<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) MAY 14, 1998
-------------------------------
TRIKON TECHNOLOGIES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 0-26482 95-4054321
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
RINGLAND WAY, NEWPORT, GWENT, UNITED KINGDOM NP6 2TA
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 44 1 633 414 000
-----------------------------
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
On April 14, 1998, Trikon Technologies, Inc. (the "Company" or "Trikon")
commenced an exchange offer (the ``Exchange Offer'') for all of its outstanding
7-1/8% Convertible Subordinated Notes due 2001 (the ``Convertible Notes''),
Series G Preferred Stock (the ``Series G Preferred Stock'') and warrants issued
in connection with the issuance of Series G Preferred Stock (the ``Warrants'').
The Exchange Offer expired at 5:00 p.m., New York City time, on May 14, 1998,
and immediately thereafter, the Company accepted for exchange or conversion all
validly tendered Convertible Notes, Series G Preferred Stock and Warrants.
$82,103,000 principal amount of Convertible Notes (approximately 95% of the
aggregate principal amount outstanding), 2,873,143 shares of Series G Preferred
Stock (approximately 97% of the total shares outstanding) and 866,388 Warrants
(approximately 97% of the Warrants outstanding) had been validly tendered for
exchange. Because more than two-thirds of the outstanding shares of Series G
Preferred Stock tendered, in accordance with the terms of the Certificate of
Determination of the Company establishing the rights, preferences and privileges
of the Series G Preferred Stock, all other outstanding shares of Series G
Preferred Stock automatically converted into shares of Common Stock. The
$82,103,000 principal amount of Convertible Notes tendered have been exchanged
for approximately 22.7 million shares of the Company's Common Stock (the
``Common Stock''), approximately 2.86 million shares of the Company's Series H
Preferred Stock, $10 stated amount per share (the "Series H Preferred Stock"),
and approximately 29,300 shares of Series I Junior Participating Preferred Stock
(the "Series I Preferred Stock"). The shares of Series G Preferred Stock and
Warrants have been converted and exchanged for approximately 7.2 million shares
of Common Stock and approximately 8,000 shares of the Series I Preferred Stock.
The Series H Preferred Stock is redeemable at the option of the Company for cash
at a redemption price equal to the stated amount and the holders of the Series H
Preferred Stock are entitled to receive dividends at an annual rate of 8-1/8% of
the stated amount payable annually, at the option of the Company, in cash or
additional shares of preferred stock or any combination thereof. Each share of
Series H Preferred Stock is subject to automatic conversion if the Common Stock
price reaches certain levels. Holders of Series H Preferred Stock are entitled
to elect one director if the Board of Directors of the Company is constituted of
five or fewer members and two directors if the Board of Directors of the Company
is constituted of more than five members. If the Series H Preferred Stock is not
redeemed by June 30, 2001 or at such earlier date the Company's cash exceeds a
certain amount, holders of Series H Preferred Stock shall be entitled to elect
the number of directors that would constitute a majority of the Board of
Directors. The Company intends to call a special meeting of shareholders to
approve an amendment (the ``Charter Amendment'') to the Articles of
Incorporation of the Company to provide for an increase in the number of
authorized shares of Common Stock. Upon approval of the Charter Amendment, each
share of Series I Preferred Stock will automatically convert into 1,000 shares
of Common Stock. In connection with the consummation of the Exchange Offer, the
Company has agreed to issue 5.0 million shares of restricted Common Stock and
6,476 shares of restricted Series I Preferred Stock to the Company's Chairman of
the Board and Chief Executive Officer. Upon conversion of the Series I Preferred
Stock, the issuance will represent approximately 11,500,000 shares or 12% of the
outstanding Common Stock.
In connection with the Exchange Offer, the Company solicited the consent of
holders of the Convertible Notes to certain proposed amendments to the Indenture
dated October 7, 1996, between the Company and U.S. Trust Company of California,
N.A., as trustee (the "Trustee"), and the termination of the Registration
Agreement among the Company, Salomon Brothers Inc and Unterberg Harris. Upon the
expiration of the Exchange Offer, the Company entered into a Supplemental
Indenture with the Trustee, which became operative upon the acceptance by the
Company of the tendered Convertible Notes. The Supplemental Indenture, among
other things, deleted certain "Events of Default" under the Indenture and the
"Designated Event" covenant of the Indenture and amended the "Limitations on
Suits" provisions to require at least a majority in principal amount of the then
outstanding Convertible Notes to make a request to the Trustee. Upon acceptance
of the tendered Notes, the Registration Agreement terminated, thereby
terminating the Company's obligation to register under the Securities Act of
1933, as amended, the Convertible Notes and the underlying Common Stock into
which such Convertible Notes are convertible.
As outlined in the offering documents disseminated in connection with the
Exchange Offer, the Company did not pay interest of $3.3 million accrued and
due on April 15, 1998. Interest was paid on May 15, 1998 to the holders of
Convertible Notes which did not accept the Exchange Offer. In accordance with
the terms of the Exchange Offer, any accrued and unpaid interest on Convertible
Notes accepted in the Exchange Offer will not be paid and will be included in
the calculation of the profit or loss arising on the exchange of the Convertible
Notes.
2.
<PAGE>
The Exchange Offer will be accounted for under SFAS No. 15, "Troubled Debt
Restructuring."
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA OF TRIKON
The unaudited pro forma financial information presented below should be read
in conjunction with the notes thereto, as set forth below, and the separate
financial statements of Trikon, and Trikon Technologies Limited and Trikon
Equipments Limited (collectively, "Trikon Limited") included in the Company's
Annual Report on Form 10-K for fiscal year ended December 31, 1997 (the
"1997 Form 10-K").
The accompanying unaudited pro forma financial data includes the following
unaudited pro forma financial statements:
1. Unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1997 reflecting the pro forma effects of the
restructuring and related events ("Unaudited Pro Forma Statement of Operations
No. 1")
2. Unaudited pro forma condensed consolidated statement of operations for
the year ended December 31, 1997 reflecting the pro forma effects of the
restructuring and related events and the Exchange Offer ("Unaudited Pro Forma
Statement of Operations No. 2"); and
3. Unaudited pro forma condensed consolidated statement of operations for
the quarter ended March 31, 1998 reflecting the pro forma effects of the
Exchange Offer ("Unaudited Pro Forma Statement of Operations No. 3"); and
4. Unaudited pro forma condensed consolidated balance sheet as of March
31, 1998 reflecting the pro forma effects of the Exchange Offer ("Unaudited
Pro Forma Balance Sheet").
The accompanying Unaudited Pro Forma Statement of Operations No. 1 gives effect
to 1) the repayment and termination of the Company's working capital facility
(the "Working Capital Facility"), 2) the closure of the Company's Etch
operations in its Chatsworth, California location and related asset impairment
charges and 3) certain other restructuring costs including the write-down of
intangible assets/values, as a result of recent and projected revenues,
continuing losses and negative cash flows, which indicate the intangible assets
have become impaired, as if they had occurred as of January 1, 1997.
Accordingly, the Unaudited Pro Forma Statement of Operations No. 1 excludes the
results of operations of the Company's Etch operations, includes certain
adjustments to reduce amortization expense related to the write-off of
intangible assets and the related tax effect, and reduces interest expense
reflecting the pay off of the Working Capital Facility.
Following the completion of the restructuring of the Company's operations, the
remaining business will consist primarily of the worldwide operations of Trikon
Limited, the business acquired by Trikon on November 15, 1996 with headquarters
located in the United Kingdom.
The following Unaudited Pro Forma Balance Sheet of Trikon, the Unaudited Pro
Forma Statement of Operations No. 2 and Unaudited Pro Forma Statement of
Operations No. 3 have been prepared to illustrate the effect of the Exchange
Offer. The financial statements have been prepared as though the Exchange Offer
had occurred on March 31, 1998 for purposes of the Unaudited Pro Forma Balance
Sheet and as of January 1, 1997 and 1998 for purposes of the Unaudited Pro Forma
Statement of Operations No. 2 and Unaudited Pro Forma Statement of Operations
No. 3, respectively. The pro forma adjustments and the assumptions on which they
are based are described in the accompanying notes to the unaudited pro forma
financial statements.
The unaudited pro forma condensed consolidated financial statements are
presented for illustrative purposes only and are not necessarily indicative of
the consolidated financial position or results of operations of Trikon that
would have been reported had the restructuring and related events or the
Exchange Offer occurred on the dates indicated, nor do they represent a
forecast of the consolidated financial position of Trikon at any future date
or the consolidated results of operations of Trikon for any future period.
Amounts representing the number of shares and fair market value of common and
preferred stock, and the amount of transaction fees and other assumptions as
reflected in the accompanying pro forma financial statements, are preliminary.
