event that the Company does not
cause the Registration Statement to become effective by March 15, 1998,
resumption of liquidated damages accruing at a rate of $2,500 for each day
thereafter until this Registration Statement becomes effective, and (iv)
should the Registration Statement be effective by April 1, 1998, the Company
will also owe the Limited Partners liquidated damages at a rate of $2,500 per
day for the period between November 1, 1997 and March 15, 1998 of $335,000. As
of December 1, 1997, SBIC Partners beneficially owned 1,254,900 shares of
Common Stock, or approximately 6.8% of the shares of Common Stock then
outstanding, and NorWest and its affiliates beneficially owned less than 5% of
the shares of Common Stock then outstanding.
NOTE PURCHASE AGREEMENT
On December 16, 1996, the Company entered into a Note Purchase Agreement
(the "Note Purchase Agreement") with five investors, including Brentwood
Associates V, L.P. ("Brentwood"), St. Paul Fire & Marine Insurance Company
("St. Paul") and SBIC Partners, confirming their equal $1,250,000 commitments
for unsecured subordinated debt in the amount of $6,250,000, which commitments
were given prior to the Acquisition to satisfy a working capital closing
condition thereto. Prior to the Acquisition in November 1996, St. Paul, SBIC
Partners and Brentwood beneficially owned 1,073,558, 638,604 and 564,796
shares of Common Stock, respectively, or approximately 12.3%, 7.3%, and 6.5%
of the Common Stock then outstanding, respectively.
The interest rate on amounts drawn under the Note Purchase Agreement is the
bank's prime rate plus 4%. Interest is only payable quarterly in arrears on
amounts then outstanding. The ability to borrow under the Note Purchase
Agreement expires January 1, 1998 and amounts borrowed under the Note Purchase
Agreement plus accrued but unpaid interest is due on January 1, 2000. Pursuant
to the Series G Preferred Stock Purchase Agreement (as defined below), the
Company released St. Paul and SBIC from any obligation to loan money pursuant
to the Note Purchase Agreement. As of the date of this Proxy Statement, no
amount has been borrowed under the Note Purchase Agreement.
On the date of execution of the Note Purchase Agreement, each investor
received a warrant to acquire up to 49,020 shares of Common Stock with an
exercise price of $12.75. Each such warrant became exercisable with respect to
50% of such shares on the commitment by such investors to provide financing to
the Company under the Note Purchase Agreement. Any advances made under the
Note Purchase Agreement will trigger the exercisability of the remaining
shares covered by such warrants. As of the date of this Proxy Statement,
warrants with respect to an aggregate of 122,550 shares of Common Stock at an
exercise price of $12.75 were exercisable by
16
<PAGE>
such investors. All such warrants expire on December 16, 2001. Holders of such
warrants have certain registration rights.
SERIES G PREFERRED STOCK PRIVATE PLACEMENT
On June 27, 1997, the Company entered into a Series G Preferred Stock
Agreement (the "Series G Preferred Stock Purchase Agreement") with certain
investors, including St. Paul and SBIC, regarding the issuance and sale of
shares of Series G Preferred Stock and warrants to purchase shares of Common
Stock. Pursuant to the Series G Preferred Stock Purchase Agreement, at
closings on June 30 and July 1, 1997, the Company issued and sold to
investors, in transactions exempt from registration under the Securities Act,
2,962,032 shares of Series G Preferred Stock at $6.75 per share and warrants
to purchase 888,610 shares of Common Stock at an exercise price per share of
$8.00 share. The Series G Preferred Stock is convertible on a share-for-share
basis into Common Stock (subject to customary antidilution adjustments) at any
time after September 29, 1997, bears no dividend and will automatically
convert into Common Stock on June 30, 2000. The warrants issued in connection
with the Series G Preferred Stock private placement are exercisable at any
date at least 61 days after written notice of such intended exercise is
provided to the Company. Such warrants expire on June 30, 2000. Holders of
Series G Preferred Stock and shares of Common Stock issuable upon conversion
thereof and warrants to purchase shares of Common Stock at an exercise price
of $8.00 per shares and shares of Common Stock issuable upon exercise thereof
have certain registration rights.
