<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BROOKS AUTOMATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 04-3040660
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
15 ELIZABETH DRIVE, CHELMSFORD, MASSACHUSETTS 01824 (508) 262-2400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
ROBERT J. THERRIEN, PRESIDENT
BROOKS AUTOMATION, INC.
15 ELIZABETH DRIVE, CHELMSFORD, MASSACHUSETTS 01824
(508) 262-2400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
LAWRENCE M. LEVY, ESQUIRE TIMOTHY C. MAGUIRE, ESQUIRE
BROWN, RUDNICK, FREED & GESMER TESTA, HURWITZ & THIBEAULT, LLP
ONE FINANCIAL CENTER 125 HIGH STREET
BOSTON, MASSACHUSETTS 02111 BOSTON, MASSACHUSETTS 02110
(617) 856-8200 (617) 248-7000
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the 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. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, 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
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value................. 2,669,150 Shares $31.00 $82,743,650 $25,074
- --------------------------------------------------------------------------------------------
Rights to Purchase
Common Stock(3)....... -- -- -- --
</TABLE>
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(1) Includes up to 348,150 shares of Common Stock which may be purchased by
the Underwriters to cover over-allotments, if any.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933. Based upon the
average of the high and low price of the Common Stock as reported on the
Nasdaq National Market on August 20, 1997.
(3) Pursuant to a Rights Distribution made in 1997, one right (each a "Right")
is deemed to be delivered with each share of Common Stock issued by the
Company. The Rights currently are not separately transferable apart from
the Common Stock, nor are they exercisable until the occurrence of certain
events. Accordingly, no independent value has been attributed to the
Rights.
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 COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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 REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 27, 1997
PROSPECTUS
2,321,000 SHARES
[LOGO]
COMMON STOCK
-----------
Of the 2,321,000 shares of Common Stock (the "Common Stock") of Brooks
Automation, Inc., a Delaware corporation (the "Company"), being offered hereby,
2,000,000 shares are being offered by the Company and 321,000 shares are being
offered by certain stockholders of the Company (the "Selling Stockholders").
See "Principal and Selling Stockholders." The Company will not receive any of
the proceeds from the sale of shares by the Selling Stockholders.
The Common Stock of the Company is quoted on the Nasdaq National Market under
the symbol "BRKS." On August 26, 1997, the last reported sale price on the
Nasdaq National Market for the Common Stock was $37 7/8 per share.
-----------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING
ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
-----------
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.
<TABLE>
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<CAPTION>
PRICE UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
TO PUBLIC DISCOUNTS(1) COMPANY(2) STOCKHOLDERS
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<S> <C> <C> <C> <C>
Per Share............... $ $ $ $
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Total(3)................ $ $ $ $
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</TABLE>
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including certain
liabilities under the Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses payable by the Company, estimated at $375,000.
(3) The Company and one of the Selling Stockholders have granted an option to
the Underwriters, exercisable within 30 days of the date hereof, to
purchase up to 348,150 additional shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise this option in full,
the total Price to Public, Underwriting Discounts, Proceeds to Company and
Proceeds to Selling Stockholders will be $ , $ , $ and $ ,
respectively. See "Underwriting."
-----------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the shares of Common Stock will be made in New York, New York on or
about , 1997.
-----------
MERRILL LYNCH & CO. PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.__________________________________________COWEN & COMPANY
-----------
The date of this Prospectus is , 1997
<PAGE>
WE DELIVER PRODUCTIVITY(TM)
BROOKS AUTOMATION NEXT GENERATION 300 MILLIMETER
HYBRID VACUUM AND ATMOSPHERIC CENTRAL WAFER HANDLING AND
THERMAL CONDITIONING SYSTEMS FOR CLUSTER TOOLS
Marathon Express 8000 Under Development, Scheduled
Avaliability Q1,1998
SEMI/MESC
Interface
Central OEM Process
Vacuum Wafer Module
Handling with Brooks
System ClusterLink 3
Process Module
Control
MagnaTran 7
Robot Software
with LeapFrog
Arm
TopCooler 3 or
Configuration TopHeater 3
TopLigner 3 VCE 7 Vacuum
or ARTWORK Cassette Elevator
TopHeater 3 (1 to 30 Wafers)
depicts each of the captioned products.
In-Line VCE 5 Vacuum AcuTran 3 and
Atmospheric Cassette AcuLigner 3 on
Wafer Elevator with AcuTrav 3
Handling Batch Wafer
System
Caliber 2000
Transfer Arm ClusterLink 3
Option Cluster
In-Line
Atmospheric
300mm Open Tool Control
Cassette or Software
Wafer Handling
System
Front Opening for 300mm
Unified Pod Wafers
(FOUP)
300
Millimeter
Systems and
Modules
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK TO
COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK
ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 OF REGULATION M. SEE
"UNDERWRITING."
<PAGE>
BROOKS AUTOMATION NEXT GENERATION NEW PRODUCT LINE FOR
200 ATMOSPHERIC IN-LINE AND CENTRAL WAFER
HANDLING SYSTEMS WITH INTEGRATED CONTROL SOFTWARE
Caliber 400
In-Line
ClusterLink 3 Atmospheric
Control Software for the Wafer Handling
Atmospheric Express 600 System
ARTWORK
depicts each of the captioned products.
AcuTran 3
Direct Magnetic
Drive Atmospheric
Wafer Transfer Sales software aid for
Robot process tool throughput
simulation
Atmospheric Express 600
Controlled Environment
Cluster Platform
200 Millimeter Atmospheric Systems and Modules
<PAGE>
BROOKS AUTOMATION NEXT GENERATION
200 MILLIMETER VACUUM CENTRAL WAFER HANDLING
SYSTEMS AND INTEGRATED CONTROL SOFTWARE
Marathon
Express 800
Vacuum Cluster
Platform
with the
MagnaTran 7X
Direct Magnetic
Drive
Transfer Robot
ClusterLink 3
Control Software
for the Marathon
Express 800 ARTWORK
depicts each of the captioned products.
MagnaTran 7X MagnaTran
FrogArm 7F
Configuration LeapFrog
Arm
Configuration
MagnaTran 7B
BI-Symmetric Arm
Configuration
200 Millimeter Vacuum Systems and Modules
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the Consolidated Financial
Statements, including the notes thereto, appearing elsewhere in this Prospectus
or incorporated by reference herein. Except as otherwise indicated, all
information in this Prospectus assumes no exercise of the Underwriters' over-
allotment options. References to "Common Stock" include "Rights" issuable
pursuant to that certain Rights Agreement entered into in July 1997 providing
for the delivery of a Right along with each share of Common Stock issued by the
Company. Investors should carefully consider the information set forth under
the heading "Risk Factors."
THE COMPANY
The Company is a leading worldwide independent developer, manufacturer and
supplier of wafer and substrate handling robots, modules, software, controls
and fully integrated cluster tool handling systems for the semiconductor and
flat panel display process equipment industries. The Company's products have
evolved from individual robots used to transfer wafers in advanced production
equipment to fully integrated handling system solutions that increase the
throughput and utilization of semiconductor and flat panel display process
equipment. In 1997, the Company introduced a line of products for the
atmospheric handling market, including in-line and controlled environment
systems, robots, aligners and traversers.
The demand for more productive and cost-effective wafer and substrate
handling systems poses significant engineering challenges related to
throughput, reliability, accuracy and contamination control. The automation
requirements of the wafer and substrate handling equipment market have resulted
in two common architectural solutions--cluster tool and in-line handling
systems. Cluster tool handling systems typically link together multiple
processes such as deposition, etch, heating and cooling using a transfer robot
located in a central vacuum chamber. In-line handling systems typically link
together multiple processes such as photoresist processing using a transfer
robot located on an atmospheric horizontal traverser. The automation and
integration of cluster and in-line process equipment also requires the use of
advanced system software and controls.
Since 1989, the Company has invested over $40 million in research and
development focused on developing vacuum transfer robots and other vacuum
automation modules and systems. These investments have enabled the Company to
introduce multiple generations of products which have improved throughput,
reliability, accuracy and contamination control. Currently, in the United
States, the Company has obtained 19 patents and has 29 patent applications
pending on its behalf.
The Company's objective is to be the volume supplier of choice to
multinational process equipment OEMs requiring high performance automation
equipment, software and control solutions. The Company is pursuing a variety of
strategies to accomplish this objective including expanding its customer
relationships, providing total handling systems solutions, enhancing its
technological leadership, continuing its commitment to worldwide markets and
capitalizing on product cycle transitions.
The Company markets and sells its wafer and substrate handling systems and
modules in the United States, Asia and Europe through its direct sales and
marketing organization, primarily to vacuum process equipment OEMs. The Company
intends to market its developing family of atmospheric wafer handling equipment
to existing and potential customers. To enhance customer service, the Company
maintains and is expanding regional sales centers and technology support
centers in California, British Columbia, South Korea, Japan, Taiwan and the
United Kingdom. Significant process equipment OEM customers include Anelva, CVC
Products, Lam Research, Novellus Systems, TEL, Ulvac and Veeco Instruments.
Semiconductor manufacturer customers include Intel and Samsung.
The Company's principal executive offices are located at 15 Elizabeth Drive,
Chelmsford, Massachusetts 01824, and its telephone number is (508) 262-2400. As
used herein, the term "Company" refers to Brooks Automation, Inc., its wholly-
owned subsidiaries and the predecessors of Brooks Automation, Inc.
3
<PAGE>
THE OFFERING
<TABLE>
<C> <S>
Common Stock Offered:
By the Company............................ 2,000,000 shares
By the Selling Stockholders............... 321,000 shares
Total Common Stock Offered................... 2,321,000 shares
Common Stock Outstanding after the Offering.. 9,738,138 shares(1)
Use of Proceeds to the Company............... For the repayment of certain
indebtedness and for working capital
and general corporate purposes,
including facilities expansion and
potential acquisitions. See "Use of
Proceeds."
Nasdaq National Market Symbol................ "BRKS"
</TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
FISCAL YEARS ENDED SEPTEMBER 30, ENDED JUNE 30,
--------------------------------------- ---------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA (2):
Revenues................ $12,946 $16,425 $26,651 $50,958 $90,432 $66,446 $55,603
Gross profit............ 5,176 6,761 10,646 21,175 37,822 27,968 17,509
Research and
development............ 2,080 2,120 3,843 6,818 12,359 9,023 9,722
Selling, general and
administrative......... 2,460 3,226 4,025 7,188 12,436 9,183 8,979
Income (loss) from
operations............. 636 1,415 2,778 7,169 13,027 9,762 (1,192)
Net income (loss)....... 325 1,138 1,616 4,945 8,497 6,332 (1,237)
Net income (loss) per
share.................. $ 0.07 $ 0.24 $ 0.32 $ 0.73 $ 1.04 $ 0.77 $ (0.16)
Weighted average number
of common and common
equivalent shares...... 4,541 4,737 5,045 6,803 8,199 8,221 7,614
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1997
----------------------
ACTUAL AS ADJUSTED(3)
------- --------------
<S> <C> <C>
BALANCE SHEET DATA (2):
Working capital........................................ $27,487 $99,075
Total assets........................................... 73,580 134,718
Current portion of long term debt and capital lease
obligations........................................... 10,850 400
Long-term debt, capital lease obligations and other
liabilities, less current portion..................... 579 579
Total stockholders' equity............................. 49,896 121,484
</TABLE>
- --------
(1) Does not include 1,193,109 shares of Common Stock reserved for issuance as
of August 15, 1997 upon exercise of outstanding stock options.
(2) All financial information presented herein has been retroactively restated
to reflect the acquisition of Techware Systems Corporation ("Brooks
Canada") in February 1996, which has been accounted for as a pooling of
interests. See Notes 1 and 2 to Consolidated Financial Statements for
additional information.
(3) Adjusted to reflect the sale of the 2,000,000 shares of Common Stock
offered by the Company hereby, at an assumed public offering price of
$37.875 per share net of the estimated underwriting discount and offering
expenses, and the application of the estimated net proceeds therefrom. See
"Use of Proceeds" and "Capitalization."
Aculigner(TM), Acutran(TM), Acutrav(TM), BiSymmetrik(TM), Caliber(TM),
Hercules(TM), InCooler(TM), InLigner(TM), LeapFrog(TM), MagnaTran(TM),
Marathon(TM), Marathon Express(TM), MultiTran(TM), VCE(TM), VacuTran(TM), We
Deliver Productivity(TM) and the Company's logo are trademarks of the Company.
Service marks and trademarks of other companies are used in this Prospectus.
4
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and in the documents incorporated by
reference herein constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. The information
contained herein under the headings "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" contain such
forward-looking statements concerning the future of the industry, product
development, business strategy (including future acquisitions), continued
acceptance and growth of the Company's products and dependence on significant
customers. The words "believe," "expect," "anticipate," "intend," "project"
and "plan" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date the statement was made. All such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Company to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
factors include, among others, those listed below under the heading entitled
"Risk Factors."
RISK FACTORS
An investment in the shares of Common Stock offered by this Prospectus
involves a high degree of risk. In addition to the other information contained
in this Prospectus, the following risk factors should be carefully considered
in evaluating the Company before purchasing shares of Common Stock offered
hereby.
FLUCTUATIONS IN OPERATING RESULTS
The Company's operating results have in the past fluctuated and may in the
future continue to fluctuate significantly depending upon a variety of
factors. Such factors may include: the demand for semiconductors in general;
cyclicality in the market for semiconductor manufacturing equipment; the
timing and size of orders from the Company's customer base; the ability of the
Company to manufacture, test and deliver products in a timely and cost
effective manner; the ability of the Company's competitors to obtain orders
from the Company's customers; the timing of new product announcements and
releases by the Company and its competitors; the mix of products sold by the
Company; and competitive pricing pressures.
The Company has historically derived a substantial portion of its quarterly
and annual revenues from the sale of a relatively small number of
semiconductor and flat panel display substrate handling systems, which have
relatively high selling prices compared to its other products. As a result,
the precise timing of the recognition of revenue from an order for one or a
small number of systems can have a significant impact on the Company's total
revenues and operating results for a particular period. The Company's
operating results for a particular period could be adversely affected if
orders for a small number of systems are canceled or rescheduled by customers
or cannot be filled in time to recognize revenue during that period due to,
for example, unanticipated manufacturing, testing, shipping or product
acceptance delays. The Company's expense levels are based, in large part, on
the Company's expectations as to future revenues and are, therefore,
relatively fixed in the short term. If revenue levels fall below expectations,
net income will be disproportionately and adversely affected. The impact of
these and other factors on the Company's revenues and operating results in any
future period cannot be forecast with any degree of certainty. These factors
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
DEPENDENCE ON SEMICONDUCTOR INDUSTRY
The Company's business is significantly dependent on capital expenditures by
manufacturers of semiconductors. The semiconductor industry is highly cyclical
and has experienced periods of oversupply, resulting in significantly reduced
demand for capital equipment, including the products manufactured and marketed
by the Company. The Company's future financial condition, revenues and
operating results may be materially and adversely affected by semiconductor
industry downturns or slowdowns. The Company believes that downturns in the
semiconductor manufacturing industry will occur in the future, and will result
in decreased
5
<PAGE>
demand for semiconductor manufacturing equipment. In addition, the Company
believes that its ability to reduce expenses in a future downturn will be
constrained by the need for continual investment in research and development,
and the need to maintain extensive ongoing customer service and support
capability. Accordingly, any downturn in the semiconductor industry could have
a material adverse effect on the Company's business, financial condition and
results of operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business--Industry Overview."
CUSTOMER CONCENTRATION
Relatively few customers account for a substantial portion of the Company's
revenues. Sales to the Company's ten largest customers in the first nine
months of fiscal 1997 and in fiscal 1996 accounted for 68% and 70% of
revenues, respectively. In the first nine months of fiscal 1997 and in fiscal
1996, sales to Lam Research Corporation ("Lam"), the Company's largest
customer in these periods, accounted for 23% and 21% of the Company's
revenues, respectively. The Company expects that sales to Lam will continue to
represent a significant portion of the Company's revenues for the foreseeable
future. The Company's customers, including Lam, generally do not enter into
long-term agreements obligating them to purchase the Company's products. A
reduction or delay in orders from Lam or other significant customers,
including reductions or delays due to market, economic or competitive
conditions in the semiconductor or flat panel display industries, could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Business--Customers."
RELIANCE ON OEM CUSTOMERS; LENGTHY SALES CYCLE
The Company's products are principally sold to OEMs which incorporate the
Company's products into their equipment. Due to the significant capital
commitments usually incurred by semiconductor and flat panel display
manufacturers in their purchases of these OEMs' equipment, these manufacturers
demand highly reliable products which may require several years for OEMs to
develop. The Company's revenues are therefore primarily dependent upon the
timing and effectiveness of the efforts of its OEM customers in developing and
marketing equipment incorporating the Company's products.
The Company's new products are generally incorporated into an OEM customer's
process tools at the design stage. However, customer decisions to use the
Company's products, which can often require significant expenditures by the
Company without any assurance of success, often precede the generation of
volume sales, if any, by a year or more. There can be no assurance that the
Company will continue to achieve design wins, that the process tools
manufactured by the Company's customers will be introduced in a timely manner
or that such systems will achieve market acceptance. The Company's or its
customers' failure to develop and introduce new products successfully and in a
timely manner could materially and adversely affect the Company's business,
financial condition and results of operations. See "Business--Customers" and
"--Marketing, Sales and Customer Support."
NEW PRODUCTS AND RAPID TECHNOLOGICAL CHANGE
The semiconductor and flat panel display manufacturing industries have been
characterized by rapid technological change and evolving industry requirements
and standards. The Company believes that these trends will continue. The
Company's success will depend upon its ability to enhance its existing
products and to develop and market new products to meet customer requirements.
Successful product development and introduction depends on a number of
factors, including accurate new product definition, timely completion and
introduction of new product designs and market acceptance of the Company's
products and its customers' products. Currently, the Company's major
development programs include expanding its product offerings of semiconductor
and flat panel display substrate handling systems to address emerging industry
requirements for 300mm wafer and fourth generation flat panel substrates, as
well as wafer handling systems and modules for atmospheric process tools. In
addition, the Company continues to develop and enhance its process control
software product offerings. There can be no assurance that the Company will
adjust to changing market
6
<PAGE>
conditions or be successful in introducing products or product enhancements on
a timely basis, if at all, or that the Company will be able to market
successfully these products and product enhancements once developed. Further,
there can be no assurance that the Company's products will not be rendered
obsolete by new industry standards or changing technology. See "Business--
Research and Development."
RISKS OF INTERNATIONAL SALES AND OPERATIONS
Approximately 30% and 20% of the Company's revenues in the first nine months
of fiscal 1997 and in fiscal 1996, respectively, were derived from customers
located outside the United States. The Company anticipates that international
sales will continue to account for a significant portion of its revenues. To
support its overseas customers, the Company maintains subsidiaries in Japan,
Europe, South Korea and Taiwan and is expanding its field service and support
operations in Japan, Europe, South Korea, Taiwan and Southeast Asia. There can
be no assurance that the Company will be able to manage these operations
effectively or that the Company's investment in these activities will enable it
to compete successfully in international markets or to meet the service and
support needs of its customers.
Additionally, a significant portion of the Company's sales and operations
could be subject to certain risks, including tariffs, foreign government
standards and regulations and other barriers, difficulties in staffing and
managing foreign subsidiary and branch operations, currency exchange risks and
exchange controls, adverse tax consequences and difficulty in accounts
receivable collection. International trade regulations, such as United States
export controls, could change in the future and make it more difficult for the
Company to export its products to various countries. There can be no assurance
that any of these factors will not have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business--Marketing, Sales and Customer Support."
INTELLECTUAL PROPERTY RISKS
The Company believes that the success of its business depends more on such
factors as the technical expertise and innovative skills of its employees, than
on patents, copyrights, trade secrets and other intellectual property rights.
Nevertheless, the success of the Company may depend in part on patents. As of
July 31, 1997, the Company had obtained 19 United States patents and had 29
United States patent applications pending on its behalf. In addition, the
Company has obtained 10 foreign patents and has 32 foreign patent applications
pending on its behalf. The Company's United States patents expire at various
times from 1999 to 2015. There can be no assurance that the Company's pending
patent applications or any future applications will be approved, that any
patents will provide it with competitive advantages or will not be challenged
by third parties, or that the patents of others will not have an adverse effect
on the Company's ability to do business. Because foreign patents may afford
less protection under foreign law than is available under United States patent
law, there can be no assurance that any such patents issued to the Company will
adequately protect the Company's proprietary information. There can be no
assurance that others will not independently develop similar products,
duplicate the Company's products or, if patents are issued to the Company,
design around the patents issued to the Company.
Others may have filed and may file patent applications in the future that are
similar or identical to those of the Company. To determine the priority of
inventions, the Company may have to participate in interference proceedings
declared by the United States Patent and Trademark Office that could result in
substantial cost to the Company. No assurance can be given that any such patent
application will not have priority over patent applications filed on behalf of
the Company.
The Company also relies upon trade secret protection, employee and third-
party nondisclosure agreements and other intellectual property protection
methods to protect its confidential and proprietary information. Despite these
efforts, there can be no assurance that others will not independently develop
substantially equivalent proprietary information and techniques or otherwise
gain access to the Company's trade secrets or disclose such technology or that
the Company can meaningfully protect its trade secrets.
7
<PAGE>
There has been substantial litigation regarding patent and other
intellectual property rights in the semiconductor and related industries. The
Company has received notice from General Signal Corporation ("General Signal")
alleging infringements of its patent rights by certain of the Company's
products. The Company's patent counsel, Perman & Green of Fairfield,
Connecticut, continues to investigate the claims made against the Company.
With regard to the notice, the Company believes that the patents claimed may
be invalid. In the event of litigation with respect to this notice, the
Company is prepared to defend vigorously its position. However, because patent
litigation can be extremely expensive and time consuming, the Company may seek
to obtain a license to one or more of the disputed patents. There can be no
assurance that the Company would prevail in any litigation seeking damages or
expenses from the Company or to enjoin the Company from selling its products
on the basis of the alleged patent infringement, or that a license for any of
the alleged infringed patents will be available to the Company on reasonable
terms, if at all.
The Company has in the past been, and may in the future be, notified that it
may be infringing intellectual property rights possessed by other third
parties. Any patent litigation would be costly and could divert the efforts
and attention of the Company's management and technical personnel, which could
have a material adverse effect on the Company's business, financial condition
and results of operations. There can be no assurance that infringement claims
by third parties or other claims for indemnification by customers or end users
of the Company's products resulting from infringement claims will not be
asserted in the future or that such assertions, if proven to be true, will not
materially and adversely affect the Company's business, financial condition
and results of operations. If any such claims are asserted against the
Company's intellectual property rights it may seek to enter into a royalty or
licensing arrangement. There can be no assurance, however, that a license will
be available on reasonable terms or at all. The Company could decide, in the
alternative, to resort to litigation to challenge such claims or to design
around the patented technology. Such actions could be costly and would divert
the efforts and attention of the Company's management and technical personnel,
which would materially and adversely affect the Company's business, financial
condition and results of operations. See "Business--Patents and Proprietary
Rights."
MANAGEMENT OF GROWTH
The Company's strategy is to grow by providing hardware and software
solutions to enhance semiconductor and flat panel display substrate handling
systems of advanced production tools used to produce semiconductors and flat
panel displays. Due to the level of technical and marketing expertise
necessary to support its existing and new customers, the Company must attract
highly qualified and well-trained domestic and international personnel. There
is a limited number of persons with the requisite skills to serve in these
positions and it may become increasingly difficult for the Company to hire
such personnel. The Company will also be required to manage its expanding
international operations, to effect timely deliveries of its products and to
maintain the product quality and reliability required by its customers. The
Company's expansion may also significantly strain the Company's management,
manufacturing, financial and other resources. There can be no assurance that
the Company's systems, procedures, controls and existing space will be
adequate to support the Company's operations. Failure to properly manage the
Company's growth, if any, could have a material adverse effect on the
Company's business, financial condition and results of operations.
HIGHLY COMPETITIVE INDUSTRY
The markets for the Company's products are highly competitive and subject to
rapid technological change. The Company believes that its primary competition
is from integrated OEMs that satisfy their semiconductor and flat panel
display handling needs in-house rather than by purchasing systems or modules
from an independent supplier such as the Company. Many of these other
potential competitors have substantially greater resources than the Company.
Applied Materials, Inc. ("Applied Materials"), the leading process equipment
OEM, develops and manufactures its own central wafer and flat panel display
substrate handling systems and modules. There can be no assurance that the
Company will be successful in selling its products to OEMs that currently
satisfy their substrate handling needs in-house, regardless of the performance
or the price of the Company's products. Moreover, there can be no assurance
that integrated OEMs will not begin to commercialize their handling
capabilities. Competitors may develop superior products or products of similar
quality at the same or lower prices. Other technical innovations may impair
the Company's ability to market its products. There can be no assurance that
the Company will be able to compete successfully. See "Business--Competition."
8
<PAGE>
RELIANCE ON KEY EMPLOYEES
The Company's success will depend in large part on the continued services of
its President and Chief Executive Officer, Robert J. Therrien, as well as other
key domestic and international management employees. Competition for such
personnel is intense and there can be no assurance that the Company will be
able to retain and attract the personnel necessary for the development of its
business. See "Management."
RISKS ASSOCIATED WITH POSSIBLE ACQUISITIONS
The Company may pursue potential acquisitions of businesses, products and
technologies that could complement or expand the Company's business. The
Company currently has no plans, commitments or agreements with respect to any
material acquisitions and there can be no assurance that the Company will be
able to identify any appropriate acquisition candidates. If the Company
identifies an acquisition candidate, there can be no assurance that the Company
will be able to successfully negotiate the terms of any such acquisition,
finance such acquisition or integrate such acquired businesses, products or
technologies into the Company's existing business and products. The negotiation
of potential acquisitions as well as the integration of an acquired business
could cause diversion of management's time and resources, and require the
Company to use proceeds from the offering to consummate a potential
acquisition. Future acquisitions by the Company could result in potentially
dilutive issuances of equity securities, the incurrence of debt and contingent
liabilities and amortization expenses. If any such acquisition were to occur,
there can be no assurance that, whether or not consummated, any such
acquisition would not have a material adverse effect on the Company's business,
financial condition and results of operations. See "Use of Proceeds."
ANTITAKEOVER PROVISIONS; RIGHTS AGREEMENT; ISSUANCE OF PREFERRED STOCK
The Company's Certificate of Incorporation and By-laws contain provisions
that may make it more difficult for a third party to acquire, or discourage
acquisition bids for, or discourage changes in management of, the Company.
These provisions could limit the price that certain investors might be willing
to pay in the future for shares of the Company's Common Stock. Also, the
Company has adopted a Rights Agreement, pursuant to which the Company has
distributed to its stockholders rights to purchase shares of junior
participating preferred stock (the "Rights Agreement"). Upon certain triggering
events, such rights become exercisable to purchase the Company's Common Stock
at a price substantially discounted from the then applicable market price of
the Company's Common Stock. The Rights Agreement could generally discourage a
merger or tender offer involving the securities of the Company that is not
approved by the Company's Board of Directors by increasing the cost of
effecting any such transaction and, accordingly, could have an adverse impact
on stockholders who might want to vote in favor of such merger or participate
in such tender offer. In addition, shares of the Company's Preferred Stock may
be issued in the future without further stockholder approval and upon such
terms and conditions, and having such rights, privileges and preferences, as
the Board of Directors may determine. The rights of the holders of Common Stock
will be subject to, and may be adversely affected by, the rights of any holders
of Preferred Stock that may be issued in the future. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or of discouraging a third party
from acquiring, a majority of the outstanding voting stock of the Company. The
Company has no present plans to issue any shares of Preferred Stock. The
Certificate of Incorporation and By-laws impose various procedural and other
requirements that could make it more difficult for stockholders to effect
certain corporate actions. See "Description of Securities."
VOLATILITY OF STOCK PRICE
The Company believes that a variety of factors could cause the price of the
Company's Common Stock to fluctuate, perhaps substantially, including:
announcements of developments related to the Company's business; quarterly
fluctuations in the Company's actual or anticipated operating results and order
levels; general conditions in the semiconductor and flat panel display
industries or the worldwide economy; announcements of technological
innovations; new products or product enhancements by the Company or its
competitors; developments in patents or other intellectual property rights and
litigation; and developments in the Company's relationships with its customers
and suppliers. In addition, in recent years the stock market in general and the
9
<PAGE>
market for shares of small capitalization and semiconductor industry-related
companies in particular, have experienced extreme price fluctuations which have
often been unrelated to the operating performance of affected companies. Any
such fluctuations in the future could adversely affect the market price of the
Company's Common Stock. There can be no assurance that the market price of the
Common Stock of the Company will not decline. See "Price Range of Common
Stock."