3.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 1
OF TRIKON
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
REMOVE SHUT DOWN
HISTORICAL ETCH ETCH PRO FORMA
CONSOLIDATED(1)(7) OPERATIONS(2) DIVISION CONSOLIDATED(7)
------------------ ------------- ----------- ---------------
<S> <C> <C> <C> <C>
Total revenues.......... $ 85,109 $(8,803) $(29,500)(3) $ 46,806
Costs and expenses
Cost of goods sold..... 61,974 (8,095) (20,735)(3) 33,144
Research and
development........... 17,033 (7,847) -- 9,186
Selling, general and
administrative........ 34,734 (13,741) -- 20,993
Amortization of
intangibles........... 3,116 -- (3,116)(4) --
Purchased in-process
technology............ 2,975 (2,975) -- --
Restructuring costs.... 18,273 -- (18,273)(3) --
Impairment write-downs. 44,135 -- (44,135)(3) --
--------- ------- -------- --------
182,240 (32,658) (86,259) 63,323
--------- ------- -------- --------
Loss from operations... (97,131) 23,855 56,759 (16,517)
Interest expense, net.. (11,394) -- 3,106 (5) (8,288)
--------- ------- -------- --------
Loss before income tax
provision (benefit)... (108,525) 23,855 59,865 (24,805)
Income tax provision
(benefit)............. (9,248) -- 9,540 (6) 292
--------- ------- -------- --------
Net loss............... $ (99,277) $23,855 $ 50,325 $(25,097)
========= ======= ======== ========
Net loss per share
basic and diluted..... $ (6.71) $ (1.70)
========= ========
Number of shares used
in per share
computation........... 14,800 14,800
========= ========
</TABLE>
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NO. 1 OF TRIKON
(1) As presented in the Consolidated Financial Statements included in the
Company's 1997 Form 10-K.
(2) Removes the operations of the Company's Etch operations in Chatsworth,
California, except for ongoing corporate cost of approximately $750,000.
(3) Removes the restructuring cost and asset impairment write-downs and the
license revenues from the sale of the MORI(TM) source and Forcefill(R) PVD
technologies licenses.
(4) Represents a reduction in amortization expense related to the write-down
of intangible assets discussed above.
(5) Represents a reduction in interest expense resulting from the assumed
repayment of the Working Capital Facility as of January 1, 1997 and the
removal of financing cost written off calculated as follows:
<TABLE>
<S> <C>
Working Capital Facility paid off................ $14,261
Interest rate in effect during period............ 10%
-------
Reduced interest expense......................... 1,426
Write off of financing cost...................... 1,680
-------
$ 3,106
=======
</TABLE>
(6) Represents the removal of the tax effect of the amortization adjustment and
write-off of a deferred tax liability which was established when the Company
acquired Trikon Limited in November 1996, for the difference in the book and
tax basis of the assets primarily consisting of intangible assets.
Accordingly, the write-off of such intangible assets directly impacts the
deferred tax liability and creates a deferred income tax benefit.
(7) Includes approximately $5.2 million effect (charged to cost of goods sold)
associated with the APB No. 16 write-up of Trikon Limited inventory.
4.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 2
OF TRIKON
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL EXCHANGE PRO FORMA
CONSOLIDATED(1)(7) OFFER CONSOLIDATED(7)
------------------ -------- ---------------
<S> <C> <C> <C>
Total revenues........................ $ 46,806 $ -- $ 46,806
Costs and expenses
Cost of goods sold................... 33,144 -- 33,144
Research and development............. 9,186 -- 9,186
Selling, general and administrative.. 20,993 1,517 (2) 22,510
-------- ------- --------
63,323 1,517 64,840
-------- ------- --------
Loss from operations................. (16,517) (1,517) (18,034)
Interest expense, net................ (8,288) 7,144 (3) (1,144)
-------- ------- --------
Loss before income tax provision..... (24,805) 5,627 (19,178)
Income tax provision................. 292 -- 292
-------- ------- --------
Loss before extraordinary item........ $(25,097) $ 5,627 $(19,470)
======== ======= ========
Loss before extraordinary item
per share basic and diluted (4)..... $ (1.70) $ (0.27)
======== ========
Number of shares used in per share
computation......................... 14,800 67,083 (4) 81,883
======== ======= ========
</TABLE>
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
NO. 2 OF TRIKON
(1) Represents unaudited pro forma consolidated condensed statement of
operations reflecting the effects of the restructuring and related events
derived from the Unaudited Pro Forma Statement of Operations No. 1 of
Trikon.
(2) Represents compensation expense recognized based on the vesting of the
restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer. The Common Stock issued to the Chairman
of the Board and Chief Executive Officer becomes 100% vested after five
years. This amount represents 20% of the total fair market value of the
restricted Common Stock issuance, based on recent quoted market prices
(i.e., $0.66 per share) of the Company's Common Stock on the date of
consummation of the Exchange Offer.
(3) Adjustment to interest expense to give effect to Exchange Offer at the
beginning of period presented computed as follows:
<TABLE>
<S> <C>
Notes................................ $82,103
Interest rate........................ 7.625%
-------
6,260
Amortization of financing cost....... 884
-------
$ 7,144
=======
</TABLE>
(4) Loss per share and weighted average shares outstanding are presented as if
the 51.9 million shares of common stock to be issued to the holders of the
Notes, 11.5 million shares of restricted Common Stock to be issued to the
Chairman of the Board and Chief Executive Officer of the Company and 15.2
million shares of Common Stock to be issued to the holders of the Series G
Preferred Stock and the Warrants in the Exchange Offer as consummated were
issued as of January 1, 1997. The net loss has been increased by $2.3
million, representing one year of dividends on the Series H Preferred Stock,
for purposes of calculating the basic and diluted net loss per share. All of
the restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer have been excluded from the basic earnings
per share computation because the restrictions would not have lapsed during
the one year period. The 11.5 million shares of restricted Common Stock
issued to the Company's Chairman of the Board and Chief Executive Officer
have been excluded from diluted loss per share because they are anti-
dilutive.
The Unaudited Pro Forma Statement of Operations No. 2 of Trikon does not
reflect a bonus payable to the Company's Chairman of the Board and Chief
Executive Officer in the amount of $1.5 million payable upon the achievement
of certain profitability levels and the occurrence of certain other events.
This bonus will be reflected as a charge to earnings when it is probable that
the profitability levels will be achieved and the other events will occur.
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded from
the Unaudited Pro Forma Statement of Operations No. 2.
5.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO. 3
QUARTER ENDED MARCH 31, 1998
(IN THOUSANDS OF U.S. DOLLARS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
EXCHANGE PRO FORMA
CONSOLIDATED(1) OFFER CONSOLIDATED
--------------- ------------ ------------
<S> <C> <C> <C>
Total revenues........................ $ 17,203 $ -- $ 17,203
Costs and expenses
Cost of goods sold................... 4,635 -- 4,635
Research and development............. 2,036 -- 2,036
Selling, general and administrative.. 4,803 379 (2) 5,181
Amortization of intangibles.......... 1 -- 1
----------- ----------- -----------
11,474 379 11,853
----------- ----------- -----------
Income from operations............... 5,729 (379) 8,350
Interest expense, net................ (1,941) 1,744 (3) (197)
----------- ----------- -----------
Income before income tax provision... 3,788 1,365 5,153
Income tax benefit................... (217) -- (217)
----------- ----------- -----------
Income before extraordinary item..... $ 4,005 $ 1,365 $ 5,370
=========== =========== ===========
Basic earnings per share (4)......... $ .26 $ 0.06
=========== ===========
Dilutive earnings per share.......... $ 0.22 $ 0.05
=========== ===========
Average common shares-basic.......... 15,147 67,083 82,230
=========== =========== ===========
Average common shares-diluted........ 18,109 69,778 87,887
=========== =========== ===========
</TABLE>
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS NO.
3 OF TRIKON
(1) As presented in the unaudited condensed consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(2) Represents compensation expense recognized based on the vesting of the
restricted Common Stock to be issued to the Company's Chairman of the
Board and Chief Executive Officer. The Common Stock issued to the Chairman
of the Board and Chief Executive Officer becomes 100% vested after five
years. This amount represents one quarters worth of compensation expense
attributable to the restricted stock issuance, based on recent quoted market
prices (i.e., $0.66 per share) of the Company's Common Stock.
(3) Adjustment to interest expense to give effect to Exchange Offer at the
beginning of period presented computed as follows:
<TABLE>
<S> <C>
Notes........................................... $82,103
Interest rate................................... 7.625%
-------
Annual interest................................. $ 6,260
=======
Quarterly interest.............................. $ 1,565
Quarterly amortization of financing cost........ 179
-------
$ 1,744
=======
</TABLE>
6.
