<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
----
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 0-22114
ASYST TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 94-2942251
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
48761 KATO ROAD, FREMONT, CALIFORNIA 94538
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(510) 661-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES X NO
----- -----
THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, NO PAR VALUE, OUTSTANDING
AS OF AUGUST 5, 1999 WAS 12,789,981.
- --------------------------------------------------------------------------------
<PAGE>
ASYST TECHNOLOGIES, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------------------- --------
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS --
JUNE 30, 1999 AND MARCH 31, 1999 2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS --
THREE MONTHS ENDED JUNE 30, 1999 AND
JUNE 30, 1998 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS --
THREE MONTHS ENDED JUNE 30, 1999 AND
JUNE 30, 1998 4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 15
PART II. OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 2. SALE OF UNREGISTERED SECURITIES 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 16
SIGNATURES 17
- ----------
EXHIBIT INDEX 18
- -------------
</TABLE>
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1999 1999
-------------- -------------
(unaudited) (unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 2,913 $ 6,382
Short-term investments 33,883 29,380
Accounts receivable, net 20,688 14,511
Inventories 18,556 19,373
Deferred tax asset 19,845 19,142
Prepaid expenses and other current assets 3,618 3,474
-------- --------
Total current assets 99,503 92,262
-------- --------
Property and equipment, net 12,755 12,923
Other assets, net 18,164 19,103
-------- --------
$130,422 $124,288
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ -- $ 2,190
Accounts payable 6,127 5,055
Accrued liabilities and other current liabilities 8,511 10,051
Income taxes payable 709 676
Customer deposits 1,284 1,806
-------- --------
Total current liabilities 16,631 19,778
-------- --------
Long-term liabilities:
Redeemable convertible preferred stock -- 5,000
Long-term debt, net of current portion -- 2,876
-------- --------
Total long-term liabilities -- 7,876
-------- --------
Shareholders' equity:
Common stock 134,066 111,751
Accumulated deficit (20,275) 15,117)
-------- --------
Total shareholders' equity 113,791 96,634
-------- --------
$130,422 $124,288
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------------------------
1999 1998
--------------- ---------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales $27,086 $37,441
Cost of sales 15,840 19,724
------- -------
Gross profit 11,246 17,717
------- -------
Operating expenses:
Research and development 4,235 4,540
Selling, general & administrative 11,342 10,545
In-process research and development of acquired business -- 1,200
------- -------
Total operating expenses 15,577 16,285
------- -------
Operating income (loss) (4,331) 1,432
Other income (expense), net (14) 355
------- -------
Income (loss) before provision (benefit) for income taxes (4,345) 1,787
Provision (benefit) for income taxes (1,477) 887
------- -------
Net income (loss) $(2,868) $ 900
======= =======
Basic earnings (loss) per share $ (0.23) $ 0.07
======= =======
Diluted earnings (loss) per share $ (0.23) $ 0.07
======= =======
Shares used in the per share calculation:
Basic earnings (loss) per share 12,228 12,148
======= =======
Diluted earnings (loss) per share 12,228 12,761
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------
1999 1998
-------- --------
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (2,868) $ 900
Adjustments to reconcile net income (loss) to net cash
provided by (used by) operating activities:
Adjustment to conform year end of pooled company (2,290) --
Purchased in-process research and development of acquired business -- 1,200
Depreciation and amortization expense 2,101 1,425
Change in provision for doubtful accounts (140) 34
Change in net assets/liabilities of discontinued operations -- 1,603
Changes in current assets and liabilities, net of acquisition of
FluoroTrac(R) product line:
Accounts receivable (6,037) 4,424
Inventories 817 (2,585)
Deferred tax asset (650) --
Prepaid expenses and other current assets (144) (70)
Other asset, net 251 --
Accounts payable 1,072 (555)
Accrued liabilities and other current liabilities (1,540) 381
Customer deposits (522) (151)
Income taxes payable 33 1,678
-------- --------
Net cash provided by (used by) investing activities (9,917) 8,284
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of short-term investments (37,783) (20,050)
Sale of short-term investments 33,280 8,802
Purchase of property, plant and equipment, net (1,298) (941)
Increase in other assets, net -- (444)
Cash used for acquisition of the FluoroTrac(R) product line -- (2,794)
-------- --------
Net cash used by investing activities (5,801) (15,427)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on current and long-term debt (1,429) (1,045)
Issuance of common stock 13,678 114
-------- --------
Net cash provided by (used by) financing activities 12,249 (931)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (3,469) (8,074)
CASH, BEGINNING OF PERIOD 6,382 15,006
-------- --------
CASH, END OF PERIOD $ 2,913 $ 6,932
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
ASYST TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of Asyst
Technologies, Inc. the ("Company"), a California corporation, and its wholly
owned subsidiaries. Significant inter-company accounts and transactions have
been eliminated. On June 2, 1999 the Company acquired Progressive System
Technologies, Inc. ("PST") in a transaction accounted for using the pooling-of-
interest accounting method. Accordingly, the restated condensed consolidated
financial statements of the Company give retroactive effect to the merger with
PST and all material inter-company transactions have been eliminated.
While the financial information furnished is unaudited, the condensed
consolidated financial statements included in this report reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the results of operation for
the interim periods covered and of the financial condition of the Company at the
date of the interim balance sheet. The Company closes its books on the last
Saturday of each quarter and thus the actual date of the quarter-end is usually
different from the month-end dates used throughout this 10-Q report. The results
for interim periods are not necessarily indicative of the results for the entire
year. The condensed consolidated financial statements should be read in
connection with the Asyst Technologies, Inc. consolidated financial statements
for the year ended March 31, 1999 included in its Annual Report on Form 10-K.
Short-term Investments
As of June 30, 1999 and March 31, 1999, the Company's short-term investments
consisted of liquid debt investments with maturities, at the time of purchase,
of one year or less and will remain classified as such until such time they are
subsequently sold and converted to cash. All such investments have been
classified as "available-for-sale" and are carried at fair value, with
unrealized holding gains and losses (which have not been material to date), net
of taxes reported as a separate component of shareholders' equity. The cost of
the debt security is adjusted for amortization of premiums and accretion of
discounts to maturity. Such amortization, interest income, realized gains and
losses and declines in value that are considered to be other than temporary, are
included in other income (expense), net, on the accompanying condensed
consolidated statements of operations. There have been no declines in value that
are considered to be other than temporary for any of the three months in the
period ended June 30, 1999. The cost of investments sold is based on specific
identification. The Company does not intend to hold the individual securities
for greater than one year.
Short-term investments by security type consist of the following (dollars in
thousands):
<TABLE>
<CAPTION>
Cost / Fair Value
----------------------------------
June 30, 1999 March 31, 1999
--------------- ----------------
(unaudited) (unaudited)
<S> <C> <C>
Debt securities issued by states of the United States and political subdivisions of
the states........................................................................... $ -- $12,780
Corporate debt securities.............................................................. 33,883 16,600
------- -------
Total $33,883 $29,380
======= =======
</TABLE>
5
<PAGE>
Supplemental Statements of Cash Flows Disclosure
Cash paid for interest and domestic and foreign income taxes was as follows
(dollars in thousands):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
---------------------------------------------
1999 1998
--------------------- --------------------
(unaudited) (unaudited)
<S> <C> <C>
Interest............................................................. $ 158 $100
Income taxes......................................................... $ 32 $ 64
</TABLE>
Inventories
Inventories are stated at the lower of cost (first in, first out) or market
and include materials, labor and manufacturing overhead costs. Inventories
consist of the following (dollars in thousands):
<TABLE>
<CAPTION>
June 30, 1999 March 31, 1999
--------------------- --------------------
(unaudited) (unaudited)
<S> <C> <C>
Raw materials........................................................ $13,949 16,119
Work-in-process and finished goods................................... 4,607 3,254
------- -------
Total $18,556 $19,373
======= =======
</TABLE>
Intangible Assets
The realizability of intangible assets, which are included in other assets,
net, in the accompanying condensed consolidated balance sheet, is evaluated
periodically as events or circumstances indicate a possible inability to recover
the net carrying amount. Such evaluation is based on various analyses,
including cash flow and profitability projections that incorporate, as
applicable, the impact on existing lines of business. The analyses involve a
significant level of management judgment in order to evaluate the ability of the
Company to perform within projections.
Provision (Benefit) for Income Taxes
The Company has recorded a deferred tax asset of approximately $19.8 million,
of which $1.5 million relates to net operating losses and tax credits generated
during the current year. The Company will be able to recognize approximately
$5.0 million of the deferred tax asset immediately following the filing of
carryback claims with Federal and various state taxing authorities, which will
be completed in the near future. Realization of the remaining deferred tax asset
is dependent on generating sufficient future taxable income. Although
realization is not assured, the Company believes that it is more likely than not
that the deferred tax assets will be realized. Although the deferred tax asset
is considered realizable, actual amounts could be reduced if sufficient future
taxable income is not achieved.