SHARES ELIGIBLE FOR FUTURE SALE
Sales of a substantial number of shares of Common Stock in the public market
following the offering (pursuant to Rule 144 or otherwise), as well as sales of
shares issued upon exercise of employee stock options, could adversely affect
the prevailing market price of the Common Stock and impair the Company's
ability to raise additional capital through the sale of equity securities. The
Company's executive officers and directors have agreed that they will not,
without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, sell any of their shares of Common Stock, or any securities
exercisable for Common Stock, prior to the expiration of 90 days from the date
of the consummation of the offering.
10
<PAGE>
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under the
symbol "BRKS." The following table sets forth, for the periods indicated, the
high and low closing prices per share of Common Stock, as reported by the
Nasdaq National Market.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR ENDED SEPTEMBER 30, 1995
Second Quarter (commencing February 1, 1995)................ $14.25 $10.00
Third Quarter............................................... 21.50 13.00
Fourth Quarter.............................................. 24.00 17.00
FISCAL YEAR ENDED SEPTEMBER 30, 1996
First Quarter............................................... $22.25 $13.25
Second Quarter.............................................. 15.75 10.75
Third Quarter............................................... 15.50 10.25
Fourth Quarter.............................................. 14.63 9.63
FISCAL YEAR ENDING SEPTEMBER 30, 1997
First Quarter............................................... $19.50 $ 9.50
Second Quarter.............................................. 19.75 14.75
Third Quarter............................................... 19.50 12.38
Fourth Quarter (through August 26).......................... 38.69 19.50
</TABLE>
The last reported closing price of the Common Stock on the Nasdaq National
Market on August 26, 1997 was $37.875 per share. As of August 15, 1997, there
were approximately 104 holders of record of the Company's Common Stock.
DIVIDEND POLICY
Other than dividends paid by Brooks Canada prior to its acquisition by the
Company, the Company has never declared or paid cash dividends on its capital
stock and does not plan to pay any cash dividends in the foreseeable future.
The Company's current policy is to retain all of its earnings to finance
future growth. The Company's lending arrangements prohibit the payment of
dividends without prior approval. See "Use of Proceeds."
11
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,000,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately
$71,587,500, assuming a public offering price of $37.875 per share and after
deduction of the estimated underwriting discounts and offering expenses
payable by the Company. The Company will not receive any proceeds from the
sale of shares of Common Stock by the Selling Stockholders.
The Company intends to use a portion of the net proceeds to repay in full
the principal amounts outstanding ($10,450,000 at June 30, 1997) under its
$22.0 million revolving line of credit with USTrust and CoreStates Bank N.A.
and its $6.0 million foreign currency line of credit with CoreStates Bank N.A.
The Company has used the proceeds of these credit facilities primarily for
working capital purposes. Amounts repaid by the Company under these credit
facilities may be reborrowed by the Company. Advances under the revolving line
of credit bear interest, at the option of the Company, at the prime rate (8.5%
at June 30, 1997) or the LIBOR rate plus 2%. Advances under the foreign
currency line of credit bear interest at the LIBOR rate plus 2% (2.6% for
Japanese yen at June 30, 1997). These credit facilities expire on December 31,
1998.
The Company anticipates that the balance of its net proceeds will be used to
increase funds available for general corporate purposes, including working
capital, leasehold improvements and capital equipment, and expansion of the
Company's presence in international markets. The Company is planning to expand
its manufacturing capacity in its existing facility and anticipates that it
will use at least $1.5 million of the net proceeds of this offering in
connection with the expansion. The Company may also use a portion of its net
proceeds of this offering to acquire companies, technologies or products that
complement the business of the Company. As of the date of this Prospectus, no
such material transactions are being planned or actively negotiated. Pending
such uses, the Company plans to invest the net proceeds of this offering in
short-term, interest-bearing investment-grade securities.
CAPITALIZATION
The following table sets forth the capitalization of the Company at June 30,
1997, and as adjusted to give effect to the sale of the 2,000,000 shares of
Common Stock offered by the Company hereby, at an assumed public offering
price of $37.875, after deducting the estimated underwriting discounts and
offering expenses payable by the Company.
<TABLE>
<CAPTION>
JUNE 30, 1997
--------------------
ACTUAL AS ADJUSTED
------- -----------
(IN THOUSANDS,
EXCEPT SHARE DATA)
<S> <C> <C>
Current portion of long-term debt and capital lease
obligations(1)........................................... $10,850 $ 400
======= ========
Long-term debt, capital lease obligations and other
liabilities, less current portion(2)..................... 579 579
------- --------
Stockholders' equity:
Preferred stock, $01 par value, 1,000,000 shares
authorized;
no shares currently issued and outstanding............. -- --
Common stock, $.01 par value; 21,500,000 shares
authorized;
7,653,315 issued and outstanding; 9,653,315 shares
issued and
outstanding, as adjusted(3)............................ 76 96
Additional paid-in capital.............................. 34,682 106,250
Less:Cumulative translation adjustment.................. (97) (97)
Deferred compensation................................... (92) (92)
Retained earnings....................................... 15,327 15,327
------- --------
Total stockholders' equity.............................. 49,896 121,484
------- --------
Total capitalization.................................. $50,475 $122,063
======= ========
</TABLE>
- --------
(1) See Note 5 to Consolidated Financial Statements.
(2) See Notes 5 and 6 to Consolidated Financial Statements.
(3) Excludes 1,207,775 shares of Common Stock reserved as of June 30, 1997 for
issuance upon exercise of outstanding options.
12
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table contains certain selected consolidated financial data of
the Company and is qualified by the more detailed Consolidated Financial
Statements and Notes thereto included elsewhere in this Prospectus. The
consolidated statement of operations data for the fiscal years ended September
30, 1994, 1995 and 1996 and the consolidated balance sheet data as of
September 30, 1995 and 1996 have been derived from Consolidated Financial
Statements, which statements have been audited by Price Waterhouse LLP,
independent accountants, and are included elsewhere in this Prospectus. The
consolidated statement of operations data for the fiscal years ended September
30, 1992 and 1993 and the consolidated balance sheet data as of September 30,
1992, 1993 and 1994 have been derived from the Consolidated Financial
Statements, which statements have been audited by Price Waterhouse LLP and are
not included in this Prospectus. Data as of June 30, 1997 and for the nine
months ended June 30, 1996 and 1997 have been derived from unaudited
Consolidated Financial Statements included elsewhere in this Prospectus and,
in the opinion of management, include all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of the results
of operations for the periods presented. Results for the nine months ended
June 30, 1997 are not necessarily indicative of the results to be expected for
the full year. This data should be read in conjunction with the Consolidated
Financial Statements and Notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing elsewhere
herein.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEARS ENDED SEPTEMBER 30, JUNE 30,
--------------------------------------- -----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA(1):
Revenues(2)............. $12,946 $16,425 $26,651 $50,958 $90,432 $ 66,446 $ 55,603
Cost of revenues........ 7,770 9,664 16,005 29,783 52,610 38,478 38,094
------- ------- ------- ------- ------- -------- --------
Gross profit............ 5,176 6,761 10,646 21,175 37,822 27,968 17,509
Operating expenses:
Research and
development........... 2,080 2,120 3,843 6,818 12,359 9,023 9,722
Selling, general and
administrative........ 2,460 3,226 4,025 7,188 12,436 9,183 8,979
------- ------- ------- ------- ------- -------- --------
Income (loss) from
operations............. 636 1,415 2,778 7,169 13,027 9,762 (1,192)
Interest expense........ 152 233 506 482 388 283 415
Interest income......... -- 7 68 507 334 312 16
------- ------- ------- ------- ------- -------- --------
Income (loss) before
income taxes........... 484 1,189 2,340 7,194 12,973 9,791 (1,591)
Income tax provision
(benefit).............. 159 51 724 2,249 4,476 3,459 (354)
------- ------- ------- ------- ------- -------- --------
Net income (loss)....... 325 1,138 1,616 4,945 8,497 6,332 (1,237)
======= ======= ======= ======= ======= ======== ========
Net income (loss) per
share.................. $ 0.07 $ 0.24 $ 0.32 $ 0.73 $ 1.04 $ 0.77 ($0.16)
======= ======= ======= ======= ======= ======== ========
Weighted average number
of common and common
equivalent shares...... 4,541 4,737 5,045 6,803 8,199 8,221 7,614
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30,
-------------------------------------- JUNE 30,
1992 1993 1994 1995 1996 1997
------ ------- ------- ------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
DATA(1):
Working capital................ $ 703 $ 4,261 $ 6,032 $32,563 $32,582 $27,487
Total assets................... 8,129 12,487 14,488 53,580 64,761 73,580
Current portion of long-term
debt and capital lease
obligations .................. 989 267 432 1,522 1,431 10,850
Long-term debt, capital lease
obligations and other
liabilities, less current
portion....................... 907 3,413 3,475 700 687 579
Total stockholders' equity..... 2,118 3,388 5,589 42,222 50,691 49,896
</TABLE>
- --------
(1) All financial information presented herein has been retroactively restated
to reflect the acquisition of Brooks Canada in February 1996, which has
been accounted for as a pooling of interests. See Notes 1 and 2 to
Consolidated Financial Statements for additional information.
(2) Includes revenues from related party of $916, $6,361, $10,530, $19,109,
$13,852 and $12,622 in the fiscal years ended September 30, 1993, 1994,
1995 and 1996 and the nine months ended September 30, 1996 and 1997,
respectively.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion of the results of operations and financial
condition should be read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto included elsewhere in this Prospectus.
With the exception of historical matters and statements of current status,
certain matters discussed below are forward-looking statements that involve
substantial risks and uncertainties that could cause actual results to differ
materially from targets or projected results. Factors that could cause actual
results to differ materially include, among others, those factors described in
"Risk Factors." Many of these factors are beyond the Company's ability to
predict or control. Prospective investors are cautioned not to put undue
reliance on forward-looking statements, which statements have been made as of
the date of this Prospectus, and prospective investors should not infer that
there has been no change in the affairs of the Company since the date hereof
that would warrant any modification of any forward-looking statement made
herein. The Company disclaims any intent or obligation to update publicly
these forward-looking statements, whether as a result of new information,
future events or otherwise.
OVERVIEW
The Company's Massachusetts predecessor was organized in February 1989 and
acquired the semiconductor wafer handling business of the Brooks Automation
Division of Aeronca Electronics, Inc., a subsidiary of Fleet Aerospace
Corporation, in March 1989. The Company and its predecessors have been in the
semiconductor wafer handling business since 1978.
Since the acquisition in 1989, the Company has invested over $40.0 million
in research and development focused on developing vacuum transfer robots and
other vacuum automation modules and systems. In 1992, the Company introduced
the family of vacuum central wafer handling systems and modules that forms the
foundation of the Company's current business. In 1994, the Company introduced
a similar family of systems and modules for flat panel display substrates,
including a next-generation magnetically driven vacuum transfer robot. In
1996, the Company acquired Techware Systems Corporation (now Brooks Canada), a
designer and supplier of integrated equipment control software for the
semiconductor and related industries, expanding its software and control
capability. In 1997, the Company introduced a line of products for the
atmospheric handling market, including in-line and controlled environment
systems, robots, aligners and traversers.
Many of the Company's customers purchase the Company's vacuum transfer
robots and other modules before purchasing the Company's vacuum central wafer
handling systems. As a result, systems sales have become an increasing
percentage of the Company's revenues. In the first nine months of fiscal 1997,
approximately 43% of the Company's revenues were attributable to systems
sales. The Company's goal is to continue to increase systems sales as a
percentage of net revenues. The Company believes that once a customer has
selected the Company's products for a process tool, the customer is likely to
rely on those products for the life of that process tool model, which can be
in excess of five years.
The Company records revenue from product sales upon shipment to the customer
provided that no significant Company obligations remain outstanding and
collection of the related receivable is deemed probable by management. When
insignificant Company obligations remain after shipment of the product, the
Company accrues for the estimated costs of such obligations upon shipment.
Additionally, the Company accrues for warranty costs upon shipment.
Most of the Company's revenues have been generated by sales to customers in
the United States, although the Company believes that a significant portion of
these customers incorporate the Company's products into equipment sold to
their foreign customers. The Company's foreign sales have occurred principally
in Japan, South Korea and Europe. The Company has recently expanded its
international marketing and sales efforts in Asia and intends to increase
these efforts in the future. See "Use of Proceeds."
14
<PAGE>
The Company's foreign revenues are generally denominated in United States
dollars. Accordingly, foreign currency fluctuations have not had a significant
impact on the comparison of the results of operations for the periods
presented. The costs and expenses of the Company's international subsidiaries
are generally denominated in currencies other than the United States dollar.
However, since the functional currency of the Company's international
subsidiaries is the local currency, foreign currency translation adjustments
are reflected as a component of stockholders' equity. To the extent that the
Company expands its international operations or changes its pricing practices
to denominate prices in foreign currencies, the Company will be exposed to
increased risks of currency fluctuation. See "Risk Factors--Risks of
International Sales and Operations."
The Company's business is highly dependent upon the capital expenditures of
semiconductor and flat panel display manufacturers, and the Company's ability
to develop, manufacture and sell new products and product enhancements. The
Company's results will also be affected, especially when measured on a
quarterly basis, by volume, composition and timing of orders, conditions in
the industries served by the Company, competition and general economic
conditions. See "Risk Factors."
RESULTS OF OPERATIONS
The following table sets forth certain financial data for the periods
indicated as a percentage of revenues:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, JUNE 30,
---------------------------- ------------------
1994 1995 1996 1996 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues..................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues............. 60.1 58.4 58.2 57.9 68.5
-------- -------- -------- -------- --------
Gross profit................. 39.9 41.6 41.8 42.1 31.5
Operating expenses:
Research and development.... 14.4 13.4 13.7 13.6 17.5
Selling, general and admin-
istrative.................. 15.1 14.1 13.7 13.8 16.1
-------- -------- -------- -------- --------
Income (loss) from opera-
tions....................... 10.4 14.1 14.4 14.7 (2.1)
Interest expense............. 1.9 1.0 0.4 0.4 0.7
Interest income.............. 0.3 1.0 0.4 0.4 0.0
-------- -------- -------- -------- --------
Income (loss) before income
taxes....................... 8.8 14.1 14.4 14.7 (2.8)
Income tax provision (bene-
fit)........................ 2.7 4.4 5.0 5.2 (0.6)
-------- -------- -------- -------- --------
Net income (loss)............ 6.1% 9.7% 9.4% 9.5% (2.2)%
======== ======== ======== ======== ========
</TABLE>
NINE MONTHS ENDED JUNE 30, 1997 AS COMPARED TO NINE MONTHS ENDED JUNE 30, 1996
Revenues. Revenues for the nine months ended June 30, 1997 decreased 16.3%
or $10.8 million to $55.6 million compared with revenues of $66.4 million in
the comparable prior fiscal period. Revenues from 200mm vacuum central wafer
handling systems and components decreased 31.8%, or $14.9 million, for the
nine months ended June 30, 1997. The decrease in 200mm product revenues for
the nine months ended June 30, 1997 was offset to a lesser extent by shipments
of 300mm and flat panel display products. The Company attributes the lower
revenue levels in the nine months ended June 30, 1997 to a broad decline in
capital spending by the semiconductor manufacturing equipment industry. As a
result, the Company expects that revenues for fiscal 1997 will be lower than
fiscal 1996 revenues.
Foreign revenues for the nine months ended June 30, 1997 increased 42.0% to
$16.9 million (30.4% of revenues), including $13.1 million of sales to Asian
customers, compared with foreign revenues of $11.9 million (17.9% of
revenues), including $8.3 million of sales to Asian customers in the
comparable prior fiscal period. The increase in foreign revenues is
attributable to shipments of 200mm and 300mm vacuum central wafer handling
systems and flat panel display systems to customers primarily in Japan and
South Korea. The Company
15
<PAGE>
expects that foreign revenues will continue to grow throughout fiscal 1997 and
account for a significant portion of total revenues. However, there can be no
assurance that geographical growth rates, if any, in the foreseeable future
will be comparable to those achieved in the nine months ended June 30, 1997.
Gross Profit. Gross profit as a percentage of revenues decreased to 31.5%
for the nine months ended June 30, 1997 compared with 42.1% for the comparable
prior fiscal period. The decrease in the gross profit percentage is
attributable to underutilization of manufacturing capacity, higher
concentration of shipments of lower gross margin platforms, increased global
support costs and to a lesser extent, pricing pressure and higher new product
introduction costs. Global support costs, consisting primarily of personnel
costs and travel expenses, increased 104% to $4.7 million (8.5% of revenues)
for the nine months ended June 30, 1997 from $2.3 million (3.5% of revenues)
in the comparable prior fiscal period. The increase in global support costs
are indicative of the expansion of the Company's global support organization
in support of the international growth of its customer base. In future
periods, gross profit may be adversely affected by changes in the mix of
products sold, continued pricing pressure or increases in the cost of goods.
Research and Development. Research and development expenses increased 7.7%
to $9.7 million (17.5% of revenues) for the nine months ended June 30, 1997
from $9.0 million (13.6% of revenues) in the comparable prior fiscal period.
During fiscal 1997, the Company has continued to make investments in research
and development to enhance existing and develop new semiconductor and flat
panel display products. As a percentage of revenues, the increase in research
and development expenses reflects the effect on the Company's cost structure
of the lower revenue level in the nine months ended June 30, 1997. The Company
believes that research and development expenditures are essential to
maintaining its competitive position in the semiconductor and flat panel
display fabrication equipment market and expects these expenditure levels to
continue at or above current levels in the foreseeable future.
Selling, General and Administrative. Selling, general and administrative
expenses decreased 2.2% to $9.0 million (16.1% of revenues) for the nine
months ended June 30, 1997 from $9.2 million (13.8% of revenues) in the
comparable prior fiscal period. Selling, general and administrative expenses
for the nine months ended June 30, 1996 included merger-related expenses of
$230,000 in connection with the acquisition of Brooks Canada during the fiscal
1996 second quarter. There were no such merger-related expenses incurred by
the Company during the nine months ended June 30, 1997. As a percentage of
revenues, the increase in selling, general and administrative expenses
reflects the effect on the Company's cost structure of the lower revenue level
in the current quarter and the nine months ended June 30, 1997. The Company
expects expenditure levels to support the growth of its worldwide sales and
administrative organizations will continue at or above current levels in the
foreseeable future, reflecting the Company's commitment to further penetrate
key international markets.
Interest Income and Expense. Interest income decreased 94.9% or $296,000 to
$16,000 for the nine months ended June 30, 1997 from $312,000 (0.4% of
revenues) in the comparable prior fiscal period. The decrease in interest
income is due to lower cash and investment balances during the nine months
ended June 30, 1997 compared with the same period of fiscal 1996. Interest
expense increased 46.6% or $132,000 to $415,000 (0.7% of revenues) for the
nine months ended June 30, 1997 from $283,000 (0.4% of revenues) in the
comparable prior fiscal period. The increase in interest expense is primarily
due to higher borrowings during the second and third quarters of fiscal 1997
compared with the same periods of fiscal 1996.
FISCAL YEAR ENDED SEPTEMBER 30, 1996 AS COMPARED TO FISCAL YEAR ENDED
SEPTEMBER 30, 1995
Revenues. Revenues increased 77% to $90.4 million in fiscal 1996 from $51.0
million in fiscal 1995. Sales of vacuum central wafer handling systems,
modules and control software comprised 72% of the increase in revenues, which
was primarily attributable to increased unit sales. The remainder of the
increase was primarily attributable to increased unit sales of flat panel
display substrate handling systems and modules, and service revenues, each
comprising 14% of the increase in 1996 revenues. Fiscal 1996 shipments
included initial deliveries of 300mm vacuum central wafer handling systems
incorporating the MagnaTran 6 high speed vacuum transport robot, the Company's
sixth generation product developed to enable the production of advanced
16
<PAGE>
semiconductors (0.35 micron feature sizes and below). Foreign revenues
increased to $18.1 million (20% of revenues), including $13.3 million of sales
to Asian customers in fiscal 1996, compared to foreign revenues of $6 million
(12% of revenues), including $3.9 million of sales to Asian customers in
fiscal 1995.
Gross Profit. Gross profit as a percentage of revenues improved slightly to
41.8% in fiscal 1996, compared to 41.6% in fiscal 1995. Cost reductions
attributable to manufacturing efficiencies from increased unit sales and
increased sales of products incorporating higher value-added control software
were partially offset by higher material costs related to changes in product
mix, new product introductions, including the introduction of the Company's
300mm vacuum central wafer handling systems and modules, and generally
competitive price pressure.
Research and Development. Research and development expenses increased 81% to
$12.4 million (13.7% of revenues) in fiscal 1996 from $6.8 million (13.4% of
revenues) in fiscal 1995. The increase in research and development expenses
primarily resulted from continued enhancement of the Company's semiconductor
and flat panel display products, including 300mm Marathon vacuum central wafer
handling systems and modules, control and scheduling software, and factory
automation wafer cassette delivery systems.
Selling, General and Administrative. Selling, general and administrative
expenses increased 73% to $12.4 million (13.7% of revenues) in fiscal 1996
from $7.2 million (14.1% of net revenues) in fiscal 1995. The increase in
selling, general and administrative expenses resulted from the hiring of
additional sales, marketing and administrative staff to manage and support the
Company's international expansion in Japan, South Korea, Taiwan and the United
Kingdom.
Interest Income and Expense. Interest income decreased to $334,000 (0.4% of
net revenues) in fiscal 1996 from $507,000 (1.0% of net revenues) in fiscal
1995. The decrease reflects lower cash balances in fiscal 1996 as a result of
the Company's investments in infrastructure and working capital to support its
growth. Interest expense decreased to $388,000 (0.4% of net revenues) in
fiscal 1996 from $482,000 (1.0% of net revenues) in fiscal 1995. The decrease
in interest expense was due to the Company's improved working capital position
and reduced borrowings following the Company's fiscal 1995 public offerings of
common stock.
Income Tax Provision. The Company's effective tax rate was 34.5% in fiscal
1996 compared to 31.3% in fiscal 1995. The increase in the effective rate is
primarily due to the statutory lapse of federal research and development tax
credits during the first nine months of 1996.
FISCAL YEAR ENDED SEPTEMBER 30, 1995 AS COMPARED TO FISCAL YEAR ENDED
SEPTEMBER 30, 1994
Revenues. Revenues increased 91% to $51.0 million in fiscal 1995 from $26.7
million in fiscal 1994. The increase in revenues was primarily attributable to
increased unit sales of vacuum central wafer handling systems and to an
increase in unit sales of wafer handling and conditioning modules. Foreign
revenues increased to $6.0 million (12% of revenues), including $3.9 million
in sales to Asian customers in fiscal 1995, compared to foreign revenues of
$4.0 million (15% of revenues), including $1.8 million of sales to Asian
customers in fiscal 1994.
Gross Profit. Gross profit as a percentage of revenues improved to 41.6% in
fiscal 1995, compared to 39.9% in fiscal 1994. Cost reductions attributable to
manufacturing efficiencies from increased unit sales were partially offset by
higher material costs related to changes in product mix and new product
introductions, including the latest generation of the Company's vacuum
cassette elevator load locks, the VCE 4.
Research and Development. Research and development expenses increased 77% to
$6.8 million (13.4% of revenues) in fiscal 1995 from $3.8 million (14.4% of
revenues) in fiscal 1994. This increase was primarily attributable to the
development of the Company's latest generation of vacuum cassette elevator
load locks, MagnaTran vacuum transfer robots, standard mechanical interface
("SMIF") automation technology, transport module control and scheduling
software, and new vacuum central substrate handling systems and conditioning
modules for the semiconductor and flat panel display manufacturing industries.
Selling, General and Administrative. Selling, general and administrative
expenses increased 79% to $7.2 million (14.1% of revenues) in fiscal 1995 from
$4.0 million (15.1% of revenues) in fiscal 1994. The increase in these
expenses was primarily attributable to the addition of sales, marketing and
administrative staff to manage
17
<PAGE>
and support the Company's growth, domestically and internationally. The
establishment of the Company's new subsidiary in Japan, increased marketing
and customer support activities in South Korea, and the increased costs
associated with being a public company also contributed to the increase in
selling, general and administrative expenses.
Interest Income and Expense. Interest income increased to $507,000 (1.0% of
revenues) in fiscal 1995 from $68,000 (0.3% of revenues) in fiscal 1994. The
increase in investment income reflects higher cash balances available for
investment in fiscal 1995, following the Company's two public offerings of
common stock. Interest expense decreased to $482,000 (1.0% of revenues) in
fiscal 1995 from $506,000 (1.9% of revenues) in fiscal 1994. The decrease in
interest expense was due to the Company's improved working capital position
and reduced borrowings following the Company's two public offerings of common
stock.
Income Tax Provision. The Company's effective tax rate increased to 31.3% in
fiscal 1995 from 30.9% in fiscal 1994.
18
<PAGE>
QUARTERLY RESULTS OF OPERATIONS
The following table presents certain unaudited consolidated quarterly
financial information for the seven quarters ended June 30, 1997. In the
opinion of the Company's management, this information has been prepared on the
same basis as the Consolidated Financial Statements appearing elsewhere in
this Prospectus and includes all adjustments, consisting only of normal
recurring adjustments, necessary to present fairly the financial results set
forth herein. Results of operations for any previous quarter are not
necessarily indicative of results for any future periods.
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------
DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1995 1996 1996 1996 1996 1997 1997
-------- ---------- -------- --------- -------- ---------- --------
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Revenues................ $ 18,564 $ 22,602 $ 25,280 $ 23,986 $ 16,111 $ 16,433 $ 23,059
Cost of revenues........ 10,677 12,988 14,813 14,132 10,631 12,035 15,428
-------- -------- -------- -------- -------- -------- --------
Gross profit............ 7,887 9,614 10,467 9,854 5,480 4,398 7,631
Operating expenses:
Research and
development........... 2,531 3,204 3,288 3,336 2,810 3,298 3,614
Selling, general and
administrative........ 2,595 3,178 3,410 3,253 2,554 2,983 3,442
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
operations............. 2,761 3,232 3,769 3,265 116 (1,883) 575
Interest expense........ 98 97 89 104 71 186 158
Interest income......... 160 112 41 21 16 0 0
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
income taxes........... 2,823 3,247 3,721 3,182 61 (2,069) 417
Income tax provision
(benefit).............. 979 1,134 1,346 1,017 21 (525) 150
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....... 1,844 2,113 2,375 2,165 40 (1,544) 267
======== ======== ======== ======== ======== ======== ========
Net income (loss) per
share.................. $ 0.22 $ 0.26 $ 0.29 $ 0.27 $ 0.00 $ (0.20) $ 0.03
======== ======== ======== ======== ======== ======== ========
Weighted average number
of common and common
equivalent shares...... 8,289 8,244 8,184 8,066 8,425 7,625 8,439
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------
DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30,
1995 1996 1996 1996 1996 1997 1997
-------- ---------- -------- --------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
AS A PERCENTAGE OF
REVENUES:
Revenues................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues........ 57.5 57.5 58.6 58.9 66.0 73.2 66.9
-------- -------- -------- -------- -------- -------- --------
Gross profit............ 42.5 42.5 41.4 41.1 34.0 26.8 33.1
Operating expenses:
Research and
development........... 13.6 14.2 13.0 13.9 17.4 20.1 15.7
Selling, general and
administrative........ 14.0 14.0 13.5 13.6 15.9 18.2 14.9
-------- -------- -------- -------- -------- -------- --------
Income (loss) from
operations............. 14.9 14.3 14.9 13.6 0.7 (11.5) 2.5
Interest expense........ 0.5 0.4 0.4 0.4 0.4 1.1 0.7
Interest income......... 0.8 0.5 0.2 0.1 0.1 0.0 0.0
-------- -------- -------- -------- -------- -------- --------
Income (loss) before
taxes.................. 15.2 14.4 14.7 13.3 0.4 (12.6) 1.8
Income tax provision
(benefit).............. 5.3 5.1 5.3 4.3 0.2 (3.2) 0.6
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....... 9.9% 9.3% 9.4% 9.0% 0.2% (9.4)% 1.2%
======== ======== ======== ======== ======== ======== ========
</TABLE>
The Company's quarterly operating results have varied and may continue to
vary significantly due to a number of factors, including the demand for
semiconductors in general; cyclicality in the market for semiconductor
manufacturing equipment; the timing and size of orders from the Company's
customer base; the ability of the Company to manufacture, test and deliver
products in a timely and cost effective manner; the ability of the Company's
competitors to obtain orders from the Company's customers; the timing of new
product announcements and releases by the Company and its competitors; the mix
of products sold by the Company; and competitive pricing pressures. Customers
may cancel or reschedule shipments and production difficulties could
19
<PAGE>
delay shipments. These factors could have a material adverse effect on the
Company's results of operations. The Company believes that its significantly
lower revenues in the first two quarters of 1997 primarily reflected the broad
decline in capital spending by the semiconductor manufacturing equipment
industry, and that its increase in revenues in the third quarter of fiscal
1997 reflects renewed spending in that industry. The increase in cost of goods
sold as a percentage of revenues in the first two quarters of 1997 was
attributable to underutilization of manufacturing capacity, higher
concentration of shipments of lower gross margin platforms, increased global
support costs and, to a lesser extent, pricing pressure and higher new product
introduction costs. The increase in research and development expenses as a
percentage of revenues in these quarters was primarily attributable to the
Company's commitment to continue to invest in research and development during
the industry downturn. During the first two quarters of fiscal 1997, the
Company's lower selling, general and administrative expenses reflected reduced
overall personnel costs in addition to reduced commissions on lower sales.