<PAGE>
Following the Exchange Offer, the interest rate on Convertible Notes still
outstanding will be 7-1/8% under the terms of the amended Indenture.
(4) Basic and dilutive earnings per share and weighted average shares
outstanding are presented as if the 51.9 million shares of Common Stock to
be issued to the holders of the Convertible Notes in the Exchange Offer,
11.5 million shares of restricted Common Stock to be issued to the Chairman
of the Board and Chief Executive Officer of the Company in the Exchange
Offer and 15.2 million shares of Common Stock to be issued to the holders of
the Series G Preferred Stock and the Warrants in the Exchange Offer were
issued as of January 1, 1998. Net income has been decreased by $0.6 million,
representing one quarter of a year of dividends on the Series H Preferred
Stock, for purposes of calculating the basic and diluted net earnings per
share. None of the 11.5 million shares of restricted Common Stock to be
issued to the Company's Chairman of the Board and Chief Executive Officer
are included in the number of shares used in the basic per share computation
because the time-based vesting restriction would not have lapsed during the
quarter. For purposes of diluted earnings per share the number of shares of
the 11.5 million shares of restricted Common Stock issued to the Company's
Chairman of the Board and Chief Executive Officer included in the
denominator of the computation is based on the treasury stock method. For
the quarter ended March 31, 1998 the denominator in the diluted earnings per
share computation included 5,655,694 shares of the 11.5 million shares of
restricted common stock computed under the treasury stock method assuming an
average unrecognized compensation expense of $7.4 million and an average
price for the quarter of $1.267 per share.
The Unaudited Pro Forma Statement of Operations No. 3 of Trikon does not
reflect a bonus payable to the Company's Chairman of the Board and Chief
Executive Officer in the amount of $1.5 million payable upon the achievement
of certain profitability levels and the occurrence of certain other events.
This bonus will be reflected as a charge to earnings when it is probable that
the profitability levels will be achieved and the other events will occur.
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded from
the Unaudited Pro Forma Statement of Operations No. 3.
7.
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET OF TRIKON
MARCH 31, 1998
(IN THOUSANDS OF U.S. DOLLARS)
<TABLE>
<CAPTION>
EXCHANGE PRO FORMA
CONSOLIDATED(1) OFFER CONSOLIDATED
ASSETS --------------- --------- ---------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents........ $ 17,204 $ -- $17,204
Accounts receivable, net......... 10,278 -- 10,278
Inventories, net................. 23,732 -- 23,732
Other current assets............. 1,987 -- 1,987
--------- --------- -------
Total current assets........... 53,201 -- 53,201
Property, equipment and leasehold
improvements, net................. 21,926 -- 21,926
Demonstration systems, net......... 1,227 -- 1,227
Bond financing costs, net of
accumulated amortization........ 2,127 (2,025) (2) 102
Other assets....................... 400 -- 400
--------- --------- -------
Total assets................... $ 78,881 $ (2,025) $76,856
========= ========= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities:
Convertible subordinated notes... $ 86,250 $(86,250) (2) $ --
Accounts payable and accrued
expenses........................ 5,799 500 (2)(4) 6,299
Restructuring cost............... 1,561 -- 1,561
Sales returns payable............ 11,468 -- 11,468
Other current liabilities........ 8,415 (2,870) (2) 5,545
--------- --------- -------
Total current liabilities...... 113,493 (88,620) 24,873
Other non-current liabilities...... 5,744 -- 5,744
Convertible subordinated notes..... -- 4,147 (2) 4,147
SHAREHOLDERS' EQUITY (DEFICIENCY)
Series G Preferred Stock......... 19,349 (19,349) (2) --
Series H Preferred Stock......... -- 28,558 (2) 28,558
Common Stock..................... 137,767 34,271 (2) 198,972
19,349 (2)
7,585 (3)
Cumulative translation........... (163) -- (163)
Deferred compensation............ -- (7,585) (3) (7,585)
Accumulated deficit.............. (197,309) 19,619 (2) (177,690)
--------- --------- -------
Total shareholders' equity
(deficiency).................. (40,356) 82,448 42,092
--------- --------- -------
Total liabilities and
shareholders' equity
(deficiency).................. $ 78,881 $ (2,025) $76,856
========= ========= =======
</TABLE>
- --------
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(1) As presented in the unaudited condensed consolidated financial statements
included in the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
(2) To give effect to the issuance of Common Stock and Series H Preferred Stock,
accrual of estimated transaction fees, conversion of the Convertible Notes
and Series G Preferred Stock, forgiveness of interest payable and recording
of the related gain on the transaction, under SFAS No. 15 "Troubled Debt
Restructuring," pursuant to the Exchange Offer, as consummated on May 14,
1998. Holders of $82,103,000 of the Convertible Notes have elected to
participate in the exchange offer. The holders of $4,147,000 of the
Convertible Notes have elected not to participate in the Exchange Offer and
accordingly, this amount has been reclassified to long-term debt in
accordance with the amended Indenture resulting from the Exchange Offer. In
accordance with SFAS No. 15, the Series H Preferred Stock is stated at the
full liquidation value. No dividends are accrued on the Series H Preferred
Stock in computing the amount of the gain on the transaction since the
Company has the option to pay such dividends with additional preferred
stock, cash or any combination thereof. The Common Stock amount includes
approximately 15.2 million shares of Common Stock to be issued to the
holders of the Series G Preferred Stock and the Warrants. The excess of the
$19.3 million of Series G Preferred Stock over the fair market value of the
Common Stock of $9.3 million, based on $0.66 per share quoted market prices,
has been recorded as an addition to Common Stock. The Common Stock amount
also includes approximately 51.9 million shares of Common Stock to be issued
to the holders of the Notes at an estimated fair market value of $0.66 per
share based on recent quoted market prices of the Company's Common Stock,
resulting in a gain computed as follows:
<TABLE>
<CAPTION>
AMOUNT
-------
(000'S)
<S> <C>
Carrying amount of the Convertible Notes redeemed................... $82,103
Accrued interest on Convertible Notes redeemed...................... 2,870
-------
84,973
Less:
Series H Preferred Stock at liquidation value....................... 28,558
Common Stock at current market value................................ 34,271
Write-off capitalized financing cost, related to the Convertible
Notes redeemed.................................................... 2,025
Estimated transaction cost.......................................... 500
-------
65,354
-------
Gain................................................................ $19,619
=======
</TABLE>
The gain resulting from the Exchange Offer will be reflected as an
extraordinary item in the quarter ended June 30, 1998. The gain is excluded
from the Unaudited Pro Forma Statement of Operations No. 2 and the Unaudited
Statement of Operations No. 3.
The unaudited pro forma Common Stock amounts assume the Series I Preferred
Stock to be issued in the transaction and subsequently converted into Common
Stock, upon shareholder approval of the Company's Charter Amendment, has
been converted to Common Stock as of March 31, 1998 since shareholder
approval is expected.
(3) Represents the recording of deferred compensation expense associated with
the issuance of 11.5 million shares of Common Stock to the Company's
Chairman of the Board and Chief Executive Officer valued at an estimated
fair market value of $0.66 based on recent quoted market prices.
(4) Represents estimated transaction fees of $500,000.
8.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
4.5 Certificate of Determination establishing the rights,
preferences and privileges of the Series H Preferred Stock
4.6 Certificate of Determination establishing the rights,
preferences and privileges of the Series I Junior
Participating Preferred Stock
4.7 First Supplemental Indenture, dated as of May 14, 1998, between
the Company and U.S. Trust Company of California, N.A.
9.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIKON TECHNOLOGIES, INC.
Date: May 28, 1998 By: /s/ Christopher D. Dobson
------------------------------
Christopher D. Dobson
Chairman of the Board and
Chief Executive Officer
10.
<PAGE>
CERTIFICATE OF DETERMINATION OF RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS OF
TRIKON TECHNOLOGIES, INC.
Nigel Wheeler and Jeremy Linnert do hereby certify:
1. That they are President and Secretary, respectively, of Trikon
Technologies, Inc., a California corporation (the "Corporation").
2.1. That upon the terms of the Series G Preferred Stock, all of the
outstanding shares of the Series G Preferred Stock converted into shares of
Common Stock on May 14, 1998 and no shares of Series G Preferred Stock are
outstanding;
2.2. That pursuant to authority conferred upon the Board of Directors
by the Seventh Restated Articles of Incorporation of the Corporation, under the
provisions of Section 401 of the Corporations Code of the State of California,
the Board of Directors, by written consent effective May 7, 1998, adopted the
following resolutions:
IT IS RESOLVED that the Board of Directors does hereby establish a
series of Preferred Stock as follows:
(a) The designation of such series of Preferred Stock is the Series H
Preferred Stock, and the number of shares of such Series H Preferred Stock is
3,000,000, none of which has been issued.