Earnings Per Share
Earnings per share has been reported based upon Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share", which requires presentation of basic and
diluted earnings per share. Basic earnings per share has been computed using the
weighted average number of actual common shares outstanding, while diluted
earnings per share has been computed using the weighted average number of common
equivalent shares outstanding. Common equivalent shares used in the computation
of diluted earnings per share result from the assumed exercise of stock options
warrants and redeemable convertible preferred stock, using the treasury stock
method.
6
<PAGE>
The following table sets forth the calculation of basic and diluted earnings
per share (dollars in thousands, except share and per share amounts):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-------------------------------------
1999 1998
----------------- ----------------
(unaudited) (unaudited)
<S> <C> <C>
Basic earnings (loss) per share:
Net income (loss)................................................................... $(2,868) $ 900
------- -------
Weighted average common shares...................................................... 12,228 12,148
------- -------
Basic earnings (loss) per share..................................................... $ (0.23) $ 0.07
======= =======
Diluted earnings (loss) per share:
Net income (loss)................................................................... $(2,868) $ 900
------- -------
Weighted average common shares...................................................... 12,228 12,148
Weighted average common share equivalents:
Options and warrants................................................................ - 579
Redeemable preferred stock.......................................................... - 34
------- -------
Diluted weighted average common shares.............................................. 12,228 12,761
------- -------
Diluted earnings (loss) per share................................................... $ (0.23) $ 0.07
======= =======
</TABLE>
Comprehensive Income
In 1999, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 130 "Reporting Comprehensive Income," which establishes standards
for reporting and presentation of comprehensive income. SFAS No. 130, which was
adopted by the Company in the first quarter of 1999, requires companies to
report a new measure of income (loss). Comprehensive income is defined as the
change in equity of a company during a period from transactions and other events
and circumstances excluding transactions resulting from investments by owners
and distributions to owners and is to include unrealized gains and losses that
have historically been excluded from net income (loss) and reflected instead in
equity. The Company has not had any such transactions or events during the
periods and therefore comprehensive income (loss) is the same as the net income
(loss) reported in the condensed consolidated financial statements.
New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
establishes accounting and reporting standards requiring that every derivative
instrument be recorded in the balance sheet as either an asset or liability
measured at its fair value. It requires that changes in the derivative's fair
value be recognized currently in earnings unless specific hedge accounting
criteria are met and that a company must formally document, designate and assess
the effectiveness of transactions that receive hedge accounting. SFAS No. 133
is effective for fiscal years beginning after June 15, 2001 and cannot be
applied retroactively. The Company has not yet determined the effect SFAS No.
133 will have on its financial position, results of operations or cash flows.
RESTRUCTURING ACTIVITY
During the year ended March 31, 1999 the Company underwent significant
restructuring of its operations to reduce its costs structure in response to the
reduction in net sales activities. The Company also is in the process of
completing the planned restructuring activities in Japan and Europe to
reposition its activities to compete more effectively. In addition, the Company
is repositioning its product offerings to eliminate low margin products, or
software services that have high risks of failure. During the fiscal year ended
March 31, 1999, the Company recorded a restructuring expense of approximately
$5.5 million.
7
<PAGE>
The following table summarizes restructuring charges and amounts incurred by
geographic region as of June 30, 1999 (dollars in thousands):
<TABLE>
<CAPTION>
Expensed Cash outlays Ending
as of as of Accrual
March 31, 1999 June 30, 1999 June 30, 1999
--------------- ------------------ -------------
<S> <C> <C> <C>
Europe:
Severance................................................................ $1,732 $1,050 $ 682
Facilities............................................................... 336 235 101
Other.................................................................... 437 138 299
Japan:
Severance................................................................ 150 75 75
Other.................................................................... 35 -- 35
US:
Severance................................................................ 700 594 106
Facilities............................................................... 550 297 253
Other.................................................................... 1,002 64 938
Non-cash................................................................... 600 N/A N/A
------ ------ ------
Total $5,542 $2,453 $2,489
====== ====== ======
</TABLE>
As of June 30, 1999, the Company has severed all employees targeted in
connection with the restructuring. The Company expects all cash payments to
severed employees will be disbursed by December 31, 1999. Certain facilities
and other restructuring costs may not be fully disbursed before the end of
fiscal year ended March 31, 2000.
REPORTABLE SEGMENTS
In 1999, the Company adopted SFAS 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS 131 supersedes SFAS 14, "Financial
Reporting for Segments of a Business Enterprise", replacing the "industry
segment" approach with the "management" approach. SFAS 131 designates the
internal organization that is used by management for making decisions,
evaluating performance and allocating resources of the enterprise as the source
of the Company's reportable segments. SFAS 131 also requires disclosures about
products and services, geographic areas and major customers. The adoption of
SFAS 131 did not impact the results of operations or financial position but did
affect the disclosures of segment information.
The Company offers a family of products and related services to provide a front-
end automation and isolation system for wafer handling in semiconductor
manufacturing facilities. All of the Company's activities are aggregated into a
single operating segment. As a result, no operating segment information is
required.
Net sales by geography were as follows (dollars in thousands):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
------------------------------------
1999 1998
----------------- -----------------
(unaudited) (unaudited)
<S> <C> <C>
United States............................................................. $12,292 $15,528
Taiwan.................................................................... 9,948 16,200
Singapore................................................................. 1,346 1,200
Japan..................................................................... 2,646 2,867
Europe.................................................................... 854 1,646
Other Asia (excluding Japan, Singapore and Taiwan)........................ -- --
-------- -------
Total.................................................................. $27,086 $37,441
======== =======
</TABLE>
8
<PAGE>
The net sales by product or service categories comprising the Company's net
sales were as follows (dollars in thousands):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
------------------------------------
1999 1998
----------------- ----------------
(unaudited) (unaudited)
<S> <C> <C>
SMIF Systems........................................................... $22,852 $30,028
SMART Traveler Systems................................................. 1,579 3,499
Robotics............................................................... 1,333 --
Services & other....................................................... 1,322 3,914
------- -------
Total............................................................... $27,086 $37,441
======= =======
</TABLE>
ACQUISITION OF THE FLUOROTRAC(R) PRODUCT LINE
In April 1998, the Company entered into an agreement with Fluoroware, Inc.
("Fluoroware"), a supplier of materials management solutions; to acquire
Fluoroware's FluoroTrac(R) automated radio frequency identification ("RFID")
technology for automated work-in-progress tracking in semiconductor factories.
Under the terms of the agreement, the Company acquired all of the FluoroTrac
intellectual property including RFID tracking solutions, inventory and
installed-base opportunities from Fluoroware in consideration for approximately
$2.8 million in cash and liabilities assumed by the Company.
In connection with the acquisition, approximately $1.2 million of the intangible
assets acquired consisted of in-process research and development. Because there
can be no assurance that the Company will be able to successfully complete the
development of FluoroTrac products or that the technology has any alternative
future use, such in-process research and development was charged to expense in
the three-month period ended June 30, 1998. As a result of the purchase price
allocation, approximately $0.3 million was assigned to intangible assets related
to existing product technology, the assembled workforce and the excess purchase
price over the net assets acquired. These intangibles are being amortized over a
three to five year period. Management believes that the unamortized balance of
these assets, which is included in other assets, net, in the accompanying
condensed consolidated balance sheets, is recoverable.
ACQUISITION OF HINE DESIGN INCORPORATED
On July 31, 1998, the Company completed its acquisition of Hine Design
Incorporated ("Hine"). The acquisition, originally announced on July 6, 1998,
was structured as a purchase of all of the outstanding capital stock of Hine for
approximately $12.4 million in cash. In addition, the Company granted options to
purchase the Company's common stock in substitution for outstanding, vested
options to purchase capital stock of Hine worth approximately $1.0 million and
assumed certain liabilities of Hine of approximately $12.5 million. Hine, a
supplier of wafer-handling robots for semiconductor process tools, is now a
wholly owned subsidiary of the Company.
In connection with the acquisition, approximately $18.4 million of the purchase
price in excess of the value of net liabilities assumed were allocated to
various intangible assets, which are being amortized over periods of four to
fourteen years (dollar average life of ten years). During the current quarter, a
charge for amortization relating to these intangibles of approximately $0.6 was
included in selling, general and administrative expenses.
ACQUISITION OF PROGRESSIVE SYSTEM TECHNOLOGIES, INC.
On June 2, 1999, the Company completed its acquisition of 100 percent of the
common stock of PST, a Texas corporation, in exchange for 274,810 shares of
common stock of the Company. In addition to the exchange of common stock in the
merger, 225,190 shares of common stock of the Company were issued in exchange
for $4.9 million of PST debt. PST manufactures wafer-sorting equipment used by
semiconductor manufacturers. The acquisition has been accounted for using the
pooling-of-interest method of accounting. Accordingly, the
9
<PAGE>
accompanying condensed consolidated financial statements have been restated for
all periods prior to the business combination. All material inter-company
transactions between the Company and PST have been eliminated.