Selling, general and administrative expenses during the quarter ended June 30,
1996 reflected $230,000 of expenses incurred in connection with the Company's
acquisition of Brooks Canada. See "Risk Factors--Fluctuations in Operating
Results."
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997, the Company had working capital of $27.5 million,
including $1.1 million of cash and cash equivalents, compared with working
capital of $32.6 million, including $2.1 million of cash and cash equivalents,
as of September 30, 1996. During the nine month period ended June 30, 1997,
the Company used cash of $3.0 million in operating activities primarily to
finance losses and increased inventory levels. Inventories increased,
particularly in the quarter ended June 30, 1997, to support increased demand
for products. Investing activities during the period consist primarily of
CAD/CAM/CAE (computer-aided design, manufacturing and engineering) hardware
and software, test and demonstration equipment and improvements in and
expansion of the Company's facilities worldwide. While the Company has no
significant capital commitments, as the Company expands its product offerings
and prepares for expected growth, the Company anticipates that it will
continue to make capital expenditures to support its business. The Company is
also planning to expand its manufacturing capacity in its existing facility,
and anticipates that it will use at least $1.5 million of the net proceeds of
this offering in connection with this expansion. The Company may also use a
portion of the net proceeds to acquire companies, technologies or products
that complement the business of the Company. Financing activities during the
nine month period ended June 30, 1997 consisted primarily of $9.4 million of
net borrowings under credit lines to fund working capital requirements. The
Company intends to use a portion of the net proceeds from this offering to
repay borrowings outstanding under these credit facilities. Amounts repaid
under these facilities may be reborrowed by the Company. See "Use of
Proceeds."
During fiscal 1996, the Company used cash of $2.1 million in operating
activities primarily to finance accounts receivable and inventories resulting
from revenue growth. Investing activities in fiscal 1996 consisted of capital
expenditures primarily for reliability, test and demonstration equipment, and
the expansion of the Company's regional technology and customer support center
in Japan.
The Company has a $22.0 million unsecured revolving line of credit and a
$6.0 million unsecured foreign currency line of credit, both of which expire
December 31, 1998. Under the revolving credit facility, advances bear
interest, at the option of the Company, at the prime rate (8.5% at June 30,
1997) or the LIBOR rate plus 2%. At June 30, 1997, the Company had outstanding
$9.7 million under the revolving credit facility and $0.7 million (denominated
primarily in Japanese yen) under the foreign currency line of credit. Foreign
currency advances bear interest at the LIBOR rate plus 2% (2.6% for Japanese
yen at June 30, 1997). Under the terms of the credit facilities, as amended as
of June 30, 1997, the Company is required to comply with various covenants,
including the maintenance of specified financial ratios and a minimum tangible
capital base, as defined, and limit the Company's annual level of capital
expenditures. At June 30, 1997, the Company was in compliance with these
covenants.
The Company has received notice from a third-party alleging infringements of
such party's patent rights by certain of the Company's products. The Company
believes the patents claimed may be invalid. In the event of litigation with
respect to this claim, the Company is prepared to vigorously defend its
position. Currently, the
20
<PAGE>
Company does not believe that it is probable that future events related to
this threatened matter will have a material adverse effect on the Company's
business; however, there can be no assurance that this will be the case. The
Company is currently unable to reasonably estimate any possible loss related
to this matter. See "Risk Factors--Intellectual Property Risks" and
"Business--Patents and Proprietary Rights."
The Company believes that anticipated cash from operations, available funds
and borrowings available under the Company's bank lines of credit, together
with the net proceeds from the sale of Common Stock in this offering, will be
adequate to fund the Company's currently planned working capital and capital
expenditure requirements through fiscal 1998.
RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
(SFAS 128), which establishes standards for computing and presenting earnings
per share. The new standard replaces the presentation of primary earnings per
share prescribed by Accounting Principles Board Opinion No. 15, "Earnings per
Share" (APB 15), with a presentation of basic earnings per share and also
requires dual presentation of basic and diluted earnings per share on the face
of the statement of operations for all entities with complex capital
structures. Basic earnings per share excludes dilution and is computed by
dividing income available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted earnings per share
is computed similarly to fully diluted earnings per share pursuant to APB 15.
The Company will be required to implement SFAS 128 in the first quarter of
fiscal 1998 and to restate all prior periods. See Note 1 to Consolidated
Financial Statements.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" (SFAS 130), and Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131). The Company will implement
SFAS 130 and SFAS 131 as required in fiscal 1999, which require the Company to
report and display certain information related to comprehensive income and
operating segments, respectively. Adoption of SFAS 130 and SFAS 131 will not
impact the Company's financial position or results of operations.
21
<PAGE>
BUSINESS
The Company is a leading worldwide independent developer, manufacturer and
supplier of wafer and substrate handling robots, modules, software, controls
and fully integrated cluster tool handling systems for the semiconductor and
flat panel display process equipment industries. The Company's products have
evolved from individual robots used to transfer wafers in advanced production
equipment to fully integrated handling system solutions that increase the
throughput and utilization of semiconductor and flat panel display process
equipment. In 1996, the Company acquired Techware Systems Corporation (now
Brooks Canada), a designer and supplier of integrated equipment control
software for the semiconductor and related industries, expanding its software
and control capability. In 1997, the Company introduced a line of products for
the atmospheric handling market, including in-line and controlled environment
systems, robots, aligners and traversers.
INDUSTRY BACKGROUND
The semiconductor and flat panel process equipment markets are expected to
experience significant growth. According to industry sources, semiconductor
process equipment sales are expected to grow from $19.6 billion in 1997 to
$45.0 billion in 2001, representing a 23% compound annual growth rate, and
flat panel display process equipment sales are expected to grow from $2.0
billion in 1997 to $3.4 billion in 2001, representing a 14% compound annual
growth rate.
Factors that are expected to contribute to semiconductor process equipment
growth include demand for improved semiconductor performance, increased
complexity, reduced feature size and increased number of metal layers. These
factors have led to an increase in the number of process steps, an increase in
the number and cost of process tools required, and to new forms of process
tool architecture. In response to these productivity and cost demands,
semiconductor manufacturers are increasing the size of the wafer substrates
that can be processed and forcing process equipment OEMs to adopt more
efficient equipment configurations and factory interfaces. Significant factors
which are expected to contribute to the growth of the flat panel display
processing equipment industry include the increasing demand for both lower
cost and larger flat panel displays and pressure to increase equipment
productivity. As a result, manufacturers of process equipment are also
increasing the size of the flat panel display substrates that can be processed
by their equipment and adopting more efficient equipment configurations and
factory interfaces.
Semiconductor process equipment manufacturers are seeking to improve the
productivity and availability of their process equipment by increasing
throughput, reliability and accuracy and by reducing contamination. New
equipment is being introduced that can process wafers that are 300mm in
diameter (compared to the current 200mm standard), increasing the number of
semiconductor chips that can be manufactured on each wafer. Semiconductor
manufacturers are also adopting new equipment configurations, such as cluster
tool configurations for vacuum processing that require increased automation,
to increase yields by improving throughput and equipment utilization and
reducing wafer contamination.
A flat panel display substrate may contain as few as two laptop computer
displays, while a wafer may contain more than 100 microprocessor chips.
Leading flat panel display manufacturers have begun to produce flat panel
display substrates as large as 550mm x 650mm and at least one manufacturer has
announced plans for 650mm x 830mm substrate processing. The growing demand for
flat panel displays is also pressuring equipment manufacturers to increase
productivity by adopting a vacuum cluster tool architecture similar to that
used in semiconductor manufacturing.
Fabrication of semiconductors and flat panel displays requires a large
number of complex process steps in which electrically insulating or conductive
materials are deposited and etched into patterns on the surface of a
substrate. In a simplified production sequence, one or more layers of a film
of material are deposited on a substrate (deposition), the desired circuit
pattern is then imaged on the deposited material (photolithography),
22
<PAGE>
and the material not covered with the pattern is then selectively removed
(etch). Each deposition, photolithography or etch process requires the use of
one or more process tools.
Semiconductor and flat panel display substrates must be handled in
ultraclean environments during this manufacturing process, either in a clean
room (atmospheric), controlled environment (nitrogen purged atmospheric) or a
vacuum environment. Physical vapor deposition ("PVD"), chemical vapor
deposition ("CVD"), etch and ion implant are typically conducted in a vacuum
environment. The types of semiconductor equipment operating at atmospheric,
rather than vacuum pressure, are much more diverse and encompass a range of
tools related to the steps before, during and after photolithography and a
wide range of process tools as well as inspection and metrology tools. Flat
panel display process tools generally use vacuum environments for deposition
and etch processes, and atmospheric environments for photolithography and
other processes.
Substrate Handling Automation
Historically, OEMs have designed and manufactured the substrate handling
equipment for their stand-alone process tools. However, as substrate handling
technology and requirements have become more complex, expensive and demanding,
particularly for vacuum cluster tools, OEMs have become increasingly willing
to outsource their automation requirements to independent suppliers. By
outsourcing, OEMs can focus their development resources on improving their
process performance and integration, rather than on the automation solutions
serving their process equipment. Additionally, outsourcing can reduce an OEM's
time-to-market, as well as its technical and capital risk in developing its
own automation solutions. Outsourcing from a specialized independent supplier
also provides access to the supplier's technological and product base,
support, manufacturing capacity and familiarity with regional market
requirements.
The demand for more productive and cost-effective substrate handling systems
poses significant engineering challenges related to throughput, reliability,
accuracy and contamination control. The automation requirements of the wafer
and substrate handling equipment markets have resulted in two common
architectural solutions-cluster tools and in-line handling systems. Cluster
tool handling systems typically link together multiple processes such as
deposition, etch, heating and cooling using a transfer robot located in a
central vacuum chamber. In-line handling systems typically link together
multiple processes such as photoresist processing using a transfer robot
located on an atmospheric horizontal traverser. The in-line architecture is
now emerging in the stripping, cleaning and chemical mechanical polishing
process markets.
Central substrate handling systems must be more reliable than systems
serving only a single process module. A central substrate handling system
serving four process modules, on average, must complete four times more
transfers than a system serving a single module and, as a result, must be four
times more reliable. OEMs are seeking to increase mean time between failures
of central substrate handling systems because the failure of a system disables
several process modules.
Increasing throughput is made more difficult when operating in a vacuum
environment. Unlike atmospheric transfer robots, which often use vacuum
suction to hold a substrate in place when being carried, vacuum transfer
robots use gravity and the friction between the substrate and the robot end
effector (the robot hand). Carrying a substrate in a vacuum requires
sophisticated motion control to maximize the speed of substrate transfer,
while maintaining the substrate position and placement accuracy. Throughput
can also be improved through the use of sophisticated software algorithms that
carefully control the speed and scheduling of substrate transfers within the
cluster tool.
Vacuum environments create further challenges in constructing and operating
a highly reliable central handling system. Materials must be carefully
selected and surface finished to reduce and control particle and molecular
contamination. Many plastics and lubricants do not work in a vacuum as they
emit gases that contaminate the vacuum environment and may even evaporate.
Gears, pulleys and other mechanical interfaces and moving parts, which are
potential sources of particle contamination within the vacuum environment,
must be minimized. Pumping and venting of load locks must be carefully
controlled (profiled) to reduce wafer contamination.
23
<PAGE>
The Company believes that many of the enhancements developed for vacuum
automation can be applied to atmospheric automation of substrate handling to
increase throughput, reliability and accuracy and reduce contamination of
those systems. Traditionally, atmospheric tools have lacked the
standardization that has been accepted with cluster tools for vacuum
automation. However, increasing pressures on productivity are resulting in the
use of in-line and central architectures which rely on increased automation
and integration to increase the productivity of these tools.
Automation and integration of vacuum and atmospheric process equipment
requires the use of advanced system software and controls. According to an
industry source, software failures are a significant cause of down time in
semiconductor equipment. As a result, there is substantial pressure on process
tool manufacturers in both the semiconductor and flat panel display industries
to improve their software and controls for their process and automation
equipment.
In addition to vacuum and atmospheric tool automation, factory automation
(at atmospheric pressure) is becoming much more important as factory material
handling logistics become more complex, and the value and weight of the
substrates to be transported escalates. Reduction of tool downtime by ensuring
that substrates are presented for process continuously has become critical as
tool costs have risen dramatically. These trends are placing a much greater
premium on efficient automated interfaces between factory automation and the
individual tools.
THE BROOKS SOLUTION
The Company has developed broad, technical expertise in material transfer
equipment, software and controls, and a strong corporate infrastructure to
serve the global semiconductor and flat panel display markets. Key elements of
the Brooks solution include:
Comprehensive Product Lines. The Company has developed comprehensive product
lines that encompass automation modules, complete handling systems and
integrated software and controls for each of its targeted markets. These
solutions are designed to enhance the productivity of process tools by
offering high throughput, reliability, accuracy and contamination control. The
Company believes that it offers the broadest product offerings in vacuum tool
automation of any independent supplier, and it is now pursuing a similar
strategy in the atmospheric market.
Leadership in Automation Technology. The Company's leadership in product
innovations over multiple generations of products reflects its large-scale
investment in automation and control technology. The Company believes that its
position as one of the largest independent suppliers of automation solutions
to the semiconductor and flat panel display process equipment industries has
enabled it to invest more than all but the largest OEMs on advancing
automation and control technology. The Company is now applying its innovations
in vacuum automation to meet the demands of the atmospheric automation market.
Global Service and Support. The Company has built a global sales, service
and support infrastructure in four overseas countries and in locations across
North America. Its facilities and personnel in these sites provide locally
available spare parts and service and local applications and software
engineering support.
High-Volume Efficient Manufacturing. The Company has manufacturing resources
to meet the high volume demands of large OEMs and is able to offer economies
of scale in manufacturing from a facility that meets high quality standards
while responding to short lead times for delivery. The Company has adopted
stringent quality assurance procedures that include standard design practices
and comprehensive reliability testing and has obtained ISO 9001 certification.
Experienced Global Management Team. Over the past two years, the Company has
added seven senior members to management in North America, Japan, South Korea
and the United Kingdom, with broad international and industry experience. The
Company's senior management team has, on average, more than 17 years of
experience per person in the semiconductor or flat panel display manufacturing
equipment industries.
24
<PAGE>
STRATEGY
The Company believes that a number of important trends affecting its
customers will continue to shape the semiconductor and flat panel display
substrate automation and controls marketplace. Process equipment OEMs are
continually faced with pressures from end-users to reduce price while
improving process performance, yield and tool productivity. Moreover,
automation and controls suppliers are required to rapidly design and introduce
new products. To meet these demands, the design and manufacture of automation
and controls require increased specialization. The Company's objective is to
be the volume supplier of choice to multinational process equipment OEMs
requiring high performance automation equipment, software and control
solutions. To achieve these objectives, the Company is pursuing the following
strategies:
Expand Customer Relationships. The Company intends to meet the emerging
requirements of its customers for automation solutions. The Company is also
seeking to expand sales to its existing customers by providing tool
automation, software and control solutions across three market segments--
vacuum, atmospheric and factory automation-to-process tool interfaces.
Provide Total Handling Systems Solutions. The Company has developed software
and controls for the entire process tool system, including the substrate
handling system, the graphical user interface and process modules. The Company
intends to provide total handling systems solutions, including software and
controls, across all its targeted markets. The Company believes that it will
be able to increase the value it provides by fulfilling evolving customer
needs for greater automation integration.
Leverage and Enhance Technological Leadership. The Company believes that it
has become a leading independent supplier of vacuum automation solutions for
the semiconductor and flat panel display process equipment markets by
continually improving hardware and software automation solutions. The Company
has been granted and applied for a number of patents encompassing its
automation and control technology. The Company intends to continue to enhance
and expand upon its technical expertise to develop increasingly efficient and
cost-effective automation solutions.
Continue Commitment to Worldwide Markets. The Company believes that its
long-term success is dependent on its ability to compete on a worldwide basis.
The Company intends to continue to focus on expanding its sales and service
activities in each of the primary worldwide markets for semiconductor and flat
panel display process equipment. Approximately 30% of its revenues for the
nine months ended June 30, 1997 were from customers outside of the United
States. The Company believes that a significant portion of its United States
customers incorporate the Company's products into equipment sold to their
foreign customers. The Company has achieved its international stature as a
result of consistent and direct involvement by senior management, increased
local sales, engineering and support personnel and investment in overseas
facilities.
Capitalize on Product Cycle Transitions The Company's software and system
integration expertise developed for automated vacuum handling systems is
relevant to the next generation of automation in the atmospheric market. The
Company also seeks to capitalize on the transition to the emerging market for
300mm wafer processing equipment. The Company believes that it was one of the
first companies to develop 300mm vacuum automation solutions, and has recently
introduced atmospheric products to address the more rigorous wafer handling
specifications required for 300mm wafers. In addition, the Company is
developing its next generation flat panel display platform to handle
substrates of up to approximately 1 meter by 1 meter.
PRODUCTS
The Company offers a full complement of semiconductor wafer and flat panel
display substrate handling systems. The Company has developed comprehensive
product lines that encompass automation modules, complete handling systems and
integrated software and controls for its targeted markets. The Company's
systems, robots and modules are designed, developed and produced with similar
technologies and can use the Company's ClusterLink software. The Company uses
the synergies of its complementary products to respond to changing industry
demands such as processing 300mm semiconductor wafers and the larger, fourth
generation
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flat panel display substrates. The Company believes that its products offer
significant advantages in a number of areas, including those set forth below:
Throughput. The Company's patented LeapFrog robots have been able to achieve
significant improvements in throughput compared to other robots. The Company
also has been able to increase throughput by developing patented algorithms to
calculate efficient trajectories and acceleration and deceleration profiles
(time optimal trajectories) for its robot arms while reducing vibrations and
maintaining position control of the substrate being transported. The Company
has developed system software to improve cluster tool throughput. By combining
digital signal processing ("DSP") technology with time optimal trajectory
software, the Company believes that it has achieved additional reductions in
transfer time.
Reliability. The Company has developed and implemented a rigorous design and
test program to enhance and evaluate product reliability. The Company's
reliability initiative is guided by the computer-based reliability models
developed by SEMATECH and Sandia National Laboratories. The magnetic drive in
the Company's latest generation robots transmits force magnetically, without
piercing the vacuum barrier, and eliminates the need for moveable vacuum
seals. By designing robots with fewer moving parts and eliminating moveable
seals, the Company believes that it will be able to increase the reliability
of its transfer robots significantly. The Company's goal is to continue to
increase mean time between failures.
Accuracy. As wafer and substrate sizes increase and placement accuracy
becomes more demanding, it is becoming increasingly important to minimize
tracking errors, substrate sliding and arm deflection (the bending or wobbling
of the robot arm). The Company's transfer robots contain a closed loop servo
control which monitors and maintains placement accuracy in the rotational axis
by obtaining constant positioning feedback. Many other transfer robots use an
open loop stepper control system which commands a robot to move a specified
number of steps with limited or no feedback as to the final position of the
robot. These stepper systems can lead to misplacement of the robot arm if the
number of steps is miscounted. To further enhance tracking, the Company has
incorporated a closed loop feedback system with a proprietary DSP-based
controller in its latest generation robots.
Contamination Control. The Company has designed its wafer and flat panel
display substrate handling systems and modules to reduce contamination by
using several design criteria: limited moving parts within the tool
environment and above the wafer or substrate plane; picking and placing with a
vertical motion to prevent wafer or substrate sliding on process module
surfaces and cassette slots; gentle handling motions which reduce relative
wafer or substrate vibration and movement on the transfer robot end effectors;
controlled load lock pumping and venting; incorporation of materials that
reduce contamination; and assembly, test and packaging in the Company's clean
rooms.
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The Company currently manufactures products for the semiconductor and flat
panel display markets. The following table lists the Company's product
offerings within each of the markets it serves:
<TABLE>
<CAPTION>
MARKET PRODUCT LINES
- ----------------------------------------------------------------------------
<S> <C>
Semiconductor Vacuum Products Central Wafer Handling Systems
Transfer Robots
Thermal Conditioning Modules (Cool and Degas)
Cassette Elevator Load Locks
Aligners
Factory Automation Interface Modules
System Software and Controls
- ----------------------------------------------------------------------------
Semiconductor Atmospheric and Central Wafer Handling Systems
Inert Environment Products In-line Wafer Handling Systems
Transfer Robots
Robot Traversers
Thermal Conditioning Modules (Cool)
Cassette Elevator Load Locks
Aligners
Factory Automation Interface Modules
System Software and Controls
- ----------------------------------------------------------------------------
Flat Panel Display Products Central Substrate Handling Systems
Transfer Robots
Cassette Elevator Load Locks
Thermal Conditioning Modules (Degas)
System Software and Controls
</TABLE>
SEMICONDUCTOR VACUUM PRODUCTS
Vacuum Central Wafer Handling Systems
The Company's family of Marathon vacuum central wafer handling systems
handle wafer sizes of 100mm to 300mm in diameter, are offered with four to
eight sides (referred to as ports) and have vacuum ranges of 10-/3/ to 10-/8/
torr (a measure of vacuum pressure). Each port can accommodate process modules
meeting SEMI/MESC standards. Using a two load lock configuration, the
Company's Marathon 800 eight-sided central wafer handling system can
accommodate up to six process modules.
The Company's Marathon systems currently incorporate either the Company's
single VacuTran or dual MultiTran frog-arm vacuum transfer robot, one or more
of the Company's vacuum cassette elevator (VCE) load locks, the Company's
InLigner wafer aligner, and, if required, the Company's InCooler wafer cooling
module. The Company has been able to increase the availability of ports for
use with process modules by developing a wafer aligner and a cooling module
which mount between a vacuum cassette elevator load lock or process module and
the central wafer handling chamber. The Company is developing degas modules
for its Marathon systems.
The Company has also developed tool control ClusterLink 3 system software to
control its vacuum wafer handling systems, graphical user interface and
process modules. The software interfaces with process tool controllers and
provides environment control, profiled load lock pumping and venting, error
recovery diagnostics, safety control and scheduling of wafer transfers. When
providing a turn-key solution that includes the Company's system control and
scheduling software, the Company is able to provide guarantees relating to
throughput and particle contamination.
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<PAGE>
In 1997, the Company developed a next-generation 200mm wafer handling
system, the Marathon Express 800, which features the dual same-side LeapFrog
robot and offers improvement to throughput, vacuum performance and
serviceability. In anticipation of the emergence of next-generation 300mm
wafers, the Company has developed central wafer handling systems (the Marathon
4000 and 6000) and is developing a Marathon Express 8000 eight-sided
configuration. These systems have incorporated handling technology developed
by the Company for flat panel display substrates, which are generally
significantly more demanding to handle than wafers.
Vacuum Transfer Robots
The Company's next-generation vacuum transfer robot, the MagnaTran 7, is a
second generation magnetic drive robot which incorporates the Company's
patented time optimal trajectory software algorithims to control and monitor
its operation. The MagnaTran 7 is smaller and lighter than its predecessor.
Building on its experience in developing robot wafer transfer technology, the
Company has developed the dual, same-side LeapFrog high-productivity arm
configuration. The LeapFrog arm is only available on the MagnaTran 7 robot and
is a feature of the Company's Marathon Express central handling systems. These
robots are constructed to SEMI/MESC standards and are sold separately for use
with other vacuum wafer handling applications. The Company believes that the
technical advances implemented to meet the requirements of the flat panel
display industry enabled the Company to adopt its MagnaTran robots, with
minimal technical modifications, to handle 300mm wafers.
Other Vacuum Wafer Handling and Conditioning Modules
Vacuum Cassette Elevator Load Locks. The Company has developed a family of
vacuum cassette elevator load locks to hold and index (raise and lower)
cassettes of wafers for cluster tools and other vacuum automated equipment.
The Company's VCE 4 200mm cassette load lock features flexible and changeable
interfaces, is field upgradable and is available with either a manual or
automatic door configuration. The automatic door uses an innovative low
particle, low profile drive mechanism, which opens vertically below the
cluster platform for SMIF, automated guided vehicle ("AGV") and rail guided
vehicle ("RGV") compatibility. The Company has developed the VCE 5 for 300mm
wafers with a batch wafer transfer arm and a front opening unified pod
("FOUP") interface. The Company is developing the VCE 7 for 300mm wafers to
interface with the Company's Caliber atmospheric, in-line handling system.
Vacuum Aligners. Wafer processing requires precise alignment and, often,
orientation of a wafer for processing. The Company's InLigner intermodule
wafer aligner provides fast one-step wafer alignment by optically sensing the
location of the wafer on the aligner and communicating that position to the
vacuum transfer robot. Using this information, the transfer robot adjusts the
placement of its arm to pick up the wafer in the proper position. The InLigner
is designed for intermodule mounting between a module, such as the cassette
load lock and the central wafer handling chamber, in order to conserve a port
of the cluster tool. The Company's InLigner 3 is designed for 300mm wafer
alignment. The Company is developing a new family of aligners for 200mm and
300mm wafers, the TopLigners, that mount from the top in the central transport
chamber and offer improved serviceability.
Vacuum Cool Modules. The Company's InCooler intermodule cool station cools
wafers after hot processing to a temperature that allows placement into a
plastic wafer cassette. This module is also designed for intermodule mounting.
The Company's InCooler 3 is designed for 300mm wafer applications. The Company
is developing a family of new cooling modules for 200mm and 300mm wafers, the
TopCoolers, that mount from the top in the central transport chamber and offer
improved serviceability.
Vacuum Degas Modules. The Company is developing degas modules to remove
water from the surface of the wafer. The Company is developing a stand alone
200mm and a top mount 300mm module that offer improved serviceability.
28
<PAGE>
SEMICONDUCTOR ATMOSPHERIC AND INERT ENVIRONMENT PRODUCTS
Building upon its vacuum wafer and substrate handling systems, the Company
is pursuing the development of a broad line of products for atmospheric
applications. Atmospheric wafer handling systems may be segregated into two
subcategories: the traditional ambient atmospheric wafer handling systems and
"inert" (principally nitrogen) environment wafer handling systems. The
traditional atmospheric wafer handling systems include fully integrated
automated wafer handling platforms for open, ambient air in-line wafer
handling platforms. The inert environment wafer handling systems include fully
integrated, automated wafer handling platforms for at or above atmospheric
pressure cluster tools.
Atmospheric Wafer Handling Systems
The Company's Caliber atmospheric, in-line wafer handling systems handle
wafer sizes from 150mm to 300mm in diameter and are offered with two to four
cassette staging locations and may be operated in Class 1 clean room
environments. These configurations have been developed to meet broad market
requirements. The Caliber 200 and 400 are used for 200mm wafer open cassettes
and the Caliber 400 S is being developed for use with 200mm SMIF applications.
The Company is developing the Caliber 2000 in-line wafer handling system to
handle 300mm wafers in open cassette or FOUP applications.
The Company's Caliber systems incorporate the Company's single scara-arm
AcuTran atmospheric transfer robot, the Company's AcuTrav robot traverser, two
or more of the Company's cassette staging locations, and, if required, the
Company's AcuLigner wafer aligner. The Company's Caliber systems also
incorporate a system controller to control all wafer handling functions and to
interface to the process tool's primary controller.
Atmospheric Transfer Robots
Building on its experience in developing transfer robots and employing its
magnetic direct drive technology, the Company has developed the AcuTran 3, its
next-generation atmospheric transfer robot, to handle up to 300mm wafers.
These robots are a standard feature of the Company's Caliber in-line wafer
handling systems, are constructed to SEMI standards and are sold separately
for use with other atmospheric wafer handling applications. The Company's
robots incorporate DSP technology and patented time optimal trajectory
software to control and monitor their operation.
Other Atmospheric Wafer Handling Modules
Atmospheric Robot Traverser. The Company's AcuTrav provides high speed
horizontal motion permitting the AcuTran 3 robot to access multiple process
tool load ports and cassette staging locations. The AcuTrav uses direct drive
mechanism which allows high speed motions comparable to the Company's robot
family.
