<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
OnTrak Systems, Inc.
(Name of Issuer)
Common Stock, $0.0001 Par Value Per Share
-------------------------------------------------------
(Title of Class of Securities)
683374102
(CUSIP Number)
Richard H. Lovgren, Esq.
Lam Research Corporation
4650 Cushing Parkway
Fremont, California 94538
(510) 659-0200
- ------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 24, 1997
-------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of
that section of the Exchange Act but shall be subject to all other provisions of
the Exchange Act.
____________________
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
<PAGE>
- ----------------------
CUSIP NO. 683374102
- ----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 LAM RESEARCH CORPORATION
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
94-2634797
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) / /
(b) / /
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
00
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
5 ITEMS 2(d) OR 2(e) / /
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
State of Delaware
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF -0-
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
2,502,371
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING -0-
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
-0-
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,502,371 shares
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12 [_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
30.7%
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
Neither the filing of this statement on Schedule 13D nor any of its
contents shall be deemed to constitute an admission by Lam Research Corporation
that it is the beneficial owner of any of the Common Stock referred to herein
for purposes of Section 13(d) of the Exchange Act or for any other purpose, and
such beneficial ownership is expressly disclaimed.
<PAGE>
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the Common Stock, $0.0001 par
value per share (the "OSI Common Stock"), of OnTrak Systems, Inc., a Delaware
corporation ("OSI"). The principal executive offices of OSI are located at 1010
Rincon Circle, San Jose, CA 95131.
ITEM 2. IDENTITY AND BACKGROUND
(a) The name of the person filing this statement is Lam Research
Corporation, a Delaware corporation ("Lam").
(b) The address of the principal office and principal business of Lam is
4650 Cushing Parkway, Fremont, California 94538.
(c) Lam develops, manufactures, markets and supports semiconductor etch and
chemical vapor deposition equipment. Set forth in Schedule I to this Schedule
13D is the name and present principal occupation or employment of each of Lam's
executive officers and directors and the name, principal business and address of
any corporation or other organization in which such employment is conducted.
(d) During the past five years, neither Lam nor, to Lam's knowledge, any
person named in Schedule I to this Schedule 13D, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the past five years, neither Lam nor, to Lam's knowledge, any
person named in Schedule I to this Schedule 13D, was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of or prohibiting or mandating activity
subject to federal or state securities laws or finding any violation with
respect to such laws.
(f) All of the directors and executive officers of Lam named in Schedule I
to this Scheduled 13D are citizens of the United States, except for Osamu Kano,
who is a citizen of Japan.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
To facilitate the consummation of the Merger (as defined in Item 4 below),
certain stockholders of OSI have entered into Voting Agreements with Lam as
described in Item 4. The Voting Agreements do not give Lam the right to
purchase the OSI shares that are subject to the Agreements.
ITEM 4. PURPOSE OF TRANSACTION
(a) - (b) Pursuant to the Agreement and Plan of Merger dated as of March
24, 1997 (the "Merger Agreement"), among OSI, Omega Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of Lam ("Merger Sub") and Lam,
and subject to the conditions set forth therein (including regulatory approval
and the approval of the stockholders of OSI and Lam), Merger Sub will be merged
with and into OSI (the "Merger") and OSI will become a wholly-owned subsidiary
of Lam. Each share of OSI Common Stock shall be converted into the right to
receive 0.83 shares of Lam's Common Stock, $.001 par value per share ("Lam
Common Stock"); provided, that if Lam's average stock price during a specified
period prior to closing the Merger falls below $30.00 per share, and if that
average price represents more than a 15 percent decline relative to an index of
semiconductor equipment companies
<PAGE>
during a specified period, Lam will have the option to fix the consideration at
$24.90 of Lam stock per OnTrak share by adjusting the exchange ratio upwards to
equal $24.90 divided by the average value of Lam's common stock over a specified
period prior to closing. If Lam does not exercise the option to fix the
consideration in those circumstances, OnTrak will have the right to terminate
the transaction. In addition, Lam will assume outstanding options exercisable
for OSI Common Stock and certain rights under OSI's employee stock purchase plan
on the terms set forth in Section 5.10 of the Merger Agreement.