Costs associated with the PST merger, which consist primarily of transaction
costs amounted to approximately $0.1 million and were expensed during the
current fiscal period ended. PST's fiscal year end was December 31. In
accordance with Securities and Exchange Commission Rules, the condensed
consolidated statements of operations and cash flows for the three months ended
June 30, 1998 have been restated to reflect the statement of operations and cash
flows of PST. The condensed consolidated balance sheet, as of March 31, 1999,
has also been restated to reflect the financial position of PST. PST's results
of operations for the three-month period ended March 31, 1999 have been excluded
from the reported results of operations and, therefore, have been added to the
Company's accumulated deficit as of April 1, 1999. PST's net sales and net loss
for the three-month period ended March 31, 1999 were $1.5 million and $2.3
million, respectively.
The conforming of Asyst's and PST's accounting practices resulted in no
adjustments to net income (loss) or shareholders' equity. Net sales and net
income (loss) for the individual companies reported prior to the merger were as
follows (dollars in thousands):
<TABLE>
<CAPTION>
Three Months Ended
June 30,
---------------------------
1999 1998
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales:
Asyst Technologies, Inc. .................................................... $24,865 $34,073
PST.......................................................................... 2,221 3,368
------- -------
Total........................................................................... $27,086 $37,441
======= =======
Net income (loss):
Asyst Technologies, Inc. .................................................... $(1,926) $ 1,576
PST.......................................................................... (942) (676)
------- -------
Total........................................................................... $(2,868) $ 900
======= =======
</TABLE>
In conjunction with the PST acquisition, the Company also completed a private
placement of 625,000 shares of its Common Stock to eight institutional
investors. The private placement, which closed in May 1999, was priced at
$18.00 per share, for aggregate proceeds of approximately $11.3 million. The
purpose of the private placement was to untaint shares of Common Stock to obtain
pooling-of-interests accounting treatment for the acquisition of PST. The
proceeds will be used for general corporate purposes.
SHAREHOLDERS' RIGHTS PLAN
The Company has adopted a Shareholders' Rights Plan under which all shareholders
of record, as of July 10, 1998 (the "Record Date"), received a dividend of one
preferred share purchase right (a "Right") for each outstanding share of common
stock, without par value per share, (the "Common Shares") of the Company. The
Rights will also attach to new Common Shares issued after the Record Date. Each
Right entitles the registered holder to purchase from the Company one one-
hundredth of a share of Series A Junior Participating Preferred Stock, without
par value per share, (the "Preferred Shares") of the Company at a price of $140
per one one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. Each Preferred Share is designed to be the economic equivalent of
100 Common Shares.
STOCK REPURCHASE PROGRAM
On June 22, 1998, the Board of Directors of the Company, authorized a stock
repurchase program whereby up to 2,000,000 shares of its Common Stock may be
repurchased by the Company using existing cash, from time-to-time at market
prices, and as market and business conditions warrant, in the open market, or in
negotiated transactions. The Company utilized a portion of the reacquired shares
for reissuance in connection with certain employee stock programs. On June 3,
1999, in connection with the acquisition of PST, the Company rescinded the stock
purchase program and reissued the remaining portion of the reacquired shares in
May 1999.
10
<PAGE>
RELATED PARTY TRANSACTIONS
On September 30, 1997, the Company entered into an asset purchase agreement with
Palo Alto Technologies, Inc. ("PAT") pursuant to which the Company sold to PAT
certain intellectual property rights and office equipment which were owned or
licensed by a wholly-owned subsidiary of the Company in consideration for
quarterly "Earn-Out Payments" up to an aggregate of $2.0 million. The earn-out
payments are equal to 4.0 percent of PAT gross revenue. The Company may convert
the right to receive such earn-out payments into shares of PAT securities at the
closing of certain issuance of securities by PAT. In addition, PAT granted the
Company the non-exclusive, worldwide right to distribute and sell any of PAT's
products on PAT's most favorable distributor terms and conditions; except PAT
may grant exclusive distribution rights to particular markets so long as such
rights are first offered to the Company and the Company does not accept the
offer. Such distribution rights shall terminate on the earlier of (i) the fifth
anniversary of such agreement or (ii) if the Company begins selling its own
products which are directly competitive with PAT's products. The Chairman and
Chief Executive Officer of the Company is the Chairman and principal shareholder
of PAT. The parties have agreed that the Chairman and Chief Executive Officer of
the Company and one other officer (also a shareholder of PAT) of the Company may
be advisors or directors of PAT while employed full time by the Company.
As of June 30, 1999 and March 31, 1999, the Company held four notes receivable,
with balances totaling $1,172,750, from two executive officers of the Company,
which have resulted from advances made to the officers to assist in their
relocation to California. The notes bear interest that ranges from 4.0 percent
to 6.4 percent per annum and are fully secured by second deeds of trust on
certain real property, as well as, other pledged securities of the Company owned
by the officers, respectively. The notes, which are included in "Prepaid
expenses and other current assets" in the accompanying condensed consolidated
balance sheets, mature at various dates between September 1, 2002 and January
31, 2004.
LEGAL PROCEEDINGS
In October 1996, the Company filed a lawsuit in the United States District Court
for the Northern District of California against Jenoptik A.G. ("Jenoptik"),
Jenoptik-Infab, Inc. ("Infab"), Emtrak, Inc. ("Emtrak") and Empak, Inc.
("Empak") alleging infringement of two patents related to the Company's SMART
Traveler System(TM). The Company amended its Complaint in April 1997 to allege
causes of action for breach of fiduciary duty against Jenoptik and Meissner &
Wurst, GmbH, and misappropriation of trade secrets and unfair business practices
against all defendants. The Company's Complaint seeks damages and injunctive
relief against further infringement. All defendants filed counter claims,
seeking a judgment declaring the patents invalid, unenforceable and not
infringed. Jenoptik, Infab, and Emtrak also alleged that the Company has
violated federal antitrust laws and engaged in unfair competition. The Company
has denied these allegations. In May 1998, the Company and Empak stipulated to a
dismissal, without prejudice, of their respective claims and counter claims
against each other. In November 1998, the court granted defendants' motion for
partial summary judgment as to most of the patent infringement claims and
invited further briefing as to the remainder. In January 1999, the court
granted the Company's motion for leave to seek reconsideration of the November
summary judgment order and also, pursuant to a stipulation of the parties,
dismissed without prejudice two of the three antitrust counter claims brought by
the defendants. Since then, the parties stipulated to, and the court has
ordered, the dismissal with prejudice of the defendants' unfair competition and
remaining antitrust counterclaim, and the Company's breach of fiduciary duty,
misappropriation of trade secrets and unfair business practices claims. On June
4, 1999, the court issued an order by which it granted the Company's motion for
reconsideration in the sense that it considered the merits of the Company's
arguments, but decided that it would not change its prior ruling on summary
judgment and would also grant summary judgment for defendants on the remaining
patent infringement claim. The Company intends to take an appeal. The trial
date has since been vacated and the court has under submission whether it is
obligated to proceed with any remaining matters. While it is not possible to
predict accurately or to determine the eventual outcome of these matters, the
Company believes that the outcome of these legal proceedings will not have a
material adverse effect on the financial position of the Company.
11
<PAGE>
Item 2 - Management's Discussion and Analysis of Results of Financial
Condition and Results of Operations
Except for the historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in this section and those contained in the Company's
Annual Report on Form 10-K for the year ended March 31, 1999.
During the past year, Asyst Technologies, Inc., completed its acquisition of
Hine Design Incorporated ("Hine") and Progressive System Technologies, Inc.
("PST"). The acquisition of Hine was completed on July 31, 1998 and was
accounted for using the purchase method of accounting. The acquisition of PST
was completed on June 2, 1999 and was accounted for using the pooling-of-
interest method of accounting. While the results of operations for the quarter
ended June 30, 1998 have been restated to reflect the pooling-of-interest
related to the acquisition of PST, these results do not contain the results of
operations for Hine, as the acquisition date occurred during the second quarter
of fiscal 1999. The following discussion of the results of operations is made on
a comparative basis for the three-month periods ended June 30, 1999 and 1998,
respectively. It should be noted that on a comparative basis, there has been
increases in all categories of the results of operations, due to the inclusion
of results related to Hine for the three-month period ended June 30, 1999.