Atmospheric Aligners. The Company's AcuLigner 3 wafer aligner is being
designed for fast one-step 150mm to 300mm wafer alignment by optically sensing
the location of the wafer on the aligner and communicating that position to
the vacuum transfer robot. Using this information, the transfer robot adjusts
the placement of its arm to pick up the wafer in the proper position.
Inert Environment Wafer Handling Systems
In 1997, the Company introduced a new central wafer handling system to
address market needs for reduced water vapor environment central handling
systems for high temperature wafer processing (e.g. rapid thermal processing
and epitaxial deposition).
Building upon its expertise in vacuum central wafer handling systems and
modules, the Company developed the Atmospheric Express 600 "inert" environment
wafer handling system for 150mm to 200mm wafers. This inert environment
central wafer handling system transfers wafers at or above atmospheric
pressure in a principally nitrogen environment. The Atmospheric Express
incorporate robots and modules from the Company's vacuum wafer handling
product line. The Company is developing the Atmospheric Express 6000 to handle
up to 300mm wafers.
29
<PAGE>
FLAT PANEL DISPLAY PRODUCTS
In 1994, the Company introduced a family of vacuum central substrate handling
systems and modules for the flat panel display deposition and etch process
equipment markets, shipping its first Hercules central substrate handling
system for a flat panel display vacuum cluster tool in July 1994. The Hercules
systems can handle flat panel display substrates from 350mm x 460mm to 600mm x
720mm in size. The Company is developing a next generation flat panel display
platform, for substrates up to approximately 1 meter x 1 meter.
The Hercules system includes the Company's MagnaTran 60 magnetically driven
frog-arm vacuum transfer robot with two or three axes of motion and single or
dual arm options, a single substrate load lock, or a 20 to 30 substrate
cassette elevator load lock (VCE 40), and a seven substrate batch degas module.
The Company is developing a next generation magnetic drive robot, the
MagnaTran 70, for the flat panel display market. The MagnaTran 70 robot series
is expected to be smaller and lighter and to feature an optional extended
vertical axis for deployment in the Company's next generation platforms.
CUSTOMERS
The Company's customers are primarily semiconductor wafer and flat panel
display substrate OEMs and semiconductor manufacturers who are retrofitting the
vacuum automation of their process equipment or developing advanced process
equipment for internal use. The Company's current customers are primarily
located in the United States, Japan, South Korea and Europe. The Company
intends to market its developing family of atmospheric central wafer handling
equipment to its existing customers in the vacuum and flat panel display
markets and other potential customers. The following is a representative list
of the Company's customers:
AG Associates JUSUNG
Anelva Lam Research
ASM America MRC
Balzers Novellus Systems
BOC Coating Technology Samsung Electronics
CVC Products TEL
FSI International TRIKON Technologies
Gasonics Ulvac Japan
Genus Veeco Instruments
Intel Watkins-Johnson
In the first nine months of fiscal 1997 and in fiscal 1996, Lam accounted for
23% and 21% of the Company's revenues, respectively, and sales to the Company's
top ten customers accounted for approximately 68% and 70% of net revenues,
respectively. A reduction or delay in orders from Lam or other significant
customers could have a material adverse effect on the Company's results of
operations. See "Risk Factors--Customer Concentration."
MARKETING, SALES AND CUSTOMER SUPPORT
The Company markets and sells its wafer and substrate handling systems and
modules in the United States, Japan, South Korea, Taiwan and Europe through its
direct sales and marketing organization. As of June 30, 1997, 38 persons were
engaged in sales and marketing activities worldwide. The selling process for
the Company's products is often multilevel, involving a team comprised of
individuals from sales, marketing, engineering, operations and senior
management. Each significant customer is assigned a team that engages the
customer at different organization levels to provide planning and product
customization and to assure open communication and support.
The Company's marketing activities also include participation in trade shows,
publication of articles in trade journals, participation in industry forums and
distribution of sales literature. To enhance this communication and support,
particularly with its international customers, the Company maintains technology
centers in California, British Columbia, South Korea, and Japan. These
facilities, together with the Company's headquarters, maintain
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<PAGE>
demonstration equipment for customers to evaluate. Customers are also
encouraged to discuss the features and applications of the Company's
demonstration equipment with the Company's engineers located at these
facilities. The Company also maintains regional sales and service personnel in
Taiwan, the United Kingdom, Phoenix, Arizona and Austin, Texas. The Company
has recently experienced significant growth in foreign revenues. In the first
nine months of fiscal 1997 and in fiscal 1996, foreign revenues accounted for
30% and 20%, respectively, of the Company's revenues. The Company expects
foreign revenues to continue to represent a significant percentage of total
revenues in the foreseeable future. See "Risk Factors--Risks of International
Sales and Operations."
In 1997, the Company developed a new sales and marketing tool, a process
tool throughput simulator, to enable the evaluation of various wafer handling
system configurations to identify the preferred tool configuration for a
specific application. This tool simulates the movement of wafers with
execution times, scheduling algorithms, and flow sequences similar to those of
actual process tools and outputs this information visually. This tool is
capable of comparing multiple tool configurations simultaneously for preferred
fit comparison.
The Company provides support to its customers with (i) telephone technical
support access 24-hours a day, 365 days a year, (ii) direct training programs
and (iii) operating manuals and other technical support information for the
Company's products. The Company uses its demonstration equipment for training
programs in addition to sales and marketing. The Company maintains spare parts
inventories at its technology centers to enable its personnel to serve the
Company's customers and repair their products more efficiently.
COMPETITION
The semiconductor and flat panel display process equipment manufacturing
industries are highly competitive and characterized by continual change and
improvement in technology. Although other independent companies sell vacuum
and atmospheric wafer and flat panel display substrate handling automation
systems and vacuum transfer robots to OEMs, the Company believes that its
primary competition is from the larger, integrated semiconductor and flat
panel display OEMs that satisfy their substrate handling needs in-house rather
than by purchasing handling systems or modules from an independent source such
as the Company. Such OEMs comprise the majority of the Company's current and
potential customers. Applied Materials, the leading process equipment OEM,
develops and manufactures its own central wafer handling systems and modules.
The Company believes that most vacuum central wafer handling systems and
modules are manufactured in-house by OEMs. Many of the companies in these
industries have significantly greater research and development, clean room
manufacturing, marketing and financial resources than the Company.
Many OEMs have substantial resources and expertise in substrate handling and
automation in vacuum and atmospheric environments and will only purchase the
Company's products if the Company can demonstrate improved product performance
as measured by throughput, reliability, contamination control and accuracy, at
an acceptable price. The Company believes that it competes favorably with OEMs
and other independent suppliers with respect to all of these factors. However,
there can be no assurance that the Company will be successful in selling its
products to OEMs that currently satisfy their wafer and flat panel handling
needs in-house, regardless of the performance or the price of the Company's
products.
The Company's sale of its products for the flat panel display process
equipment market is heavily dependent upon its penetration of the Japanese
market. The Company is also seeking to expand its presence in the Japanese
semiconductor process equipment market. In addressing the Japanese markets,
the Company may be at a competitive disadvantage to Japanese suppliers. See
"Risks Factors--Risks of International Sales and Operations."
RESEARCH AND DEVELOPMENT
The Company's research and development efforts are focused on developing new
products for the semiconductor and flat panel display process equipment
industries and further enhancing the functionality, reliability and
performance of existing products. The Company's engineering, marketing,
operations and
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<PAGE>
management personnel have developed close collaborative relationships with many
of their customer counterparts and have used these relationships to identify
market demands and target its research and development to meet those demands.
The Company's current research and development efforts include the continued
development and enhancement of the Company's semiconductor and flat panel
display products, including 300mm Marathon Express vacuum central wafer
handling systems and modules, fourth generation flat panel display substrate
handling systems and modules, control and scheduling software, and atmospheric
handling systems and modules. There can be no assurance that the Company will
be able to develop new products effectively, to enhance its existing products,
or to respond effectively to technological changes or new industry standards or
developments on a timely basis, if at all. In the first nine months of fiscal
1997 and in fiscal 1996, 1995 and 1994, the Company's research and product
development expenses were $9.7 million, $12.4 million, $6.8 million and $3.8
million, respectively, representing 17.5%, 13.7%, 13.4% and 14.4% of the
Company's revenues, respectively. See "Risk Factors--New Products and Rapid
Technological Change."
MANUFACTURING
The Company's manufacturing operations consist primarily of product assembly,
integration, and testing. The Company has adopted stringent quality assurance
procedures that include standard design practices, component selection
procedures, vendor control procedures and comprehensive reliability testing and
analysis to assure the performance of its products. The Company received ISO
9001 certification in February 1996.
The Company employs a just-in-time manufacturing strategy. The Company
believes that this strategy, coupled with the outsourcing of noncritical
subassemblies, reduces fixed operating costs, improves working capital
efficiency, reduces manufacturing cycle times and improves flexibility to
rapidly adjust its production capacities. While the Company often uses single
source suppliers for certain key components and common assemblies to achieve
quality control and the benefits of economies of scale, the Company believes
that these parts and materials are readily available from other supply sources.
PATENTS AND PROPRIETARY RIGHTS
The Company relies upon trade secrets and patents to protect its technology.
Due to the rapid technological change that characterizes the semiconductor and
flat panel display process equipment industries, the Company believes that the
improvement of existing technology, reliance upon trade secrets and unpatented
proprietary know-how and the development of new products may be more important
than patent protection in establishing and maintaining a competitive advantage.
It is the Company's policy to require all technical and management personnel to
enter into nondisclosure agreements. Nevertheless, the Company has obtained
patents and will continue to make efforts to obtain patents, when available, in
connection with its product development program. There can be no assurance that
any patent obtained will provide protection or be of commercial benefit to the
Company, or that its validity will not be challenged.
As of July 31, 1997, the Company had obtained 19 United States patents and
had 29 United States patent applications pending on its behalf. In addition,
the Company had obtained 10 foreign patents and had 32 foreign patent
applications pending on its behalf. The Company's United States patents expire
at various times from 1999 to 2015.
There can be no assurance that the Company's pending patent applications or
any future applications will be approved, that any patents will provide it with
competitive advantages or will not be challenged by third parties, or that the
patents of others will not have an adverse effect on the Company's ability to
do business. Because foreign patents may afford less protection under foreign
law than is available under United States patent law, there can be no assurance
that any such patents issued to the Company will adequately protect the
Company's proprietary information. There can be no assurance that others will
not independently develop similar products, duplicate the Company's products
or, if patents are issued to the Company, design around the patents issued to
the Company.
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Others may have filed and in the future may file patent applications that
are similar or identical to those of the Company. To determine the priority of
inventions, the Company may have to participate in interference proceedings
declared by the United States Patent and Trademark Office that could result in
substantial cost to the Company. No assurance can be given that any such
patent application will not have priority over patent applications filed by
the Company.
The Company also relies upon trade secret protection, employee and third-
party nondisclosure agreements and other intellectual property protection
methods to protect its confidential and proprietary information. Despite these
efforts, there can be no assurance that others will not independently develop
substantially equivalent proprietary information and techniques or otherwise
gain access to the Company's trade secrets or disclose such technology or that
the Company can meaningfully protect its trade secrets.
There has been substantial litigation regarding patent and other
intellectual property rights in the semiconductor and related industries. The
Company has received notice from General Signal Corporation ("General Signal")
alleging infringements of General Signal's patent rights by certain of the
Company's products. The notification advised the Company that General Signal
is currently attempting to enforce its rights to those patents in litigation
against a major semiconductor process tool equipment manufacturer, and that,
at the conclusion of that litigation, it intends to enforce its rights against
the Company and others. The Company's patent counsel, Perman & Green of
Fairfield, Connecticut, continues to investigate the claims made against the
Company. With regard to the notice, the Company believes that the patents
claimed may be invalid. In the event of litigation with respect to this
notice, the Company is prepared to defend vigorously its position. However,
because patent litigation can be extremely expensive and time consuming, the
Company may seek to obtain a license to one or more of the disputed patents.
There can be no assurance that the Company would prevail in any litigation
seeking damages or expenses from the Company or to enjoin the Company from
selling its products on the basis of the alleged patent infringement, or that
a license for any of the alleged infringed patents will be available to the
Company on reasonable terms, if at all. If General Signal successfully
enforces these alleged rights against the Company or the Company's customers,
it could have a material adverse affect on the Company's business.
In 1992, at the time that General Signal first raised patent claims in the
cluster tool area, the Company joined with six major semiconductor process
tool equipment manufacturers in forming an "Ad Hoc Committee for Defense
against General Signal Cluster Tool Patents." At that time, the members of the
Ad Hoc Committee notified General Signal that the member companies were of the
opinion that the General Signal patents were invalid based on (i) prior art,
(ii) inequitable conduct before the Patent & Trademark Office and (iii)
estoppel as a result of General Signal's activities in establishing standards
for cluster tools and interfaces within the semiconductor industry. The
Company believes that the position taken by the Ad Hoc Committee remains
valid, and in the event litigation is commenced against the Company by General
Signal, is prepared to defend its position vigorously. Even if the Company is
determined to be infringing the General Signal patents, the Company believes
that the sale of its products to process tool manufacturers would result in
contributory and not direct infringement. As such, certain license rights
under the General Signal patents could cover the Company's products sold to
Lam, the Company's largest customer. The Company has been advised by Lam that
Lam has a license under the General Signal patents. The Company believes that
the products sold to Lam are covered under this license.
General Signal has offered to license its patents to the Company, and
because patent litigation can be extremely expensive and time consuming, the
Company may seek to obtain a license from General Signal. There is no
assurance, however, that a license from General Signal will be available to
the Company on reasonable terms, if at all. If the General Signal patents are
found to be valid, if the Company's products are held to infringe such
patents, and if the Company or its OEM customers are not able to obtain a
license from General Signal on reasonable terms, it could have a material
adverse effect on the business of the Company.
The Company has in the past been, and may in the future be, notified that it
may be infringing intellectual property rights possessed by other third
parties. Any patent litigation would be costly and could divert the efforts
and attention of the Company's management and technical personnel, which could
have a material adverse effect
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on the Company's business, financial condition and results of operations.
There can be no assurance that infringement claims by third parties or other
claims for indemnification by customers or end users of the Company's products
resulting from infringement claims will not be asserted in the future or that
such assertions, if proven to be true, will not materially and adversely
affect the Company's business, financial condition and results of operations.
If any such claims are asserted against the Company's intellectual property
rights it may seek to enter into a royalty or licensing arrangement. There can
be no assurance, however, that a license will be available on reasonable terms
or at all. The Company could decide, in the alternative to resort to
litigation to challenge such claims or to design around the patented
technology. Such actions could be costly and would divert the efforts and
attention of the Company's management and technical personnel, which would
materially and adversely affect the Company's business, financial condition
and results of operations. See "Risk Factors--Intellectual Property Risks."
BACKLOG
Backlog for the Company's products as of June 30, 1997 and 1996 totaled
$44.2 million and $35.6 million, respectively. Backlog consists of purchase
orders for which a customer has scheduled delivery within the next 12 months.
Orders included in the backlog may be canceled or rescheduled by customers
without significant penalty. Backlog as of any particular date should not be
relied upon as indicative of the Company's net revenues for any future period.
EMPLOYEES
As of June 30, 1997, the Company had approximately 470 full-time employees.
Of these, 172 were involved in engineering, 38 in sales and marketing, 220 in
global customer support and manufacturing operations and 40 in general and
administrative. The Company believes its future success will depend in large
part on its ability to attract and retain highly skilled employees. None of
the employees of the Company are covered by a collective bargaining agreement.
The Company considers its relationships with its employees to be good.
PROPERTIES
The Company has a seven year lease, beginning May 1995, for its headquarters
and manufacturing facility. The facility has two stories with approximately
130,000 square feet of space located in Chelmsford, Massachusetts. The lease
provides for the Company to move into all the space over a three year period
ending May 1998 with the Company occupying a minimum of approximately 83,000
square feet in the first year, 93,000 square feet in the second year, 108,000
square feet in the third year and the entire space thereafter.
The Company also maintains sales and service offices in Santa Clara,
California, Tokyo, Japan, Seoul, South Korea and Kingston, England. In July
1996, the Company expanded its regional sales and support presence in Japan,
by relocating into a 10,000 square foot facility in Tokyo, Japan. The Company
is negotiating for more space at this facility. In August 1996, the Company
entered into a six year lease for a new facility for Brooks Canada. The new
facility is a shared, three story building with approximately 41,000 square
feet of space and is located in Richmond, British Columbia.
The Company believes that these facilities are adequate for its current
needs and that it can obtain additional space at commercially reasonable rates
when and as required.
LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings. See
"Patents and Proprietary Rights" for a description of certain potential patent
disputes.
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Robert J. Therrien...... 62 President, Chief Executive Officer, Treasurer and Director
David R. Beaulieu....... 39 Vice President, Engineering
Stanley D. Piekos....... 49 Vice President, Finance and Chief Financial Officer
Michael W. Pippins...... 37 Vice President, Sales and Marketing
Michael F. Werner....... 51 Vice President, Manufacturing and Operations
Norman B. Brooks........ 65 Director
Roger D. Emerick(1)(2).. 58 Director
Amin J. Khoury(1)(2).... 57 Director
</TABLE>
- --------
(1) Member of the Company's Compensation Committee.
(2) Member of the Company's Audit Committee.
Robert J. Therrien has been the President, Chief Executive Officer and a
director of the Company since its incorporation in 1989 when he initiated the
acquisition of the Brooks Automation Division of Aeronca Electronics, Inc.
From 1983 to 1989, Mr. Therrien served as a consultant to the Company and
other firms in the semiconductor industry. From 1972 until its sale to
Schlumberger Industries in 1983, Mr. Therrien cofounded and served as Chairman
and President of Accutest Corporation, a semiconductor automatic test
equipment company. Mr. Therrien is currently a director of MKS Instruments,
Inc., a supplier of measurement and control components for laboratory and
industrial applications throughout the microelectronics industry. Mr. Therrien
also serves on the NYNEX Customer Advisory Board and the Advisory Committee of
the Massachusetts Office of Business Development.
David R. Beaulieu joined the Company in May 1996 as its Vice President of
Engineering. From 1993 to 1996, Mr. Beaulieu served as Vice President, Product
Operations of the Time/Data Systems Division of Simplex Corporation, a
manufacturer of industrial equipment. From 1991 to 1993, Mr. Beaulieu served
as Vice President of Research and Development for Tropel Corporation, a
manufacturer of advanced optical systems for semiconductor equipment. From
1979 to 1991, Mr. Beaulieu served GCA, a unit of General Signal Corporation,
in a variety of positions including Director of Lithographic Engineering.
Stanley D. Piekos joined the Company in June 1994 as its Vice President,
Finance and Chief Financial Officer. From 1985 to June 1994, Mr. Piekos served
Helix Technology Corporation, a manufacturer of cryogenic equipment used
primarily in the semiconductor industry, most recently as Vice President and
Chief Financial Officer.
Michael W. Pippins joined the Company in March 1992 as its Director of Sales
and Marketing and in June 1993 was promoted to Vice President, Sales and
Marketing. From 1989 to 1992, Mr. Pippins served as strategic marketing
manager for Varian Associates, a manufacturer of semiconductor production
equipment.
Michael F. Werner has been the Vice President, Operations of the Company
since February 1993. From 1986 to 1993, Mr. Werner served GCA, a unit of
General Signal Corporation, in a variety of positions including Senior Vice
President of Operations.
Norman B. Brooks founded the Company in 1978, and has served as a director
of the Company since its incorporation in 1989. Mr. Brooks has been semi-
retired since that date.
Roger D. Emerick has been a director of the Company since October 1993. Mr.
Emerick has been a director of Lam Research Corporation ("Lam"), a
semiconductor equipment supplier, since 1982 and Chairman of the Board of
Directors of Lam since 1984. Mr. Emerick served as President of Lam from 1982
to 1989 and as its Chief Executive Officer from 1982 until August 1997. Mr.
Emerick is currently a director of Electroglas, Inc., a manufacturer of
automatic wafer probing equipment and Semiconductor Equipment and Materials
International.
35
<PAGE>
Amin J. Khoury has been a director of the Company since July 1994. Since
1987, Mr. Khoury has served as Chairman of the Board of B/E Aerospace, Inc., a
designer, manufacturer and marketer of airline interior furnishings. Mr.
Khoury is also Chairman of the Board of Applied Extrusion Technologies, Inc.,
a manufacturer of oriented polypropylene films and extruded polymer nets.
KEY EMPLOYEES
Certain key employees of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
<S> <C> <C>
Andrew Broughton............ 46 Managing Director, Brooks Automation U.K.
Robert Carey................ 56 Vice President, Asian Operations
Bernard Casey............... 33 Director, Atmospheric Product Marketing
Michael Cullinane........... 41 Director, Global Support Services
Mitchell Drew............... 36 Director, Business Development
Michael Hanssman............ 39 Director, Technologies, of Brooks Canada
Christopher Hofmeister...... 34 Director, Atmospheric Products Engineering
Chang Ho Kim................ 39 General Manager, Brooks Automation Korea
John Masciola............... 42 Director, Software Engineering
Robert McEachern............ 53 Vice President, Flat Panel Display Engineering
Richard McMahon............. 41 Vice President, Software Engineering
Tsunehisa Yamashita......... 51 President, Brooks Automation K.K.
</TABLE>
Andrew Broughton joined the Company in 1997 as the Managing Director of the
Company's U.K. subsidiary. From 1987 until 1997, Mr. Broughton served in
various sales and management capacities, most recently as General
Manager/Director for Tencor Industries, a metrology tool production company.
Robert Carey joined the Company in April 1996 as its Vice President of
Technology and Business Development and in September 1996 began serving as
Vice President, Asian Operations. From 1993 to 1996, Mr. Carey served as
President of Dynapower/Stratopower and from 1988 to 1993 he served as
President, Senior Vice President of Product Operations and Vice President of
Research and Development of GCA. Dynapower/Stratopower and GCA are units of
General Signal Corporation.
Bernard Casey joined the Company in July 1997 as its Director, Atmospheric
Product Marketing. From 1989 to 1997, Mr. Casey served Genmark Automation in
various capacities including most recently as its Executive Vice President and
Chief Operating Officer. Genmark develops and manufactures precision alignment
and transport robotics equipment for the semiconductor and flat panel display
industries. Prior to 1989, Mr. Casey was an electrical engineer for Alcatel
Comptech.
Michael Cullinane joined the Company in April 1995 as its Director, Program
Management and in June 1996 began serving as Director Global Support Services.
From 1994 to January 1995, Mr. Cullinane served in various capacities for the
Tau-Tron unit of General Signal Corporation, including most recently as
Director of Worldwide Operations. Prior to 1994, Mr. Cullinane served for over
15 years in various positions at GCA (also a unit of General Signal
Corporation), including as its Director of Manufacturing Operations.
Mitchell Drew joined the Company in July 1993 and has served the Company in
a variety of support and marketing management positions including as Director,
Atmospheric Products Marketing. In July 1997 Mr. Drew became Director,
Business Development. From 1989 to 1993, Mr. Drew served in a strategic
product support role for Varian Associates, a manufacturer of semiconductor
production equipment.
Michael Hanssman joined the Company in 1996 as Director, Technologies of
Brooks Canada. From 1983 to 1996, Mr. Hanssman served in various engineering
and management capacities with Brooks Canada.
36
<PAGE>
Christopher Hofmeister joined the Company in August 1991 and has served the
Company in a variety of engineering positions including Mechanical Engineering
Manager and in January 1997 was promoted to Director, Atmospheric Products
Engineering. From 1989 to 1991, Mr. Hofmeister served Eaton, a manufacturer of
semiconductor production equipment, as a mechanical engineer.
Chang Ho Kim joined the Company in 1996 as General Manager, Brooks
Automation Korea. From December 1993 to February 1996, Mr. Kim served
Schlumberger Technologies as General Manager and Vice President of its Asia
Pacific automatic test equipment operations. From 1990 to December 1993, Mr.
Kim served as Director of Asia Pacific Rim operations for Semiconductor
Equipment and Materials International. Prior to 1990, Mr. Kim served in
various management and engineering capacities for Lam and National
Semiconductor, a manufacturer of semiconductors.
John Masciola joined the Company in 1995 as Director, Software Engineering.
From 1980 to 1995, Mr. Masciola served in various engineering and management
capacities at GenRad, a semiconductor test equipment firm. Mr. Masciola served
most recently as GenRad's Software Engineering Manager.
Robert McEachern joined the Company in June 1995 as its Vice President, Flat
Panel Display Engineering. Mr. McEachern was a founder of MRS Technology, a
supplier of photolithography equipment to flat panel display manufacturers,
and served as Vice President, Research and Development of MRS from its
organization in February 1986 to May 1995. Prior to MRS's formation, Mr.
McEachern was an engineering manager at Varian Associates, a manufacturer of
semiconductor production equipment.
Richard McMahon joined the Company in February 1996 as Vice President,
Software Engineering and as President of Brooks Automation Canada. Mr. McMahon
was the founder of Techware Systems Corporation, a designer and supplier of
integrated equipment control software solutions for the semiconductor and
related industries, and served as its President from 1983 through its
acquisition by the Company in February 1996.
Tsunehisa Yamashita joined the Company in August 1997 as the President of
the Company's Japanese subsidiary. Mr. Yamashita, a trained engineer, served
the Nikon Corporation in Tokyo, Japan from 1969 until his appointment to the
Company in a variety of positions, including most recently, General Manager of
the Planning and Strategic Marketing Department and General Manager of the IC
and LCD Equipment Division (April 1996 to August 1997); Senior Manager of the
Export Department (1987 to 1996) and Marketing Director, Technical Support
Director and Planning Director of Nikon Precision Inc. (1982 to 1987).
37
<PAGE>
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information as of August 15, 1997
with respect to the beneficial ownership of the Company's Common Stock by (i)
each director of the Company, (ii) each executive officer of the Company,
(iii) each Selling Stockholder and (iv) all executive officers and directors
of the Company as a group. This information is based upon information received
from or on behalf of the named individuals. All of the Selling Stockholders
are executive officers or directors of the Company.
<TABLE>
<CAPTION>
NUMBER OF
SHARES BENEFICIALLY OWNED SHARES BEING SHARES BENEFICIALLY OWNED
PRIOR TO OFFERING(1) OFFERED(1) AFTER OFFERING (2)
------------------------------ ------------ ------------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENTAGE NUMBER NUMBER PERCENTAGE
- ------------------------ --------------- -------------- ------------ --------------- --------------
<S> <C> <C> <C> <C> <C>
Robert J. Therrien(3)... 1,534,046 19.2% 300,000 1,234,046 12.4%
c/o Brooks Automation,
Inc.
15 Elizabeth Drive
Chelmsford, Massachu-
setts 01824
Stanley D. Piekos(4).... 91,852 1.2% 10,250 81,602 *
Michael W. Pippins(5)... 71,412 * 2,000 69,412 *
Michael F. Werner(6).... 52,500 * 3,750 48,750 *
David R. Beaulieu(7).... 0 * 0 0 *
Norman B. Brooks(8)..... 35,040 * 5,000 30,040 *
Roger D. Emerick(9)..... 5,000 * 0 5,000 *
Amin J. Khoury(10)...... 9,000 * 0 9,000 *
All directors and
executive officers as a
group (8 persons)
(3)(4)(5)(6)(7)
(8)(9)(10)............. 1,798,850 22.3% 321,000 1,478,516 14.7%
</TABLE>
- --------
* Less than one percent.
(1) Unless otherwise noted, each person identified possesses sole voting and
investment power with respect to the shares listed.
(2) Assumes that the Underwriters' over-allotment option is not exercised. If
the Underwriters' over-allotment option is exercised in full, Mr.
Therrien will sell an additional 50,000 shares of Common Stock, and,
after the offering, he will beneficially own 1,184,046 shares of Common
Stock constituting 11.5% of the outstanding shares of Common Stock.
(3) Includes options to purchase 247,500 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 137,500 shares which are not exercisable within 60 days after
August 15, 1997.
(4) Includes options to purchase 31,250 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 51,250 shares which are not exercisable within 60 days after
August 15, 1997.
(5) Includes options to purchase 26,334 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 25,000 shares which are not exercisable within 60 days after
August 15, 1997.
(6) Includes options to purchase 7,500 shares of Common Stock which are
exercisable within 60 days of August 15, 1997. Excludes options to
purchase 36,250 shares which are not exercisable within 60 days after
August 15, 1997.
(7) Excludes options to purchase 29,000 shares of Common Stock which are not
exercisable within 60 days after August 15, 1997.
(8) Includes options to purchase 4,000 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 16,000 shares which are not exercisable within 60 days after
August 15, 1997.
38
<PAGE>
(9) Includes options to purchase 5,000 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 16,000 shares which are not exercisable within 60 days after
August 15, 1997.
(10) Includes options to purchase 5,000 shares of Common Stock which are
exercisable within 60 days after August 15, 1997. Excludes options to
purchase 16,000 shares which are not exercisable within 60 days after
August 15, 1997.