The consummation of the Merger is subject to the satisfaction or waiver of
closing conditions for the benefit of Lam, closing conditions for the benefit of
OSI and closing conditions for the benefit of Lam and OSI, as set forth in
Article 6 of the Merger Agreement.
The foregoing summary of the Merger is qualified in its entirety by
reference to the copy of the Merger Agreement included as Exhibit 1 to this
Schedule 13D and incorporated herein in its entirety by reference.
As an inducement to Lam to enter into the Merger Agreement, each of Jerauld
Cutini, Patrick O'Connor, Wilbur Krusell, James Bagley, Advent VII L.P., Advent
Atlantic and Pacific II L.P., Advent New York L.P., TA Venture Investors Limited
Partnership, Advent Industrial II L.P., and Chestnut Capital International III,
L.P. (individually, a "Voting Agreement Stockholder" and, collectively, the
"Voting Agreement Stockholders") has entered into a Voting Agreement dated as of
March 24, 1996 (individually, a "Voting Agreement" and collectively, the "Voting
Agreements") with Lam. To Lam's knowledge, the number of shares of OSI Common
Stock beneficially owned by each of the Voting Agreement Stockholders is set
forth on Schedule II to this Schedule 13D. Pursuant to Section 7 of the Voting
Agreements, the Voting Agreement Stockholders have agreed to vote the shares of
OSI Common Stock owned by them in favor of the adoption of the Merger Agreement,
for the approval of the other actions contemplated by the Merger Agreement or
the Voting Agreement and for any action required in furtherance of those
agreements. The Voting Agreement Stockholders have also agreed not to solicit,
negotiate, encourage or facilitate any competing Acquisition Proposals, as
described in Section 5 of the Voting Agreements.
The Voting Agreement Stockholders have also executed and delivered to Lam
irrevocable proxies granting Lam and certain of its officers the authority to
vote the shares of OSI Common Stock owned by the Voting Agreement Stockholders
with respect to the matters described above. Lam did not pay any additional
consideration to any Voting Agreement Stockholder in connection with the
execution and delivery of his or its Voting Agreement or his or its irrevocable
proxy. The Voting Agreement Stockholders retain the right to vote their OSI
Common Stock in their discretion with respect to matters other than those
identified in the Voting Agreements. The Voting Agreements terminate on the
first to occur of: (i) the termination of the Merger Agreement, (ii) the
agreement of the parties to the Voting Agreement in question to terminate such
agreement, or (iii) the consummation of the Merger. Notwithstanding the
foregoing, the obligation of Advent VII L.P., Advent Atlantic and Pacific II
L.P., Advent New York L.P., TA Venture Investors Limited Partnership, Advent
Industrial II L.P., and Chestnut Capital International III L.P. to vote their
shares in accordance with the Voting Agreements shall not extend past August 31,
1997. The foregoing summary of the Voting Agreements is qualified in its
entirety by reference to the forms of Voting Agreement included as Exhibits 2
and 3 to this Schedule 13D and incorporated herein in their entirety by
reference.
Also in connection with the Merger Agreement, each of the Voting Agreement
Stockholders and the remaining directors of OSI (each an "Affiliate") will enter
into an Affiliate Agreement with Lam (individually, an "Affiliate Agreement"
and, collectively, the "Affiliate Agreements"). Pursuant to Section F of the
Affiliate Agreements, each Affiliate will agree that, during the period from the
date 30 days prior to the date of consummation of the Merger through the date on
which financial results covering at
<PAGE>
least 30 days of post-Merger combined operations of Lam and OSI have been
published by Lam (within the meaning of the applicable "pooling of interests"
accounting requirements) such Affiliate shall not sell, transfer or otherwise
dispose of, or reduce such Affiliate's risk of ownership or investment in Lam
securities. Each Affiliate will also agree, pursuant to Section B of the
Affiliate Agreement, not to transfer or otherwise dispose of any Lam common
stock received in the Merger, except as set forth in the Affiliate Agreement.