(b) The rights, preferences, privileges and restrictions granted to
and imposed upon the Series H Preferred Stock and the holders thereof shall be
as set forth below.
Section 1. Definitions.
-----------
For purposes of Sections 1 through 8 below, the following definitions
shall apply:
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Common Stock" shall mean the Common Stock of the Corporation.
(c) "Conversion Ratio" shall have the meaning set forth in Section
7(a) below.
(d) "Corporation" shall mean this corporation.
Section 2. Designation and Amount. The shares of such series shall
----------------------
be designated as "Series H Preferred Stock" and the number of shares
constituting the Series H Preferred Stock shall be Three Million (3,000,000),
none of which have been issued as of the date hereof. Such number of shares may
be increased or decreased by resolution of the Board; provided, that no
1.
<PAGE>
decrease shall reduce the number of shares of Series H Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series H Preferred Stock.
Section 3. Dividends.
---------
(a) The holders, as of the Dividend Record Date (as defined below), of
this Series H Preferred Stock shall be entitled to receive semi-annual dividends
on their respective shares of Series H Preferred Stock (aggregating, for this
purpose, all shares of Series H Preferred Stock held of record or, to the
Corporation's knowledge, beneficially by such holder), payable, at the option of
the Corporation, in cash or additional shares of Series H Preferred Stock ("PIK
Preferred") at the rate of 8-1/8% per annum (computed on the basis of a 360-day
year of twelve 30-day months) of the Dividend Base Amount (as defined below),
payable semi-annually in arrears; provided that, to the extent the declaration
or payment of such dividend is prohibited by applicable law, such dividend need
not be paid but shall nevertheless accrue and shall be paid promptly when
applicable law permits; and, provided further, that, (i) if the Corporation's
consolidated EBITDA for the two most recently completed fiscal quarters of the
Corporation preceding a dividend payment date exceeds $7,500,000 and the
Corporation elects to pay all or a portion of the dividend due on such date in
PIK Preferred, then the dividend rate for all future dividend periods shall
increase to 9-1/8% per annum until such time as the Corporation has redeemed all
PIK Preferred for cash and (ii) if the holders of the Series H Preferred Stock
are then entitled to exercise the special voting rights specified in Section
5(c) or directors elected pursuant to such Section 5(c) remain in office, then
the dividend rate for all future periods shall increase to 12% until such rights
are no longer exercisable and such directors are out of office in which case the
dividend rate shall be decreased to the amount otherwise specified in this
Section 3(a). Such dividends shall accrue from the date of issuance of such
shares and shall be paid semi- annually in April 15 and October 15 of each year
or, if any such day is not a business day, on the next succeeding business day.
Such dividends shall be paid, at the election of the Corporation, either in cash
or additional duly authorized, fully paid and non-assessable shares of PIK
Preferred. In calculating the number of shares of Series H Preferred Stock to
be paid with respect to each dividend, the Series H Preferred Stock shall be
valued at $10.00 per share (subject to appropriate adjustment to reflect any
stock split, combination, reclassification or reorganization of the Series H
Preferred Stock). Notwithstanding the foregoing, the Corporation shall not be
required to issue fractional shares of Series H Preferred Stock; the Corporation
may elect, in its sole discretion, independently for each holder, whether such
number of shares (on an aggregated basis) will be rounded to the nearest whole
share (with .5 of a share rounded upward) or whether such holder will be given
cash in lieu of any fractional shares. The "Dividend Base Amount" of a share of
Series H Preferred Stock shall be $10.00 plus all accrued but unpaid dividends
(subject to appropriate adjustment to reflect any stock split, combination,
reclassification or reorganization of the Series H Preferred Stock). The
"Dividend Record Date" shall mean, for each semi-annual dividend, the April 1 or
October 1, as the case may be, immediately preceding the dividend payment date.
2.
<PAGE>
(b) The Corporation shall not declare any dividend or distribution on
any Junior Stock (as defined below) of the Corporation unless all dividends
required by Section 3(a) have been or contemporaneously are declared and paid in
cash and all PIK Preferred has been redeemed for cash, or a sum sufficient for
the payment thereof in cash set apart for such payment on the Series H Preferred
Stock and for the redemption of outstanding PIK Preferred.
(c) All dividends or distributions declared upon the Series H
Preferred Stock shall be declared pro rata per share.
(d) No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on the Series H Preferred Stock
which may be in arrears (it being understood that this provision does not alter
the Corporation's obligations under Section 3(a)).
(e) So long as any shares of the Series H Preferred Stock are
outstanding, no other stock of the Corporation ranking on a parity with the
Series H Preferred Stock as to dividends or upon liquidation, dissolution or
winding up shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund or
otherwise for the purchase or redemption of any shares of any such stock) by the
Corporation unless the dividends, if any, accrued on all outstanding shares of
the Series H Preferred Stock shall have been paid or set apart for payment and
all outstanding PIK Preferred redeemed.
(f) "Junior Stock" shall mean the Common Stock and any shares of
preferred stock of any series or class of the Corporation, whether presently
outstanding or hereafter issued, which are junior to the shares of Series H
Preferred Stock with respect to (i) the distribution of assets on any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation, (ii)
dividends or (iii) voting. Junior Stock includes the Corporation's Series G
Preferred Stock and the Series I Preferred Stock.
(g) "EBITDA" means earnings before deduction for interest, taxes,
depreciations, amortization and other non-cash changes calculated in accordance
with generally accepted accounting principles.
Section 4. Liquidation, Dissolution or Winding Up.
--------------------------------------
(a) In the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation (excluding a merger, acquisition or
other reorganization), the assets or surplus funds of the Corporation shall be
distributed in the following manner and order of priority:
(i) First, ratably among the holders of the Series H Preferred Stock
an amount equal to $10 per share (the "Stated Amount") of Series H
Preferred Stock, plus an amount in cash equal to accrued but unpaid
dividends thereon to the date fixed for liquidation, after which holders of
Series H Preferred shall not be entitled to share in any assets or funds
remaining for distribution; and
3.
<PAGE>
(ii) Second, ratably among the holders of the Junior Stock in
accordance with their relative preferences until such remaining assets and
funds are exhausted.
(b) The liquidation preference specified in Section 4(a) shall be equitably
adjusted in the event of any stock splits, stock dividends or similar capital
modifications affecting the Series H Preferred Stock after the filing of this
Certificate of Determination.
(c) Insofar as any distribution pursuant to Section 4(a) consists of
property other than cash, the value thereof shall, for purposes of the
provisions of Section 4(a), be the fair value at the time of such distribution,
as determined in good faith by the Board.
Section 5. Voting.
------
(a) Except as otherwise expressly provided in Sections 5(b) or (c) below or
as required by law, the holders of Series H Preferred Stock shall not be
entitled to vote.
(b) The holders of Series H Preferred Stock, voting as a class, shall be
entitled to elect one director of the Board, if the Board is constituted by five
or fewer members. If the Board is constituted by more than five directors, the
holders of Series H Preferred Stock, voting as a class, shall be entitled to
elect two directors of the Board.
(c) (i) Whenever an Excess Free Cash Trigger Event or Horizon Event shall
have occurred and not have been Undone, the holders of all shares of Series H
Preferred Stock shall be entitled to elect a number of directors, which,
together with the director(s) specified in Section 5(b), shall constitute a
majority of the Board. At elections for such directors, each holder of Series H
Preferred Stock shall be entitled to one vote for each share held. The right of
holders of Series H Preferred Stock, voting separately as a class, to elect
members of the Board of Directors as aforesaid shall continue until such time as
all Excess Free Cash Trigger Events and Horizon Events shall have been Undone,
at which time such right shall terminate, except as herein or by law expressly
provided, subject to revesting in the event of each and every subsequent Excess
Free Cash Trigger Event or Horizon Event.
(ii) Whenever such voting right shall have vested, such right may be
exercised initially either at a special meeting of the holders of shares of
Series H Preferred Stock called as hereinafter provided, or at any annual
meeting of stockholders held for the purpose of electing directors, and at
such meeting or by the written consent of such holders pursuant to Section
603 of the California Corporations Code.
