As filed with the Securities and Exchange Commission on May 23, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MICRION CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts No. 04-2892070
(State or other jurisdiction (IRS Employer
of incorporation or Identification No.)
organization)
One Corporation Way, Peabody, Massachusetts 01960 (508) 531-6464
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
NICHOLAS P. ECONOMOU, Micrion Corporation, One Corporation Way,
Peabody, Massachusetts 01960 (508) 531-6464
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
ROSLYN G. DAUM, ESQ.
Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, Massachusetts 02109
(617) 248-5000
Approximate date of commencement of proposed sale to
the public: From time to time or at one time after effective
date of this Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [X]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement number of
the earlier effective registration statement for the same
offering. [ ]
If delivery of this prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
C A L C U L A T I O N O F R E G I S T R A T I O N F E E
Proposed
Title of each Amount to Proposed Maximum
Class of be Maximum Aggregate Amount of
Securities to Registered Offering Offering Registration
be Registered (shares) Price(1) Price(1) Fee
_____________ __________ ________ _________ ____________
Common Stock,
no par value 215,000 $36.375 $7,820,625 $2,697
(1) Estimated solely for the purpose of computing the
registration fee pursuant to Rule 457(c) under the
Securities Act of 1933 on the basis of the average of the
high and low sales prices of Micrion Corporation Common
Stock, no par value per share, as reported on the Nasdaq
National Market on May 21, 1996.
The registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to said
Section 8(a), may determine.
PROSPECTUS
SUBJECT TO COMPLETION, MAY 23, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME
THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO
THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
215,000 Shares
MICRION CORPORATION
Common Stock
(no par value)
________________
The 215,000 shares of Common Stock, no par value per
share (the "Common Stock"), of Micrion Corporation, a
Massachusetts corporation (the "Company"), covered by this
Prospectus (the "Shares") are being offered by a certain holder
of the Company's Common Stock (the "Selling Stockholder"). In
connection with the settlement of certain litigation, 119,200 of
the Shares were issued by the Company to the Selling Stockholder
and the remaining 95,800 were transferred to the Selling
Stockholder by certain other stockholders of the Company.
________________
FOR A DISCUSSION OF CERTAIN FACTORS WHICH SHOULD BE
CONSIDERED IN CONNECTION WITH THE PURCHASE OF THESE SECURITIES,
SEE "RISK FACTORS" COMMENCING ON PAGE 3.
________________
The Selling Stockholder may sell the Shares from time to
time in one or more transactions. The Shares may be sold on the
Nasdaq National Market, through registered brokers or dealers, or
otherwise, at market prices then prevailing, or in negotiated
transactions. In addition, any Shares that qualify for sale
pursuant to Rule 144 of the Securities Act of 1933, as amended,
may be sold under Rule 144 rather than pursuant to this
Prospectus. The Shares may also be offered in one or more
underwritten offerings, on a firm commitment or best efforts
basis. The underwriters in an underwritten offering, if any, and
the terms and conditions of any such offering will be described
in a supplement to this Prospectus. For information regarding
the Selling Stockholder and the plan of distribution of the
Shares offered hereby, see "The Offering" and "Plan of
Distribution."
The Company will not receive any of the proceeds from the
sale of the Shares by the Selling Stockholder. See "Use of
Proceeds."
The Common Stock of the Company is listed on the Nasdaq
National Market under the symbol "MICN." On ______, 1996, the
last reported sale price of Common Stock on the Nasdaq National
Market was $_____ per share.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is ______________, 1996.
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AVAILABLE INFORMATION
The Company has filed with the Securities and
Exchange Commission (the "Commission" or "SEC") a registration
statement on Form S-3 (herein, with all amendments and exhibits
thereto, referred to as the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Stock offered hereby. This Prospectus does
not contain all the information set forth in the Registration
Statement, certain items of which are omitted in accordance with
the rules and regulations of the Commission. The omitted
information may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, and copies of such
material can be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. For further information with respect to the
Company and the Shares offered hereby, reference is made to the
Registration Statement and the documents incorporated by
reference therein. See "Incorporation of Certain Documents by
Reference" herein.
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith, files reports,
proxy statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at the Commission's New York Regional Office at 7
World Trade Center, 13th Floor, New York, New York 10007 and
Chicago Regional Office at 500 West Madison Street, Room 3190,
Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission pursuant to the Exchange Act are incorporated by
reference in this Prospectus:
1. The Company's Annual Report on Form 10-KSB for the year
ended June 30, 1995.
2. The Company's Quarterly Reports on Form 10-QSB for the
quarters ended September 30, 1995, December 31, 1995 and
March 31, 1996.
3. The Company's Current Report on Form 8-K filed on March
18, 1996.
4. The description of the Company's Common Stock, contained
in the Company's registration statement on Form 8-A filed
with the Commission on April 14, 1994 (SEC File No. 0-
23840).