39
<PAGE>
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 21,500,000 shares of
Common Stock, $0.01 par value, and 1,000,000 shares of Preferred Stock, $0.01
par value (the "Preferred Stock").
COMMON STOCK
As of August 15, 1997, there were 7,738,138 shares of Common Stock
outstanding. These shares were held of record by 104 stockholders. There will
be 9,738,138 shares of Common Stock outstanding after giving effect to the
sale of the shares of Common Stock to the public offered hereby by the
Company.
The holders of Common Stock are entitled to one vote per share on all
matters to be voted on by stockholders and are entitled to receive dividends,
if any, as may be declared from time to time by the Board of Directors from
funds legally available therefore. Upon liquidation or dissolution of the
Company, the holders of Common Stock are entitled to receive all assets
available for distribution to the stockholders, subject to any preferential or
other rights of the holders of Preferred Stock. The Common Stock has no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to such shares. The holders
of Common Stock do not have cumulative voting rights in the election of
directors. All of the shares of Common Stock are, and the shares to be sold in
this offering will be, fully paid and nonassessable.
PREFERRED STOCK
The Company has no Preferred Stock outstanding. The Board of Directors has
the authority to issue the Preferred Stock in one or more series and to fix
the rights, preferences, privileges and restrictions thereof, including
dividend rights, dividend rates, conversion rights, voting rights, terms of
redemption, redemption prices, liquidation preferences and the number of
shares constituting any series or the designation of such series, without
further vote or action by the stockholders. The issuance of Preferred Stock
may have the effect of delaying, deferring or preventing a change in control
of the Company without further action by the stockholders and may adversely
affect the voting and other rights of the holders of Common Stock. The
issuance of Preferred Stock with voting and conversion rights may adversely
affect the voting power of the holders of Common Stock, including the loss of
voting control to others. The Company currently has no plans to issue any of
the Preferred Stock.
ANTITAKEOVER EFFECT OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND
BYLAWS, RIGHTS DISTRIBUTION PLAN AND DELAWARE LAW
Certificate of Incorporation and Bylaws
The Certificate of Incorporation includes several provisions in addition to
the Preferred Stock, which may render more difficult an unfriendly tender
offer, proxy contest, merger or other change in control of the Company. These
provisions are intended to enhance the likelihood of continuity and stability
in the composition of the Board of Directors and in the policies formulated by
the Board of Directors and to discourage certain types of transactions that
may involve an actual or threatened change of control of the Company. These
provisions are also designed to reduce the vulnerability of the Company to
unsolicited acquisition proposals and to discourage certain tactics that may
be used in proxy fights. However, such provisions could have the effect of
discouraging others from making tender offers for the shares of Common Stock
and, as a consequence, they also may inhibit fluctuations in the market price
of the shares of Common Stock which could result from actual or rumored
takeover attempts. Such factors also may have the effect of preventing changes
in the management of the Company.
The Certificate of Incorporation contains a so-called "anti-greenmail"
provision. The provision is intended to discourage speculators who accumulate
beneficial ownership of a significant block of stock and then, under the
threat of making a tender offer or instigating a proxy contest or some other
corporate disruption, succeed in
40
<PAGE>
extracting from the Company a premium price to repurchase the shares acquired
by the speculator. This tactic has become known as greenmail. The anti-
greenmail provision prohibits the Company from purchasing any shares of Common
Stock from a Related Person at a per share price in excess of the fair market
value at the time of such purchase, unless the purchase is approved by two-
thirds of the holders of the outstanding shares of the Common Stock, excluding
any votes cast by the Related Person. The term "Related Person" is defined in
general to mean any person, other than an existing stockholder of the Company,
who acquires more than 5% of the Company's voting stock after the closing of
the offering. Stockholder approval is not required for such purchases when the
offer is made available on the same terms to all holders of shares of Common
Stock or when the purchases are effected on the open market.
The Certificate of Incorporation also provides that all stockholder action
must be effected at a duly called meeting and not by written consent and that
certain stockholder proposals may only be approved by the holders of 80% of
the shares of stock entitled to vote thereon. In addition, the Bylaws of the
Company do not permit stockholders of the Company to call a special meeting of
stockholders.
The authority of the Board of Directors to issue authorized but unissued
shares of Common Stock might be considered as having the effect of
discouraging an attempt by another person or entity to effect a takeover or
otherwise gain control of the Company since the issuance of additional shares
of Common Stock would dilute the voting power of the Common Stock then
outstanding.
Rights Distribution
In July 1997, the Board of Directors declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of Common Stock on
August 12, 1997 (the "Record Date") to the stockholders of record on that
date. Each Right entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Series A Preferred Shares"), of the
Company, at a purchase price of $135 per one one-thousandth of a Series A
Preferred Share (the "Purchase Price"), subject to adjustment.
Subject to certain limited exceptions, until the earlier to occur of (i) ten
days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding Common Stock, or (ii) ten business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding Common Stock
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced by the Common Stock certificates with a copy of the summary
of Rights Attached thereto. As soon as practicable following the Distribution
Date, the Rights will becomes exercisable, separate certificates evidencing
the Rights ("Rights Certificates") will be mailed to stockholders of record on
the Distribution Date and the separate Rights Certificates alone will evidence
the Rights. The Rights will expire on the earlier of (i) July 31, 2007, or
(ii) the date on which the Rights are redeemed.
In the event that any person becomes an Acquiring Person, proper provisions
shall be made so that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person and its affiliates and associates (which shall
thereafter be void), will thereafter have the right to receive upon exercise,
that number of shares of Common Stock having a market value of two times the
exercise price of the Right. In the event that, at any time after a person
becomes an Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provisions will be made so that each holder of
a Right will thereafter have the right to receive, upon the exercise thereof
at the then current exercise price of the Right, that number of shares of
common stock of the surviving company which at the time of such transaction
will have a market value of two times the exercise price of the Right.
41
<PAGE>
At any time after any person becomes an Acquiring Person and prior to the
acquisition by any person or group of a majority of the outstanding Common
Stock, the Board of Directors may exchange the Rights (other than Rights owned
by such person or group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right, subject to adjustment.
At any time prior to the time any person becomes an Acquiring Person, the
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $0.001 per Right (the "Redemption Price"). The redemption of the Rights may
be made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors without the
consent of the holders of the Rights, except that from and after such time as
any person becomes an Acquiring Person, no such amendment may adversely affect
the interests of the holders of the Rights (other than the Acquiring Person
and its affiliates and associates).
Delaware Takeover Statute
The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203") which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such
stockholder became an interested stockholder, unless (i) prior to such date
the Board of Directors of the corporation approved either the business
combination or the transaction which resulted in the stockholder becoming an
interested stockholder; (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding for purposes of
determining the number of shares outstanding those shares owned (x) by persons
who are directors and also officers and (y) by employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or
exchange offer; or (iii) on or subsequent to such date, the business
combination is approved by the Board of Directors and authorized at an annual
or special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
now owned by the interested stockholder.
Section 203 defines business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii)
any sale, transfer, pledge or other disposition involving the interested
stockholder of 10% or more of the assets of the corporation; (iii) subject to
certain exceptions, any transaction which results in the issuance or transfer
by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transaction involving the corporation which has the
effect of increasing the proportionate share of the stock of any class or
series of the corporation beneficially owned by the interested stockholder; or
(v) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation. In general, Section 203 defines an "interested
stockholder" as any entity or person beneficially owning 15% or more of the
outstanding voting stock of the corporation and any entity or person
affiliated with or controlling or controlled by such entity or person.
REGISTRATION RIGHTS
Following this offering, Stanley D. Piekos, will be the holder of 50,352
shares of Common Stock and options to purchase 82,500 shares of Common Stock.
So long as he is an employee of the Company, Mr. Piekos can require the
Company to register his shares of Common Stock on a pro rata basis to the
extent the Company registers the shares of any other officer. Mr. Piekos is a
Selling Stockholder in this offering.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is Boston EquiServe
LP.
42
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Company and the Selling Stockholders have agreed to
sell to each of the Underwriters named below, and each of the Underwriters,
for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"),
PaineWebber Incorporated ("PaineWebber"), Needham & Company, Inc. ("Needham")
and Cowen & Company ("Cowen") are acting as representatives (the
"Representatives"), has severally agreed to purchase from the Company and the
Selling Stockholders, the respective numbers of shares of Common Stock set
forth opposite its name below at the public offering price less the
underwriting discount set forth on the cover page of this Prospectus. In the
Purchase Agreement, the several Underwriters have agreed, subject to the terms
and conditions set forth herein, to purchase all of the shares of Common Stock
offered hereby if any of such shares are purchased. In the event of default by
an Underwriter, the Purchase Agreement provides that, in certain
circumstances, the purchase commitments of the nondefaulting Underwriter may
be increased or the Purchase Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................................
PaineWebber Incorporated........................................
Needham & Company, Inc..........................................
Cowen & Company.................................................
---------
Total...................................................... 2,321,000
=========
</TABLE>
The Representatives have advised the Company and the Selling Stockholders
that the Underwriters propose initially to offer the shares of Common Stock to
the public at the offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not in
excess of $ per share. The Underwriters may allow, and such dealers may
reallow, a concession not in excess of $ per share to certain other dealers.
After the offering contemplated hereby, the offering price and other selling
terms may be changed by the Representatives.
The Company and one of the Selling Stockholders have granted to the
Underwriters an option, exercisable for 30 days after the date of this
Prospectus, to purchase up to an aggregate of 348,150 additional shares of
Common Stock at the public offering price set forth on the cover page hereof,
less the underwriting discount. The Underwriters may exercise such option only
to cover over-allotments, if any, made in connection with the sale of Common
Stock offered hereby. To the extent that the Underwriters exercise this
option, each Underwriter will have a firm commitment, subject to certain
conditions, to purchase approximately the same percentage thereof which the
number of shares of Common Stock to be purchased by it shown in the above
table is of the 2,321,000 shares of Common Stock initially offered hereby. If
purchased, the Underwriters will offer such additional shares on the same
terms as those on which the 2,321,000 shares are being offered.
Until the distribution of the Common Stock is completed, the rules of the
Securities and Exchange Commission (the "Commission") may limit the ability of
the Underwriters and certain selling group members (if any) to bid for and
purchase the Common Stock. As an exception to these rules, the Representatives
are permitted to engage in certain transactions that stabilize the price of
the Common Stock. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Common Stock.
If the Underwriters create a short position in the Common Stock in
connection with the offering (i.e., if they sell a greater number of shares of
Common Stock than is set forth on the cover page of this Prospectus), the
Representatives may reduce that short position by purchasing shares of Common
Stock in the open market. The Representatives may also elect to reduce any
short position by exercising all or part of the over-allotment option
described above.
43
<PAGE>
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases.
Neither the Company, the Selling Stockholders nor any of the Underwriters
makes any representation or prediction as to the direction or magnitude of any
effect that the transactions described above may have on the price of the
Common Stock. In addition, neither the Company, the Selling Stockholders nor
any of the Underwriters makes any representation that the Representatives will
engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
In connection with this offering, the Underwriters or their respective
affiliates and selling group members (if any) who are qualified market makers
on Nasdaq may engage in "passive market making" in the Common Stock on the
Nasdaq National Market in accordance with Rule 103 of Regulation M under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Rule 103
permits, upon the satisfaction of certain conditions, underwriters and selling
group members participating in a distribution that are also Nasdaq market
makers in the security being distributed (or a related security) to engage in
limited market making transactions during the period when Regulation M under
the Exchange Act would otherwise prohibit such activity. Rule 103 prohibits
underwriters and selling group members engaged in passive market making
generally from entering a bid or effecting a purchase at a price that exceeds
the highest bid for those securities displayed on the Nasdaq National Market
by a market maker that is not participating in the distribution. Under Rule
103, each underwriter or selling group member engaged in passive market making
is subject to a daily net purchase limitation equal to 30% of such entity's
average daily trading volume during the two full consecutive calendar months
immediately preceding the date of the filing of the registration statement
under the Securities Act pertaining to the security to be distributed (or such
related security).
The Company, each of its directors and executive officers and the Selling
Stockholders have agreed not to, directly or indirectly, offer, pledge, sell
contract to sell or otherwise transfer or dispose of any shares of Common
Stock or any securities convertible into or exchangeable or exercisable for
Common Stock without the prior written consent of Merrill Lynch for a period
of 90 days from the date of this Prospectus, except that the Company may,
without such consent, issue shares of Common Stock upon the exercise or
conversion of any outstanding options or warrants, or grant options to
purchase shares of Common Stock pursuant to the Company's stock option plans.
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including certain liabilities under
the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for the
Company and the Selling Stockholders by Brown, Rudnick, Freed & Gesmer, One
Financial Center, Boston, Massachusetts 02111. Certain legal matters with
respect to patents and proprietary rights of the Company as described in the
Prospectus will be passed upon by Perman & Green, Fairfield, Connecticut.
Certain legal matters in connection with the Common Stock offered hereby will
be passed upon for the Underwriters by Testa, Hurwitz & Thibeault, LLP Boston,
Massachusetts.
EXPERTS
The Consolidated Financial Statements of the Company as of September 30,
1995 and 1996 and for each of the three years in the period ended September
30, 1996 included in this Prospectus have been so included in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
44
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, NW,
Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the Commission's
Regional Offices at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York, New
York 10048, at prescribed rates. In addition, such reports, proxy statements
and information are available through the Commission's Electronic Data
Gathering and Retrieval System at http://www.sec.gov. The Company's Common
Stock is listed on the Nasdaq National Market, and reports, proxy statements
and certain other information concerning the Company can also be inspected at
the offices of the Nasdaq National Market, 1735 K Street NW, Washington D.C.
20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended with respect to the Common
Stock being offered hereby. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth in
such Registration Statement and the exhibits and schedules thereto to which
reference is hereby made. The statements in this Prospectus as to the contents
of such Registration Statement are qualified in their entirety by such
reference. The Registration Statement, together with its exhibits and
schedules, may be inspected without charge at the Public Reference Section of
the Commission in Washington, D.C. at the address noted above, and copies of
all or any part thereof may be obtained from the Commission upon payment of
the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference: (1) the Company's Annual Report on
Form 10-K/A for the fiscal year ended September 30, 1996, (2) the Company's
Quarterly Reports on Form 10-Q for the fiscal quarters ended December 31,
1996, March 31, 1997 and June 30, 1997; (3) the Company's Proxy Statement used
in connection with the Company's Annual Meeting of Stockholders held on
February 20, 1997; and (4) the description of the Company's Common Stock
contained in the Company's Registration Statements on Form 8-A, filed with the
Commission on January 24, 1995 and August 7, 1997.
All reports and other documents subsequently filed by the Company 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 the offering of the Common
Stock hereunder shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, or in any other subsequently filed document that also is (or is deemed
to be) incorporated by reference herein, 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 of the Registration
Statement or this Prospectus. The Company will furnish without charge to each
person, including any beneficial owner, to whom this Prospectus is delivered,
upon written or oral request of such person, a copy of any or all of the
documents referred to above, excluding exhibits thereto. Requests for such
documents should be submitted in writing to the Corporate Secretary at the
corporate headquarters of the Company at 15 Elizabeth Drive, Chelmsford,
Massachusetts 01824, or by telephone at (508) 262-2400.
45
<PAGE>
BROOKS AUTOMATION, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants........................................ F-2
Consolidated Balance Sheet as of September 30, 1995 and 1996, unaudited
at June 30, 1997........................................................ F-3
Consolidated Statement of Operations for the three years ended September
30, 1996, and unaudited for the nine months ended June 30, 1996 and
1997.................................................................... F-4
Consolidated Statement of Changes in Stockholders' Equity for the three
years ended September 30, 1996, and unaudited for the nine months ended
June 30, 1997........................................................... F-5
Consolidated Statement of Cash Flows for the three years ended September
30, 1996, and unaudited for the nine months ended June 30, 1996 and
1997.................................................................... F-6
Notes to Consolidated Financial Statements............................... F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors of Brooks Automation, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of changes in stockholders' equity and
of cash flows present fairly, in all material respects, the financial position
of Brooks Automation, Inc. and its subsidiaries at September 30, 1995 and
1996, and the results of their operations and their cash flows for each of the
three years in the period ended September 30, 1996, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
November 19, 1996
F-2
<PAGE>
BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE-RELATED DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30,
---------------- JUNE 30,
1995 1996 1997
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents...................... $15,594 $ 2,102 $ 1,129
Accounts receivable, net of allowance for
doubtful accounts of $80, $100 and $160,
respectively, and including related party
receivables of $3,118, $5,533 and $5,262,
respectively.................................. 12,964 24,381 24,679
Inventories.................................... 12,858 17,803 21,028
Prepaid expenses and other current assets...... 1,805 1,679 3,756
------- ------- -------
Total current assets......................... 43,221 45,965 50,592
Fixed assets, net................................ 9,347 16,698 19,523
Other assets..................................... 1,012 2,098 3,465
------- ------- -------
Total assets................................. $53,580 $64,761 $73,580
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and capital
lease obligations............................. $ 1,522 $ 1,431 $10,850
Accounts payable............................... 6,075 8,103 8,906
Accrued compensation and benefits.............. 1,556 2,719 2,154
Accrued expenses and other current
liabilities................................... 1,505 1,130 1,195
------- ------- -------
Total current liabilities.................... 10,658 13,383 23,105
Long-term debt, capital lease obligations and
other liabilities............................... 700 687 579
------- ------- -------
Total liabilities............................ 11,358 14,070 23,684
------- ------- -------
Commitments and contingency (Note 12)............ -- -- --
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000
shares authorized; none issued and
outstanding................................... -- -- --
Common stock, $.01 par value; 21,500,000 shares
authorized; 7,469,591, 7,569,109 and 7,653,315
shares issued and outstanding................. 75 76 76
Additional paid-in capital..................... 34,208 34,335 34,682
Cumulative translation adjustment.............. (136) (174) (97)
Deferred compensation.......................... (139) (110) (92)
Retained earnings.............................. 8,214 16,564 15,327
------- ------- -------
Total stockholders' equity................... 42,222 50,691 49,896
------- ------- -------
Total liabilities and stockholders' equity... $53,580 $64,761 $73,580
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, JUNE 30,
----------------------------------------- -----------------
1994 1995 1996
(FISCAL 1994) (FISCAL 1995) (FISCAL 1996) 1996 1997
------------- ------------- ------------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Revenues, including
related party revenues
of $6,361, $10,530 and
$19,109 for fiscal
years 1994, 1995 and
1996, respectively, and
$13,852 and $12,622 for
the nine months ended
June 30, 1996 and 1997,
respectively........... $26,651 $50,958 $90,432 $66,446 $55,603
Cost of revenues........ 16,005 29,783 52,610 38,478 38,094
------- ------- ------- -------- --------
Gross profit............ 10,646 21,175 37,822 27,968 17,509
------- ------- ------- -------- --------
Operating expenses:
Research and
development.......... 3,843 6,818 12,359 9,023 9,722
Selling, general and
administrative....... 4,025 7,188 12,436 9,183 8,979
------- ------- ------- -------- --------
Total operating
expenses........... 7,868 14,006 24,795 18,206 18,701
------- ------- ------- -------- --------
Income (loss) from
operations............. 2,778 7,169 13,027 9,762 (1,192)
Interest expense........ 506 482 388 283 415
Interest income......... 68 507 334 312 16
------- ------- ------- -------- --------
Income (loss) before
income taxes........... 2,340 7,194 12,973 9,791 (1,591)
Income tax provision
(benefit) ............. 724 2,249 4,476 3,459 (354)
------- ------- ------- -------- --------
Net income (loss)....... $ 1,616 $ 4,945 $ 8,497 $ 6,332 $ (1,237)
======= ======= ======= ======== ========
Net income (loss) per
share.................. $ 0.32 $ 0.73 $ 1.04 $ 0.77 $ (0.16)
======= ======= ======= ======== ========
Weighted average number
of common and common
equivalent shares...... 5,045 6,803 8,199 8,221 7,614
======= ======= ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NOTES
COMMON ADDITIONAL CUMULATIVE RECEIVABLE TOTAL
STOCK AT PAID-IN TRANSLATION DEFERRED FROM RETAINED STOCKHOLDERS'
PAR VALUE CAPITAL ADJUSTMENT COMPENSATION STOCKHOLDERS EARNINGS EQUITY
--------- ---------- ----------- ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30,
1993................... $ 35 $ 1,687 $(111) $ -- $ -- $ 1,777 $ 3,388
Issuance of common
stock.................. 5 708 -- -- (60) -- 653
Issuance of common stock
warrants............... -- 25 -- -- -- -- 25
Currency translation
adjustments............ -- -- (60) -- -- -- (60)
Dividends............... -- -- -- -- -- (33) (33)
Net income.............. -- -- -- -- -- 1,616 1,616
---- -------- ----- ----- ----- -------- --------
BALANCE AT SEPTEMBER 30,
1994................... 40 2,420 (171) -- (60) 3,360 5,589
Issuance of common
stock--public
offerings.............. 30 30,216 -- -- -- -- 30,246
Exercise of common stock
warrants............... 5 1,240 -- -- -- -- 1,245
Exercise of common stock
options................ -- 57 -- -- -- -- 57
Purchase and retire
treasury stock......... -- (119) -- 80 -- -- (39)
Currency translation
adjustments............ -- -- 35 -- -- -- 35
Deferred compensation... -- 264 -- (264) -- -- --
Amortization of deferred
compensation........... -- -- -- 45 -- -- 45
Payment of stockholders'
notes receivable....... -- -- -- -- 60 -- 60
Dividends............... -- -- -- -- -- (91) (91)
Income tax benefit
related to stock
options................ -- 130 -- -- -- -- 130
Net income.............. -- -- -- -- -- 4,945 4,945
---- -------- ----- ----- ----- -------- --------
BALANCE AT SEPTEMBER 30,
1995................... 75 34,208 (136) (139) -- 8,214 42,222
Issuance of common stock
under employee stock
purchase plan.......... -- 210 -- -- -- -- 210
Exercise of common stock
options................ 1 101 -- -- -- -- 102
Purchase and retire
treasury stock......... -- (184) -- -- -- -- (184)
Currency translation
adjustments............ -- -- (38) -- -- -- (38)
Amortization of deferred
compensation........... -- -- -- 29 -- -- 29
Elimination of Techware
net income for the the
three-months ended
December 31, 1995...... -- -- -- -- -- (147) (147)
Net income.............. -- -- -- -- -- 8,497 8,497
---- -------- ----- ----- ----- -------- --------
BALANCE AT SEPTEMBER 30,
1996................... 76 34,335 (174) (110) -- 16,564 50,691
Issuance of common stock
under employee stock
purchase plan
(unaudited)............ -- 268 -- -- -- -- 268
Exercise of common stock
options (unaudited).... -- 79 -- -- -- -- 79
Currency translation
adjustments
(unaudited)............ -- -- 77 -- -- -- 77
Amortization of deferred
compensation
(unaudited)............ -- -- -- 18 -- -- 18
Net loss (unaudited).... -- -- -- -- -- (1,237) (1,237)
---- -------- ----- ----- ----- -------- --------
BALANCE AT JUNE 30, 1997
(UNAUDITED)............ $ 76 $ 34,682 $ (97) $ (92) $ -- $ 15,327 $ 49,896
==== ======== ===== ===== ===== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30, JUNE 30,
----------------------------------------- -------------------
1994 1995 1996 1996 1997
------------- ------------- ------------- --------- --------
(FISCAL 1994) (FISCAL 1995) (FISCAL 1996) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS
CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss)...... $ 1,616 $ 4,945 $ 8,497 $ 6,332 $ (1,237)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization......... 935 1,315 3,057 2,156 3,307
Loss on disposal of
fixed assets......... -- 50 122 -- --
Changes in operating
assets and
liabilities:
Accounts receivable.. (651) (8,340) (11,742) (9,016) (208)
Inventories.......... (1,192) (8,413) (5,005) (6,335) (3,315)
Prepaid expenses and
other current assets
and other
liabilities......... (211) (600) 68 (936) (1,949)
Accounts payable..... (253) 4,195 2,127 2,852 803
Accrued compensation
and benefits........ 331 717 1,019 697 (507)
Accrued expenses and
other current
liabilities......... (497) (855) (291) 47 75
------- ------- -------- --------- --------
Net cash provided by
(used in) operating
activities......... 78 (6,986) (2,148) (4,203) (3,031)
------- ------- -------- --------- --------
CASH FLOWS FROM
INVESTING ACTIVITIES
Purchases of fixed
assets................ (1,164) (7,673) (9,689) (5,995) (5,742)
Increase in other
assets................ (52) (511) (1,267) (207) (1,740)
Proceeds from sales of
short-term
investments, net...... 488 492 -- -- --
------- ------- -------- --------- --------
Net cash used in
investing
activities......... (728) (7,692) (10,956) (6,202) (7,482)
------- ------- -------- --------- --------
CASH FLOWS FROM
FINANCING ACTIVITIES
Net borrowings under
credit lines.......... 441 236 123 187 9,430
Principal payments on
long-term debt and
capital lease
obligations........... (511) (2,293) (462) (357) (315)
Proceeds from issuance
of common stock....... 446 31,608 312 158 349
Dividends paid......... (33) -- (91) (91) --
Purchase and retire
treasury stock........ -- (39) (253) (239) --
------- ------- -------- --------- --------
Net cash provided by
(used in) financing
activities............ 343 29,512 (371) (342) 9,464
------- ------- -------- --------- --------
Effects of exchange
rate changes on cash
and cash equivalents.. (60) 35 (17) (4) 76
------- ------- -------- --------- --------
Net increase (decrease)
in cash and cash
equivalents........... (367) 14,869 (13,492) (10,751) (973)
Cash and cash
equivalents, beginning
of period............. 1,092 725 15,594 15,594 2,102
------- ------- -------- --------- --------
Cash and cash
equivalents, end of
period................ $ 725 $15,594 $ 2,102 $ 4,843 $ 1,129
======= ======= ======== ========= ========
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW
INFORMATION
Cash paid during the
period for interest... $ 393 $ 371 $ 419 $ 237 $ 378
Cash paid during the
period for income
taxes................. $ 505 $ 2,786 $ 4,076 $ 3,086 $ 1,421
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
Brooks Automation, Inc. (the "Company") is a leading, worldwide independent
developer, manufacturer and supplier of vacuum central wafer and substrate
handling systems and modules for the semiconductor process equipment and flat
panel display manufacturing industries.
A summary of the Company's significant accounting policies follows:
PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All intercompany balances and transactions
have been eliminated.
On February 28, 1996, the Company acquired Techware Systems Corporation
("Techware"), a designer and supplier of integrated equipment control software
for the semiconductor and related industries. Techware now operates as a
wholly-owned subsidiary of the Company under the name of Brooks Automation
Canada. The acquisition of Techware has been accounted for as a pooling of
interests, and therefore the accompanying consolidated financial statements
for all periods prior to the Techware acquisition have been retroactively
restated to reflect the combination of the operations and the accounts of
Techware with those of the Company.
Due to the previously differing year-ends of the Company and Techware,
Techware's results of operations for the years ended December 31, 1994 and
1995 have been combined with the Company's results of operations for the years
ended September 30, 1994 and 1995, respectively. The results of operations for
fiscal 1996 are for the twelve months ended September 30, 1996 for both the
Company and Techware. Techware's financial position as of December 31, 1995
has been combined with the Company's financial position as of September 30,
1995. Accordingly, Techware's unaudited results of operations for the three
months ended December 31, 1995 (Note 2) are included in the consolidated
statement of operations for both the year ended September 30, 1995 and 1996.
Therefore, an amount equal to Techware's net income for the three months ended
December 31, 1995 was eliminated from consolidated retained earnings for the
year ended September 30, 1996.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from these estimates.
REVENUE RECOGNITION
Revenue from product sales is recorded upon shipment to the customer
provided that no significant obligations remain and collection of the related
receivable is probable. When insignificant obligations remain after shipment
of the product, the Company accrues the estimated costs of such obligations
upon shipment. A provision for product warranty costs is recorded at the time
of sale.
CASH AND CASH EQUIVALENTS
The Company invests its excess cash in repurchase agreements with major
banks and U.S. government securities that are subject to minimal credit and
market risk. The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents. At
September 30, 1995 and 1996, cash and cash equivalents include $15,100,000 and
$1,758,000, respectively, of securities which are classified as held to
maturity and for which cost approximates fair value.
F-7
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
INVENTORIES
Inventories are stated at the lower of cost or market, cost being determined
using the first-in, first-out method. The Company provides inventory reserves
for excess, obsolete, or damaged inventory based on changes in customer
demand, technology, and other economic factors. While the Company often uses
sole source suppliers for certain key components and common assemblies to
achieve quality control and the benefits of economies of scale, the Company
believes that these parts and materials are readily available from several
supply sources.