The foregoing summary of the Affiliate Agreements is qualified in its entirety
by reference to the form of Affiliate Agreement included as Exhibit 4 to this
Schedule 13D and incorporated herein in its entirety by reference.
(c) Not applicable.
(d) If the Merger is consummated, OSI will survive the Merger and become a
wholly-owned subsidiary (hereinafter referred to as the "Surviving Corporation")
of Lam, and the directors of Merger Sub at that time (and such other persons as
shall be mutually agreed) shall be the initial directors of the Surviving
Corporation. The officers of OSI at the time of the Merger shall be the initial
officers of the Surviving Corporation.
(e) None, other than a change in the number of outstanding shares of OSI
Common Stock as contemplated by the Merger Agreement.
(f) Upon consummation of the Merger, OSI will become a wholly-owned
subsidiary of Lam.
(g) Upon consummation of the Merger, the Certificate of Incorporation of
Merger Sub, as in effect immediately prior to the Merger, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by Delaware law and such Certificate of Incorporation;
provided, however, that Article I of the Certificate of Incorporation of the
Surviving Corporation shall be amended to read as follows: "The name of the
corporation is OnTrak Systems, Inc." Upon consummation of the Merger, the
Bylaws of Merger Sub, as in effect immediately prior to the Merger, shall be the
Bylaws of the Surviving Corporation.
(h)-(i) Upon consummation of the Merger, the OSI Common Stock will be
deregistered under the Securities Exchange Act of 1934, as amended, and delisted
from the Nasdaq National Market.
(j) Other than as described above, Lam currently has no plan or proposal
which relates to, or may result in, any of the matters listed in Items 4(a) -
(j) of Schedule 13D (although Lam reserves the right to develop such plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) As a result of the Voting Agreements, Lam has shared power to
vote an aggregate of 2,502,371 shares of OSI Common Stock for the limited
purposes described in Item 4 above. Such shares constitute approximately 30.7%
of the issued and outstanding shares of OSI Common Stock as of March 24, 1997.
Lam does not have the sole power to vote or direct the vote or to dispose of or
direct the disposition of and shares of OSI Common Stock.
To Lam's knowledge, no shares of OSI Common Stock are beneficially owned by
any of the persons named in Schedule I, except for such beneficial ownership, if
any, arising solely from the Voting Agreements.
(c) Neither Lam, nor, to Lam's knowledge, any person named in Schedule I,
has effected any transaction in OSI Common Stock during the past 60 days, except
as disclosed herein.
<PAGE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Other than as described in Item 4 above, to Lam's knowledge, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of OSI, including but not limited to transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
EXHIBIT NO. DESCRIPTION
- --------------------------------------------------------------------------------
<S> <C>
1* Agreement and Plan of Merger dated as of March 24, 1997, by
and among Lam Research Corporation, a Delaware corporation,
Omega Acquisition Corporation, a Delaware corporation, and
OnTrak Systems, Inc., a Delaware corporation
- --------------------------------------------------------------------------------
2* Form of Voting Agreement dated as of March 24, 1997, by and
between Lam Research Corporation and Jerauld Cutini, Patrick
O'Connor, Wilbur Krusell, and James Bagley.
- --------------------------------------------------------------------------------
3* Form of Voting Agreement dated as of March 24, 1997 by and
between Lam Research Corporation and Advent VII L.P., Advent
Atlantic and Pacific II L.P., Advent New York L.P., TA
Venture Investors Limited Partnership, Advent Industrial II
L.P., and Chestnut Capital International III L.P.