Results of Operations
Net sales. Net sales decreased from $37.4 million for the three months ended
June 30, 1998, to $27.1 million for the three months ended June 30, 1999, a 27.7
percent decrease. The aforementioned sales figure of $37.4 million does not
include Hine, as the acquisition did not close during the three-month period
ended June 30, 1998. Net sales by Hine for the three months ended June 30, 1999
were $3.0 million. Therefore, the decrease in net sales on a comparative basis,
excluding Hine, actually decreased 35.6 percent. The decrease in net sales for
the three month period ended June 30, 1999 from the same period in the prior
fiscal year resulted primarily because of the reduction in capital expenditures
by major world-wide semiconductor manufactures. The decrease in demand for logic
and memory chips and the excess production capacity being available to many of
the semiconductor manufactures during the past four fiscal quarters, resulting
from the recession that is being experienced in the Asian economies, has
negatively effected the Company's sales orders. However, the recent public
announcements by many of the world-wide semiconductor manufactures, such as
Taiwan Semiconductor Manufacturing Company, as to increases in capital spending
budgets, has sparked new orders for the Company. The Company's ending backlog
for the quarter ended June 30, 1999 continues to be greater than net sales for
the quarter then ended. Also, the Company's book to bill ratio is above the
published book to bill ratio of the semiconductor equipment manufacturing
industry of 1.2. The stability of the backlog has improved as evidenced by a
decrease in cancellations and delays of orders requested by customers during the
quarter ended June 30, 1999 over those cancellations and delays of orders
experienced during the three recent quarters ended. Although management is
optimistic about these results, there is no assurance that this trend in orders
and sales activity will continue. Furthermore, there is no assurance that sales
activity may not decrease or that sales orders may not be cancelled or delayed
in the future.
International sales for the Company decreased from $21.0 million, or 61.6
percent of net sales during the three months ended June 30, 1998, to $14.8
million, or 54.6 percent of net sales during the three months ended June 30,
1999. The decrease in international sales as a percentage of total net sales is
primarily due to the increase in OEM sales, which are primarily U.S. based, that
typically are expected to lead end user sales when semiconductor capital
spending is recovering from low levels. International sales by region for the
three-month period ended June 30, 1999 are summarized as follows:
<TABLE>
<CAPTION>
Geographic Net Sales Percentage of
Region (in millions) Net Sales
---------- ----------------- --------------------
<S> <C> <C>
Taiwan $ 9.9 36.5%
Japan 2.7 10.0%
Singapore 1.3 4.8%
Europe 0.9 3.3%
------ ------
$14.8 54.6%
====== ======
</TABLE>
12
<PAGE>
Gross Profit Margin. Gross profit margin decreased from 47.3 percent for the
three months ended June 30, 1998, to 41.5 percent for the three months ended
June 30, 1999. The primary contributor to the decrease in gross profit margin
dollars for the current three-month period ended compared to that of the same
period in 1998, was the 35.6 percent decrease in net revenues from that reported
in fiscal 1998, as discussed above, as well as the Company's inability to reduce
fixed manufacturing overhead costs to compensate for the current lower revenue
levels. The decrease in gross profit margin for the current period was
compounded by the lower profit margin of 24.2 percent related to the sales
generated by Hine. Even though the Company has taken actions and continues to
take steps to reduce its manufacturing overhead, the Company's net sales must
continue to increase to higher levels in order to achieve historical gross
profit margins. There can be no assurance that in the future such improved
margins can be realized through an increase of net sales and certain cost
cutting efforts or that margins may not be negatively affected by other factors
such as those contained in the Company's Annual Report on Form 10-K for the
fiscal year end March 31, 1999.
Research and development. Research and development expenses decreased from $4.5
million during the three months ended June 30, 1998, to $4.2 million during the
three months ended June 30, 1999. Research and development expenses increased
from 12.1 percent of net sales during the three months ended June 30, 1998, to
15.6 percent of net sales, during the three months ended June 30, 1999. The
dollar decrease is due primarily to cost cutting measures, but offset by $0.6
million in research and development expense for Hine during the current fiscal
period. The increase as a percentage of net sales in research and development
expense is due to the lower level of net sales activity during the current
three-month period ended June 30, 1999 versus the net sales for the same period
last year. As the Company continues to develop new products and product
enhancements, the Company expects that its research and development costs may
increase in future periods, but will continue to fluctuate as a percentage of
net sales.
Selling, general and administrative. Selling, general and administrative
expenses increased from $10.5 million, or 28.2 percent of net sales, during the
three months ended June 30, 1998, to $11.3 million, or 41.9 percent of net
sales, during the three months ended June 30, 1999. Absent the inclusion of
Hine, selling, general and administrative expenses for the three-month period
ended June 30, 1999 would have been approximately $10.2 million or 42.3 percent
of net sales. Reductions in commission and variable compensation expenses and
other cost reductions contributed to the relative flat spending rate, excluding
Hine. With the acquisition of Hine in July 1998, approximately $18.4 million of
the purchase price in excess of the value of net liabilities assumed were
allocated to various intangible assets, which are being amortized over periods
of four to fourteen years (dollar average life of ten years). During the current
quarter, a charge for amortization relating to these intangibles of
approximately $0.6 was included in selling, general and administrative expenses.
The increase in selling, general and administrative expenses as a percentage of
net sales for the current three-month period ended compared to that of the same
period in 1998, was due to the decrease in net revenues from net revenues for
the same period in fiscal 1998, as discussed above. The Company expects that
selling, general and administrative spending will increase in future periods as
the higher net sales suggested by the Company's backlog are fulfilled, although
spending may continue to vary as a percentage of net sales.
Purchased in-process research and development. In April 1998, the Company
completed the acquisition of the FluoroTrac product line from Fluoroware, Inc.
The transaction was recorded using purchase accounting in the quarter ended June
30, 1998. In connection with the acquisition of FluoroTrac, the Company recorded
a write-off of $1.2 million of in-process research and development during the
quarter ended June 30, 1998. (See the Notes to Condensed Consolidated Financial
Statements)
Other income (expense), net. Other income (expense), net, decreased from $0.4
million of income, net during the three months ended June 30, 1998 to $0.01
million of expense, net during the three months ended June 30, 1999. The
decreases in other income (expense), net, resulted from lower average cash and
cash investments available during the current year period and a decrease in
royalty income from a manufacturing license agreement that has now expired. The
Company has extinguished all debt that it assumed in the acquisition of PST. The
Company expects other income (expense), net to be positively impacted by the
$0.3 to $0.4 million with the elimination of interest expense related to the PST
debt.
13
<PAGE>
Provision (benefit) for income taxes. The Company's reported effective income
tax rate decreased from 49.6 percent for the three-month period ended June 30,
1998 to 34.0 percent during the three-month period ended June 30, 1999. The
reported tax rate for the three-month period ended June 30, 1998 has been
impacted by the acquisition of PST, accounted for as a pooling-of-interest. The
annual estimated tax benefit for the three-month period ended June 30, 1998
related to net operating losses generated that period by PST was fully reserved
as there was uncertainty as to its ability to generate future taxable income.
The combined annual estimated effective tax rate, as reported, for the period
ended June 30, 1998, does not recognize the full benefit of anticipated
utilization of net operating losses of PST in the future. Absent the
restatement of earnings to reflect the pooling-of-interest related to PST for
the three-month period ended June 30, 1998, the Company's effective tax rate
would have been 36.0 percent. The annual estimated effective tax rate and
benefit recorded for the three-month period ended June 30, 1999, reflects the
estimated benefit associated with the utilization of net operating losses
generated during previous fiscal years. Additionally, the benefit for income
taxes was impacted by foreign income and withholding taxes in excess of the
statutory rates, the lack of Foreign Sales Corporation benefit due to net
operating losses during the current year and limitations on state net operating
loss carryforwards.
Liquidity and Capital Resources
Since its inception, the Company has funded its operations primarily through the
sale of equity securities and public stock offerings, customer pre-payments,
bank borrowings and cash generated by its operations. As of June 30, 1999, the
Company had approximately $36.8 million in cash and short-term investments and
approximately $82.9 million of working capital. In June 1998, the Board of
Directors of the Company authorized a stock repurchase program to repurchase up
to 2,000,000 shares of the Company's common stock. In May 1999, the Company
announced it had cancelled the repurchase program and subsequently completed a
private placement of 625,000 shares of its Common Stock to eight institutional
investors. At the time of the cancellation, the Company had repurchased a total
of 865,800 shares of common stock at an aggregate cost of approximately $11.5
million. The private placement was priced at $18.00 per share and generated
proceeds to the Company of approximately $11.3 million. The purpose of the
private placement was to remove the tainted shares of Common Stock to obtain
pooling-of-interests accounting treatment for the acquisition of PST.
Additionally, during the third and forth quarters of fiscal 1999 and the first
quarter of fiscal 2000, the Company re-issued the remaining 240,800 shares of
acquired common stock in connection with its employee stock programs, which
generated net proceeds of approximately $3.2 million. Also during the current
quarter ended June 30, 1999, the Company issued additional 96,296 shares of the
Company's common stock in connection with its employee stock programs, which
generated net proceeds of approximately $1.2 million. The proceeds from the
recent capital stock transactions will be used for general corporate purposes.
Under two separate working line of credit agreements with a bank, PST was able
to borrow up to $7.0 million conditioned upon meeting certain financial
covenants. In June 1999, in conjunction with the Company's acquisition of PST,
all borrowings against the line of credit agreements were repaid. Subsequently,
the line of credit agreements have expired and in light of the combined
Company's working capital position and in efforts to reduce overhead costs, the
Company decided not to renew the line of credit agreements.
