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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 25, 2000
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Varian Semiconductor Equipment Associates, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-25395 77-0501994
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(Commission File Number) (IRS Employer Identification No.)
35 Dory Road, Gloucester, Massachusetts 01930
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(Address of Principal Executive Offices) (Zip Code)
(978) 282-2000
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Registrant's Telephone Number, Including Area Code
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
Legal Proceedings
Effective as of June 13, 1997, Varian Associates, Inc. ("VAI"), the
predecessor of Varian Semiconductor Equipment Associates, Inc. (the "Company"),
completed the sale of its Thin Film Systems business ("TFS") to Novellus
Systems, Inc. ("Novellus"). In June 1997, Applied Materials, Inc. ("Applied
Materials") filed a civil action against VAI in the U.S. District Court for the
Northern District of California alleging infringement of four patents relating
to sputter coating systems. Applied Materials contended that its patents were
infringed by the M2i, MB/2/((TM)) and Inova ((TM)) systems that were
manufactured and sold by TFS prior to the sale of TFS to Novellus. The complaint
requested unspecified money damages and an injunction preventing further
infringement and requested that any damages awarded be increased up to three-
fold for VAI's and Novellus' alleged willful infringement. Novellus was
subsequently added as a defendant in this action and, as part of the sale of
TFS, VAI agreed to indemnify Novellus for certain damages it may suffer as a
result of such litigation and to reimburse Novellus for up to $7.5 million of
its litigation expenses. VAI's answer denied infringement and asserted that the
Applied Materials patents were invalid and that one of the asserted patents was
unenforceable. VAI also filed a separate suit seeking damages and injunctive
relief against Applied Materials contending that certain of Applied Materials'
business practices violated antitrust laws. Novellus has filed a complaint
against Applied Materials which includes a claim that Applied Materials has
infringed three of the patents acquired by Novellus from VAI. The Company
succeeded to VAI's obligations under the Applied Materials litigation and VAI's
indemnity obligations to Novellus as a result of the spinoff of the Company from
VAI on April 2, 1999.
In September 2000, the Company and Applied Materials resolved their patent
and antitrust litigation. Pursuant to the settlement, the Company paid a license
fee to Applied Materials, and Applied Materials granted the Company a license
for past use of four of its physical vapor disposition ("PVD") patents. Applied
Materials also released all claims for infringement of those PVD patents by the
Inova system as it was made and sold as of June 13, 1997 (the date on which
Novellus purchased the product line that manufactures Inova systems from VAI)
and dismissed the Company from the patent infringement lawsuit. In turn, the
Company agreed to dismiss its antitrust lawsuit against Applied Materials and
also to dismiss its counterclaims in the patent infringement lawsuit. In the
fiscal fourth quarter ended September
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29, 2000, after payment of settlement and legal expenses of $4.9 million, the
Company will record a pre-tax gain of $16 million.
Applied Materials' litigation with Novellus continues. As of September
29, 2000, the Company has a remaining accrued liability of $3.0 million (after
recording the pre-tax gain mentioned above) against the Company's remaining
indemnification obligations to Novellus.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: October 11, 2000 VARIAN SEMICONDUCTOR EQUIPMENT
ASSOCIATES, INC.
By: /s/ Ernest L. Godshalk, III
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Ernest L. Godshalk, III
Vice President and
Chief Financial Officer
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