- --------------------------------------------------------------------------------
4* Form of Affiliate Agreement to be executed by: James Bagley;
Jerauld Cutini; Michael Child; Richard Elkus, Jr.; Gary
Hultquist; Wilbur Krusell; Patrick O'Connor; Advent Atlantic
and Pacific II L.P.; Advent Industrial II L.P.; Advent New
York L.P.; Advent VII L.P.; Chestnut Capital International
III L.P.; and TA Venture Investors Limited Partnership.
</TABLE>
* Previously filed as Exhibit 2.1 and Exhibits B and E-1 thereto, respectively,
to the Current Report on Form 8-K of Lam Research Corporation filed on March
31, 1997.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: April 3, 1997 LAM RESEARCH CORPORATION
By: /s/ Richard H. Lovgren
Richard H. Lovgren
Vice President and General Counsel
<PAGE>
SCHEDULE I
EXECUTIVE OFFICERS AND DIRECTORS OF LAM
<TABLE>
<CAPTION>
Name and Title Present Principal Occupation Including Name of Employer
- ---------------------------- ----------------------------------------------------------------------------------
<S> <C>
*Roger D. Emerick Chairman of the Board and Chief Executive Officer of Lam Research Corporation
David G. Arscott General Partner of Compass Management Partners (a private investment
management partnership), 1550 El Camino Real, #275, Menlo Park, CA 94025
Jack R. Harris Chairman, Chief Executive Officer, President and Chief Financial Officer of
Optical Specialty, Inc. (a manufacturer of automated defect detection and overlay
metrology and analysis systems for the semiconductor industry), 4281 Technology
Drive, Fremont, CA 94538
Grant M. Inman General Partner of Inman & Bowman (a private venture capital partnership), 40
Orinda Way, Bldg. D, Suite 1530, Orinda, CA 94563
Osamu Kano Chairman of Lam Research Co., Ltd. (Japan), 1-1-10 Oyama, 2F, Sagamihara-
SHI, Kanagawa 229 Japan; President of Innoquest Corporation (a distributor of
high-tech products in Japan), 3945 Freedom Circle, #320, Santa Clara, CA 95054
*Hsui-Sheng ("Way") Tu President of Lam Research Corporation
*Henk J. Evenhuis Executive Vice President, Finance, and Chief Financial Officer of Lam Research
Corporation
*Alexander M. Voshchenkov Vice President and Chief Technical Officer of Lam Research Corporation
*Raymond L. Degner Senior Vice President of Lam Research Corporation
*Thomas O. Yep Senior Vice President of Lam Research Corporation
*Robert C. Fink Senior Vice President of Corporate Support and Development of Lam Research
Corporation
*Richard Friedman Vice President of Worldwide Sales and Service of Lam Research Corporation
*George R. Canavan Vice President of Marketing of Lam Research Corporation
*Richard H. Lovgren Vice President, General Counsel and Corporate Secretary of Lam Research
Corporation
</TABLE>
* All of these individuals are employed at Lam Research Corporation, 4650
Cushing Parkway, Fremont, California 94538.
<PAGE>
SCHEDULE II
VOTING AGREEMENT STOCKHOLDERS
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OUTSTANDING SHARES OF
BENEFICIALLY OSI COMMON STOCK AS
STOCKHOLDER OWNED OF MARCH 24, 1997
- ------------ ------------ ---------------------
<S> <C> <C>
James Bagley 500,000 6.1%
Jerauld Cutini 609,000 7.5%
Patrick O'Connor 272,035 3.3%
Wilbur Krusell 200,000 2.5%
Advent VII L.P. 614,223 7.5%
Advent Atlantic and Pacific II L.P. 159,062 1.9%
Advent New York L.P. 61,420 0.8%
TA Venture Investors Limited Partnership 9,215 0.1%
Advent Industrial II L.P. 57,346 0.7%
Chestnut Capital International III L.P. 20,070 0.3%
</TABLE>