The nature of the semiconductor industry, combined with the current economic
environment, makes it very difficult for the Company to predict future liquidity
requirements with certainty. However, the Company believes that its existing
cash and cash equivalents, cash generated from operations and existing sources
of working capital will be adequate to finance its operations through the next
12 months of operations.
Year 2000 Compliance Initiative
What is commonly referred to as the Year 2000 issue arises because many computer
systems use only two digits to represent the year portion of a date. As a
result, these systems may fail to properly calculate dates and date-related
computations at, around or after January 1, 2000, resulting in erroneous results
or system failures.
In conjunction with third-party expert consultants, the Company launched a
comprehensive program to assess and address its potential exposures. The
program is substantially complete with the exception of PST as noted below.
14
<PAGE>
With respect to its internal business systems, the Company is working with the
third-party vendors of such systems to ensure Year 2000 compliance either exists
today or will be achieved via vendor supplied upgrade in a timely manner. The
Company's principal enterprise resource planning system has been certified Year
2000 compliant by its manufacturer and has passed in-house compliance testing.
The Company believes that except for a systematic failure outside its control,
such as a prolonged loss of electrical power or telephone service, Year 2000
problems of these third parties will not have a material impact on operations.
The Company's products have been, and continue to be, evaluated for Year 2000
compliance. Many have been found to be compliant today and others have been
found to require modest modification to be compliant. Programs are in place and
are being further developed to complete such modifications, for both future
shipments and in the customer installed base.
Also being assessed is the potential impact to the Company of non-compliance by
suppliers, subcontractors, business partners and customers. As part of that
assessment, the Company has requested, in writing, assurances from these third
parties that they are Year 2000 compliant. Some of these third parties have
indicated that they are Year 2000 compliant. Others are still in the process of
their own compliance reviews. If the Company identifies that a third party has
a material Year 2000 compliance issue, it will work with the third party to
resolve the issue or identify another supplier or service provider that is Year
2000 compliant.
With the acquisition of PST on June 2, 1999, additional products and systems
must be integrated to the Company's Year 2000 Compliance Program. These efforts
are expected to be completed by September 30, 1999.
The Company's total incremental cost of assessing and re-mediating its systems
and product Year 2000 issues is estimated to be between $0.5 million and $1.0
million. Approximately $0.2 million has been expended as of March 31, 1999,
with between $0.2 and $0.4 million in capital expenditures planned for the
first nine months of fiscal year 2000.
While the Company is engaged in an ongoing Year 2000 assessment, it has not
developed any contingency plans at this time. The completion of the ongoing
assessment will include a determination of the need for, and nature and extent
of any contingency plans.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
There has not been a material change in the Company's exposure to interest rate
and foreign currency risk since the date of the fiscal 1999 Form 10-K.
Although the Company and its subsidiaries operate and sell products in various
global markets, substantially all sales are denominated in the U.S. dollar
(except in Japan, where over 20 percent of sales generated in Japan are
denominated in the yen), therefore reducing the foreign currency risk. To date,
the foreign currency transactions and exposure to exchange rate volatility have
not been significant. The Company cannot anticipate with certainty the effect of
inflation on its operations. To date, inflation has not had a material impact on
the Company's net sales or results of operations, however, with the industry's
upturn currently underway; labor markets are tightening thus putting upward
pressure on current labor costs. The Company's exposure to market risk for
changes in interest rates relate primarily to the investment portfolio. The
Company's investment portfolio consists of short-term, fixed income securities
and by policy is limited by the amount of credit exposure to any one issuer.
Fixed rate securities have their fair market value adversely affected due to
rise in interest rates. To date, the change in interest rate markets has not had
a material impact on the Company's results of operations or the market value of
the Company's investments. There can be no assurance that foreign currency risk,
inflation or interest rate risk will not be a material impact on the financial
position, results of operations or cash flow of the Company in the future.
15
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In October 1996, the Company filed a lawsuit in the United States
District Court for the Northern District of California against Jenoptik
A.G. ("Jenoptik"), Jenoptik-Infab, Inc. ("Infab"), Emtrak, Inc.
("Emtrak") and Empak, Inc. ("Empak") alleging infringement of two
patents related to the Company's SMART Traveler System(TM). The Company
amended its Complaint in April 1997 to allege causes of action for
breach of fiduciary duty against Jenoptik and Meissner & Wurst, GmbH,
and misappropriation of trade secrets and unfair business practices
against all defendants. The Company's Complaint seeks damages and
injunctive relief against further infringement. All defendants filed
counter claims, seeking a judgment declaring the patents invalid,
unenforceable and not infringed. Jenoptik, Infab, and Emtrak also
alleged that the Company has violated federal antitrust laws and
engaged in unfair competition. The Company has denied these
allegations. In May 1998, the Company and Empak stipulated to a
dismissal, without prejudice, of their respective claims and counter
claims against each other. In November 1998, the court granted
defendants' motion for partial summary judgment as to most of the
patent infringement claims and invited further briefing as to the
remainder. In January 1999, the court granted the Company's motion for
leave to seek reconsideration of the November summary judgment order
and also, pursuant to a stipulation of the parties, dismissed without
prejudice two of the three antitrust counter claims brought by the
defendants. Since then, the parties stipulated to, and the court has
ordered, the dismissal with prejudice of the defendants' unfair
competition and remaining antitrust counterclaim, and the Company's
breach of fiduciary duty, misappropriation of trade secrets and unfair
business practices claims. On June 4, 1999, the court issued an order
by which it granted the Company's motion for reconsideration in the
sense that it considered the merits of the Company's arguments, but
decided that it would not change its prior ruling on summary judgment
and would also grant summary judgment for defendants on the remaining
patent infringement claim. The Company intends to take an appeal. The
trial date has since been vacated and the court has under submission
whether it is obligated to proceed with any remaining matters. While it
is not possible to predict accurately or to determine the eventual
outcome of these matters, the Company believes that the outcome of
these legal proceedings will not have a material adverse effect on the
financial position of the Company.
Item 2. Sale of Unregistered Securities
In conjunction with the acquisition of Progressive System Technologies,
Inc., the Company also completed a private placement of 625,000 shares
of its Common Stock to eight institutional investors. The purpose of
the private placement was to untaint shares of Common Stock to obtain
pooling-of-interests accounting treatment for the acquisition of PST.
The sale of such shares of common stock was deemed to be exempt from
registration under the Securities Act of 1933, as amended, pursuant to
Regulation D/Rule 506. The Company intends to file a registration
statement, to be effective within 90 days. Thus permitting the resale
of the securities.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.12 Employment and Compensation Agreement between Asyst
Technologies, Inc. and Mihir Parikh, dated April 1, 1999
27.1 Financial Data Schedule
(b) Form 8-K
The Company filed a current report of Form 8-K relating to the
acquisition by Asyst Technologies, Inc. ("Asyst") of Progressive
System Technologies, Inc. and the private placement of 625,000
shares of Asyst common stock on June 18, 1999.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASYST TECHNOLOGIES, INC.
Date: August 16, 1999 By: /s/ Douglas J. McCutcheon
---------------------- ------------------------------
Douglas J. McCutcheon
Senior Vice President
Chief Financial Officer
Signing on behalf of the registrant
and as the principal accounting and
financial officer
17
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
10.12 Employment and Compensation Agreement Between Asyst
Technologies, Inc. and Mihir Parihk, dated April 1, 1999
27.1 Financial Data Schedule
18
<PAGE>
Exhibit 10.12
THIS AGREEMENT, made and entered into as of April 1, 1999, between
Asyst Technologies, Inc., a California corporation, with its principal office
located at 48761 Kato Road, Fremont, CA 94538 (together with its successors and
assigns permitted under this Agreement) ("Asyst"), and Mihir Parikh ("Parikh").
W I T N E S S E T H
WHEREAS, Asyst has determined that it is in the best interests of
Asyst and its stockholders to enter into an employment and compensation
agreement setting forth the obligations and duties of both Asyst and Parikh
(this "Agreement"); and
WHEREAS, Asyst wishes to assure itself of the services of Parikh for
the period hereinafter provided, and Parikh is willing to be employed by Asyst
for said period, upon the terms and conditions provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, Asyst and Parikh (individually a "Party" and
together the "Parties") agree as follows:
1. DEFINITIONS.
(a) "Base Salary" shall mean the annual salary provided for in Section
3 below, as adjusted from time to time by the Board.
<PAGE>
(b) "Beneficiary" shall mean the person or persons named by Parikh
pursuant to Section 22 below or, in the event that no such person is named and
survives Parikh, his estate.
(c) "Board" shall mean the Board of Directors of Asyst.