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All documents filed by the Company with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in
this Prospectus, any Prospectus supplement or in a document
incorporated or deemed to be incorporated by reference shall be
deemed to be modified or superseded to the extent that a
statement contained in any Prospectus supplement or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein or therein modifies or
supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part hereof.
The Company will provide without charge to each
person, including any beneficial owner, to whom a copy of this
Prospectus has been delivered, upon the written or oral request
of such person, a copy of any or all of the documents which are
incorporated by reference in this Prospectus, other than exhibits
to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Requests for
such copies should be directed to David M. Hunter, Chief
Financial Officer, One Corporation Way, Peabody, Massachusetts
01960 (Telephone: (508) 531-6464).
Certain information contained in this Prospectus
summarizes, is based upon, or refers to, information and
financial statements, contained in one or more documents
incorporated or deemed to be incorporated by reference in this
Prospectus; accordingly, such information contained herein is
qualified in its entirety by reference to such documents and
should be read in conjunction therewith.
THE COMPANY
The Company is a leader in the design, development,
manufacture and marketing of focused-ion-beam ("FIB") systems.
The Company's FIB systems are used in the design, fabrication and
testing of semiconductor integrated circuits ("ICs") and other
products to analyze and correct problems in the manufacturing
process and are used also in on-line manufacturing. FIB
technology is relatively new and provides a unique combination of
capabilities to image, analyze and perform "microsurgery" on ICs.
Semiconductor integrated circuit and other manufacturers use the
Company's FIB systems to reduce time to market, and to achieve
and maintain acceptable manufacturing yields more quickly and
cost effectively. The Company introduced the world's first FIB
system specifically designed for use in the manufacturing process
of ICs in 1985 and since then has introduced new products
incorporating a variety of technological advances. The
principal executive offices of the Company are located at One
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Corporation Way, Peabody, Massachusetts 01960 (Telephone: (508)
531-6464).
RISK FACTORS
In addition to the other information in this
Prospectus, the following factors should be considered carefully
by potential investors in evaluating an investment in the Common
Stock offered hereby.
Cyclical Nature of and Dependence on the
Semiconductor Industry. The Company's business depends in large
part upon the capital expenditures of semiconductor and other
technology-based manufacturers and testing laboratories, which in
turn depend on the current and anticipated market demand for
integrated circuits and products using integrated circuits and
other micro-machined parts. The semiconductor industry is highly
cyclical and historically has experienced periodic downturns.
The Company's financial results have been adversely affected
during those downturns. The Company believes that the markets
for newer generations of semiconductors will also be subject to
similar fluctuations. Any factor adversely affecting the
semiconductor industry, particular segments within the
semiconductor industry or other manufacturers using the Company's
products may have an effect on the Company's business, financial
condition and operating results. A slowdown in the semiconductor
industry or such other industries may have an exaggerated adverse
effect on the Company's business. Accordingly, there can be no
assurance that the Company's operating results will not be
adversely affected by downturns or other adverse factors
affecting the semiconductor industry or other technology-based
businesses that may occur in the future.
Uncertainties Associated with New Applications. The
Company has recently begun shipping its machines for production
applications, which are new applications of the Company's
equipment. There can be no assurance that difficulties
associated with these new applications and related warranty,
service and other costs will not have a material adverse effect
on the Company's operating results. Furthermore, the Company has
recently received a multiple-system purchase agreement, which, in
connection with a previous order from the same customer, is
valued at over $60,000,000 and involves the production of
machines for these new applications. The exercise of
cancellation or termination provisions contained in such purchase
agreement, including provisions that entitle the customer to
cancel issued purchase orders or to terminate the agreement for
convenience, would have a material adverse effect on the
Company's operating results. In addition, the inability of the
Company to make deliveries required under the multiple-system
purchase agreement as a result of a lack of production capacity,
manpower, inability to acquire necessary materials for
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manufacturing, or otherwise, could have a material adverse effect
on the Company's operating results.
Variable Operating Results. The Company's operating
results have in the past and may in the future fluctuate
significantly depending upon a variety of actors which vary
substantially over time, including: conditions in the
semiconductor industry, conditions in other technology-based
manufacturing industries using the Company's products,
competitive pricing pressures, the timing of orders from
customers, the timing of new product introductions by the Company
and competitors, customer acceleration, cancellation or delay of
shipments, changes in the mix of types of systems sold, changes
in the mix of systems, service and parts revenues, the length of
sales cycles, the relative proportions of domestic and foreign
shipments, the mix of product and contract revenues, the mix and
timing of government and commercial contracts activity, the level
and timing of selling, general and administrative expenses and
research and development expenses, specific feature needs of
customers, some of which may be available in competitors' systems
but not in the Company's systems, production delays, and currency
exchange rate fluctuations.
A substantial portion of the Company's quarterly revenues
are derived from the sale of a relatively small number of FIB
systems, which presently range in price from approximately
$300,000 to $2,500,000. Historically, a significant portion of
the Company's revenues from systems sales are recognized in the
last month of a quarter. As a result, the timing of recognition
of revenue from a single system order, either pursuant to
customer acceptance of a system or percentage of completion
contract accounting, could have a significant impact on the
Company's net sales and operating results for a particular
financial period. For example, delays in customer acceptance of
systems near the end of a quarter could have a substantial
adverse effect on operating results for that quarter.