(iii) At any time when such voting right shall have vested in the
holders of shares of Series H Preferred Stock entitled to vote thereon, and
if such right shall not already have been initially exercised, an officer
of the Corporation shall, upon the written request of 10% of the holders of
record of shares of such Series H Preferred Stock then outstanding,
addressed to the Secretary of the Corporation, call a special meeting of
holders of shares of such Series H Preferred Stock. Such meeting shall be
held at the earliest practicable date upon the notice required for special
meetings of shareholders at
4.
<PAGE>
the place for holding annual meetings of shareholders of the Corporation
or, if none, at a place designated by the Secretary of the Corporation. If
such meeting shall not be called by the proper officers of the Corporation
within 30 days after the personal service of such written request upon the
Secretary of the Corporation, or within 30 days after mailing the same
within the United States, by registered mail, addressed to the Secretary of
the Corporation at its principal office (such mailing to be evidenced by
the registry receipt issued by the postal authorities), then holders of
record of 10% of the shares of Series H Preferred Stock then outstanding
may designate in writing any person to call such meeting at the expense of
the Corporation, and such meeting may be called by such person so
designated upon the notice required for special meetings of shareholders
and shall be held at the same place as is elsewhere provided in this
paragraph. Any holder of shares of Series H Preferred Stock then
outstanding that would be entitled to vote at such meeting shall have
access to the stock books of the Corporation's transfer agent for the
purpose of causing a meeting of shareholders to be called pursuant to the
provisions of this paragraph. Notwithstanding the provisions of this
paragraph, however, no such special meeting shall be called or held during
a period within 45 days immediately preceding the date fixed for the next
annual meeting of shareholders.
(iv) Subject to the provisions hereof, the directors elected pursuant
to this Section 5(c) shall serve until the next annual meeting or until
their respective successors shall be elected and qualified. Any director
elected by the holders of Series H Preferred Stock may be removed by, and
shall not be removed otherwise than by, the vote of the holders of a
majority of the outstanding shares of the Series H Preferred Stock who were
entitled to participate in such election of directors, voting as a separate
class, without regard to series, at a meeting called for such purpose or by
written consent. If the office of any director elected by the holders of
Series H Preferred Stock, voting as a class, without regard to series,
becomes vacant by reason of death, resignation, retirement,
disqualification or removal from office or otherwise, the remaining
director elected by the holders of Series H Preferred Stock, voting as a
class, without regard to series, may choose a successor who shall hold
office for the unexpired term in respect of which such vacancy occurred.
Upon any termination of the right of the holders of Series H Preferred
Stock to vote for directors as herein provided (i.e., when all Excess Free
Cash Trigger Events and Horizon Events have been Undone), the term of
office of all directors then in office elected by the holders of Series H
Preferred Stock, pursuant to this Section 5(c) shall terminate immediately.
(d) For the purposes of Section 5(c) the following terms have the following
meanings:
"Consolidated Free Cash" means cash and cash equivalents (as
determined by generally accepted accounting principles) minus (i) debt and
(ii) projected capital expenditures budgeted and approved by the Board in
good faith for the twelve month period following such fiscal quarter end.
"Excess Free Cash Trigger Event" means the ninetieth day after the end
of each fiscal quarter of the Corporation if (i) as at the end of such
fiscal quarter the Corporation
5.
<PAGE>
had Consolidated Free Cash in excess of $30,000,000 and (ii) during such
ninety day period the Corporation shall not have irrevocably offered to
redeem, pursuant to Section 6(a), an amount of Series H Preferred Stock
(based on its then Stated Amount) equal to the difference between
Consolidated Free Cash and $30,000,000 (the "Relevant Portion").
"Horizon Event" means that shares of Series H Preferred Stock are
outstanding after June 30, 2001.
"Undone" means (i) with respect to a Horizon Event, the point in time
after June 30, 2001 at which no shares of Series H Prepared Stock are
outstanding and (ii) with respect to an Excess Free Cash Trigger Event, the
point in time after the occurrence of an Excess Free Cash Trigger Event
when the Relevant Portion of the Series H Preferred Stock has been redeemed
pursuant to Section 6(a).
Section 6. Redemption.
----------
The Series H Preferred Stock (including the PIK Preferred) shall be
redeemable by the Corporation as follows:
(a) Optional Redemption. Each share of Series H Preferred Stock shall be
-------------------
subject to redemption by the Corporation in whole or in part at the option of
the Corporation, as determined by the Board, for a cash amount per share equal
to the Stated Amount plus dividends accrued but unpaid on the date of
redemption.
(b) Notice of Redemption. In the event the Corporation shall redeem shares
--------------------
of Series H Preferred Stock pursuant to clauses (a) above, a notice of such
redemption shall be given by first-class mail, postage prepaid, mailed not less
than 20 nor more than 60 days prior to the date fixed for redemption (the
"Redemption Date"), to each holder of record of the shares to be redeemed at
such holder's address as the same appears on the stock books of the
Corporation's transfer agent. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of Series H Preferred Stock to be redeemed and,
if less than all the shares held by such holder are to be redeemed, the number
of such shares to be redeemed from such holder; (iii) the redemption price and
the cash amount in which such redemption price will be paid; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; (v) that payment will be made upon presentation and
surrender of such Series H Preferred Stock; (vi) the then current Conversion
Ratio; (vii) that dividends on the shares to be redeemed shall cease to accrue
following such redemption date; (viii) that such redemption is at the option of
the Corporation; and (ix) that accrued and unpaid dividends up to and including
the redemption date will be paid in accordance with the terms herein. Notice
having been mailed as aforesaid, on and after the redemption date, dividends on
the shares of the Series H Preferred Stock so called for redemption shall cease
to accrue, said shares shall be deemed no longer outstanding, and all rights of
the holders thereof as shareholders of the Corporation (except the right to
receive from the Corporation the monies payable upon redemption, without
interest thereon, upon surrender of the certificates evidencing such shares)
shall cease. The Corporation's
6.
<PAGE>
obligation to provide monies in accordance with the preceding sentence shall be
deemed fulfilled if, on or before the redemption date, the Corporation shall
deposit with a bank or trust company having an office or agency in the Borough
of Manhattan, City of New York, and having a capital and surplus of at least
$500,000,000, the principal amount of funds necessary for such redemption, in
trust for the account of the holders of the shares to be redeemed (and so as to
be and continue to be available therefor), with irrevocable instructions and
authority to such bank or trust company that such funds be applied to the
redemption of the shares of Series H Preferred Stock so called for redemption.
Any interest accrued on such funds shall be paid to the Corporation from time to
time. Any funds so deposited and unclaimed at the end of three years from such
redemption date shall be released or repaid to the Corporation, after which the
holder or holders of such shares of Series H Preferred Stock shall be without
recourse against the Corporation for payment of the redemption price.
Upon surrender in accordance with said notice of the certificates for any
such shares so redeemed (properly endorsed or assigned for transfer, if the
Board shall so require and the notice shall so state), such shares shall be
redeemed by the Corporation at the applicable redemption price aforesaid. If
fewer than all the outstanding shares of Series H Preferred Stock are to be
redeemed, shares to be redeemed shall be selected by the Corporation from
outstanding shares of Series H Preferred Stock not previously called for
redemption by lot or pro rata or by any other equitable method determined by the
Board in its sole discretion. If fewer than all the shares represented by any
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
Section 7. Conversion.
----------
The Series H Preferred Stock shall be subject to conversion as follows:
(a) Automatic Conversion. Each share of Series H Preferred Stock shall
--------------------
automatically be converted into 1.4285 shares of Common Stock (the "Conversion
Ratio") on the day after which the Corporation's Common Stock has a Closing
Price equal to or in excess of $7.00 (the "Base Price") per share for a period
of 30 consecutive Trading Days.
(b) Mechanics of Automatic Conversion. All holders of record of shares of
---------------------------------
Series H Preferred Stock will be sent written notice of the actual date of such
conversion. Each notice shall designate a place for automatic conversion of all
of the shares of Series H Preferred Stock pursuant to Section 7(a). Notice will
be sent by mail, first class, postage prepaid, to each record holder of Series H
Preferred Stock at such holder's address appearing on the stock register. Each
holder of shares of Series H Preferred Stock shall surrender his or its
certificate or certificates for all such shares to the Corporation at the place
designated in such notice, and shall thereafter receive certificates for the
number of shares of Common Stock or other securities to which such holder is
entitled. On the date of conversion, all rights with respect to the Series H
Preferred Stock will terminate, except only (1) any rights to receive declared
but unpaid dividends with a record date preceding the date of conversion, and
(2) the rights of the holders thereof, upon surrender of their certificate or
certificates therefor, to receive certificates for the number of shares of
Common Stock or other securities into which such Series H Preferred Stock has
been
7.