(d) "Cause" shall mean:
(i) Parikh's conviction of a felony,
(ii) repeated and willful actions by Parikh that are committed
in bad faith and that result in material and demonstrable economic harm to
Asyst, or
(iii) a material breach by Parikh of the provisions of Sections
9 or 10 below to the demonstrable and material detriment of Asyst; provided that
in no event shall Parikh's failure to perform the duties associated with his
position caused by his mental or physical disability constitute Cause for his
termination.
(e) "Change in Control" shall mean:
(i) an acquisition by an individual, an entity or a group
(excluding Asyst or an employee benefit plan of Asyst or a corporation
controlled by Asyst's stockholders) of 30 percent or more of Asyst's common
stock or voting securities;
(ii) a change in the composition of the Board occurring within
a rolling two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors ("Incumbent Directors" shall mean directors
who either (x) are members of the Board as of the date first above written or
(y) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination, but shall not include an individual not otherwise an
Incumbent Director whose election or nomination
2
<PAGE>
is in connection with an actual or threatened proxy contest relating to the
election of directors to the Board;
(iii) consummation of a complete liquidation or dissolution of
Asyst or a merger, consolidation or sale of all or substantially all of Asyst's
assets (collectively, a "Business Combination") other than a Business
Combination (x) in which the stockholders of Asyst receive 50 percent or more of
the stock resulting from the Business Combination, (y) at least a majority of
the board of directors of the resulting corporation were Incumbent Directors and
(z) after which no individual, entity or group (excluding any corporation
resulting from the Business Combination or any employee benefit plan of such
corporation or of Asyst) owns 30 percent or more of stock of the resulting
corporation, who did not own such stock immediately before the Business
Combination.
(f) "Compensation Committee" or "Committee" shall mean the
Compensation Committee of the Board.
(g) "Disability" shall mean the illness or other mental or physical
disability of Parikh, as determined by a physician acceptable to Asyst and
Parikh, resulting in his failure (i) to perform substantially his material
duties under this Agreement for a period of six or more consecutive months or an
aggregate of nine months in any 12-month period and (ii) to return to the
performance of his duties within 30 days after receiving written notice of
termination.
(h) "Fiscal Year" shall mean the 12-month period beginning on April 1
and ending on the next subsequent March 31.
(i) "Good Reason" shall mean, without Parikh's prior written consent
or his acquiescence:
(i) reduction in his then current Base Salary,
3
<PAGE>
(ii) Asyst's failure to pay Parikh any amounts otherwise
vested and due hereunder or under any plan or policy of Asyst,
(iii) diminution of his titles, position, authorities or
responsibilities, including not serving on the Board,
(iv) assignment to Parikh of duties incompatible with his
position of Chief Executive Officer,
(v) diminution, reduction or other adverse change in the
bonus or incentive compensation opportunities available to Parikh (with respect
to the level of bonus or incentive compensation opportunities, the applicable
performance criteria and otherwise the manner in which bonuses and incentive
compensation are determined, in the aggregate), from those available as of the
date hereof,
(vi) termination of Parikh's employment, for any reason other
than Cause, death, Disability or voluntary termination, within six months after
a Change in Control,
(vii) imposition of a requirement that Parikh report other than
directly to the full Board,
(viii) a material breach of the Agreement by Asyst that is not
cured within 10 business days after written notification by Parikh of such
breach,
(ix) notification of Parikh by Asyst that the Term will not be
renewed, or
(x) relocation of Asyst's principal place of business to a
location more than 30 miles from the location first above described.
(j) "Spouse" shall mean, during the Term of Employment, the woman who
as of any relevant date is legally married to Parikh.
4
<PAGE>
(k) "Term of Employment" or "Term" shall mean the period specified in
Section 2(b) below.
2. TERM OF EMPLOYMENT, POSITIONS AND DUTIES.
(a) Employment of Parikh. Asyst hereby employs Parikh, and Parikh
hereby accepts employment with Asyst, in the positions and with the duties and
responsibilities set forth below and upon such other terms and conditions as are
hereinafter stated.
(b) Term of Employment. The Term of Employment shall commence on the
date first above written and shall terminate on the third anniversary of such
date, provided that at the end of each day after the date hereof, unless either
Party gives written notice to the other that it or he does not want the Term to
continue, the Term shall thereafter automatically extend for an additional
period of one day (with the result that, in the absence of such notice, the Term
shall be three years in length), unless sooner terminated as provided by Section
8 below.
(c) Title and Duties.
(i) Until the date of termination of his employment
hereunder, Parikh shall be employed as Chief Executive Officer, reporting to the
full Board. In his capacity as Chief Executive Officer, Parikh shall have the
customary powers, responsibilities and authorities of chief executive officers
of corporations of the size, type and nature of Asyst, including without
limitation complete authority to hire and fire the other employees of Asyst.
5
<PAGE>
(ii) During the Term, Asyst shall use its best efforts to
secure the election of Parikh to the Board and to the chairmanship thereof.
During the Term, if the Board forms an executive or similar committee, Parikh
shall serve thereon.
(d) Time and Effort. Parikh agrees to devote his best efforts and
abilities, and such of his business time and attention as he deems necessary, to
the affairs of Asyst in order to carry out his duties and responsibilities under
this Agreement, except that nothing shall preclude Parikh from (i) serving on
the boards of a reasonable number of trade associations, charitable
organizations and/or businesses not in competition with Asyst, (ii) engaging in
charitable activities and community affairs and (iii) managing his personal
investments and affairs; provided, however, that, such activities do not
materially interfere with the proper performance of his duties and
responsibilities specified in Section 2(c) above.
3. BASE SALARY.
Parikh shall receive from Asyst an initial Base Salary, payable in
accordance with the regular payroll practices of Asyst, of a minimum of
$325,000. During the Term, the Committee shall review the Base Salary for
increase no less often than annually as of the beginning of each Fiscal Year,
beginning April 1, 1999. Any amount to which Parikh's Base Salary is increased
shall not thereafter be reduced, and the term "Base Salary" as used in this
Agreement shall refer to his Base Salary as so increased.
6
<PAGE>
4. BONUSES.
(a) Annual Bonus. Parikh shall be eligible to receive an annual bonus
for each Fiscal Year or portion thereof during the Term in accordance with
Asyst's Executive Bonus Plan, provided that (i) award opportunities (with
respect to their level, applicable performance criteria and the manner in which
bonuses are determined) in the aggregate shall not be less than those in effect
as of the date hereof and (ii) any performance targets thereunder established
after such date shall be reasonable.
(b) Parikh shall be entitled to participate in Asyst's Long-Term
Incentive Compensation Plan (the "LTIP"), a copy of which is attached hereto as
Attachment I, and receive awards thereunder in accordance with its terms,
provided that (i) award opportunities (with respect to their level, applicable
performance criteria and the manner in which LTIP awards are determined) in the
aggregate shall not be less than those in effect as of the date hereof and (ii)
any performance targets thereunder established after such date shall be
reasonable.
5. EQUITY OPPORTUNITY.
(a) (a) General. Throughout the Term, Parikh shall be eligible to
receive grants of options to purchase shares of Asyst's stock and awards of
shares of Asyst's stock, either or both as determined by the Compensation
Committee, under and in accordance with the terms of applicable plans of Asyst
and related option agreements.
7
<PAGE>
(b) Registration Rights. Asyst expressly acknowledges that Parikh has
been granted options under Asyst's 1993 Stock Option Plan. Asyst shall use its
best efforts to file, and cause to be effective under the Securities Act of
1933, as amended, a registration statement on Form S-8 (or a comparable form)
with respect to the shares (or other units) of (i) equity issued as provided for
or referenced by this Section 5, (ii) if applicable, equity issuable upon
exercise of rights so provided for or referenced and (iii) any other equity
awarded or granted to Parikh under any of Asyst's other incentive, stock option
or compensation plans. Asyst will also ensure that each grant provided for under
this Section 5 or such other plans shall meet the requirements of Rule 16b-3 for
exception under the Securities Exchange Act of 1934, as amended.
6. EXPENSE REIMBURSEMENT.
During the Term, Parikh shall be entitled to prompt reimbursement by
Asyst for all reasonable out-of-pocket expenses incurred by him in performing
services under this Agreement, upon his submission of any accounts and records
as may be reasonably required by Asyst.
7. EMPLOYEE BENEFIT PLANS.
(a) General. Parikh shall be eligible to participate in all of
Asyst's life insurance, short- and long-term disability, health insurance,
savings/retirement, stock option and other equity-based plans and similar
benefits that may be available to other Asyst senior executives generally,
including any plans that supplement the foregoing types of plans, whether funded
or unfunded.
8
<PAGE>
(b) Disability Benefit.
(i) During the Term Asyst shall provide Parikh with long-term
disability insurance through a combination of group plans sponsored by Asyst and
individual policies obtained by Asyst for the benefit of Parikh.
(ii) To the extent that individual policies are obtained for
Parikh, he shall be the owner of such policies and shall pay the premiums
thereon. Asyst shall reimburse Parikh for any premiums that he pays.