Announcements by the Company or its competitors of new products
and technologies could cause customers to defer or not purchase
the Company's existing systems, which could also have a material
adverse effect on the Company's business, financial condition and
results of operations. The deferral or loss of an anticipated
order could have a material adverse effect on the Company's
results of operations. The impact of these and other factors on
the Company's sales and operating results in any future period
cannot be forecast with certainty. Moreover, the Company's
backlog at the beginning of each quarter and orders received
during a quarter are not necessarily indicative of actual sales
for any succeeding period. The Company's sales may reflect
orders shipped in the same quarter that they are received. In
addition, the need for continued investment in research and
development, capital equipment and ongoing customer service and
support capability worldwide results in significant fixed costs
which will be difficult to reduce in the event that the Company
does not meet its sales objectives. Furthermore, as a result of
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competitive pressures to deliver systems promptly and a long
manufacturing cycle, the Company typically begins to build
systems prior to receipt of customer orders, thereby incurring
significant inventory costs in advance of sales. Accordingly,
there can be no assurance that the Company will be profitable in
the future.
Rapid Technological Change and New Product Innovation.
The FIB market is subject to rapid technological change and new
product introductions and enhancements. The Company's ability to
remain competitive in this market will depend in significant part
upon its ability to develop and introduce new products and
enhancements on a timely and cost effective basis. The success
of the Company in developing new and enhanced FIB systems depends
on a variety of factors, including product selection, timely and
efficient completion of product design, implementation of
manufacturing and assembly processes and effective sales and
marketing. If the Company experiences reliability or quality
problems with new products, then reductions in orders, higher
manufacturing costs and additional service and warranty expense
may result. Because new product development commitments must be
made well in advance of sales, new product decisions must
anticipate both future demand and the availability of technology
to satisfy that demand. There can be no assurance that the
Company will successfully develop and introduce new products and
product enhancements or that such products will achieve market
acceptance. At any point in time, competitors of the Company may
achieve technological advances which provide a competitive
advantage over the Company's FIB systems. Announcements by the
Company or its competitors of new products or features have in
the past and could in the future, cause customers to defer or not
purchase the Company's existing products, which would also
adversely affect the Company. In addition, advances or
developments in other technologies could render the Company's FIB
systems obsolete for particular applications. For example,
advances in software verification tools could reduce the need for
FIB systems in the design and modification applications of
integrated circuit manufacturing.
Uncertain Market. The market for FIB systems is
relatively new. The Company believes that the first FIB system
used in IC manufacturing was sold commercially in 1985, and that
since then approximately 450 systems have been sold. The Company
sold its first FIB system in 1985 and as of March 31, 1996, had
sold a total of 153 FIB systems. The size of the market for the
Company's FIB systems is affected by the relatively high unit
prices of FIB systems, limited applications of FIB technology and
by the relatively small number of purchasers of such systems.
Most of the systems sold by the Company have prices in excess of
$400,000 and are sold to customers in the semiconductor industry.
The size of the market for FIB systems also is limited by the
rate at which prospective customers recognize the functions and
capabilities of FIB systems. There can be no assurance the
market for the Company's FIB systems in the semiconductor
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industry will continue to grow or that FIB systems will be
accepted in markets outside of the semiconductor industry.
Competition. The FIB system industry is highly
competitive, and the Company expects this competition to
intensify. Certain of the Company's competitors and potential
competitors have substantially greater financial, marketing,
technological and production resources than the Company. Certain
of these competitors are themselves semiconductor manufacturers
and, therefore, familiarity with semiconductor manufacturing as
well as greater financial resources give these companies a
competitive advantage. Individual competitors have advantages
and strengths in different areas, including system features,
geographic market presence, customer service and support, breadth
of applications, time to delivery and price. The Company
experiences price competition in the sale of FIB systems which
has adversely affected, and in the future could adversely affect
its operating margins. Certain of the Company's competitors use
demonstration systems, leasing arrangements and loans of
equipment to a greater extent than the Company as a means of
gaining market acceptance. There can be no assurance that the
Company will be able to compete successfully against current and
future competitors or that the competitive pressures faced by the
Company will not adversely affect its financial performance.
Ability to Manage Growth. The Company has experienced
growth in production and in its employee base which has placed,
and will continue to place, a significant strain on the Company's
management, financial and operating resources. As part of its
business strategy, the Company intends to continue to expand its
operations. This strategy will require expanded manufacturing
capability, customer services and support, increased personnel
throughout the Company, expanded operational and financial
systems and implementation of new control procedures. There can
be no assurance that the Company will be able to attract
qualified personnel or successfully manage expanded operations.