<PAGE>
converted and cash for fractional shares. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the duly
executed by the registered holder or by his or its attorney duly authorized in
writing. All certificates evidencing shares of Series H Preferred Stock which
are converted in accordance with the provisions hereof shall, from and after the
date of conversion, be deemed to have been retired and cancelled and the shares
of Series H Preferred Stock represented thereby converted into Common Stock for
all purposes, notwithstanding the failure of the holder or holders thereof to
surrender such certificates. As soon as practicable after the date of such
automatic conversion and the surrender of the certificate or certificates for
Series H Preferred Stock as aforesaid, the Corporation shall cause to be issued
and delivered to such holder, or to his or its written order, a certificate or
certificates for the number of full shares of Common Stock or other securities
issuable on such conversion in accordance with the provisions hereof and cash
equal to the product of the Base Price multiplied by the fraction of a share of
Common Stock otherwise issuable upon such conversion.
(c) "Closing Price" on any Trading Day with respect to the per share price
of any shares of Common Stock means the last reported sale price regular way or,
in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if such shares of Common Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
national market.
(d) "Trading Day," with respect to a United States national securities
exchange or automated quotation system in the United States, means a day on
which such exchange or system is open for a full day of trading.
(e) Certain Adjustments to Conversion Ratio for Stock Splits, Dividends,
--------------------------------------------------------------------
Reorganizations, Etc.
- --------------------
(i) Adjustment for Stock Splits, Stock Dividends and Combinations of
Common Stock. In the event the outstanding shares of Common Stock shall,
after the filing of this Certificate of Determination, be further
subdivided (split), or combined (reverse split), by reclassification or
otherwise, or in the event of any dividend or other distribution payable on
the Common Stock in shares of Common Stock, the Conversion Ratio in effect
immediately prior to such subdivision, combination, dividend or other
distribution shall, concurrently with the effectiveness of such
subdivision, combination, dividend or other distribution, be
proportionately adjusted.
(ii) Adjustment for Merger or Reorganization, Etc. In case of a
--------------------------------------------
reclassification, reorganization or exchange (other than described in
Subsection (i) above) or any consolidation or merger of the Corporation
with another corporation, each share of Series H Preferred Stock shall
thereafter be convertible into the number of shares of stock or other
securities or property to which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion of the Series H
Preferred Stock
8.
<PAGE>
would have been entitled upon such reclassification, reorganization,
exchange, consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the Board) shall be made in the
application of the provisions herein set forth with respect to the rights
and interests thereafter of the holders of the Series H Preferred Stock, to
the end that the provisions set forth herein (including provisions with
respect to changes in and other adjustments of the applicable Conversion
Ratio) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter deliverable
upon the conversion of the Series H Preferred Stock.
(iii) Adjustments for Other Dividends and Distributions. In the
-------------------------------------------------
event the Corporation at any time or from time to time after the filing of
this Certificate of Determination makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Company other than shares
of Common Stock, then and in each such event provision shall be made so
that the holders of Series H Preferred Stock shall receive upon conversion
thereof, in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities of the Company which they would have
received had their Series H Preferred Stock been converted into Common
Stock on the date of such event and had they thereafter, during the period
from the date of such event to and including the conversion date, retained
such securities receivable by them as aforesaid during such period, subject
to all other adjustments called for during such period under this Section 7
with respect to the rights of the holders of the Series H Preferred Stock.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
-----------------------------
or readjustment of the Conversion Ratio pursuant to this Section 7, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series H Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in reasonable detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request, at any time, of any holder of Series H Preferred Stock, furnish or
cause to be furnished to such holder a like certificate setting forth: (i) such
adjustments and readjustments; (ii) the applicable Conversion Ratio at the time
in effect; and (iii) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of the Series H Preferred Stock.
(g) Payment of Taxes. The Corporation will pay all taxes (other than taxes
----------------
based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion of
shares of Series H Preferred Stock, other than any tax or other charge imposed
in connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series H Preferred
Stock so converted were registered.
9.
<PAGE>
Section 8. Miscellaneous.
-------------
(a) Preemptive Rights. Except as required by law, the holders of Series H
-----------------
Preferred Stock shall not be entitled to any preemptive rights with respect to
any class or series of the Corporation's stock, whether such class or series
currently exists or has not yet been created.
(b) Funded Debt. Without the consent of a majority of the outstanding
-----------
shares of Series H Preferred Stock or the unanimous approval of the directors of
the Corporation, the Corporation shall not incur funded debt, other than
purchase money debt and debt utilized for working capital purposes.
(c) Limitation and Rights Upon Insolvency. Notwithstanding any other
-------------------------------------
provision of this certificate, the Corporation shall not be required to pay any
dividend on, or to pay any amount in respect of any redemption or conversion of,
the Series H Preferred Stock at a time when immediately after making such
payment the Corporation is or would be rendered insolvent (as defined by
applicable law), provided that the obligation of the Corporation to make any
such payment shall not be extinguished in the event the foregoing limitation
applies.
(d) Parity or Senior Securities. Without the consent of a majority of the
---------------------------
outstanding shares of Series H Preferred Stock or the unanimous approval of the
directors of the Corporation, the Corporation shall not issue any shares of
stock on parity with or senior to the shares of Series H Preferred Stock as to
dividends, distributions or liquidation.
(e) Shares to Be Retired. Any share of Series H Preferred Stock converted,
--------------------
redeemed or otherwise acquired by the Corporation shall be retired and cancelled
and shall upon cancellation be restored to the status of authorized but unissued
shares of preferred stock, subject to reissuance by the Board as Series H
Preferred Stock or shares of preferred stock of one or more other series.
(f) Notices of Record Date. In the event of any taking by the Corporation
----------------------
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend,
distribution, conversion, redemption, any capital reorganization of the
Corporation, any reclassification or recapitalization of the Corporation's
capital stock, any consolidation or merger with or into another corporation, any
transfer of all or substantially all of the assets of the Corporation or any
dissolution, liquidation or winding up of the Corporation, the Corporation shall
mail to each holder of Series H Preferred Stock at least ten (10) days prior to
the date specified for the taking of a record, a notice specifying the date
10.
<PAGE>
on which any such record is to be taken for the purpose of such corporate
action.
(g) Record Holders. The Corporation and the Corporation's transfer agent
--------------
may deem and treat the record holder of any shares of Series H Preferred Stock
as the true and lawful owner thereof for all purposes, and neither the
Corporation nor the Corporation's transfer agent shall be affected by any notice
to the contrary.
(h) Notice. Except as may otherwise be provided for herein, all notices
------
referred to herein shall be in writing, and all notices hereunder shall be
deemed to have been given upon, the earlier of receipt of such notice or three
Business Days after the mailing of such notice if sent by registered mail
(unless first-class mail shall be specifically permitted for such notice under
the terms of this Certificate of Designations) with postage prepaid, addressed:
if to the Corporation, to its offices at Ringland Way, Newport, Gwent NP6 2TA,
United Kingdom (Attention: Secretary) or to an agent of the Corporation
designated as permitted by the Certificate of Incorporation or, if to any holder
of the Series H Preferred Stock, to such holder at the address of such holder of
the Series H Preferred Stock as listed in the stock record books of the
Corporation (which may include the records of the Corporation's transfer agent);
or to such other address as the Corporation or holder, as the case may be, shall
have designated by notice similarly given.
3. That the number of shares designated as Series H Preferred Stock
is 3,000,000, none of which has been issued.
The undersigned each further declares under penalty of perjury under
the laws of the State of California that the matters set forth in this
certificate are true and correct of his own knowledge and that this certificate
has been executed on this 15th day of May, 1998.
By /s/ Nigel Wheeler
------------------------------
Nigel Wheeler, President
By /s/ J.J. Linnert
------------------------------
Jeremy Linnert, Secretary
11.
<PAGE>
CERTIFICATE OF DETERMINATION OF RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS OF
TRIKON TECHNOLOGIES, INC.
Nigel Wheeler and Jeremy Linnert do hereby certify:
1. That they are President and Secretary, respectively, of Trikon
Technologies, Inc., a California corporation (the "Corporation").
2.1. That upon the terms of the Series G Preferred Stock, all of the
outstanding shares of the Series G Preferred Stock converted into shares of
Common Stock on May 14, 1998 and no shares of Series G Preferred Stock are
outstanding;
2.2. That pursuant to authority conferred upon the Board of Directors
by the Seventh Restated Articles of Incorporation of the Corporation, under the
provisions of Section 401 of the Corporations Code of the State of California,
the Board of Directors, by written consent effective May 7, 1998, adopted the
following resolutions:
IT IS RESOLVED, that the Board of Directors does hereby establish a
series of Preferred Stock as follows:
(a) The designation of such series of Preferred Stock is the Series I
Junior Participating Preferred Stock, and the number of shares of such Series I
Preferred Stock is 44,000, none of which has been issued.