8. TERMINATION OF EMPLOYMENT.
The Parties may terminate this Agreement by mutual agreement at any
time.
(a) General. Notwithstanding anything to the contrary herein, in the
event of termination of Parikh's employment under this Agreement, he, his
dependents or his Beneficiary, as may be the case, shall be entitled to receive
(in addition to payments and benefits under Sections 8(b) through 8(g) below, as
applicable):
(i) any Base Salary or other benefits earned and accrued
under this Agreement prior to the date of termination,
(ii) benefits under the equity grants and awards described in
Section 5 above and employee benefits plans described in Section 7 above, in
accordance with the applicable terms and conditions of each grant, award or
plan, and
9
<PAGE>
(iii) reimbursement in accordance with this Agreement of any
business expenses incurred by Parikh but not yet paid to him.
(b) Termination Due to Death. In the event that Parikh's employment
is terminated due to his death, his Beneficiary shall be entitled to:
(i) Parikh's Base Salary, at the rate in effect on the date
of his death, through the end of the month in which his death occurs,
(ii) any annual bonus awarded but not yet paid to Parikh, and
(iii) a prorated annual bonus for the year in which his death
occurs.
(c) Termination Due to Disability. In the event of Disability, Asyst
or Parikh may terminate Parikh's employment. If Parikh's employment is
terminated due to Disability, he shall be entitled to:
(i) his Base Salary through the date of termination of his
employment,
(ii) any annual bonus awarded but not yet paid to him,
(iii) a prorated annual bonus for the year in which he is
terminated for Disability, and
(iv) long-term disability payments, payable at least monthly,
beginning six months after his termination of employment due to Disability and
continuing until the earliest to occur of (A) termination of his Disability,
(B) his death or (C) his attainment of age 65, in the amount of $2,500 per
month, reduced by any long-term disability payments he receives from any
disability plan sponsored by Asyst or any individual policy obtained by Asyst
for Parikh's benefit.
(d) Termination by Asyst for Cause. Asyst may terminate Parikh's
employment hereunder for Cause only upon written notice to Parikh no less than
30 days prior to any intended
10
<PAGE>
termination, which notice shall specify the grounds for such termination in
reasonable detail; provided that, notwithstanding anything to the contrary in
this Agreement, Asyst may only terminate Parikh for Cause if he shall have
failed to cure the grounds for such termination prior to the intended
termination date. Further, Cause shall in no event be deemed to exist except
upon a finding reflected in a resolution approved by a majority (excluding
Parikh) of the members of the Board (whose finding shall not be binding upon any
court, arbitrator or other decision-maker ruling on this Agreement) at a meeting
of which Parikh shall have been given proper notice and at which Parikh (and his
counsel) shall have a reasonable opportunity to present his case. In the event
that Parikh's employment is terminated for Cause, he shall only be entitled to:
(i) his Base Salary through the date of termination of his
employment for Cause, and
(ii) any annual bonus awarded but not yet paid to him.
(e) Termination without Cause or by Parikh for Good Reason.
(i) Termination without Cause shall mean termination of
Parikh's employment other than (A) due to death, Disability, Cause or voluntary
termination or (B) by mutual agreement of Parikh and Asyst. Asyst shall provide
Parikh 30 days' prior written notice of termination by it without Cause.
(ii) In the event of termination of Parikh's employment
without Cause or of termination by Parikh of his employment for Good Reason, he
shall be entitled to receive, within 30 business days after termination, a lump-
sum cash payment comprising the present value of:
(A) an amount equal to 36 months of his then Base
Salary, plus
11
<PAGE>
(B) an amount equal to three times:
(1) if the termination occurs in 1998, the prior
year's bonus;
(2) if the termination occurs in 1999, (I) the sum
of (x) two times the prior year's bonus plus (y) the bonus for the year two
years prior to the year of termination, (II) divided by three;
(3) if the termination occurs in 2000 or
thereafter, (I) the sum of (x) three times the prior year's bonus plus (y) two
times the bonus for the year two years prior to the year of termination plus (z)
the bonus earned for the year three years prior to the year of termination, (II)
divided by six.
Present value shall be determined by using the interest
rate in effect for U.S. Treasury issues of three-year duration on the date of
Parikh's termination of employment.
(iii) In the event of termination of Parikh's employment
without Cause or of termination by Parikh of his employment for Good Reason, he
shall also be entitled, at no cost to him, to continued participation for 18
months in the medical, and life insurance plans described in Section 7(a) above
in which he is participating at the time of termination, to the extent that any
of these plans provides for such continued participation. Continued
participation in the medical plan shall constitute satisfaction of Asyst's COBRA
obligation.
If Parikh is precluded from continued participation in
any of the above plans, he shall, for the 18 months following either such
termination of employment, be entitled to receive the after-tax economic
equivalent of the benefits provided under the plan in which he is ineligible to
participate. The economic equivalent of any benefit foregone shall be deemed to
be the
12
<PAGE>
lowest cost that Parikh would incur in obtaining any such equivalent benefit
himself on an individual basis.
(iv) In the event of termination of Parikh's employment
without Cause or of termination by Parikh of his employment for Good Reason,
Asyst will use its best efforts, promptly and at Parikh's request, to assist and
enable him to dispose of any shares of Asyst stock that he then owns.
(v) Prior written consent by Parikh to any of the events
described in Section 1(i) above shall be deemed a waiver by Parikh of his right
to terminate for Good Reason under this Section 8(e) solely by reason of the
events set forth in such waiver.
(f) Voluntary Termination by Parikh or Notice that He Does Not Want
the Term to Renew.
(i) Parikh shall have the right, upon 60 days' written notice
to Asyst, voluntarily to terminate his employment without Good Reason, in which
event his entitlements shall be the same as if Asyst had terminated his
employment for Cause, as provided in Section 8(d) above.
(ii) In the event that Parikh notifies Asyst that he does not
want the Term to renew as provided in Section 2(b) above, the Board, at its
option, within 60 days after such notice, may deem it a voluntary termination of
employment by Parikh and, in such event, the provisions of clause (i) above
shall apply.
(g) Change In Control. In the event of termination of Parikh's
employment within six months following a Change in Control without Cause or for
Good Reason, he shall be entitled to the payments and benefits provided under
clauses (ii), (iii) and (iv) of Section 8(e) in addition to those provided under
Section 8(a).
13
<PAGE>
9. CONFIDENTIAL INFORMATION.
(a) General.
(i) Parikh understands and hereby acknowledges that as a
result of his employment with Asyst he will necessarily become informed of and
have access to certain valuable and confidential information of Asyst and any of
its subsidiaries, joint ventures and affiliates, including, without limitation,
inventions, trade secrets, technical information, computer software and
programs, know-how and plans ("Confidential Information"), and that any such
Confidential Information, even though it may be developed or otherwise acquired
by Parikh, is the exclusive property of Asyst to be held by him in trust solely
for Asyst's benefit.
(ii) Accordingly, Parikh hereby agrees that, during and
subsequent to the Term, he shall not, and shall not cause others to, use,
reveal, report, publish, transfer or otherwise disclose to any person,
corporation or other entity any Confidential Information without the prior
written consent of Asyst, except to (x) responsible officers and employees of
Asyst or (y) responsible persons who are in a contractual or fiduciary
relationship with Asyst or who need such information for purposes in the
interest of Asyst. Notwithstanding, the foregoing, the prohibitions of this
clause (ii) shall not apply to any Confidential Information that becomes of
general public knowledge other than from Parikh or is required to be divulged by
court order or administrative process.
(b) Return of Documents. Upon termination of his employment with
Asyst for any reason whatsoever, Parikh shall promptly deliver to Asyst all
plans, drawings, manuals, letters, notes, notebooks, reports, computer programs
and copies thereof and all other materials, including without
14
<PAGE>
limitation those of a secret or confidential nature, relating to Asyst's
business that are then in his possession or control, except that in any event
Parikh may retain his rolodex.
10. NONSOLICITATION.
(a) During Parikh's employment hereunder and for a period of 12
months thereafter, Parikh shall not:
(i) without prior written authorization of Asyst, solicit any
of its employees to terminate their employment, or otherwise interfere with or
cease their relationship, with Asyst, or
(ii) intentionally and directly divert or take away from
Asyst, or attempt to divert or take away, the business or patronage of any of
the clients, customers, co-venturers, licensees or accounts, if any, of Asyst
that were contacted, solicited or served by Parikh during his employment with
Asyst.
(b) Notwithstanding anything to the contrary in this Section 10, its
provisions shall not apply if (i) Asyst terminates Parikh's employment without
Cause or (ii) Parikh terminates his employment for Good Reason, each as provided
in Section 8(e) above.
15
<PAGE>
11. WITHHOLDING TAXES.
All payments to Parikh or his Beneficiary shall be subject to
withholding on account of federal, state and local taxes as required by law
12. NO DUTY TO MITIGATE.
Parikh shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise, nor will any payments hereunder be subject to offset in the event
Parikh does mitigate.