As the Company expands, it may from time to time experience
constraints that will adversely affect its ability to satisfy
customer demand in a timely fashion or to provide consistent
levels of support to existing customers. For example, because
the Company's FIB systems are technically complex, receipt of
orders for a larger than expected number of systems within a
short period of time could extend the delivery cycle, in turn
causing delayed revenue and possible cancellation or loss of
orders. There can be no assurance that the Company will
anticipate all of the changing demands that expansion may place
on the Company's operational, management and financial systems
and controls or that the Company will be able to continue to
improve such systems and controls. If the Company's management
is unable to manage growth effectively, the Company's business,
results of operations and financial condition could be materially
and adversely affected.
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Substantial International Operations. International
sales accounted for approximately 27%, 43%, 63% and 53% of the
Company's net revenues in fiscal 1993, 1994 and 1995 and for the
nine month period ended March 31, 1996, respectively. The
Company expects international sales to comprise a significant
percentage of its sales in the foreseeable future. Certain risks
are inherent in international operations, including changes in
demand resulting from fluctuations in exchange rates, the risk of
government financed or subsidized competition, changes in trade
policies and tariff regulations, difficulties in obtaining U.S.
export licenses and geopolitical risks. Although most of the
Company's international sales are denominated in United States
dollars, fluctuations in foreign currencies can impact the prices
quoted by the Company to prospective customers and thereby affect
the Company's ability to obtain orders from such foreign
customers. Therefore, a decrease in the value of certain foreign
currencies in relation to the U.S. dollar could have an adverse
impact on the Company's results of operations.
The Company's sales to Japanese customers represented
approximately 24%, 45%, 28% and 31% respectively, of its product
revenues in fiscal 1993, 1994 and 1995 and for the nine month
period ended March 31, 1996. The Company's sales to South Korean
customers represented 0%, 0%, 28% and 8%, respectively of its
total product revenues in fiscal 1993, 1994, 1995 and for the
nine month period ended March 31, 1996. Changes in trade
policies between the United States and Japan or South Korea could
adversely affect the Company's sales to customers in these
countries.
In foreign markets the Company markets and sells its
products through independent sales representatives and a Japanese
distributor. The use of such sales representatives and
distributor results in lower gross profit margins on sales to
foreign customers. Accordingly, an increase in the proportion of
international sales could negatively affect the Company's gross
profit margins. The Company does not have long-term contracts
with its sales representatives, and the distribution agreement
with its Japanese distributor may be cancelled on 60 days notice.
The loss of such sales representatives or distributor or the
inability to develop and maintain an alternative foreign
distribution network could have a material adverse impact on the
Company's international sales.
Dependence on Significant Customers. Historically, the
Company has sold its FIB systems to and has entered into
development contracts with a relatively small number of
significant customers. During fiscal year 1995, Tokyo Electron
Limited, the Company's Japanese distributor, Samsung and LG
Semicon accounted for approximately 28%, 15% and 12%,
respectively, of the Company's total revenues. The loss of any
of these significant customers or the inability of the Company to
attract new customers to replace these customers could have a
material adverse effect on the Company's operations and financial
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condition. In addition, the Company has entered into a multiple-
system purchase agreement, which with a previous order from the
same customer, is valued at over $60,000,000, and the loss of
this customer could have a material adverse effect on the
Company's operations and financial condition. See
" Uncertainties Associated with New Applications."
Lengthy Sales Cycle. The decision to purchase a FIB
system involves a significant commitment of capital by the
Company's customers and generally the consent of a number of
internal decision-makers. Therefore, there are frequently
lengthy periods between the initiation of contact by the Company
with a customer and the closing of a sale. During the lengthy
sales cycle for the Company's products, the Company may expend
substantial funds and management effort in anticipation of a sale
even though a sale may not result from the effort, thus adversely
affecting the Company's revenues and results of operations.
Possible Volatility of Stock Price. The market price of
the Company's Common Stock has risen substantially since the
Company's initial public offering in May 1994 and may be subject
to wide fluctuations and possible rapid increases or declines in
a short time period. These fluctuations may occur in response to
variations in quarterly operating results, changes in earnings
estimates by analysis, announcements concerning technological
innovations, new product introductions, or new contracts by the
Company, its competitors, or their customers, governmental
regulatory action, litigation and other factors. In addition,
the stock market and in particular the stock prices for many
technology companies may fluctuate widely for reasons that may be
unrelated to the operating performance of particular companies.
These fluctuations, as well as general economic or political
conditions, may adversely affect the market price of the
Company's Common Stock.
Dependence on Suppliers. Certain of the components and
subassemblies included in the Company's products, such as high
voltage power supplies, are made to the Company's specifications
and obtained from a single source or a limited group of
suppliers. A number of these components and subassemblies
require lengthy manufacturing lead times. In the past the
Company has experienced manufacturing delays due to the temporary
unavailability of qualified components and parts. Although the
Company believes it could develop alternative sources for all of
the components and parts used in its products, significant delays
or interruptions in the delivery of components or parts from
current suppliers, receipt of defective components or parts, as
well as difficulties or delays in shifting manufacturing capacity
to new suppliers could have a material adverse effect on the
Company.