C.E. Unterberg, Towbin, (formerly Unterberg Harris) acted as an investment
banker to the Company in the Series G Preferred Stock private placement and
received from the Company approximately $250,000 in fees for such services.
Thomas Unterberg was then a managing director of C.E. Unterberg, Towbin.
As of December 1, 1997, St. Paul and SBIC beneficially owned approximately
1,040,235 and 1,254,900 shares of Common Stock, respectively, or 6.8% and 6.8%
of the Common Stock then outstanding, respectively.
As of December 1, 1997, Thomas Unterberg and affiliated entities
beneficially owned approximately 11.8% of the Series G Preferred Stock.
SHAREHOLDER PROPOSALS FOR PROXY STATEMENT FOR
THE ANNUAL MEETING FOR THE YEAR ENDING DECEMBER 31, 1997
Because the Company currently intends to hold its 1998 annual meeting (the
"1998 Annual Meeting") on or about July 31, 1998, shareholder proposals that
are intended to be presented at the 1998 Annual Meeting must be received by
the Company no later than February 28, 1998 in order to be included in the
proxy statement and related proxy materials.
ANNUAL REPORTS
A copy of the Company's annual report on Form 10-K and the amendment thereto
are being mailed to each shareholder of record along with this Proxy
Statement. Such reports are not part of the Company's soliciting material.
OTHER MATTERS
The Board of Directors knows of no other matters to be presented for
shareholder action at the Annual Meeting. However, if other matters do
properly come before the Annual Meeting or any adjournments or postponements
thereof, the Board of Directors intends that the persons named in the proxies
will vote upon such matters in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Jeremy Linnert
Secretary
17
<PAGE>
LOGO
PROXY TRIKON TECHNOLOGIES, INC.
1997 ANNUAL MEETING OF SHAREHOLDERS, JANUARY 23, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TRIKON TECHNOLOGIES, INC.
The undersigned revokes all previous proxies, acknowledges receipt of the
notice of 1997 Annual Meeting of Shareholders to be held on January 23, 1998
and the proxy statement, and appoints Christopher D. Dobson and Nigel Wheeler
or either of them the proxy of the undersigned, with full power of
substitution, to vote all shares of Common Stock of Trikon Technologies, Inc.
that the undersigned is entitled to vote, either on his or her own behalf or
on behalf of an entity or entities, at the 1997 Annual Meeting of Shareholders
of the Company to be held at the Michelangelo Hotel located at 152 West 51st
Street, New York, New York 10019, on Friday, January 23, 1998 at 9:00 a.m.,
and at any adjournment or postponement thereof, with the same force and effect
as the undersigned might or could do if personally present thereat. The shares
represented by this proxy shall be voted in the manner set forth below.
1. ELECTION OF ALL NOMINEES LISTED BELOW TO THE BOARD OF DIRECTORS TO SERVE
UNTIL THE NEXT ANNUAL MEETING AND UNTIL THEIR SUCCESSORS HAVE BEEN DULY
ELECTED AND QUALIFIED, EXCEPT AS NOTED (WRITE THE NAMES, IF ANY, OF NOMINEES
FOR WHOM YOU WITHHOLD AUTHORITY TO VOTE):
NOMINEES: Richard M. Conn, Christopher D. Dobson, Brian D. Jacobs, Jeremy
Linnert, Nigel Wheeler.
[_] FOR all nominees [_] WITHHOLD from all nominees [_]__________________
For all nominees
except as noted above
<PAGE>
LOGO
2. PROPOSAL TO RATIFY THE SELECTION OF ERNST & YOUNG LLP, AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1997.
[_] FOR [_] AGAINST [_] ABSTAIN
MARK HERE FOR ADDRESS
CHANGE AND NOTE BELOW [_]
Please sign your name
exactly as it appears
hereon. If acting as an
attorney, executor,
trustee, or in other
representative capacity,
sign name and title.
Signature: ________________
Date: _____________________
Signature: ________________
Date: _____________________