(b) The rights, preferences, privileges and restrictions granted to
and imposed upon the Series I Junior Participating Preferred Stock and the
holders thereof shall be as set forth below.
Section 1. Designation and Amount. The shares of such series shall
----------------------
be designated as "Series I Junior Participating Preferred Stock" (the "Series I
Preferred Stock") and the number of shares constituting the Series I Preferred
Stock shall be Forty Four Thousand (44,000), none of which have been issued as
of the date hereof. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series I Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series I Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(a) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series I Preferred Stock with respect to dividends, the holders of shares of
Series I Preferred Stock, in preference to the holders of the Common Stock of
the Corporation (the "Common Stock"), and of any other junior stock, shall
1.
<PAGE>
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in cash
on the first day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series I Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, 1000 times the aggregate per share amount of
all cash dividends, and 1000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series I Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series I Preferred Stock were entitled
immediately prior to such event under the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series I Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series I Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series I Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series I Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series I Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series I Preferred
-------------
Stock have the following voting rights:
2.
<PAGE>
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series I Preferred Stock shall entitle the holder thereof to 1000
votes on all matters submitted to a vote of the shareholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series I
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Certificate of
Determination creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series I Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series I Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
(d) Notwithstanding any provision hereof to the contrary, holders of
Series I Preferred Stock shall not be entitled to vote at and with respect to
any regular or special meeting regarding the Charter Amendment. "Charter
Amendment" means an amendment to the Corporation's Articles of Incorporation the
purpose of which is to authorize an increase in the authorized number of shares
of Common Stock for the purpose of having a sufficient number of shares of
Common Stock to permit the conversion of the Series I Preferred Stock into
Common Stock as provided in Section 10 below.
Section 4. Certain Restrictions.
--------------------
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series I Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series I Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series I Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or
3.
<PAGE>
winding up) with the Series I Preferred Stock, except dividends paid
ratably on the Series I Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series I Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series I Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series I Preferred Stock, or any shares of stock ranking on a
parity with the Series I Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series I Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate of Determination creating
a series of Preferred Stock or any similar stock or as otherwise required by
law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series I Preferred Stock unless,
prior thereto, the holders of shares of Series I Preferred Stock shall have
received $.001 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series I Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series I Preferred Stock,
except distributions made ratably on the Series I Preferred Stock and all such
parity stock in proportion to the total amounts to
4.
<PAGE>
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series I Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
--------------------------
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series I Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series I Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series I Preferred Stock shall
-------------
not be redeemable.
Section 9. Rank. The Series I Preferred Stock shall rank, with respect to
----
the payment of dividends and the distribution of assets, junior to all series of
the Corporation's Preferred Stock.
Section 10. Conversion. The Series I Preferred Stock shall be subject to
----------
conversion as follows:
(a) Automatic Conversion. Each share of Series I Preferred Stock shall
automatically be converted into 1,000 shares of Common Stock ("Conversion
Ratio") (i) on September 30, 1998 or such earlier date of approval of the
Charter Amendment, or (ii) simultaneously with approval of the Charter
Amendment, provided that, with respect to clause (ii), both at the time of the
original issuance of the Series I Preferred Stock and at the time of the
conversion, the
5.
<PAGE>
Corporation is a "listed corporation" and the common stock is listed or
qualified for trading on a stock exchange or market system as defined in
subdivision (d) of Section 301.5 of the California Corporations Code. The
Conversion Ratio shall be reduced (i.e., the number of shares of Common Stock
receivable with respect to each share of Series I Preferred Stock) by one
percent (1%) for each six months period that elapses after the date that the
Charter Amendment is first submitted to the shareholders for approval until
shareholder approval of the Charter Amendment is received.
(b) Mechanics of Automatic Conversion. All holders of record of shares of
Series I Preferred Stock will be given written notice of the actual date of such
conversion within thirty days after approval of the Charter Amendment. Notice
will be sent by mail, first class, postage prepaid, to each record holder of
Series I Preferred Stock at such holder's address appearing on the stock
register. Each holder of shares of Series I Preferred Stock shall surrender his
or its certificate or certificates for all such shares to the Corporation at the
place designated in such notice, and shall thereafter receive certificates for
the number of shares of Common Stock or other securities to which such holder is
entitled. On the date of conversion, all rights with respect to the Series I
Preferred Stock will terminate, except only (1) any rights to receive declared
but unpaid dividends with a record date preceding the date of conversion, and
(2) the rights of the holders thereof, upon surrender of their certificate or
certificates therefor, to receive certificates for the number of shares of
Common Stock or other securities into which such Series I Preferred Stock has
been converted and cash for fractional shares. If so required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or by
his or its attorney duly authorized in writing. All certificates evidencing
shares of Series I Preferred Stock which are required to be surrendered for
conversion in accordance with the provisions hereof shall, from and after the
date such certificates are so required to be surrendered, be deemed to have been
retired and cancelled and the shares of Series I Preferred Stock represented
thereby converted into Common Stock for all purposes, notwithstanding the
failure of the holder or holders thereof to surrender such certificates on or
prior to such date. As soon as practicable after the conversion date and the
surrender of the certificate or certificates for Series I Preferred Stock as
aforesaid, the Corporation shall cause to be issued and delivered to such
holder, or to his or its written order, a certificate or certificates for the
number of full shares of Common Stock or other securities issuable on such
conversion in accordance with the provisions hereof.
(c) Adjustments for Stock Splits, Stock Dividends and Combinations of
Common Stock. In the event the outstanding shares of Common Stock shall, after
the filing of this Certificate of Determination, be further subdivided (split),
or combined (reverse split), by reclassification or otherwise, or in the event
of any dividend or other distribution payable on the Common Stock in shares of
Common Stock, the Conversion Ratio in effect immediately prior to such
subdivision, combination, dividend or other distribution shall, concurrently
with the effectiveness of such subdivision, combination, dividend or other
distribution, be proportionately adjusted.
6.
<PAGE>
3. That the number of shares designated as Series I Preferred Stock
is 44,000, none of which has been issued.
The undersigned each further declares under penalty of perjury under
the laws of the State of California that the matters set forth in this
certificate are true and correct of his own knowledge and that this certificate
has been executed on this 15th day of May, 1998.
By /s/ Nigel Wheeler
-----------------------------
Nigel Wheeler, President
By /s/ J.J. Linnert
-----------------------------
Jeremy Linnert, Secretary
7.
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 14, 1998
between
TRIKON TECHNOLOGIES, INC.,
AS ISSUER
and
U.S. TRUST COMPANY OF CALIFORNIA, N.A.
AS TRUSTEE
Supplementing the Indenture
Dated as of October 7, 1996
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of May 14, 1998 (the "First
Supplemental Indenture"), by and among Trikon Technologies, Inc., a California
corporation, formerly known as Plasma & Materials Technologies, Inc. (the
"Company") and U.S. Trust Company of California, N.A., as trustee (the
"Trustee").
WHEREAS, the Company executed and delivered the Indenture dated as of
October 7, 1996 (the "Indenture"), to the Trustee to provide for the issuance of
the Company's 7 /1/8% Convertible Subordinated Notes Due October 15, 2001 (the
"Securities").
WHEREAS, an offering circular relating to an offer to exchange each $1,000
in principal amount of the Securities into units comprising (i) 262.7339 shares
of the Company's common stock, (ii) 34.7826 shares of the Company's Series H
preferred stock, and (iii) 0.3393 shares of the Company's Series I junior
participating preferred stock, dated April 14, 1998 (the "Offering Circular"),
and a related Note Consent and Letter of Transmittal has been delivered to the
holders of the Securities pursuant to which (i) an offer to exchange the units
referred to above for all of the outstanding Securities has been made (such
offer on the terms set forth in the Offering Circular and Note Consent and
Letter of Transmittal, collectively, the "Offer") and (ii) consents have been
solicited to the execution and delivery of this First Supplemental Indenture.
WHEREAS, pursuant to Article 11 of the Indenture, the Company desires to
amend certain provisions of the Indenture as described below.
WHEREAS, all necessary actions to make this First Supplemental Indenture a
valid agreement of the Company and the Trustee in accordance with its terms and
a valid amendment and supplement to the Indenture, have been completed.
NOW THEREFORE, for and in consideration of the premises and mutual
covenants herein contained, each party hereto agrees as follows for the benefit
of the holders of the Securities:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms.
-------------------
Unless the context otherwise requires:
(a) a term defined in the Indenture has the same meaning when used in this
First Supplemental Indenture;
1.