Dependence on Key Personnel. The Company's future
success is dependent, in part, on its ability to attract and
retain certain key scientific, marketing and management personnel
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and on its ability to continue to attract and retain qualified
employees, particularly as it expands the market for its FIB
systems beyond the semiconductor industry. In addition, certain
of such personnel are in limited supply and are difficult to
attract and retain. Competition for these personnel is intense,
and the loss of several key employees could have an adverse
effect on the Company's results of operations and prospects. The
Company does not have employment contracts with, and does not
maintain key person life insurance policies on, any personnel.
Protection of Intellectual Property. The Company's
success depends in significant part on maintenance and protection
of its intellectual property. The Company attempts to protect
its intellectual property rights through a range of measures,
including patents, trade secrets and confidentiality agreements.
There can be no assurance that the Company will be able to
protect its technology or that others will not be able to develop
similar technology independently. No assurance can be given that
the claims allowed on any patents held by the Company will be
sufficiently broad to protect the Company's technology: that
patents issued to the Company will not be invalidated,
circumvented or challenged: or that the rights granted thereunder
will provide competitive advantages to the Company. There is no
assurance that foreign intellectual property laws will protect
the Company's patents and other intellectual property rights. In
addition, significant and protracted litigation may be necessary
to enforce the Company's patents and other intellectual property
rights, to protect the Company's trade secrets, to determine the
validity and scope of the proprietary rights of others or to
defend against claims of infringement. There can be no assurance
that third party claims alleging infringement of intellectual
property rights, including infringement of patents that have been
or may be issued in the future, will not be asserted against the
Company. Several of the Company's competitors hold patents
covering a variety of FIB products and applications and methods
of use of focused ion and electron beam products. From time to
time the Company has received correspondence from competitors of
the Company claiming that certain of the Company's products may
be infringing one or more of these patents. The Company believes
that it has credible arguments that these patents are either
invalid, not infringed or would not be enforced by a court. Any
such assertions of intellectual property claims could require the
Company to discontinue the use of certain processes or to cease
the manufacture, use and sale of infringing products, to incur
significant litigation costs and damages, and to develop
noninfringing technology or to acquire licenses to the alleged
infringed technology. Litigation may also divert the efforts of
management and technical personnel from other matters. There can
be no assurance that the Company would be able to obtain such
licenses on acceptable terms or to develop noninfringing
technology. The Company has received patent and technology
licenses from certain companies and academic institutions. The
failure to renew certain of these licenses or significant
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increases in amounts payable under these licenses could have an
adverse effect on the Company.
Single Production Facility. The Company's only
production facility is located in Peabody, Massachusetts and
substantially all of the Company's manufacturing inventory is
maintained there. In the event that production at the facility
were interrupted by fire, earthquake or other catastrophic
events, power failures, work stoppages, regulatory actions or
other causes, the Company would be unable to continue to
manufacture its products. Although the Company maintains
business interruption insurance, such insurance may not be
adequate in the event of such an interruption and, therefore,
such an event could materially adversely affect the Company's
business and results of operations.
Government Audits. The Company is a party to certain
contracts with agencies of the United States government. The
Company is compensated under such contracts on a cost plus fixed
fee basis. The Company's costs allocated to such contracts are
subject to review and audit by the United States government. The
Company is currently being audited by the United States
government with respect to one such contract. There can be no
assurance that the revenues recognized under such contracts will
not be negatively impacted or revised as a result of such a
review or audit by the United States government.
Dividends. The Company has not paid any cash dividends
since its inception and the Company does not anticipate paying
cash dividends in the foreseeable future. The Company's current
bank line of credit prohibits payment of dividends without the
bank's consent.
Anti-Takeover Provisions. Certain provisions in the
Company's Second Restated Articles and Restated By-laws, as well
as certain provisions of the Massachusetts General Laws, could
have the effect of delaying, deferring or preventing a change in
control of the Company. It is possible that such provisions
could make it more difficult to accomplish transactions which
stockholders may otherwise deem to be in their best interests.
THE OFFERING
Pursuant to the terms of a Settlement Agreement dated as
of May 7, 1996 (the "Settlement Agreement"), by and among the
Company, the Selling Stockholder and certain other parties
arising out of certain litigation filed in Massachusetts Superior
Court, Essex County, the Company issued 119,200 Shares and
certain other stockholders transferred 95,800 Shares to the
Selling Stockholder. Pursuant to the Settlement Agreement, the
Company agreed to prepare and file with the Commission a
a registration statement on Form S-3 (or equivalent form),
upon the written request of the Selling
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Stockholder, for resale of as many of the Shares as requested by
the Selling Stockholder. The Selling Stockholder delivered a
written request to the Company, requesting the filing of a
registration statement with respect to all of the Shares.
The following table sets forth the number of Shares being
offered hereby by the Selling Stockholder. The Selling
Stockholder has had no material relationship with the Company or
any of its affiliates during the past three years. To the
Company's knowledge, the Selling Stockholder is currently the
beneficial owner of 244 shares of Common Stock in addition to the
Shares being offered hereby.