13. PARACHUTES.
(a) Reductions in Payment. In the event that any payments or other
benefits received or to be received by Parikh pursuant to this Agreement
("Payments") would (i) constitute a "parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code) and
(ii) but for this Section 13, be subject to the excise tax imposed by Section
4999 of the Code (the "Excise Tax"), then, in accordance with this Section 13,
such Payments shall be reduced to the maximum amount that would result in no
portion of the payments being subject to the Excise Tax, but only if and to the
extent that such a reduction would result in Parikh's receipt of Payments that
are greater than the net amount that Parikh would receive hereunder (after
application of the Excise Tax) if no reduction is made. The amount of required
16
<PAGE>
reduction, if any, shall be the smallest amount so that Parikh's net proceeds
with respect to the Payments (after taking into account payment of any Excise
Tax) shall be maximized, as determined by Parikh. Parikh's determination of any
required reduction pursuant to this Section 13(a) shall be conclusive and
binding upon Asyst. Asyst shall reduce Payments in accordance with this Section
13(a) only upon written notice from Parikh indicating the amount of such
reduction, if any. If the Internal Revenue Service (the "IRS") determines that a
Payment is subject to the Excise Tax, then Section 13(b) shall apply.
(b) Repayment. Notwithstanding any reduction described in Section
13(a) (or in the absence of any such reduction), if the IRS determines that
Parikh is liable for the Excise Tax as a result of the receipt of Payments, then
Parikh shall be obligated to pay back to Asyst, within 30 days after final IRS
determination, an amount of the Payments equal to the "Repayment Amount." The
Repayment Amount shall be the smallest such amount, if any, as shall be required
to be paid to Asyst so that Parikh's net proceeds with respect to the Payments
(after taking into account the payment of the Excise Tax imposed on such
Payments) shall be maximized. Notwithstanding the foregoing, the Repayment
Amount shall be zero if a Repayment Amount of more than zero would not eliminate
the Excise Tax imposed on the Payments. If the Excise Tax is not eliminated
pursuant to this Section 13(b), Parikh shall pay the Excise Tax.
14. INDEMNIFICATION AND LIABILITY INSURANCE.
Nothing herein is intended to limit Asyst's indemnification of Parikh,
and Asyst shall indemnify him to the fullest extent permitted by applicable law
consistent with Asyst's Certificate
17
<PAGE>
of Incorporation and By-Laws as in effect at the beginning of the Term, with
respect to any action or failure to act on his part while he is an officer,
director or employee of Asyst or any subsidiary or affiliate thereof. Asyst
shall cause Parikh to be covered at all times by directors' and officers'
liability no less favorable than the directors' and officers' liability
insurance maintained by Asyst on the date hereof in terms of coverage and
amounts. Asyst shall continue to indemnify Parikh as provided above and maintain
such liability insurance coverage for him after the Term has ended for any
claims that may be made against him with respect to his service as a director or
officer of Asyst.
15. EFFECT OF AGREEMENT ON OTHER BENEFITS.
The existence of this Agreement shall not prohibit or restrict
Parikh's entitlement to participate fully in compensation, employee benefit and
other plans of Asyst in which senior executives are eligible to participate.
16. ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of Parikh) and
assigns. No rights or obligations of Asyst under this Agreement may be assigned
or transferred by Asyst except pursuant to (a) a merger or consolidation in
which Asyst is not the continuing entity or (b) sale or liquidation of all or
substantially all of the assets of Asyst, provided that the surviving entity or
assignee or transferee is the successor to all or substantially all of the
assets of Asyst and such surviving entity or assignee
18
<PAGE>
or transferee assumes the liabilities, obligations and duties of Asyst under
this Agreement, either contractually or as a matter of law.
Asyst further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall use its best
efforts to have such assignee or transferee expressly agree to assume the
liabilities, obligations and duties of Asyst hereunder; provided, however, that
notwithstanding such assumption, Asyst shall remain liable and responsible for
fulfillment of the terms and conditions of this Agreement; and provided,
further, that in no event shall such assignment and assumption of this Agreement
adversely affect Parikh's rights upon a Change in Control, as provided in
Section 8(g). No rights or obligations of Parikh under this Agreement may be
assigned or transferred by him.
17. REPRESENTATIONS.
The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance
of its or his obligations, as the case may be, under this Agreement will not
violate any agreement between such Party and any other person, firm or
organization. Asyst represents and warrants that this Agreement has been duly
authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms.
19
<PAGE>
18. ENTIRE AGREEMENT.
Except to the extent otherwise provided herein, this Agreement
contains the entire understanding and agreement between the Parties concerning
the subject matter hereof and supersedes any prior agreements, whether written
or oral, between the Parties concerning the subject matter hereof.
19. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both Parikh and an authorized officer of
Asyst. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.
20. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this
20
<PAGE>
Agreement shall be unaffected thereby and shall remain in full force and effect
to the fullest extent permitted by law.
21. SURVIVAL.
The respective rights and obligations of the Parties under this
Agreement shall survive any termination of Parikh's employment with Asyst.
22. BENEFICIARIES/REFERENCES.
Parikh shall be entitled to select (and change, to the extent
permitted under any applicable law) a beneficiary or beneficiaries to receive
any compensation or benefit payable under this Agreement following his death by
giving Asyst written notice thereof. In the event of Parikh's death or of a
judicial determination of his incompetence, reference in this Agreement to
Parikh shall be deemed to refer, as appropriate, to his beneficiary, estate or
other legal representative.
23. GOVERNING LAW/JURISDICTION.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of California, without reference to principles of
conflict of laws.
21
<PAGE>
24. RESOLUTION OF DISPUTES; CERTAIN OTHER COSTS.
(a) Arbitration. Any disputes arising under or in connection with
this Agreement shall be resolved by arbitration, to be held in San Francisco,
California, in accordance with the commercial rules and procedures of the
American Arbitration Association.
(b) Judgments. The determination of the arbitrator(s) shall be
conclusive and binding on Asyst (or its affiliates, where applicable) and
Parikh, and judgment may be entered on the arbitration award in any court having
jurisdiction.
(c) Costs of Disputes. Asyst shall pay, at least monthly, all costs
and expenses, including attorneys' fees and disbursements, of Parikh in
connection with any proceeding, whether or not instituted by Asyst or Parikh,
relating to any provision of this Agreement, including but not limited to the
interpretation, enforcement or reasonableness thereof; provided, however, that,
if Parikh instituted the proceeding and the judge or other decision-maker
presiding over the proceeding affirmatively finds that he did so in bad faith,
he shall pay his own costs and expenses and, if applicable, return any amounts
theretofore paid to him or on his behalf under this subsection (c).
(d) Certain Other Costs. Asyst shall pay all reasonable costs and
expenses, including attorneys' fees and disbursements and consultants' fees and
disbursements, that Parikh has incurred in connection with the negotiation and
execution of this Agreement.
22
<PAGE>
25. NOTICES.
Any notice given to either Party shall be in writing and shall be
deemed to have been given when delivered either personally, by fax, by overnight
delivery service (such as Federal Express) or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed address as the Party
may subsequently give notice of.
If to Asyst or the Board:
Asyst Technologies, Inc.
48761 Kato Road
Fremont, CA 94538
Attention: Douglas J. McCutcheon
Senior Vice President
FAX: (510) 661-5151
With a copy to:
If to Parikh:
Mihir Parikh, Ph.D.
Asyst Technologies, Inc.
48761 Kato Road
Fremont, CA 94538
23
<PAGE>
26. HEADINGS.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
27. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
Asyst Technologies, Inc.
Attest: /s/ Holly N. Bell By: /s/ Stanley J. Grubel
---------------------- ---------------------------
Stanley J. Grubel
Chairman, Compensation Committee
/s/ Holly N. Bell /s/ Douglas J. McCutcheon
---------------------- ---------------------------
Douglas J. McCutcheon
Senior Vice President
Witness: /s/ Carol Higgins /s/ Mihir Parikh
---------------------- -------------------------
Mihir Parikh
24
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,913
<SECURITIES> 33,883
<RECEIVABLES> 23,099
<ALLOWANCES> 2,411
<INVENTORY> 18,556
<CURRENT-ASSETS> 99,503
<PP&E> 32,030
<DEPRECIATION> 19,275
<TOTAL-ASSETS> 130,422
<CURRENT-LIABILITIES> 16,631
<BONDS> 0
0
0
<COMMON> 134,066
<OTHER-SE> (20,275)
<TOTAL-LIABILITY-AND-EQUITY> 130,422
<SALES> 27,086
<TOTAL-REVENUES> 27,086
<CGS> 15,840
<TOTAL-COSTS> 15,577
<OTHER-EXPENSES> 14
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 158
<INCOME-PRETAX> (4,345)
<INCOME-TAX> (1,477)
<INCOME-CONTINUING> (2,868)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,868)
<EPS-BASIC> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