<PAGE>
(b) capitalized terms used herein that are not otherwise defined herein
shall have the meaning assigned to such terms in the Indenture;
(c) references to Sections or Articles mean reference to such Section or
Article in the Indenture, unless stated otherwise; and
(d) rules of construction applicable pursuant to the Indenture are also
applicable herein.
ARTICLE II
AMENDMENTS TO THE INDENTURE
Section 2.1 Deletions.
---------
A. The Indenture is amended to delete the following provisions in their
entirety, including all cross-references thereto in other provisions of the
Indenture:
(a) SECTION 3.8 Designated Event Offer.
(b) SECTION 4.2 SEC Reports.
(c) SECTION 4.3 Compliance Certificate.
(d) SECTION 4.5 Corporate Existence.
(e) SECTION 4.6 Taxes.
(f) SECTION 4.7 Designated Event.
(g) SECTION 7.1 Merger, Consolidation or Sale of Assets.
(h) SECTION 8.2 Acceleration.
B. The Indenture is amended so as to deem the following defined terms deleted
from all sections in which they appear, as follows:
(a) "Commencement Date"
(b) "Designated Event Offer"
(c) "Designated Event Payment Date"
2.
<PAGE>
(d) "Liquidated Damages"
(e) "Offer Amount"
(f) "Tender Period"
Section 2.2 Amendments.
----------
The Indenture is amended so as to amend and restate the following
provisions in their entirety, as follows:
(a) Section 2.12, Defaulted Interest, is amended in its entirety so as to
read in full as follows:
"If the Company fails to make a payment of interest on the Notes, it shall
pay such defaulted interest plus any interest payable on the defaulted interest,
in any lawful manner. It may pay such defaulted interest, plus any such
interest payable on them, to the persons who are Noteholders on a subsequent
special record date. The Company shall fix any such record date (which shall be
at least 5 and not more than 30 days before the payment date) and the payment
date. At least 15 days before any such record date, the Company shall mail to
Noteholders a notice that states the record date, payment date, and amount of
such interest to be paid. Interest to be paid prior to the expiration of the
30-day grace period specified in Section 8.1(a) of this Indenture shall be paid
to the holders on the regular record date for the interest payment that has not
been made."
(b) Section 3.3, Notice of Redemption, is amended in its entirety so as to
read in full as follows:
"At least 15 days but not more than 60 days before a redemption date (other
than with respect to a Special Redemption), the Company shall mail a notice of
redemption to each holder whose Notes are to be redeemed at such holder's
registered address. In the event of a Special Redemption, the Company shall
mail a notice of redemption to each holder at such holder's registered address
at least ten Business Days before a redemption date.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date, upon cancellation of such Note, a new Note or Notes in principal
amount equal to the unredeemed portion will be issued in the name of the
holder thereof;
3.
<PAGE>
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price plus accrued interest;
(f) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Notes or portions thereof
called for redemption ceases to accrue on and after the redemption date;
and
(g) the paragraph of the Notes pursuant to which the Notes called for
redemption are being redeemed.
Such notice shall also state the current Conversion Price, if any, and the
date on which the right to convert such Notes or portions thereof into Common
Stock of the Company will expire.
At the Company's request, the Trustee shall give notice of redemption in
the Company's name and at its expense."
(c) Section 3.5, Deposit of Redemption Price, is amended in its entirety so
as to read in full as follows:
"On or before the redemption date (other than for a Special Redemption),
the Company shall deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued interest, if any, up to
but not including the redemption date on all Notes to be redeemed on that date
(subject to the right of holders of record on the relevant record date to
receive interest due on an interest payment date) unless theretofore converted
into Common Stock pursuant to the provisions hereof. The Trustee or the Paying
Agent shall return to the Company any money not required for that purpose."
(d) Section 4.1, Payment of Notes, is amended in its entirety so as to read
in full as follows:
"The Company shall pay the principal of, premium, if any, and interest on,
the Notes on the dates and in the manner provided in the Notes. Principal,
premium, if any, and interest shall be considered paid on the date due if the
Paying Agent (other than the Company or an Affiliate of the Company) holds on
that date money designated for and sufficient to pay all principal, premium, if
any, and interest then due and such Paying Agent is not prohibited from paying
such money to the Noteholders on that date pursuant to the terms of this
Indenture. To the extent lawful, the Company shall pay interest, if any
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest (without regard to any applicable grace period)
at the rate borne by the Notes, compounded semiannually."
4.
<PAGE>
(e) Section 8.1, Events of Default, is amended in its entirety so as to
read in full as follows:
"In ``Event of Default'' occurs if:
(a) the Company defaults in the payment of interest on any Note when the
same becomes due and payable, whether or not such payments shall be prohibited
by Article 6, and the Default continues for a period of 30 days after the date
due and payable;
(b) the Company defaults in the payment of the principal of any Note when
the same becomes due and payable at maturity, upon redemption or otherwise,
whether or not such payment shall be prohibited by Article 6;
(c) [Intentionally omitted.]
(d) [Intentionally omitted.]
(e) [Intentionally omitted.]
(f) [Intentionally omitted.]
(g) the Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case in which it
is the debtor, (iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) makes the admission in writing that it
generally is unable to pay its debts as the same become due; or
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (i) is for relief against the Company or any Subsidiary of
the Company in an involuntary case, (ii) appoints a Custodian of the Company or
any Subsidiary of the Company or for all or substantially all of its property,
and the order or decree remains unstayed and in effect for 60 days, or (iii)
orders the liquidation of the Company or any Subsidiary of the Company, and the
order or decree remains unstayed and in effect for 60 days.
The term ``Bankruptcy Law'' means Title 11, U.S. Code or any similar
Federal or state law for the relief of debtors. The term ``Custodian'' means
any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law."
(f) Section 8.6, Limitation on Suits, is amended in its entirety so as to
read in full as follows:
"A Noteholder may pursue a remedy with respect to this Indenture or the
Notes only if:
5.
<PAGE>
(a) the Noteholder gives to the Trustee notice of a continuing Event of
Default;
(b) the Noteholders of at least a majority in principal amount of the then
outstanding Notes make a request to the Trustee to pursue the remedy;
(c) such Noteholder or Noteholders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(e) during such 60-day period the Noteholders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request."
(g) Section 11.4, Revocation and Effect of Consents, is amended in its
entirety so as to read in full as follows:
"Until an amendment, supplement or waiver becomes effective, a consent to
it by a Noteholder of a Note is a continuing consent by the Noteholder and every
subsequent Noteholder of a Note or portion of a Note that evidences the same
debt as the consenting Noteholder's Note, even if notation of the consent is not
made on any Note.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those persons who were
Noteholders at such record date (or their duly assigned proxies), and only those
persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Noteholders after such record date.
After an amendment, supplement or waiver becomes effective it shall bind
every Noteholder, unless it is of the type described in any of clauses (a)
through (i) of Section 11.2 hereof. In such case, the amendment or waiver shall
bind each Noteholder who has consented to it and every subsequent Noteholder
that evidences the same debt as the consenting Noteholder's Note."
ARTICLE III
MISCELLANEOUS
Section 3.1 Ratification of Indenture.
-------------------------
6.
<PAGE>
The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided and every holder of Securities heretofore or hereafter
authenticated and delivered under the Indenture shall be bound hereby.
Section 3.2 Governing Law.
-------------
THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
Section 3.3 Severability.
------------
In case any one or more of the provisions in this First Supplemental
Indenture shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions shall not in any way be
affected or impaired thereby, it being intended that all of the provisions
hereof shall be enforceable to the full extent permitted by law.
Section 3.4 Counterparts.
------------
This First Supplemental Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
Section 3.5 Effectiveness.
-------------
This First Supplemental Indenture shall be effective and binding when
executed by the Company and the Trustee; provided, however, that the provisions
of Article II herein shall only become operative upon consummation of the Offer.
Section 3.6 Trustee Not Responsible for Recitals.
------------------------------------
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
Section 3.7 Performance of Trustee.
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The Trustee, for itself and its successors, accepts the Trust of the
Indenture as amended by this First Supplemental Indenture and agrees to perform
the First Supplemental Indenture and the Indenture, but only upon the terms and
conditions set forth therein,
7.
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including the terms and provisions in the Indenture defining and limiting the
liability and responsibility of the Trustee.
8.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
TRIKON TECHNOLOGIES, INC.,
formerly known as Plasma & Materials
Technologies, Inc., as Company
By: /s/ C.D. Dobson
--------------------------------
Name: C.D. Dobson
Title: Chairman & CEO
U.S. TRUST COMPANY OF CALIFORNIA, N.A.,
as Trustee
By: /s/ Sandee Parks
--------------------------------
Name: Sandee Parks
Title: Vice President
9.