Name Number of Shares
KLA Instruments Corporation 215,000
160 Rio Robles
San Jose, CA 95161-9055
USE OF PROCEEDS
The Company will not receive any of the proceeds from the
sale of the Shares by the Selling Stockholder.
PLAN OF DISTRIBUTION
The Selling Stockholder has not advised the Company of
any specific plans for the distribution of the Shares, but it is
anticipated that the Selling Stockholder may, from time to time,
offer for sale and sell or distribute the Shares to be offered by
it hereby (a) in transactions executed on the Nasdaq National
Market, or any securities exchange on which the shares may be
traded, through registered broker-dealers (who may act as
principals, pledgees or agents) pursuant to unsolicited orders or
offers to buy, (b) in negotiated transactions, or (c) through
other means, including pursuant to the exemption provided by SEC
Rule 144, if available. The Shares may be sold from time to time
in one or more transactions at market prices prevailing at the
time of sale or a fixed offering price, which may be changed, or
at varying prices determined at the time of sale or at negotiated
prices. Such prices will be determined by the Selling
Stockholder or by agreement between the Selling Stockholder and
its underwriters, dealers, brokers or agents. The Shares may
also be offered in one or more underwritten offerings. The
underwriters in an underwritten offering, if any, and the terms
and conditions of any such offering will be described in a
supplement to this Prospectus.
In connection with distribution of the Shares, the
Selling Stockholder may enter into hedging or other option
transactions with broker-dealers in connection with which, among
other things, such broker-dealers may engage in short sales of
the Shares pursuant to this Prospectus in the course of hedging
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the positions they assume with the Selling Stockholder. The
Selling Stockholder may also sell Shares short pursuant to this
Prospectus and deliver the Shares to close out such short
positions. The Selling Stockholder may also enter into option or
other transactions with broker-dealers which may result in the
delivery of Shares to such broker-dealers who may sell such
Shares pursuant to this Prospectus. The Selling Stockholder may
also pledge the Shares to a broker-dealer and upon default the
broker-dealer may effect the sales of the pledged Shares pursuant
to this Prospectus.
Any underwriters, dealers, brokers or agents
participating in the distribution of the Shares may receive
compensation in the form of underwriting discounts, concessions,
commissions or fees from the Selling Stockholder and/or
purchasers of Shares, for whom they may act. Such discounts,
concessions, commissions or fees will not exceed those customary
for the type of transactions involved. In addition, the Selling
Stockholder and any such underwriters, dealers, brokers or agents
that participate in the distribution of Shares may be deemed to
be underwriters under the Securities Act, and any profits on the
sale of Shares by them and any discounts, commissions or
concessions received by any of such persons may be deemed to be
underwriting discounts and commissions under the Securities Act.
Those who act as underwriter, broker, dealer or agent in
connection with the sale of the Shares will be selected by the
Selling Stockholder and may have other business relationships
with the Company and its subsidiaries or affiliates in the
ordinary course of business.
Pursuant to the Settlement Agreement, the Selling
Stockholder (and any underwriter and selling broker participating
in the distribution of Shares) are entitled to indemnification by
the Company against liability (including liability under the
Securities Act and the Exchange Act) arising by reason of any
untrue statement or omission or alleged omission (other than a
statement provided by the Selling Stockholder) contained in the
registration statement of which this Prospectus is a part.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Company's Second Restated Articles provide that no
director of the Company shall be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for
approving a dividend, stock repurchases or other distributions to
stockholders that would result in personal liability to the
directors under Section 61 or Section 62 of Chapter 156B of the
General Laws of Massachusetts, or (iv) for any transaction in
which the director derived an improper personal benefit.
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Section 67 of Chapter 156B of the General Laws of
Massachusetts provides that to the extent specified in or
authorized by the articles of organization, a by-law adopted by
shareholders or a resolution adopted by the holders of the
majority of shares of stock entitled to vote on the election of
directors, a corporation can indemnify directors, officers, and
other employees or agents of the corporation except as to any
matter as to which such person shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable
belief that the action was in the best interests of the
corporation. The Company's Second Restated Articles provide,
in part, that the Company shall indemnify any person who is or
was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding, or
claim, by reason of the fact that such person is or was a
director or officer of the Company or while a director or
officer is or was servicing at the request of the Company as a
director, trustee, officer, employee or other agent of another
organization, including service in any capacity with respect to
employee benefit plans, against all liabilities, costs, expenses
(including attorneys' fees and expenses), judgments, fines,
penalties and amounts paid in settlement incurred in connection
with the defense or disposition of or otherwise in connection
with or resulting from any such action, suit, proceeding or
claim.
Pursuant to the Settlement Agreement, the directors and
officers of the Company are entitled to indemnification by the
Selling Stockholder against liability (including liability under
the Securities Act and the Exchange Act) arising by reason of any
statement contained in the registration statement that the
Selling Stockholder provided to the Company in writing
explicitly for use in this registration statement, being false or
misleading or omitting to state a material fact necessary to be
stated in order that the statements made in this registration
statement, in the circumstances in which they are made, not be
misleading.