FIXED ASSETS
Fixed assets are recorded at cost and depreciated over their estimated
useful lives using the straight-line method. Equipment held under capital
leases is recorded at the lower of the fair market value of the equipment or
the present value of the minimum lease payments at the inception of the
leases. Leasehold improvements and equipment held under capital leases are
amortized over the shorter of their estimated useful lives or the term of the
respective leases. Repair and maintenance costs are expensed as incurred.
PATENTS
The Company capitalizes the direct costs associated with obtaining patents.
Capitalized patent costs are amortized using the straight-line method over six
years, the estimated economic life of the patents.
RESEARCH AND DEVELOPMENT AND SOFTWARE DEVELOPMENT COSTS
Costs incurred in the research and development of the Company's products are
expensed as incurred, except for certain software development costs. Software
development costs are expensed prior to establishing technological feasibility
and capitalized thereafter until the related product is available for general
release to customers. Capitalized software development costs are amortized to
cost of sales on a product-by-product basis over the estimated lives of the
related products.
STOCK COMPENSATION
The Company's stock compensation plans are accounted for in accordance with
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees". In October 1995, the Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-based Compensation" ("SFAS123"), which establishes a
fair-value based method of accounting for stock-based compensation plans. The
new standard allows companies to continue to apply the intrinsic value method
based on APB No. 25 provided certain pro forma disclosures are made as if the
fair-value-based method had been applied. The Company will be required to
implement SFAS123 in fiscal 1997 and intends to adopt this standard through
the pro forma disclosure method.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes". Under
this method, deferred income tax assets and liabilities are recognized for the
expected future tax consequences, utilizing current tax rates, of temporary
differences between the financial statement carrying amounts and the tax bases
of assets and liabilities. Deferred income tax expense represents the change
in the net deferred tax asset and liability balances.
FOREIGN CURRENCY
The functional currency of the Company's international subsidiaries is the
local currency. Accordingly, foreign currency financial statements of the
Company's international subsidiaries are translated into U.S. dollars using
exchange rates in effect at period-end for assets and liabilities and at
average rates during the period for results of operations. The resulting
foreign currency translation adjustments are reflected as a separate component
of consolidated stockholders' equity.
F-8
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NET INCOME (LOSS) PER SHARE
Net income (loss) per share is determined based on the weighted average
number of common shares and common equivalent shares, if dilutive, assumed
outstanding during the applicable period. Pursuant to Securities and Exchange
Commission Staff Accounting Bulletin No. 83, certain common and common
equivalent shares issued by the Company during the twelve month period prior
to the initial filing of the registration statement relating to the Company's
initial public offering have been included in the calculation of weighted
average shares, using the treasury stock method and an estimated initial
public offering price of $9.00 per share, as if these shares were outstanding
for all periods prior to the initial public offering.
SUPPLEMENTAL NET INCOME (LOSS) PER SHARE (UNAUDITED)
Supplemental net income (loss) per share, which gives effect to the
Company's use of its proceeds resulting from its public offering of common
stock was $(0.14) per share for the nine months ended June 30, 1997.
Supplemental net income (loss) per share for the year ended September 30, 1996
was not significantly different from net income (loss) per share as reported.
The Company intends to repay its outstanding borrowings under the line of
credit agreements (Note 5). Supplemental net income (loss) per share was
determined by adding back the interest expense on the aforementioned
borrowings (net of tax effects) to net income (loss) for the year ended
September 30, 1996 and the nine months ended June 30, 1997, and dividing this
total by the supplemental weighted shares outstanding which include the number
of shares necessary to be sold to retire such borrowings (assuming net public
offering proceeds of $35.79 per share), plus the weighted average common and
common equivalent shares for the respective periods, as applicable.
RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
In February 1997, the FASB issued Statement of Financial Accounting
Standards No. 128, "Earnings per Share" (SFAS128), which establishes standards
for computing and presenting earnings per share. The new standard replaces the
presentation of primary earnings per share prescribed by Accounting Principles
Board Opinion No. 15, "Earnings per Share" (APB15) with a presentation of
basic earnings per share and also requires dual presentation of basic and
diluted earnings per share on the face of the statement of operations for all
entities with complex capital structures. Basic earnings per share excludes
dilution and is computed by dividing income available to common stockholders
by the weighted-average number of common shares outstanding for the period.
Diluted earnings per share is computed similarly to fully diluted earnings per
share pursuant to APB15. The Company will be required to implement SFAS128 in
the first quarter of fiscal 1998 and to restate all prior periods. If the
Company had been required to implement the guidance in SFAS128 during the nine
months ended June 30, 1997, the following earnings per share amounts would
have been reported.
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
SEPTEMBER 30, JUNE 30,
----------------- ------------------
1994 1995 1996 1996 1997
----- ----- ----- -------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net income (loss) per common share:
Basic................................. $0.36 $0.82 $1.13 $ 0.85 $ (0.16)
===== ===== ===== ======== =========
Diluted............................... $0.32 $0.73 $1.04 $ 0.77 $ (0.16)
===== ===== ===== ======== =========
Weighted average number of common
shares................................. 4,474 5,997 7,503 7,489 7,614
===== ===== ===== ======== =========
Weighted average number of common and
dilutive potential common shares....... 5,045 6,803 8,199 8,221 7,614
===== ===== ===== ======== =========
</TABLE>
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" (SFAS 130) and Statement of
Financial Accounting Standards No. 131, "Disclosures
F-9
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
about Segments of an Enterprise and Related Information" (SFAS 131). The
Company will implement SFAS 130 and SFAS 131 as required in fiscal 1999, which
require the Company to report and display certain information related to
comprehensive income and operating segments, respectively. Adoption of SFAS
130 and SFAS 131 will not impact the Company's financial position or results
of operations.
2. ACQUISITION
In February 1996, the Company issued 462,189 shares of common stock in
exchange for all the outstanding shares of Techware pursuant to a Combination
Agreement dated as of February 28, 1996. The Techware acquisition has been
accounted for as a pooling of interests. In connection with the Techware
acquisition, the Company incurred expenses of $230,000, consisting primarily
of transaction costs to effect the acquisition, in the quarter ended March 31,
1996.
Adjustments recorded to conform the accounting policies of the companies
were not material to the consolidated financial statements. Revenues and net
income for each of the previously separate companies for the periods prior to
the Techware acquisition are as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED
SEPTEMBER 30, DECEMBER 31,
--------------- --------------
1994 1995 1994 1995
------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Brooks Automation.............................. $24,030 $45,691 $8,414 $16,754
Techware....................................... 2,621 5,267 1,185 1,810
------- ------- ------ -------
$26,651 $50,958 $9,599 $18,564
======= ======= ====== =======
Net income:
Brooks Automation.............................. $ 1,473 $ 4,578 $ 678 $ 1,697
Techware....................................... 143 367 233 147
------- ------- ------ -------
$ 1,616 $ 4,945 $ 911 $ 1,844
======= ======= ====== =======
</TABLE>
3. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------- JUNE 30,
1995 1996 1997
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials and purchased parts................... $ 8,902 $12,547 $14,229
Work-in-process..................................... 3,317 2,899 5,721
Finished goods...................................... 639 2,357 1,078
------- ------- -------
$12,858 $17,803 $21,028
======= ======= =======
</TABLE>
4. FIXED ASSETS
Fixed assets consist of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30,
ESTIMATED USEFUL ---------------- JUNE 30,
LIFE IN YEARS 1995 1996 1997
---------------- ------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Computer equipment and soft-
ware.......................... 3-5 $ 3,296 $ 6,221 $ 8,088
Demonstration equipment........ 5-7 2,283 5,521 8,154
Machinery and equipment........ 5-7 1,112 3,093 3,570
Furniture and fixtures......... 3-10 1,907 3,077 3,395
Leasehold improvements......... 7 3,522 4,133 4,697
------- ------- -------
12,120 22,045 27,904
Less--Accumulated depreciation
and amortization.............. (2,773) (5,347) (8,381)
------- ------- -------
$ 9,347 $16,698 $19,523
======= ======= =======
</TABLE>
F-10
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Fixed assets include $749,000 and $1,379,000 of machinery and equipment,
computer equipment and purchased software held under capital leases at
September 30, 1995 and 1996, respectively. Accumulated amortization related to
fixed assets held under capital leases was $383,000 and $626,000 at September
30, 1995 and 1996, respectively. Amortization of fixed assets under capital
leases was $113,000, $124,000 and $243,000 in fiscal 1994, 1995 and 1996,
respectively.
5. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS
Long-term debt consists of the following (in thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30,
------------- JUNE 30,
1995 1996 1997
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Outstanding borrowings under bank line of credit
agreements......................................... $1,272 $1,019 $10,450
Subordinated note payable in monthly installments of
$5 plus interest at prime plus 2.75% (11.5% and
11.0% at September 30, 1995 and 1996).............. 311 246 197
Capital lease obligations at rates of 5% to 21%, se-
cured by certain fixed assets; expiring at various
dates through January 1999......................... 470 755 489
------ ------ -------
2,053 2,020 11,136
Less--Current portion............................... 1,522 1,431 10,850
------ ------ -------
$ 531 $ 589 $ 286
====== ====== =======
</TABLE>
The aggregate maturities of long-term debt and capital lease obligations are
as follows as of September 30, 1996 (in thousands):
<TABLE>
<CAPTION>
FISCAL
------
<S> <C>
1997............................................................... $1,431
1998............................................................... 398
1999............................................................... 137
2000............................................................... 54
------
$2,020
======
</TABLE>
The Company has a $15.0 million unsecured revolving credit facility and a
$3.0 million unsecured foreign currency line of credit, both of which expire
in December 1997. Subsequent to September 30, 1996, the Company increased the
revolving credit facility to $22.0 million (unaudited), and the unsecured
foreign currency line of credit to $6.0 million (unaudited). In addition, both
facilities were extended to an expiration date of December 31, 1998
(unaudited). Under the revolving credit facility, advances bear interest, at
the option of the Company, at the prime rate or the LIBOR rate plus 2%. There
were no borrowings outstanding under the revolving credit facility at
September 30, 1996. At September 30, 1996 the Company had $1,019,000
outstanding ($725,000 denominated in Japanese yen and $294,000 denominated in
Canadian dollars) under the foreign currency line of credit. Under the foreign
currency line of credit, advances bear interest at the LIBOR rate plus 2%
(2.56% and 6.06%, respectively, at September 30, 1996). The terms of the Loan
Agreement require the Company to comply with various covenants, including the
maintenance of specified financial ratios and a minimum tangible capital base,
as defined, and limit the Company's annual level of capital expenditures.
The Company has a $450,000 term note agreement with a third party due in
June 2000. The note is secured by the Company's fixed assets, with a
subordinated security interest in substantially all of the other assets of the
Company and is personally guaranteed by the president of the Company. The note
agreement contains various restrictive covenants.
F-11
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
At September 30, 1996, the Company was in compliance with the terms of these
credit agreements or had obtained the appropriate waivers.
6. INCOME TAXES
The components of the income tax provision are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------------
1994 1995 1996
---- ------ ------
<S> <C> <C> <C>
Current:
Federal............................................ $615 $1,719 $3,695
State.............................................. 115 241 625
Foreign............................................ 4 174 600
---- ------ ------
734 2,134 4,920
---- ------ ------
Deferred:
Federal............................................ 36 67 (42)
State.............................................. (46) 48 (402)
---- ------ ------
(10) 115 (444)
---- ------ ------
$724 $2,249 $4,476
==== ====== ======
</TABLE>
The components of income before income taxes are as follows (in thousands):
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
---------------------
1994 1995 1996
------ ------ -------
<S> <C> <C> <C>
Domestic............................................ $2,193 $6,651 $11,580
Foreign............................................. 147 543 1,393
------ ------ -------
$2,340 $7,194 $12,973
====== ====== =======
</TABLE>
The significant components of the net deferred tax asset are as follows (in
thousands):
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1994 1995 1996
----- ----- ------
<S> <C> <C> <C>
Deferred tax assets:
Reserves not currently deductible....................... $ 431 $ 382 $ 819
Tax credit carryforwards................................ -- -- 411
Other................................................... 44 12 61
----- ----- ------
Gross deferred tax assets............................. 475 394 1,291
----- ----- ------
Deferred tax liabilities:
Depreciation and amortization........................... (188) (266) (676)
Other................................................... (60) (16) (60)
----- ----- ------
Gross deferred tax liabilities........................ (248) (282) (736)
----- ----- ------
$ 227 $ 112 $ 555
===== ===== ======
</TABLE>
The net current deferred tax asset and net long-term deferred tax liability
balances are included in prepaid expenses and other current assets and long-
term debt, capital lease obligations and other liabilities, respectively.
F-12
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The differences between the income tax provision and income taxes computed
using the applicable U.S. statutory federal tax rate are as follows (in
thousands):
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
---------------------------
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Taxes computed at federal statutory rate........... $ 819 $ 2,518 $ 4,540
State income taxes, net of federal benefit......... 45 207 420
Research and development tax credits............... (163) (255) (587)
Foreign sales corporation tax benefit.............. -- (85) (325)
Foreign income taxed at different rates............ -- (20) 161
Non-deductible transaction expenses................ -- -- 110
Other.............................................. 23 (116) 157
------- -------- --------
$ 724 $ 2,249 $ 4,476
======= ======== ========
</TABLE>
The Company does not provide for U.S. income taxes applicable to
undistributed earnings of its foreign subsidiaries since these earnings are
indefinitely reinvested.
7. STOCKHOLDERS' EQUITY
In February 1995, the Company issued 2,000,000 shares of common stock in an
initial public offering, at a purchase price of $8.00 per share. Proceeds to
the Company, net of offering costs, were $13.6 million. In July 1995, the
Company completed a secondary offering of 1,000,000 shares of common stock.
Proceeds to the Company, net of offering costs, were $16.6 million.
8. STOCK PLANS
1992 COMBINATION STOCK OPTION PLAN
The 1992 Combination Stock Option Plan (the "1992 Plan") allows for the
grant of non-qualified and incentive stock options for the purchase of up to
1,550,000 shares of the Company's common stock, net of cancellations, by
employees, directors or consultants who provide services to the Company. In
fiscal 1996, the Company's stockholders approved an increase in the number of
shares issuable under the 1992 Plan from 1,050,000 shares to 1,550,000 shares.
The Board of Directors of the Company is responsible for administration of the
1992 Plan. Stock options granted under the plan have been granted at exercise
prices, as determined by the Board of Directors, of not less than the fair
value per common share on the date of the grant. Both non-qualified and
incentive stock options are exercisable at various dates as determined by the
Board of Directors. Incentive stock options are exercisable either within 10
years of the date of grant or within 5 years of the date of grant for
employees holding greater than 10% of the Company's voting stock.
1993 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
The 1993 Non-Employee Director Stock Option Plan (the "Director Plan")
allows for the issuance of stock options to directors who provide services to
the Company. The Director Plan allows for the purchase of up to 90,000 shares
of the Company's common stock. Subsequent to September 30, 1996, the
stockholders of the Company approved an increase in the number of shares of
common stock issuable under the Director Plan to 190,000 (unaudited). The
price of the stock options is determined by the Board of Directors and are
priced at not less than the fair market value on the date of grant. Options
vest over a five year period.
F-13
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Stock option activity under all plans is summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE
SHARES PRICE
--------- ------------
<S> <C> <C>
Outstanding, September 30, 1993........................ 302,499 $ .83
Granted.............................................. 703,500 1.67- 2.43
Canceled............................................. (38,499) .83- 2.21
Exercised............................................ (25,200) .83
---------
Outstanding, September 30, 1994........................ 942,300 .83- 2.43
Granted.............................................. 128,500 2.21-20.75
Canceled............................................. (9,000) 2.21
Exercised............................................ (49,700) .83- 2.21
---------
Outstanding, September 30, 1995........................ 1,012,100 .83-20.75
Granted.............................................. 717,500 11.00-21.50
Canceled............................................. (405,375) .83-20.63
Exercised............................................ (101,575) .83- 2.21
---------
Outstanding, September 30, 1996........................ 1,222,650 .83-21.50
=========
Exercisable, September 30, 1996........................ 217,150 $ .83-17.75
=========
Available for grant, September 30, 1996................ 308,400
=========
</TABLE>
On July 25, 1996, the Board of Directors determined that certain stock
options issued to employees of the Company had an exercise price significantly
higher than the fair market value of the Company's common stock. In light of
the Board's conclusions that such options were not providing the desired
incentive, the Board provided employees with the opportunity to exchange
options previously granted to them under the 1992 Plan for new options (the
"Replacement Options") to purchase the same number of shares of common stock
at an exercise price of $11.00 per share, the then fair market value of the
Company's common stock. Employees were given the choice of retaining their
existing options, with the original vesting schedule, or accepting the
Replacement Options, with a vesting schedule commencing on July 25, 1996. The
Company canceled and replaced options to purchase 344,600 shares of common
stock with an average exercise price of $14.36 per share.
DEFERRED COMPENSATION (UNAUDITED)
During July 1997, the Company granted stock options to purchase 30,000
shares of its common stock at an exercise price of $12.75 per share to certain
employees. The Company recorded deferred compensation totaling $349,000,
representing the difference between the fair market value of the common stock
on the date of grant and the exercise price. Deferred compensation related to
these options is being amortized ratably over the option vesting periods of
five years.
1995 EMPLOYEE STOCK PURCHASE PLAN
On February 22, 1996, the stockholders approved the 1995 Employee Stock
Purchase Plan (the "1995 Plan") which enables eligible employees to purchase
shares of the Company's common stock. Under the 1995 Plan, eligible employees
may purchase up to an aggregate of 150,000 shares during six-month offering
periods commencing on January 1 and July 1 of each year at a price per share
of 85% of the lower of the market price per share on the first or last day of
each six-month offering period. Participating employees may elect to have up
to 10% of base pay withheld and applied toward the purchase of such shares.
The rights of participating employees under the 1995 Plan terminate upon
voluntary withdrawal from the plan at any time or upon
F-14
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
termination of employment. As of September 30, 1996, the Company has reserved
128,607 shares of common stock for issuance under the 1995 Plan.
RESTRICTED STOCK PURCHASE PLAN
Prior to its initial public offering, the Company had an informal stock
purchase plan whereby selected key employees and consultants have been granted
the opportunity to purchase common stock. The shares of common stock sold
pursuant to this plan are generally subject to purchase by the Company at the
original purchase price plus a specified interest rate, if the individual
ceases to be employed or associated with the Company after various specified
periods of time. In connection with this plan, the Company issued a total of
423,195 shares of common stock to employees and consultants at per share
prices ranging from $.83 to $2.21. During fiscal 1995 and 1996, the Company
purchased and retired 18,000 and 25,500 shares, respectively, under this plan.
At September 30, 1995 and 1996, the number of shares of common stock
outstanding includes 154,345 shares and 62,295 shares, respectively, subject
to purchase by the Company.
9. BENEFIT PLAN
The Company sponsors a defined contribution plan which meets the
requirements of Section 401(k) of the Internal Revenue Code. All domestic
employees of the Company who meet minimum age and service requirements are
eligible to participate in the plan. The plan allows employees to contribute
1% to 15% of their annual salary subject to statutory limitations. The Company
contributes 50% of amounts contributed by employees up to 3% of their annual
salary. The Company's contribution expense was $25,000, $82,000 and $133,000
in fiscal 1994, 1995 and 1996, respectively.
10. GEOGRAPHIC, SIGNIFICANT CUSTOMERS AND RELATED PARTY INFORMATION
Revenues from customers outside the United States were 16% (7% to Asia and
9% to Europe), 12% (8% to Asia and 4% to Europe) and 20% (15% to Asia and 5%
to Europe) of total revenues for fiscal 1994, 1995 and 1996, respectively.
During fiscal 1994, 1995 and 1996, the Company had revenues from a related
party representing 24%, 21% and 21% of revenues, respectively. An executive of
this customer is a member of the Company's Board of Directors. In April 1994,
this customer purchased 240,000 shares of the Company's common stock from
existing stockholders. In June 1993, the Company issued a warrant to the
customer to purchase 463,974 shares of common stock for total consideration of
$1,245,000. A value of $168,000 was ascribed to this warrant when issued which
has been recorded as additional paid-in capital. The customer partially
exercised this warrant to purchase 300,000 shares for $805,000 upon closing of
the Company's initial public offering of common stock. In June 1995, the
customer exercised this warrant to purchase the remaining 163,974 shares for
$440,000. At September 30, 1996, this customer is no longer a stockholder of
the Company.
During fiscal 1995, the Company had revenues from one customer (not a
related party) representing 13% of revenues.
A financial instrument which potentially exposes the Company to
concentration of credit risk is accounts receivable, as the Company's
customers are concentrated in the semiconductor industry and relatively few
customers account for a significant portion of the Company's revenues. At
September 30, 1995 and 1996, accounts receivable from three customers and two
customers, respectively, accounted for approximately 49% and 36%,
respectively, of accounts receivable. The Company regularly monitors the
creditworthiness of its customers and believes that it has adequately provided
for any exposure to potential credit losses.
F-15
<PAGE>
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
11. SUPPLEMENTAL CASH FLOW INFORMATION
During fiscal 1994, 1995 and 1996, the Company acquired $155,000, $348,000
and $630,000, respectively, of fixed assets under capital leases.
During fiscal 1995, the Company recorded deferred compensation of $264,000
relating to certain common stock issued and common stock options granted
during the twelve month period prior to the initial filing of the registration
statement relating to the Company's initial public offering. During fiscal
1996, the Company recorded compensation expense of $69,000 in connection with
the purchase and retirement of 25,500 shares of restricted common stock (Note
8).
12. COMMITMENTS AND CONTINGENCY
LEASE COMMITMENTS
The Company leases manufacturing and office facilities and certain equipment
under operating and capital leases (Notes 4 and 5) that expire through 2003.
Rent expense under operating leases for fiscal 1994, 1995 and 1996 was
$460,000, $725,000 and $976,000, respectively. Future minimum lease payments
under operating and capital leases with initial or remaining noncancelable
terms of one or more years are as follows as of September 30, 1996 (in
thousands):
<TABLE>
<CAPTION>
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
FISCAL
------
1997....................................................... $1,401 $403
1998....................................................... 1,307 368
1999....................................................... 1,175 46
2000....................................................... 1,140 --
2001....................................................... 1,094 --
Thereafter................................................. 485 --
------ ----
Total minimum lease payments............................... $6,602 817
======
Less--Amount representing interest......................... 62
----
Net present value of minimum lease payments................ $755
====
</TABLE>
CONTINGENCY
There has been substantial litigation regarding patent and other
intellectual property rights in the semiconductor and related industries. The
Company has received notice from a third-party alleging infringements of such
party's patent rights by certain of the Company's products. The Company's
patent counsel is investigating the claim and the Company believes the patents
claimed may be invalid. In the event of litigation with respect to this claim,
the Company is prepared to vigorously defend its position. However, because
patent litigation can be extremely expensive and time consuming, the Company
may seek to obtain a license to one or more of the disputed patents. Based
upon currently available information, the Company would only do so if such
license fees would not be material to the Company's consolidated financial
statements. Currently, the Company does not believe that it is probable that
future events related to this threatened matter will have a material adverse
effect on the Company's business. The Company is currently unable to
reasonably estimate any possible loss related to this matter.
F-16
<PAGE>
BROOKS AUTOMATION THIRD GENERATION
FLAT PANEL DISPLAY SUBSTRATE HANDLING SYSTEMS AND
INTEGRATED CONTROL SOFTWARE
ClusterLink 3
Control Software for
the Hercules 7500 ARTWORK
depicts each of the captioned products.
Hercules 7500
Vacuum
MagnaTran 60
Cluster Direct
Platform for Magnetic
600mm x 720mm Drive
Flat Panel Vacuum VCE 40
Displays Transfer Vacuum
Robot Cassette
Elevator
TCM 20
Vacuum
Thermal
Conditioning
Degas
Module
Flat Panel Display Systems and
Modules
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY THE
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
-----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 5
Price Range of Common Stock.............................................. 11
Dividend Policy.......................................................... 11
Use of Proceeds.......................................................... 12
Capitalization........................................................... 12
Selected Consolidated Financial Data..................................... 13
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 14
Business................................................................. 22
Management............................................................... 35
Principal and Selling Stockholders....................................... 38
Description of Securities................................................ 40
Underwriting............................................................. 43
Legal Matters............................................................ 44
Experts.................................................................. 44
Available Information.................................................... 45
Incorporation of Certain Information by Reference........................ 45
Index to Consolidated Financial Statements............................... F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2,321,000 SHARES
[LOGO]
COMMON STOCK
-----------------
PROSPECTUS
-----------------
MERRILL LYNCH & CO.
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
COWEN & COMPANY
, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee........................................... $ 25,074
NASD Filing Fee................................................ 8,775
Blue Sky Fees.................................................. 10,000*
Nasdaq National Market Listing Fee............................. 17,500
Transfer Agent and Registrar Fees.............................. 2,500*
Accounting Fees and Expenses................................... 50,000*
Legal Fees and Expenses........................................ 175,000*
Printing and Engraving Fees.................................... 60,000*
Miscellaneous.................................................. 26,151
--------
Total.......................................................... $375,000
========
</TABLE>
- --------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Ninth of the Company's Certificate of Incorporation eliminates the
personal liability of directors of the Company or its stockholders for
monetary damages for breach of fiduciary duty to the full extent permitted by
Delaware law. Article VII of the company's Bylaws provides that the company
may indemnify its officers and directors to the full extent permitted by the
Delaware General Corporation Law. Section 145 of the Delaware General
Corporation Law authorizes a corporation to indemnify directors, officers and
employees unless such party has been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation. The Company also maintains directors and officers
liability insurance.
Reference is hereby made to Section 6 of the Underwriting Agreement between
the Company, the Selling Stockholders and the Underwriters, filed as Exhibit
1.01 to this Registration Statement, for a description of indemnification
arrangements between the Company and the Underwriters.
Reference is hereby made to Section 2 of the Selling Stockholder Agreement
among the Company and the Selling Stockholders, filed as Exhibit 99.1 to this
Registration Statement, for a description of indemnification arrangements
among the Company and the Selling Stockholders.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE
------- -----
<C> <S>
1.01 --Form of Underwriting Agreement**
2.01 --Merger Agreement relating to the reincorporation of the Company in
Delaware*
3.01 --Certificate of Incorporation of the Company*
3.02 --Bylaws of the Company*
3.03 --Certificate of Designation of Series A Junior Participating
Preferred Stock**
4.01 --Specimen Certificate for shares of the Company's Common Stock*
4.02 --Description of Capital Stock (contained in the Certificate of
Incorporation of the Company filed as Exhibit 3.01 and in the
Certificate of Designation filed as Exhibit 3.03)*
4.03 --Rights Agreement dated July 23, 1997***
5.01 --Opinion of Brown, Rudnick, Freed & Gesmer**
23.1 --Consent of Brown, Rudnick, Freed & Gesmer (included in Exhibit
5.01)**
23.2 --Consent of Price Waterhouse LLP**
23.3 --Consent of Perman & Green**
24.01 --Power of Attorney (Included on Signature Page of this Registration
Statement)**
99.1 --Selling Stockholder Agreement**
</TABLE>
- --------
* The above exhibits were previously filed as an exhibit of the same number
to the Company's Registration Statement on Form S-1 (Registration No. 33-
87296) and are incorporated herein by reference.
** Filed herewith.
*** Previously filed as an exhibit to the Company's Current Report on Form 8-K
filed on August 7, 1997.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant, 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 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.
The undersigned Registrant hereby further undertakes that:
(1) 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
initial the bona fide offering thereof.
(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
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-2
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL 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 BOSTON, COMMONWEALTH OF MASSACHUSETTS, ON THE 27TH
DAY OF AUGUST 1997.
Brooks Automation, Inc.