Insofar as indemnification of liabilities arising under
the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Company pursuant to
the provisions described under Item 15 above, or otherwise, the
Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of
the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with any of the securities being registered,
the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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LEGAL MATTERS
The legality of the Common Stock offered hereby is being
passed upon for the Company by Choate, Hall & Stewart (a
partnership including professional corporations), Boston,
Massachusetts.
EXPERTS
The consolidated financial statements of the
Company and its subsidiaries as of June 30, 1995 and June 30,
1994 and for each of the years in the three-year period ended
June 30, 1995, incorporated by reference in this Prospectus and in
the Registration Statement, have been incorporated by reference
herein in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, which report has been
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
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No dealer, salesman or any other person has been
authorized to give any information or to make any representations
not contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having
been authorized by the Company or any of the Underwriters. This
Prospectus does not constitute an offer of any securities other
than those to which it relates or an offer to sell, or a
solicitation of an offer to buy, to any person in any
jurisdiction where such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale
hereunder shall, under any circumstances, create any implication
that the information contained herein is correct as of any time
subsequent to the date hereof.
215,000 Shares
MICRION
CORPORATION
Common Stock
(no par value)
____________
PROSPECTUS
______, 1996
____________
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses
payable by the registrant in connection with the distribution of
the securities being registered hereunder. All of the amounts
shown are estimates, except the Securities and Exchange
Commission registration fee. The Selling Stockholder will bear
all selling commissions with respect to the sale of the shares
registered hereby. The Selling Stockholder has agreed to
reimburse the registrant for its reasonable cost and expenses in
connection with the distribution of the securities being
registered hereunder, together with legal fees incurred by the
registrant not to exceed $10,000.
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . $ 2,697
Nasdaq Listing Fee . . . . . . . . . . . $ 2,384
Legal Fees and Expenses . . . . . . . . $ 3,519
Accountants' Fees and Expenses . . . . . $ 3,000
Total . . . . . . . . . . . . . . . $11,600
Item 15. Indemnification of Directors and Officers
The Registrant's Second Restated Articles provide that no
director of the Company shall be liable to the Company or its
stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for
approving a dividend, stock repurchases or other distributions to
stockholders that would result in personal liability to the
directors under Section 61 or Section 62 of Chapter 156B of the
General Laws of Massachusetts, or (iv) for any transaction in
which the director derived an improper personal benefit.
Section 67 of Chapter 156B of the General Laws of
Massachusetts provides that to the extent specified in or
authorized by the articles of organization, a by-law adopted by
shareholders or a resolution adopted by the holders of the
majority of shares of stock entitled to vote on the election of
directors, a corporation can indemnify directors, officers, and
other employees or agents of the corporation except as to any
matter as to which such person shall have been adjudicated in any
proceeding not to have acted in good faith in the reasonable
belief that the action was in the best interests of the
corporation. The Registrant's Second Restated Articles provide,
in part, that the Registrant shall indemnify any person who is or
was a party or is threatened to be made a party to any
threatened, pending or completed action, suit, proceeding, or
claim, by reason of the fact that such person is or was a
director or officer of the Registrant or while a director or
II-1
officer is or was servicing at the request of the Registrant as a
director, trustee, officer, employee or other agent of another
organization, including service in any capacity with respect to
employee benefit plans, against all liabilities, costs, expenses
(including attorneys' fees and expenses), judgments, fines,
penalties and amounts paid in settlement incurred in connection
with the defense or disposition of or otherwise in connection
with or resulting from any such action, suit, proceeding or
claim.
Pursuant to the Settlement Agreement, the directors and
officers of the registrant are entitled to indemnification by the
Selling Stockholder against liability (including liability under
the Securities Act and the Exchange Act) arising by reason of any
statement contained in the registration statement that the
Selling Stockholder provided to the registrant in writing
explicitly for use in this registration statement, being false or
misleading or omitting to state a material fact necessary to be
stated in order that the statements made in this registration
statement, in the circumstances in which they are made, not be
misleading.
II-2
Item 16. Exhibits
Exhibit No. Description
3.1* Restated Articles of Organization of
Registrant.
3.2** Amended and Restated By-Laws of the
Registrant.
4.1*** Specimen Stock Certificate.
5 Opinion of Choate, Hall & Stewart.
10**** Settlement Agreement by and among KLA
Instruments Corporation, the Registrant and
Other Parties dated May 7, 1996.
23.1 Consent of Choate, Hall & Stewart (included in
Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (included in the signature
page of this Registration Statement).
* Filed as an exhibit to the registrant's report on Form 10-
QSB filed on June 24, 1994 and incorporated herein by
reference.
** Filed as an exhibit to the registrant's report on Form 10-
KSB filed on September 28, 1994 and incorporated herein by
reference.