/s/ Robert J. Therrien
By: _________________________________
Robert J. Therrien,
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Robert J. Therrien and Stanley D. Piekos, and
each of them, with the power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution
for him or in his name, place and stead, in any and all capacities to sign any
and all amendments or post-effective amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, and in connection with any registration of
additional securities pursuant to Rule 462(b) under the Securities Act of
1933, as amended, to sign any abbreviated registration statements and any and
all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, in each case, 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 or necessary to be done 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 substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Robert J. Therrien Director and August 27, 1997
- ------------------------------------- President
ROBERT J. THERRIEN (Principal
Executive Officer)
/s/ Stanley D. Piekos Chief Financial August 27, 1997
- ------------------------------------- Officer (Principal
STANLEY D. PIEKOS Financial Officer)
/s/ Deborah D. Fox Controller August 27, 1997
- ------------------------------------- (Principal
DEBORAH D. FOX Accounting Officer)
/s/ Norman B. Brooks Director August 27, 1997
- -------------------------------------
NORMAN B. BROOKS
/s/ Roger D. Emerick Director August 27, 1997
- -------------------------------------
ROGER D. EMERICK
/s/ Amin J. Khoury Director August 27, 1997
- -------------------------------------
AMIN J. KHOURY
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER TITLE
------- -----
<C> <S>
1.01 --Form of Underwriting Agreement**
2.01 --Merger Agreement relating to the reincorporation of the Company in
Delaware*
3.01 --Certificate of Incorporation of the Company*
3.02 --Bylaws of the Company*
3.03 --Certificate of Designation of Series A Junior Participating
Preferred Stock**
4.01 --Specimen Certificate for shares of the Company's Common Stock*
4.02 --Description of Capital Stock (contained in the Certificate of
Incorporation of the Company filed as Exhibit 3.01 and in the
Certificate of Designation filed as Exhibit 3.03)*
4.03 --Rights Agreement dated July 23, 1997***
5.01 --Opinion of Brown, Rudnick, Freed & Gesmer**
23.1 --Consent of Brown, Rudnick, Freed & Gesmer (included in Exhibit
5.01)**
23.2 --Consent of Price Waterhouse LLP**
23.3 --Consent of Perman & Green**
24.01 --Power of Attorney (Included on Signature Page of this Registration
Statement)**
99.1 --Selling Stockholder Agreement**
</TABLE>
- --------
* The above exhibits were previously filed as an exhibit of the same number
to the Company's Registration Statement on Form S-1 (Registration No. 33-
87296) and are incorporated herein by reference.
** Filed herewith.
*** Previously filed as an exhibit to the Company's Current Report on Form 8-K
filed on August 7, 1997.
<PAGE>
Exhibit 1.01
BROOKS AUTOMATION, INC.
2,321,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: September ___, 1997
<PAGE>
TABLE OF CONTENTS
SECTION 1. Representations and Warranties..............................3
(a) Representations and Warranties by the Company......................3
(i) Compliance with Registration Requirements.........................3
(ii) Incorporated Documents...........................................4
(iii) Independent Accountants.........................................4
(iv) Financial Statements.............................................4
(v) Internal Accounting Controls......................................4
(vi) No Material Adverse Change in Business...........................5
(vii) Good Standing of the Company....................................5
(viii) Good Standing of Subsidiaries..................................5
(ix) Capitalization...................................................5
(x) Authorization of Agreement........................................6
(xi) Authorization and Description of Securities......................6
(xii) Absence of Defaults and Conflicts...............................6
(xiii) Absence of Labor Dispute.......................................7
(xiv) Absence of Proceedings..........................................7
(xv) Accuracy of Exhibits.............................................7
(xvi) Possession of Intellectual Property.............................7
(xvii) Absence of Further Requirements................................8
(xviii) Possession of Licenses and Permits............................8
(xix) Title to Property...............................................8
(xx) Compliance with Cuba Act.........................................9
(xxi) Investment Company Act..........................................9
(xxii) Environmental Laws.............................................9
(xxiii) Accuracy of Statements........................................9
(xxiv) Stabilization..................................................9
(xxv) Listing of Shares..............................................10
(xxvi) Insurance.....................................................10
(b) Representations and Warranties by the Selling Shareholders........10
(i) Accurate Disclosure..............................................10
(ii) Authorization of Agreements.....................................10
(iii) Good and Marketable Title......................................11
(iv) Due Execution of Power of Attorney and Custody Agreement........11
(v) Absence of Manipulation..........................................11
(vi) Absence of Further Requirements.................................11
(vii) Restriction on Sale of Securities..............................12
(viii) Certificates Suitable for Transfer............................12
(ix) No Association with NASD........................................12
i
<PAGE>
(c) Officer's Certificates............................................12
SECTION 2 Sale and Delivery to Underwriters; Closing..................12
(a) Initial Securities................................................12
(b) Option Securities.................................................13
(c) Payment...........................................................13
(d) Denominations; Registration.......................................14
SECTION 3. Covenants of the Company...................................14
(a) Compliance with Securities Regulations and Commission Requests....14
(b) Filing of Amendments..............................................15
(c) Delivery of Registration Statements...............................15
(d) Delivery of Prospectuses..........................................15
(e) Continued Compliance with Securities Laws.........................15
(f) Blue Sky Qualifications...........................................16
(g) Rule 158..........................................................16
(h) Use of Proceeds...................................................16
(i) Listing...........................................................16
(j) Restriction on Sale of Securities.................................16
(k) Reporting Requirements............................................17
SECTION 4 Payment of Expenses.........................................17
(a) Expenses..........................................................17
(b) Expenses of the Selling Shareholders..............................17
(c) Termination of Agreement..........................................18
(d) Allocation of Expenses............................................18
SECTION 5 Conditions of Underwriters' Obligations.....................18
(a) Effectiveness of Registration Statement...........................18
(b) Opinion of Counsel for Company and the Subsidiaries...............18
(c) Opinion of Counsel for the Selling Shareholders...................19
(d) Opinion of Counsel for Underwriters...............................20
(e) Officers' Certificate.............................................20
(f) Certificate of Selling Shareholders...............................20
(g) Accountant's Comfort Letter.......................................21
(h) Bring-down Comfort Letter.........................................21
(i) Approval of Listing...............................................21
(j) No Objection......................................................21
(k) Lock-up Agreements................................................21
(l) Conditions to Purchase of Option Securities.......................21
(i) Officers' Certificate............................................21
(ii) Certificate of Selling Shareholders.............................22
(iii) Opinion of Counsel for Company.................................22
(iv) Opinion of Counsel for Therrien.................................22
ii
<PAGE>
(v) Opinion of Counsel for Underwriters..............................22
(vi) Bring-down Comfort Letter.......................................22
(m) Additional Documents..............................................22
(n) Termination of Agreement..........................................22
SECTION 6. Indemnification............................................23
(a) Indemnification of Underwriters...................................23
(b) Indemnification of Company, Directors and Officers and
Selling Shareholders.............................................24
(c) Actions against Parties; Notification.............................24
(d) Settlement without Consent if Failure to Reimburse................25
(e) Other Agreements with Respect to Indemnification..................26
SECTION 7. Contribution...............................................26
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery....................................................27
SECTION 9. Termination of Agreement...................................27
(a) Termination; General..............................................27
(b) Liabilities.......................................................28
SECTION 10. Default by One or More of the Underwriters...............28
SECTION 11. Default by one or more of the Selling Shareholders
or the Company......................................................29
SECTION 12. Notices..................................................29
SECTION 13. Parties..................................................30
SECTION 14. GOVERNING LAW AND TIME...................................30
SECTION 15. Effect of Headings.......................................30
SCHEDULES
Schedule A - List of Underwriters..........................Sch A-1
Schedule B - List of Selling Shareholders..................Sch B-1
Schedule C - Pricing Information...........................Sch C-1
Schedule D - List of Subsidiaries..........................Sch D-1
Schedule E - List of Persons subject to Lock-up............Sch E-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel
Exhibit A-1 - Opinion of Local Counsel in Barbados
Exhibit A-2 - Opinion Of Local Counsel in Canada
Exhibit A-3 - Opinion of Local Counsel in Japan
Exhibit A-4 - Opinion of Local Counsel in the United Kingdom
Exhibit A-5 - Opinion of Local Counsel in Korea
Exhibit B - Form of Opinion for the Selling Shareholders
Exhibit C - Form of Lock-up Letter
iii
<PAGE>
BROOKS AUTOMATION, INC.
2,321,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
------------------
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
PaineWebber Incorporated
Needham & Company, Inc.
Cowen & Company
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Brooks Automation, Inc. (the "Company"), and the persons listed in Schedule
B hereto (the "Selling Shareholders"), confirm their respective agreements with
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch, PaineWebber Incorporated, Needham & Company, Inc. and Cowen & Company are
acting as representatives (in such capacity, the "Representatives"), with
respect to (i) the sale by the Company and the Selling Shareholders, acting
severally and not jointly, and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $.01 per share, of the Company ("Common Stock") set forth in Schedules
A and B hereto and (ii) the grant by the Company and the Selling Shareholders to
the Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of 348,150 additional shares of
Common Stock to cover over-allotments, if any. The aforesaid 2,321,000 shares of
Common Stock (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the 348,150 shares of Common Stock subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities".
1
<PAGE>
The Company and the Selling Shareholders understand that the Underwriters
propose to make a public offering of the Securities as soon as the
Representatives deem advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-___) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b).
The information included in such prospectus or in such Term Sheet, as the case
may be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to
the preliminary prospectus dated September ___, 1997 together with the Term
Sheet and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or
2
<PAGE>
supplements to the Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated by
reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with each Underwriter, as
follows:
(i) Compliance with Registration Requirements. The Company meets
-----------------------------------------
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or Prospectus
made in reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through Merrill Lynch expressly for
use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the
3
<PAGE>
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
----------------------
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was issued and at
the Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules, if any, included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in
--------------------
the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statement
of operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved, except as otherwise disclosed in the Prospectus. No other
financial statements or schedules of the Company are required by the 1933
Act or the 1933 Act Regulations to be included in the Registration
Statement or the Prospectus. The supporting schedules, if any, included in
the Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus present fairly
the information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the Registration
Statement.
(v) Internal Accounting Controls. The Company maintains a system
----------------------------
of internal accountings control sufficient to provide reasonable assurance
that (i) material transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
4
<PAGE>
(vi) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered as
one enterprise, and (C) there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vii) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under this Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(viii) Good Standing of Subsidiaries. Each "significant subsidiary"
-----------------------------
of the Company (as such term is defined in Rule 1-02 of Regulation S-X) and
each subsidiary listed on Schedule D hereto (each a "Subsidiary" and,
collectively, the "Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified as a foreign corporation
to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement, all of
the issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued, is fully paid and non-assessable and is
owned by the Company, directly or through subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; none of the outstanding shares of capital stock of any Subsidiary
was issued in violation of the preemptive or similar rights of any
securityholder of such Subsidiary. The only subsidiaries of the Company are
the subsidiaries listed on Schedule D hereto.
(ix) Capitalization. The authorized, issued and outstanding
--------------
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). The shares of issued and outstanding
capital stock, including the Securities to be purchased by the Underwriters
from the Selling Shareholders, have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares of
capital stock, including the Securities to be purchased
5
<PAGE>
by the Underwriters from the Selling Shareholders, was issued in violation
of the preemptive or other similar rights of any securityholder of the
Company. Except for the stock of the Subsidiaries and the Company's equity
interest in Alliance Sales (Europe) Ltd., the Company does not own, and at
the Closing Time will not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have
any equity interest in any firm, partnership, joint venture, association or
other entity. Complete and correct copies of the certificate of
incorporation and of the by-laws of the Company and each of its
subsidiaries and all amendments thereto have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Time or, if later, the Date of Delivery.
(x) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(xi) Authorization and Description of Securities. The Securities
-------------------------------------------
to be purchased by the Underwriters from the Company have been duly
authorized for issuance and sale to the Underwriters pursuant to this
Agreement and, when issued and delivered by the Company pursuant to this
Agreement against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable; the Common Stock conforms
to all statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same; no holder of the Securities will be subject to personal liability
by reason of being such a holder; and the issuance of the Securities is not
subject to the preemptive or other similar rights of any securityholder of
the Company.
(xii) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Company with its obligations
hereunder have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to, the Agreements and
Instruments (except for
6
<PAGE>
such conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any subsidiary or any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their assets, properties or operations
(except for such violations that would not result in a Material Adverse
Effect). As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xiii) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration Statement
(other than as disclosed therein), or which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets of the Company
and its subsidiaries considered as one enterprise or the consummation of
the transactions contemplated in this Agreement or the performance by the
Company of its obligations hereunder; the aggregate of all pending legal or
governmental proceedings to which the Company or any subsidiary is a party
or of which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xvi) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them and as proposed to be conducted by them, and, except
as disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or
7
<PAGE>
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xviii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, except where the
failure to possess such Governmental Licenses would not, singly or in the
aggregate, have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except when the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither
the Company nor any of its subsidiaries has received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of the property held by the Company and its
subsidiaries considered as one enterprise and do not interfere with the use
made and proposed to be made of such property by the Company or any of its
subsidiaries considered as one enterprise; and all of the leases and
subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has any notice
of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
8
<PAGE>
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xx) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xxi) Investment Company Act. The Company is not, and upon the
----------------------
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Prospectus
will not be, an "investment company" or an entity "controlled" by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the Registration
------------------
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or, to the knowledge of the Company, threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to Hazardous Materials or any
Environmental Laws.
(xxiii) Accuracy of Statements. No statement, representation,
----------------------
warranty or covenant made by the Company in this Agreement or made in any
certificate or document required by this Agreement to be delivered to the
Representatives was or will be, when made, inaccurate, untrue or incorrect
in any material respect.
(xxiv) Stabilization. Neither the Company nor any of its directors,
-------------
officers or controlling persons has taken, directly or indirectly, any
action intended, or which might reasonably be expected, to cause or result,
under the 1933 Act or otherwise, in, or which has
9
<PAGE>
constituted, stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(xxv) Listing of Shares. Prior to the Closing Time, the Shares will
-----------------
be duly authorized for listing on the Nasdaq National Market.
(xxvi) Insurance. The Company and its subsidiaries are insured by
---------
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are customary in the businesses in which they
are engaged or propose to engage after giving effect to the transactions
described in the Prospectus; and neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue their
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings, business or operations
of the Company and its subsidiaries considered as a whole, except as
described in or contemplated by the Prospectus.
(b) Representations and Warranties by the Selling Shareholders. Each
Selling Shareholder severally represents and warrants to each Underwriter as of
the date hereof, as of the Closing Time, and, if the Selling Shareholder is
selling Option Securities on a Date of Delivery, as of each such Date of
Delivery, and agrees with each Underwriter, as follows:
(i) Accurate Disclosure. To the best knowledge of such Selling
-------------------
Shareholder, the representations and warranties of the Company contained in
Section 1(a) hereof are true and correct; such Selling Shareholder has
reviewed and is familiar with the Registration Statement and the Prospectus
and neither the Prospectus nor any amendments or supplements thereto
includes any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; such
Selling Shareholder is not prompted to sell the Securities to be sold by
such Selling Shareholder hereunder by any information concerning the
Company or any subsidiary of the Company which is not set forth in the
Prospectus.
(ii) Authorization of Agreements. Each Selling Shareholder has the
---------------------------
full right, power and authority to enter into this Agreement and a Power of
Attorney and Custody Agreement (the "Power of Attorney and Custody
Agreement") and to sell, transfer and deliver the Securities to be sold by
such Selling Shareholder hereunder. The execution and delivery of this
Agreement and the Power of Attorney and Custody Agreement and the sale and
delivery of the Securities to be sold by such Selling Shareholder and the
consummation of the transactions contemplated herein and compliance by such
Selling Shareholder with its obligations hereunder have been duly
authorized by such Selling Shareholder and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict
with or constitute a breach of, or default under, or result in the creation
or imposition of any tax, lien, charge or encumbrance upon the Securities
to be sold by such Selling Shareholder or any property or assets of such
Selling Shareholder pursuant to any
10
<PAGE>
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other agreement or instrument to which such Selling
Shareholder is a party or by which such Selling Shareholder may be bound,
or to which any of the property or assets of such Selling Shareholder is
subject, nor will such action result in any violation of the provisions of
the charter or by-laws or other organizational instrument of such Selling
Shareholder, if applicable, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
such Selling Shareholder or any of its properties.
(iii) Good and Marketable Title. Such Selling Shareholder has and
-------------------------
will at the Closing Time and, if any Option Securities are purchased, on
the Date of Delivery have good and marketable title to the Securities to be
sold by such Selling Shareholder hereunder, free and clear of any security
interest, mortgage, pledge, lien, charge, claim, equity or encumbrance of
any kind, other than pursuant to this Agreement; and upon delivery of such
Securities and payment of the purchase price therefor as herein
contemplated, assuming each such Underwriter has no notice of any adverse
claim, each of the Underwriters will receive good and marketable title to
the Securities purchased by it from such Selling Shareholder, free and
clear of any security interest, mortgage, pledge, lien, charge, claim,
equity or encumbrance of any kind.
(iv) Due Execution of Power of Attorney and Custody Agreement.
--------------------------------------------------------
Such Selling Shareholder has duly executed and delivered, in the form
heretofore furnished to the Representatives, the Power of Attorney and
Custody Agreement with Robert J. Therrien and Stanley D. Piekos, or either
of them, as attorneys-in-fact (the "Attorneys-in-Fact") and the Company, as
custodian (the "Custodian"); the Custodian is authorized to deliver the
Securities to be sold by such Selling Shareholder hereunder and to accept
payment therefor; and each Attorney-in-Fact is authorized to execute and
deliver this Agreement and the certificate referred to in Section 5(f) or
that may be required pursuant to Sections 5(l) and 5(m) on behalf of such
Selling Shareholder, to sell, assign and transfer to the Underwriters the
Securities to be sold by such Selling Shareholder hereunder, to determine
the purchase price to be paid by the Underwriters to such Selling
Shareholder, as provided in Section 2(a) hereof, to authorize the delivery
of the Securities to be sold by such Selling Shareholder hereunder, to
accept payment therefor, and otherwise to act on behalf of such Selling
Shareholder in connection with this Agreement.
(v) Absence of Manipulation. Such Selling Shareholder has not
-----------------------
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be expected
to cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities.
(vi) Absence of Further Requirements. No filing with, or consent,
-------------------------------
approval, authorization, order, registration, qualification or decree of,
any court or governmental authority or agency, domestic or foreign, is
necessary or required for the performance by each Selling Shareholder of
its obligations hereunder or in the Power of Attorney and Custody
Agreement, or in connection with the sale and delivery of the Securities
hereunder
11
<PAGE>
or the consummation of the transactions contemplated by this Agreement,
except such as may have previously been made or obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(vii) Restriction on Sale of Securities. During a period of 90 days
---------------------------------
from the date of the Prospectus, such Selling Shareholder will not, without
the prior written consent of Merrill Lynch, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any share of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap
or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Common Stock, whether any such swap or transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(i) the Securities to be sold hereunder or (ii) Securitieswhich are
transferred pursuant to a bona fide gift whereby the donee agrees in
---- ----
writing as a condition precedent to such gift to be bound by the terms of
this Section 1(b)(vii).
(viii) Certificates Suitable for Transfer. Certificates for all of
----------------------------------
the Securities to be sold by such Selling Shareholder pursuant to this
Agreement, in suitable form for transfer by delivery or accompanied by duly
executed instruments of transfer or assignment in blank with signatures
guaranteed, have been placed in custody with the Custodian with irrevocable
conditional instructions to deliver such Securities to the Underwriters
pursuant to this Agreement.
(ix) No Association with NASD. Neither such Selling Shareholder
------------------------
nor any of his/her/its affiliates directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, or has any other association with (within the meaning of
Article I, Section 1(m) of the By-laws of the National Association of
Securities Dealers, Inc. (the "NASD")), any member firm of the NASD.
(c) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby; and any
certificate signed by or on behalf of the Selling Shareholders as such and
delivered to the Representatives or to counsel for the Underwriters pursuant to
the terms of this Agreement shall be deemed a representation and warranty by
such Selling Shareholder to each Underwriter as to the matters covered thereby.
SECTION 2 Sale and Delivery to Underwriters; Closing.
------------------------------------------
(a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company and each Selling Shareholder, severally and not jointly, agrees to sell
to each Underwriter, severally and not
12
<PAGE>
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company and each Selling Shareholder, at the price per share set forth
in Schedule C, that proportion of the number of Initial Securities set forth in
Schedule B opposite the name of the Company or such Selling Shareholder, as the
case may be, which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter, plus any additional number of Initial
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof, bears to the total number of Initial
Securities, subject, in each case, to such adjustments among the Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company and Robert J. Therrien ("Therrien"), acting severally and
not jointly, hereby grant an option to the Underwriters, severally and not
jointly, to purchase up to an additional 348,150 shares of Common Stock, as set
forth in Schedule B, at the price per share set forth in Schedule C, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
The option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the
Company and Therrien setting forth the number of Option Securities as to which
the several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representatives, but
shall not be later than seven full business days after the exercise of said
option, nor in any event prior to the Closing Time, as hereinafter defined. If
the option is exercised as to all or any portion of the Option Securities, each
of the Underwriters, acting severally and not jointly, will purchase that
proportion of the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite the name of
such Underwriter bears to the total number of Initial Securities, subject in
each case to such adjustments as the Representatives in their discretion shall
make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Testa,
Hurwitz & Thibeault, LLP, High Street Tower, 125 High Street, Boston,
Massachusetts 02110, or at such other place as shall be agreed upon by the
Representatives and the Company and the Selling ShareholderS, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company and the Selling Shareholders (such time and date
of payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed
13
<PAGE>
upon by the Representatives and the Company and Therrien, on each Date of
Delivery as specified in the notice from the Representatives to the Company and
the Selling Shareholders.
Payment shall be made to the Company and the Selling Shareholders by wire
transfer of immediately available funds to bank accounts designated by the
Custodian pursuant to each Selling Shareholder's Power of Attorney and Custody
Agreement, as the case may be, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be
purchased by them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Initial Securities and the Option
Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least two full
business days before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with each
------------------------
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when
any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for filing
by the Commission and, in the event that it was not, it will promptly file
such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain
the lifting thereof at the earliest possible moment.
14
<PAGE>
(b) Filing of Amendments. The Company will give the
Representatives notice of its intention to file or prepare any amendment to
the Registration Statement (including any filing under Rule 462(b)), any
Term Sheet or any amendment, supplement or revision to either the
prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement
as originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus
and any amendments or supplements thereto furnished to the Underwriters
will be identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus.
If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or for the Company, to
amend the Registration Statement or amend or supplement the Prospectus in
order that the Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances
existing at the time it is delivered to a purchaser, or if it shall be
15
<PAGE>
necessary, in the reasonable opinion of such counsel, at any such time to
amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the
Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best
efforts, in cooperation with the Underwriters, to qualify the Securities
for offering and sale under the applicable securities laws of such states
and other jurisdictions (domestic or foreign) as the Representatives may
designate with the approval of the Company and to maintain such
qualifications in effect for a period of not less than one year from the
later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities have
been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification
in effect for a period of not less than one year from the effective date of
the Registration Statement and any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant
to the 1934 Act as are necessary in order to make generally available to
its securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Securities in the manner specified in
the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect and
maintain the quotation of the Securities on the Nasdaq National Market and
will file with the Nasdaq National Market all documents and notices
required by the Nasdaq National Market of companies that have securities
that are traded in the over-the-counter market and quotations for which are
reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the
prior written consent of Merrill Lynch, (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of any share of Common Stock
or any securities convertible into or exercisable or exchangeable for
Common Stock or file
16
<PAGE>
any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Stock, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled
by delivery of Common Stock or such other securities, in cash or otherwise.
The foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon the
exercise of an option or the conversion of a security outstanding on the
date hereof and referred to in the Prospectus, (C) any shares of Common
Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company referred to in the
Prospectus or (D) any shares of Common Stock issued pursuant to any non-
employee director stock plan.
(k) Reporting Requirements. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act
and the 1934 Act Regulations.
SECTION 4 Payment of Expenses. (a) Expenses. The Company and the
-------------------
Selling Shareholders will pay or cause to be paid all expenses incident to the
performance of their obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the printing and delivery to the Underwriters of this Agreement,
any Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable upon the sale, issuance or delivery of the
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of any
transfer agent or registrar for the Securities and (ix) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the terms of the sale of the
Securities and (x) the fees and expenses incurred in connection with the
inclusion of the Securities in the Nasdaq National Market.
(b) Expenses of the Selling Shareholders. The Selling Shareholders,
jointly and severally, will pay all expenses incident to the performance of
their respective obligations under, and the consummation of the transactions
contemplated by this Agreement, including (i) any stamp duties, capital duties
and stock transfer taxes, if any, payable upon the sale of the
17
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Securities to the Underwriters, and their transfer between the Underwriters
pursuant to an agreement between such Underwriters, and (ii) the fees and
disbursements of their counsel and accountants.
(c) Termination of Agreement. If this Agreement is terminated prior to
the Closing Time by the Representatives in accordance with the provisions of
Section 5, Section 9(a)(i) or Section 11 hereof, the Company and the Selling
Shareholders shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters; provided however, that if this Agreement is terminated after the
-------- -------
Closing Time in accordance with the provisions of Section 5, Section 9(a)(i) or
Section 11 hereof, the Company and the Selling Shareholders shall reimburse the
Underwriters only for such out-of-pocket expenses incurred after the Closing
Time.
(d) Allocation of Expenses. The provisions of this Section shall not
affect any agreement that the Company and the Selling Shareholders may make for
the sharing of such costs and expenses.
SECTION 5 Conditions of Underwriters' Obligations. The obligations
---------------------------------------
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholders
contained in Section 1 hereof or in certificates of any officer of the Company
or any subsidiary of the Company or on behalf of any Selling Shareholder
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a post-
effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule 430A) or, if
the Company has elected to rely upon Rule 434, a Term Sheet shall have been
filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Counsel for Company and the Subsidiaries. (i) At
Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Brown, Rudnick, Freed & Gesmer,
counsel for the Company, in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth in
Exhibit A hereto and to such further effect as counsel to the Underwriters
may reasonably request.
18
<PAGE>
(ii) At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of local counsel
in Barbados for Brooks Automation International, in form and substance
reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-1 hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(iii) At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of local counsel
in Canada for Brooks Automation (Canada) Corp., in form and substance
reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-2 hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(iv) At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of local counsel
in Japan for Brooks Automation K.K., in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A-3 hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(v) At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of local counsel
in the United Kingdom for Brooks Automation, Ltd., in form and substance
reasonably satisfactory to counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A-4 hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(vi) At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of local counsel
in Korea for Brooks Automation Korea, in form and substance reasonably
satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A-5 hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(vii) At Closing Time, the Representatives shall have
received from Perman & Green, patent counsel for the Company, an opinion
dated as of Closing Time, which opinion shall be reasonably satisfactory in
all respects to the Representatives and their counsel.
(c) Opinion of Counsel for the Selling Shareholders. At Closing
Time, the Representatives shall have received the favorable opinion, dated
as of Closing Time, of Brown, Rudnick, Freed & Gesmer, counsel for the
Selling Shareholders, in form and substance reasonably satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of
such letter for each of the other Underwriters to the effect set forth
19
<PAGE>
in Exhibit B hereto and to such further effect as counsel to the
Underwriters may reasonably request. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other
than the law of the Commonwealth of Massachusetts, the federal law of the
United States and the General Corporation Law of the State of Delaware,
upon the opinions of counsel satisfactory to counsel for the Underwriters.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(d) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Testa, Hurwitz & Thibeault, LLP, counsel for the
Underwriters, together with signed or reproduced copies of such letter for
each of the other Underwriters with respect to the matters set forth in
clauses (i), (ii), (v), (vi) (solely as to preemptive or other similar
rights arising by operation of law or under the charter or by-laws of the
Company), (vii) through (ix), inclusive, (xi), (xiii) (solely as to the
information in the Prospectus under "Description of Securities--Common
Stock") and the penultimate paragraph of Exhibit A hereto. In giving such
opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the Commonwealth of Massachusetts, the
federal law of the United States and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper,
upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(e) Officers' Certificate. At Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of Closing Time, to the effect
that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Certificate of Selling Shareholders. At Closing Time, the
Representatives shall have received a certificate of an Attorney-in-Fact on
behalf of each Selling Shareholder, dated as of Closing Time, to the effect
that (i) the representations and warranties of each Selling Shareholder
contained in Section 1(b) hereof are true and
20
<PAGE>
correct in all respects with the same force and effect as though expressly
made at and as of Closing Time and (ii) each Selling Shareholder has
complied in all material respects with all agreements and all conditions on
its part to be performed under this Agreement at or prior to Closing Time.
(g) Accountant's Comfort Letter. At the time of the execution of
this Agreement, the Representatives shall have received from Price
Waterhouse LLP, a letter dated such date, in form and substance reasonably
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Price Waterhouse LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (g) of this Section,
except that the specified date referred to shall be a date not more than
three business days prior to Closing Time.
(i) Approval of Listing. At Closing Time, the Securities shall
have been approved for inclusion in the Nasdaq National Market, subject
only to official notice of issuance.
(j) No Objection. The NASD has confirmed that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
(k) Lock-up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit C hereto signed by the persons listed on Schedule E hereto.
(l) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b) hereof
to purchase all or any portion of the Option Securities, the
representations and warranties of the Company and Therrien contained herein
and the statements in any certificates furnished by the Company, any
subsidiary of the Company and Therrien hereunder shall be true and correct
as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
---------------------
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
21
<PAGE>
(ii) Certificate of Selling Shareholders. A certificate, dated
-----------------------------------
such Date of Delivery, of an Attorney-in-Fact on behalf of Therrien
confirming that the certificate delivered at Closing Time pursuant to
Section 5(f) remains true and correct as of such Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable opinion of
------------------------------
counsel for the Company and the Subsidiaries contained in Section 5(b)
hereof, each in form and substance reasonably satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Section 5(b)
hereof.