*** Filed as an exhibit to the registrant's registration
statement on Form SB-2 (Registration No. 33-75784) or an
amendment thereto and incorporated by reference herein.
**** Filed as an exhibit to the registrant's Quarterly Report on
Form 10-QSB filed May 14, 1996 and incorporated herein by
reference.
II-3
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933, unless the
information required to be included in such post effective
amendment is contained in a periodic report filed by the
registrant pursuant to Section 13 or 15(d) of the Exchange
Act and incorporated herein by reference;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this
Registration Statement, unless the information required to
be included in such post-effective amendment is contained in
a periodic report filed by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act and
incorporated herein by reference; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by
reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-4
(h) Insofar as indemnification of liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with any of the securities being registered,
the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has
duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City
of Peabody, Commonwealth of Massachusetts, on May 22, 1996.
MICRION CORPORATION
By: /s/ Nicholas P. Economou
Nicholas P. Economou, President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose
signature appears below constitutes and appoints Nicholas P.
Economou and David M. Hunter, jointly and severally, his true and
lawful attorneys-in-fact and agents with full powers of
substitution, for him and in his name, place and stead, in any
and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and all documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be in and about
the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below on May 22, 1996, by
the following persons in the capacities indicated.
Name Capacity
/s/ Nicholas P. Economou President, Chief Executive Officer
Nicholas P. Economou and Director (Principal Executive
Officer)
/s/ David M. Hunter Vice President, Finance, Chief
David M. Hunter Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
/s/ John A. Doherty Vice President, Marketing, and
John A. Doherty Director
II-6
/s/ Louis P. Valente Director
Louis P. Valente
/s/ Thomas W. Folger Director
Thomas W. Folger
/s/ Charles M. McKenna Director
Charles M. McKenna
II-7
INDEX TO EXHIBITS
Exhibit No. Description
3.1* Restated Articles of Organization of
Registrant.
3.2** Amended and Restated By-Laws of the
Registrant.
4.1*** Specimen Stock Certificate.
5 Opinion of Choate, Hall & Stewart.
10**** Settlement Agreement by and among KLA
Instruments Corporation, the Registrant and
Other Parties dated May 7, 1996.
23.1 Consent of Choate, Hall & Stewart (included in
Exhibit 5).
23.2 Consent of KPMG Peat Marwick LLP.
24 Power of Attorney (included in the signature
page of this Registration Statement).
* Filed as an exhibit to the registrant's report on Form 10-
QSB filed on June 24, 1994 and incorporated herein by
reference.
** Filed as an exhibit to the registrant's report on Form 10-
KSB filed on September 28, 1994 and incorporated herein by
reference.
*** Filed as an exhibit to the registrant's registration
statement on Form SB-2 (Registration No. 33-75784) or an
amendment thereto and incorporated by reference herein.
**** Filed as an exhibit to the registrant's Quarterly Report on
Form 10-QSB filed May 14, 1996 and incorporated herein by
reference.
II-8
Exhibit 5
CHOATE, HALL & STEWART
A partnership including professional corporations
EXCHANGE PLACE
53 STATE STREET
BOSTON, MASSACHUSETTS 02110
May 23, 1996
Micrion Corporation
One Corporation Way
Peabody, Massachusetts 01960
Gentlemen:
This opinion is delivered to you in connection with a
registration statement on Form S-3 (the "Registration Statement")
to be filed on May 23, 1996, by Micrion Corporation (the
"Company") under the Securities Act of 1933, as amended (the
"Act"), for registration under the Act of 215,000 shares of
Common Stock, no par value (the "Common Stock"), of the Company.
Terms not otherwise defined herein shall be deemed to have the
meanings ascribed such terms in the Registration Statement.
In connection with rendering this opinion, we have examined
such corporate records, certificates and other documents as we
have considered necessary for the purposes of this opinion. In
such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, the conformity of the original documents of all
document submitted to us as copies and the authenticity of the
originals of such latter documents. As to any facts material to
our opinion, we have, when relevant facts were not independently
established, relied upon the aforesaid records, certificates and
documents.
Based upon the foregoing, we are of the opinion that the
shares of Common Stock to be sold by the Selling Stockholder are
and, when sold by the Selling Stockholder, will be, legally
issued, fully paid and non-assessable.
We hereby consent to be named in the Registration Statement
and in any amendments thereto as counsel for the Company, to the
statements with reference to our firm made in the Registration
Statement, and to the filing and use of this opinion as an
exhibit to the Registration Statement.
Very truly yours,
CHOATE, HALL & STEWART
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Micrion Corporation:
We consent to incorporation by reference in this Registration
Statement on Form S-3 of Micrion Corporation of our report dated
July 28, 1995, relating to the consolidated balance sheets of
Micrion Corporation and subsidiaries as of June 30, 1995, and the
related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three year
period ended June 30, 1995, which reports appear in the Annual
Report on Form 10-KSB of Micrion Corporation, and to the reference
to our firm under the heading "Experts" in the Registration Statement.
KPMG Peat Marwick LLP
Boston, Massachusetts
May 22, 1996