(iv) Opinion of Counsel for Therrien. The favorable opinion of
-------------------------------
Brown, Rudnick, Freed & Gesmer, counsel for Therrien, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(v) Opinion of Counsel for Underwriters. The favorable opinion of
-----------------------------------
Testa, Hurwitz & Thibeault, LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(d) hereof.
(vi) Bring-down Comfort Letter. A letter from Price Waterhouse
-------------------------
LLP, in form and substance reasonably satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(g) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(m) Additional Documents. At Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as
herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company, the Selling
Shareholders and Therrien, as the case may be, in connection with the
issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters.
(n) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the
22
<PAGE>
Company at any time at or prior to Closing Time or such Date of Delivery,
as the case may be, and such termination shall be without liability of any
party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. The Company and the Selling
Shareholders, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the
extent and in the manner set forth in clauses (i), (ii) and (iii) below as
follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company and the Selling Shareholders; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or
(ii);
provided, however, that this indemnity agreement shall not apply to any loss,
- -------- -------
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any
23
<PAGE>
amendment or supplement thereto); provided further, however that the Company
-------- ------- -------
and the Selling Shareholders will not be liable to any Underwriter or each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act with respect to any loss, liability,
claim, damage or expense arising out of or based on any untrue statement or
alleged untrue statement or omission or alleged omission to state a material
fact in the preliminary prospectus which is corrected in the Prospectus if the
person asserting any such loss, claim, liability, charge or damage purchased
Securities from such Underwriter but was not sent or given a copy of the
Prospectus at or prior to the written confirmation of the sale of such
Securities to such person; provided further, however, that the liability of each
-------- ------- -------
Selling Shareholder under the indemnity agreements contained in the provisions
of this Section 6 shall be limited to an amount equal to the initial public
offering price of the Securities sold by such Selling Shareholder to the
Underwriters minus the amount of the underwriting commissions paid thereon to
the Underwriters by such Selling Shareholder.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholders. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling
Shareholder against any and all loss, liability claim, damage and expense
described in the indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through Merrill
Lynch expressly for use in the Registration Statement (or any amendment thereto)
or such preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
- -------- -------
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be one or more legal defenses available
to it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party shall not have
the right to direct the defense of such action on behalf of such indemnified
party or parties and such indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. After notice from the indemnifying
24
<PAGE>
party to such indemnified party of its election so to assume the defense thereof
and approval (which approval shall not be unreasonably withheld) by such
indemnified party of counsel appointed to defend such action, the indemnifying
party will not be liable to such indemnified party under this Section 6 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso of the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Representatives in the case of
paragraph (a) of this Section 6, representing the indemnified parties under such
paragraph (a) who are parties to such action or actions) or (ii) the
indemnifying party does not promptly retain counsel reasonably satisfactory to
the indemnified party or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified
parties are actual or potential parties thereto), unless such settlement,
compromise or consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any indemnified
party. An indemnifying party will not be liable (except as provided in Section
6(d) below) for any settlement of an action effected without its consent (which
consent shall not be unreasonably withheld).
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement. Notwithstanding the immediately preceding sentence, if at any time
an indemnified party shall have requested and indemnifying party to reimburse
the indemnified party for fees and expenses of counsel, an indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
6(a)(ii) effected without its consent if such indemnifying party (i) reimburses
such indemnified party in accordance with such request to the extent it
considers such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
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<PAGE>
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect any agreement among the Company and the Selling
Shareholders with respect to indemnification.
SECTION 7. Contribution. If the indemnification provided for in Section 6
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Selling Shareholders on the one hand and the Underwriters on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Selling Shareholders on the one hand and of the Underwriters on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company and the Selling Shareholders
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Company and the Selling Shareholders and the total underwriting discount
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Company and the Selling Shareholders on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or the Selling Shareholders or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Company, the Selling Shareholders and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
26
<PAGE>
Notwithstanding the provisions of this Section 7, (i) no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission and (ii) no Selling
Shareholder shall be required to contribute any amount in excess of the amount
by which the initial public offering price of the Securities sold by such
Selling Shareholder to the Underwriters minus the amount of the underwriting
commission thereon paid to the Underwriters by such Selling Shareholder exceeds
the amount of damages which such Selling Shareholder has otherwise been required
to pay by reason of any such untrue or alleged untrue statement or omission or
alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or any
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
such Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the number of Initial Securities set forth opposite their respective names in
Schedule A hereto and not joint.
The provisions of this Section shall not affect any agreement among the
Company and the Selling Shareholders with respect to contribution.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries or the
Selling Shareholders submitted pursuant hereto, shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholders, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company and the Selling Shareholders, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the
27
<PAGE>
United States, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the Nasdaq
National Market, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (iv) if a banking moratorium has been declared by either Federal
or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
------------------------------------------
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of
the number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
number of Securities to be purchased on such date, this Agreement or,
with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such
Date of Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a
28
<PAGE>
termination of the obligation of the Underwriters to purchase and the Company to
sell the relevant Option Securities, as the case may be, either (i) the
Representatives or (ii) the Company and any Selling Shareholder shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Default by one or more of the Selling Shareholders or the
---------------------------------------------------------
Company. (a) If a Selling Shareholder shall fail at Closing Time or at a Date
- -------
of Delivery to sell and deliver the number of Securities which such Selling
Shareholder or Selling Shareholders are obligated to sell hereunder, and the
remaining Selling Shareholders do not exercise the right hereby granted to
increase, pro rata or otherwise, the number of Securities to be sold by them
hereunder to the total number to be sold by all Selling Shareholders as set
forth in Schedule B hereto, then the Underwriters may, at option of the
Representatives, by notice from the Representatives to the Company and the non-
defaulting Selling Shareholders, either (a) terminate this Agreement without any
liability on the fault of any non-defaulting party except that the provisions of
Sections 1, 4, 6, 7 and 8 shall remain in full force and effect or (b) elect to
purchase the Securities which the non-defaulting Selling Shareholders and the
Company have agreed to sell hereunder. No action taken pursuant to this Section
11 shall relieve any Selling Shareholder so defaulting from liability, if any,
in respect of such default.
In the event of a default by any Selling Shareholder as referred to in this
Section 11, each of the Representatives and the Company and the non-defaulting
Selling Shareholders shall have the right to postpone Closing Time or Date of
Delivery for a period not exceeding seven days in order to effect any required
change in the Registration Statement or Prospectus or in any other documents or
arrangements.
(b) If the Company shall fail at Closing Time or at the Date of Delivery
to sell the number of Securities that it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of any non-
defaulting party; provided, however, that the provisions of Sections 1, 4, 6, 7
and 8 shall remain in full force and effect. No action taken pursuant to this
Section shall relieve the Company from liability, if any, in respect of such
default.
SECTION 12. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1201, attention of Syndicate
Department; notices to the Company shall be directed to it at 15 Elizabeth
Drive, Chelmsford, Massachusetts 01824, attention of Robert J. Therrien; and
notices to the Selling Shareholders shall be directed to 15 Elizabeth Drive,
Chelmsford, Massachusetts 01824, attention of Robert J. Therrien.
29
<PAGE>
SECTION 13. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon the Underwriters, the Company and the Selling Shareholders
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Company and the Selling
Shareholders and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company and the Selling Shareholders
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
30
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Attorney-in-Fact for the Selling
Shareholders a counterpart hereof, whereupon this instrument, along with all
counterparts, will become a binding agreement among the Underwriters, the
Company and the Selling Shareholders in accordance with its terms.
Very truly yours,
BROOKS AUTOMATION, INC.
By
---------------------------------------------
Title:
By
---------------------------------------------
As Attorney-in-Fact acting on behalf of the
Selling Shareholders named in Schedule B hereto
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
PAINEWEBBER INCORPORATED
NEEDHAM & COMPANY, INC.
COWEN & COMPANY
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
--------------------------------
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
31
<PAGE>
SCHEDULE A
Name of Underwriter Number of
------------------- Initial
Securities
----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..................................
PaineWebber Incorporated............................
Needham & Company, Inc..............................
Cowen & Company.....................................
-----------
Total................................................ 2,321,000
-----------
32
<PAGE>
SCHEDULE B
Number of Initial Maximum Number of Option
Securities to be Sold Securities to Be Sold
--------------------- ------------------------
Brooks Automation, Inc. 2,000,000 298,150
Robert J. Therrien 300,000 50,000
Stanley D. Piekos 10,250 0
Michael W. Pippins 2,000 0
Michael F. Werner 3,750 0
Norman B. Brooks 5,000 0
--------- -------
Total................... 2,321,000 348,150
33
<PAGE>
SCHEDULE C
2,321,000 Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $______.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $_______, being an amount equal to the initial
public offering price set forth above less $______ per share; provided that the
purchase price per share for any Option Securities purchased upon the exercise
of the over-allotment option described in Section 2(b) shall be reduced by an
amount per share equal to any dividends or distributions declared by the Company
and payable on the Initial Securities but not payable on the Option Securities.
34
<PAGE>
SCHEDULE D
List of subsidiaries
Name Jurisdiction
- ---- ------------
Brooks Automation International Barbados
Brooks Automation K.K. Japan
Brooks Automation Massachusetts Securities Corporation Massachusetts
Brooks Automation, Ltd. United Kingdom
Brooks Automation (Canada) Corp. Canada
Brooks Automation Taiwan Taiwan
Brooks Automation Korea Korea
35
<PAGE>
SCHEDULE E
List of persons and entities
subject to lock-up
David R. Beaulieu
Norman B. Brooks
Roger D. Emerick
Amin J. Khoury
Stanley D. Piekos
Michael W. Pippins
Robert J. Therrien
Michael F. Werner
36
<PAGE>
EXHIBIT A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)(i)
(i) Each of the Company and Brooks Automation Massachusetts Securities
Corporation has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware and
the Commonwealth of Massachusetts, respectively.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in [LIST STATES].
(iv) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus in the column entitled "Actual" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the Purchase Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the exercise of
convertible securities or options referred to in the Prospectus); the shares of
issued and outstanding capital stock of the Company, including the Securities to
be purchased by the Underwriters from the Selling Shareholders, have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of any preemptive rights set forth in the Company's Certificate of Incorporation
or By-laws or under Delaware law or, to our knowledge, other preemptive or
similar rights of any securityholder of the Company.
(v) The Securities to be purchased by the Underwriters from the Company
have been duly authorized for issuance and sale to the Underwriters pursuant to
the Purchase Agreement and, when issued and delivered by the Company pursuant to
the Purchase Agreement against payment of the consideration set forth in the
Purchase Agreement, will be validly issued and fully paid and non-assessable and
no holder of the Securities is or will be subject to personal liability by
reason of ownership of such Securities.
(vi) To our knowledge, the issuance and sale of the Securities by the
Company and the sale of the Securities by the Selling Shareholders are not
subject to the preemptive or other similar rights of any securityholder of the
Company.
(vii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
<PAGE>
(viii) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of our knowledge, no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectus, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectus, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and notes thereto, supporting schedules and other financial information included
therein or omitted therefrom, as to which we express no opinion) complied as to
form in all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(x) The documents incorporated by reference in the Prospectus (other
than the financial statements notes thereto, supporting schedules and other
financial information included therein or omitted therefrom, as to which we
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material respects
with the requirements of the 1933 Act or the 1934 Act, as applicable, and the
rules and regulations of the Commission thereunder.
(xi) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the Nasdaq National Market.
(xii) Except as disclosed in the Prospectus, to the best of our
knowledge, there is not pending or threatened any action, suit, proceeding,
inquiry or investigation, to which the Company or any subsidiary is a party, or
to which the property of the Company or any subsidiary is subject, before or
brought by any court or governmental agency or body, domestic or foreign, which
might reasonably be expected to result in a Material Adverse Effect, or which
might reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xiii) The information in the Prospectus under "Description of Securities
- -- Common Stock", "Business--Properties", "Business--Legal Proceedings," and in
the Registration Statement under Item 15, only to the extent that it constitutes
matters of law, summaries of legal matters, the Company's charter and bylaws or
legal proceedings, or legal conclusions, has been reviewed by us and is correct
in all material respects.
(xiv) To the best of our knowledge, there are no statutes or regulations
that are required to be described in the Prospectus that are not described as
required.
Exhibit A - Page 2
<PAGE>
(xv) All descriptions in the Registration Statement of contracts and
other documents to which the Company or its subsidiaries are a party are
accurate in all material respects; to the best of our knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xvi) To the best of our knowledge, the Company is not in violation of
its charter or by-laws and no default by the Company or any subsidiary exists in
the due performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument that is described or
referred to in the Registration Statement or the Prospectus or filed or
incorporated by reference as an exhibit to the Registration Statement.
(xvii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required by the
NASD under the securities or blue sky laws of the various states, as to which we
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Purchase Agreement or for the
offering, issuance, sale or delivery of the Securities.
(xviii) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use Of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xi) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument, known to us, to which the Company or any subsidiary is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would not
have a Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company, or any applicable law,
statute, rule, regulation, judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
(xix) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the 1940
Act.
Exhibit A - Page 3
<PAGE>
(xx) The Rights under the Company's Shareholder Rights Plan to which
holders of the Securities will be entitled have been duly authorized and validly
issued.
We have participated in conferences with officers and other representatives
of the Company, and representatives to the independent public accountants for
the Company, at which conferences the contents of the Registration Statement,
the Prospectus and related matters were discussed and, although we are not
passing upon and do not assume any responsibility for the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, nothing came to our attention during the preparation of the
Registration Statement that led us to believe that the Registration Statement,
as of the Effective Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or any
amendment or supplement thereto, as of its date or on the date hereof,
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading (provided that we express no view with respect to
the financial statements, the notes thereto and the related schedules, other
financial data or statistical data derived from the Company's financial
statements included in the Registration Statement or the Prospectus).
In rendering such opinion, such counsel may rely, as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
Such opinion shall not state that it is to be governed or qualified by, or
that it is otherwise subject to, any treatise, written policy or other
document relating to legal opinions, including, without limitation, the Legal
Opinion Accord of the ABA Section of Business Law (1991).
Exhibit A - Page 4
<PAGE>
EXHIBIT A-1
OPINION OF LOCAL COUNSEL IN BARBADOS
1. Brooks Automation International ("Brooks Barbados") is a corporation duly
organized validly existing and in good standing under the laws of Barbados
with corporate power to own or lease its properties and to conduct its
business. Brooks Barbados is duly qualified to do business and in good
standing as a Foreign Sales Corporation in all other jurisdictions in which
the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary, except
where the failure to be so qualified would not have a material adverse effect
on the financial position of the Company.
2. The outstanding shares of capital stock of Brooks Barbados have been duly
authorized and validly issued, are fully paid and non-assessable and (except
for director qualifying shares) are owned directly by the Company free and
clear of any liens, encumbrances, equities or claims other than under the
Company's agreements with its commercial lender.
<PAGE>
EXHIBIT A-2
OPINION OF LOCAL COUNSEL IN CANADA
1. Brooks Automation (Canada) Corp. ("Brooks Canada") has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
__________, is duly qualified to do business as a foreign corporation and is
in good standing in __________, and has full corporate power and authority to
own its properties and conduct its business as described in the Prospectus.
2. All of the issued and outstanding shares of Brooks Canada have been duly
and validly authorized and issued, are fully paid and nonassessable and are
owned beneficially by the Company free and clear of all liens, encumbrances,
equities, claims, security interests, voting trusts or other defects of title
whatsoever.
<PAGE>
EXHIBIT A-3
OPINION OF LOCAL COUNSEL IN JAPAN
1. Brooks Automation K.K. ("Brooks Japan") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of Japan,
is duly qualified to do business as a foreign corporation and is in good
standing in Japan, and has full corporate power and authority to own its
properties and conduct its business as described in the Prospectus.
2. All of the issued and outstanding shares of Brooks Japan have been duly and
validly authorized and issued, are fully paid and nonassessable and are owned
beneficially by the Company free and clear of all liens, encumbrances,
equities, claims, security interests, voting trusts or other defects of title
whatsoever.
<PAGE>
EXHIBIT A-4
OPINION OF LOCAL COUNSEL IN THE UNITED KINGDOM
1. Brooks Automation, Ltd. ("Brooks U.K.") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
__________, is duly qualified to do business as a foreign corporation and is
in good standing in __________, and has full corporate power and authority to
own its properties and conduct its business as described in the Prospectus.
2. All of the issued and outstanding shares of Brooks U.K. have been duly and
validly authorized and issued, are fully paid and nonassessable and are owned
beneficially by the Company free and clear of all liens, encumbrances,
equities, claims, security interests, voting trusts or other defects of title
whatsoever.
<PAGE>
EXHIBIT A-5
OPINION OF LOCAL COUNSEL IN KOREA
1. Brooks Automation Korea ("Brooks Korea") has been duly incorporated and is
validly existing as a corporation in good standing under the laws of Korea,
is duly qualified to do business as a foreign corporation and is in good
standing in Korea, and has full corporate power and authority to own its
properties and conduct its business as described in the Prospectus.
2. All of the issued and outstanding shares of Brooks Korea have been duly and
validly authorized and issued, are fully paid and nonassessable and are owned
beneficially by the Company free and clear of all liens, encumbrances,
equities, claims, security interests, voting trusts or other defects of title
whatsoever.
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDERS
TO BE DELIVERED PURSUANT TO SECTION 5(c)
(i) No filing with, or consent, approval, authorization, license, order,
registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign, (other than the issuance of the
order of the Commission declaring the Registration Statement effective and
such authorizations, approvals or consents as may be necessary from the
NASD under state securities laws, as to which we express no opinion) is
necessary or required to be obtained by the Selling Shareholders for the
performance by each Selling Shareholder of its obligations under the
Purchase Agreement or in the Power of Attorney and Custody Agreement, or
in connection with the offer, sale or delivery of the Securities.
(ii) Each Power of Attorney and Custody Agreement has been duly executed and
delivered by the respective Selling Shareholders named therein and
constitutes the legal, valid and binding agreement of such Selling
Shareholder.
(iii) The Purchase Agreement has been duly authorized, executed and delivered
by or on behalf of each Selling Shareholder.
(iv) Each Attorney-in-Fact has been duly authorized by the Selling Shareholders
to deliver the Securities on behalf of the Selling Shareholders in
accordance with the terms of the Purchase Agreement.
(v) The execution, delivery and performance of the Purchase Agreement and the
Power of Attorney and Custody Agreement and the sale and delivery of the
Securities and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement and compliance by the
Selling Shareholders with its obligations under the Purchase Agreement
have been duly authorized by all necessary action on the part of the
Selling Shareholders and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
material breach of, or material default under or result in the creation or
imposition of any tax, lien, charge or encumbrance upon the Securities or
any property or assets of the Selling Shareholders pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, license, lease or other instrument or agreement known to us to which
any Selling Shareholder is a party or by which such Selling Shareholder
may be bound, or to which any of the property or assets of the Selling
Shareholders may be subject nor will such action result in any violation
of the provisions of the charter or by-laws of the Selling Shareholders,
if applicable, or any law, administrative regulation, judgment or order of
any governmental agency or body or any administrative or court decree
having jurisdiction over such Selling Shareholder or any of its
properties.
(vi) To the best of our knowledge, each Selling Shareholder has valid and
marketable title to the Securities to be sold by such Selling Shareholder
pursuant to the Purchase Agreement, free and
<PAGE>
clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind, and has full right, power and authority to sell,
transfer and deliver such Securities pursuant to the Purchase Agreement.
By delivery of a certificate or certificates therefor such Selling
Shareholder will transfer to the Underwriters who have purchased such
Securities pursuant to the Purchase Agreement (without notice of any
defect in the title of such Selling Shareholder and who are otherwise bona
fide purchasers for purposes of the Uniform Commercial Code) valid and
marketable title to such Securities, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind.
Exhibit B - Page 2
<PAGE>
EXHIBIT C
August 20, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
PaineWebber Incorporated
Needham & Company, Inc.
as Representatives of the several Underwriters to be
named in the within-mentioned to the Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
North Tower
World Financial Center
250 Vesey Street
New York, NY 10281-1327
Re: Restrictions on Sales of Common Shares
--------------------------------------
Dear Ladies and Gentlemen:
Brooks Automation, Inc., a Delaware corporation (the "Company"), proposes
to sell shares (the "Shares") of its Common Stock, $.01 par value per share
(the "Common Stock") of the Company, in a public offering (the "Public
Offering") underwritten by Merrill Lynch & Co., Merill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), PaineWebber Incorporated and Needham &
Company, Inc. (the "Representatives"), as representatives of the several
underwriters (the Representatives and such other underwriters are collectively
referred to as the "Underwriters").
The Underwriters have indicated that the prospect of sale of shares of
Common Stock by certain existing stockholders, prior to three months after
the Public Offering would be detrimental to their underwriting effort.
In consideration of the Underwriters' agreement to purchase and undertake
the Public Offering of the Company's Common Stock and for other good and
valuable consideration, receipt of which is hereby acknowledged, the undersigned
agrees that, during a period from the date of this Agreement and continuing and
including 90 days after the effective date of the Registration Statement on Form
S-3 (the "Registration Statement") to be filed by the Company in connection with
the Shares, the undersigned will not, without the prior written consent of
Merrill Lynch, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or
<PAGE>
dispose of, directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the Securities Act of 1933, as amended, with
respect to any of the foregoing, or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such securities, in cash or otherwise.
Notwithstanding the foregoing, the undersigned may transfer any or all of
the Shares subject to this Agreement (the "Lock-up Shares") as a bona fide gift
or gifts, provided the donee or donees thereof, agrees in writing as a condition
precedent to such gift or gifts to be bound by the terms hereof. The transferor
shall notify Merrill Lynch in writing prior to the transfer, and there shall be
no further transfer of the Lock-up Shares except in accordance with this
Agreement.
In addition, the undersigned agrees that the Company may, and that the
undersigned will, (i) with respect to any shares for which the undersigned is
the record holder, cause the transfer agent for the Company to note stop
transfer instructions with respect to such shares on the transfer books and
records of the Company, and (ii) with respect to any shares for which the
undersigned is the beneficial holder but not the record holder, cause the record
holder of such shares to cause the transfer agent for the Company to note stop
transfer instructions with respect to such shares on the transfer books and
records of the Company. The undersigned further agrees to permit all
certificates evidencing the Shares to be stamped with an appropriate restrictive
legend, and will cause the transfer agent for the Company to note such
restriction on the transfer books and stock records of the Company.
It is understood that, if the Purchase Agreement, between the
Representatives and the Company (the "Purchase Agreement') does not become
effective, or if the Purchase Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and
delivery of the Shares, you will release us from our obligations under this
Agreement.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Agreement, and that, upon request,
the undersigned will execute any additional documents necessary or desirable in
connection with the enforcement hereof. All authority herein conferred or agreed
to be conferred shall survive the death or incapacity of the undersigned and any
obligations of the undersigned shall be binding upon the heirs, personal
representatives, successors, and assigns of the undersigned.
Exhibit C - Page 2
<PAGE>
Executed as of the day first written above.
Very truly yours,
----------------------------------------------
Signature of Securityholder
----------------------------------------------
Signature of Co-Securityholder, if applicable
----------------------------------------------
Securityholder (please print)
----------------------------------------------
Address
----------------------------------------------
(Social Security or Taxpayer Identification No.
of Securityholder)
Number of shares owned or Certificate numbers:
subject to warrants, options
or convertible securities:
----------------------------------------------
- ---------------------------- ----------------------------------------------
Exhibit C - Page 3
<PAGE>
EXHIBIT 3.03
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
BROOKS AUTOMATION, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------------------------
Brooks Automation, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on July 23, 1997:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation of the Corporation, the Board of Directors hereby designates
21,500 shares of the Corporation's Preferred Stock, par value $0.01 per share,
as "Series A Junior Participating Preferred Stock" of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of this series shall be
----------------------
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 21,500. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and superior to the
Series A Preferred
-1-
<PAGE>
Stock with respect to dividends, the holders of shares of Series A Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount (if any) per share (rounded to the nearest cent), subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the
aggregate per share amount of all cash dividends, and 1000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, par
value $0.01 per share (the "Common Stock"), of the Company or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
(C) Dividends due pursuant to paragraph (A) of this Section
shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment
-2-
<PAGE>
of a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
-------------
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided in the Certificate of
Incorporation of the Company, including any other Certificate of Designations
creating a series of Preferred Stock or any similar stock, or by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation,
-3-
<PAGE>
dissolution or winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to dividends and-upon dissolution,
liquidation or winding up) to the Series A Preferred Stock.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation of the Company, including any Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Corporation the holders of shares
of Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount to be distributed per share to holders of shares
of Common Stock plus an amount equal to any accrued and unpaid dividends. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
--------------------------
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or
-4-
<PAGE>
any other property, then in any such case each share of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1000 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. Redemption. The shares of Series A Preferred Stock
----------
shall not be redeemable.
Section 9. Ranking. Unless otherwise provided in the Certificate of
-------
Incorporation or a Certificate of Designations relating to a
subsequently-designated series of preferred stock of the Corporation, the Series
A Preferred Stock shall rank junior to any other series of the Corporation's
preferred stock subsequently issued, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and shall rank
senior to the Common Stock.
Section 10. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be amended in any manner, including in a merger or
consolidation, which would alter, change, or repeal the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a single
class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
-----------------
in whole shares or in any fraction of a share that is one one-thousandth of a
share or any integral multiple of such fraction, which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation may elect to make a cash payment as provided in the
Rights Agreement for fractions of a share other than one one-thousandth of a
share or any integral multiple thereof .
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its____________this _____ day of August, 1997.
BROOKS AUTOMATION, INC.
-5-
<PAGE>
By:___________________________
-6-
<PAGE>
EXHIBIT 5.01
August 27, 1997
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
RE: Registration Statement on Form
S-3 of Brooks Automation, Inc.
filed on August 27, 1997
Ladies and Gentlemen:
We have acted as counsel to Brooks Automation, Inc., a Delaware corporation
(the "Company"), in connection with the preparation and filing with the
Securities and Exchange Commission of a Registration Statement on Form S-3
(the "Registration Statement") pursuant to which the Company is registering
under the Securities Act of 1933, as amended (the "Act"), a total of 2,669,150
shares of common stock, $.01 par value (the "Common Stock"). Pursuant to the
Registration Statement and an underwriting agreement (the "Underwriting
Agreement") by and among the Company, Merrill Lynch & Co., PaineWebber
Incorporated and Needham & Company, Inc., as representatives of the several
underwriters (the "Underwriters") and certain of the Company's Stockholders
(the "Selling Stockholders"), in substantially the form filed as Exhibit 1.01
to the Registration Statement, the Company proposes to sell to the
Underwriters up to 2,298,150 shares of Common Stock (the "Company Shares") and
the Selling Stockholders propose to sell to the Underwriters 371,000 shares of
Common Stock (the "Selling Stockholder Shares"). This opinion is being
rendered in connection with the filing of the Registration Statement. Unless
otherwise indicated, capitalized terms used herein shall have the meanings
ascribed thereto in the Underwriting Agreement.
For purposes of this opinion, we have assumed, without any investigation,
(i) the legal capacity of each natural person, (ii) the full power and
authority of each entity and person other than the Company to execute, deliver
and perform each document heretofore executed and delivered or hereafter to be
executed and delivered and to do each other act heretofore done or hereafter
to be done by such entity or person, (iii) the due authorization by each
entity or person other than the Company of each document heretofore executed
and delivered or hereafter to be executed and delivered and to do each other
act heretofore done or to be done by such entity or person, (iv) the due
execution and delivery by each entity or person other than the Company of each
document heretofore executed and delivered or hereafter to be executed and
delivered by such entity or person, (v) the legality, validity, binding effect
and enforceability as to each entity or person other than the Company of each
document heretofore executed and delivered or hereafter to be executed and
delivered and of each other act heretofore done or hereafter to be done by
such entity or person, (vi) the genuineness of each signature on, and the
completeness of each document submitted to us as an original, (vii) the
conformity to the original of each document submitted to us as a copy, (viii)
the authenticity of the original of each document submitted to us as a copy,
(ix) the completeness, accuracy and proper indexing of all governmental and
judicial records searched and (x) no modification of any provision of any
document, no waiver of any right or remedy and no exercise of any right or
remedy other than in a commercially reasonable and conscionable manner and in
good faith.
In connection with this opinion, we have examined the following
(collectively, the "Documents"):
(i) the Certificate of Incorporation of the Company incorporated by
reference as Exhibit 3.01 to the Registration Statement;
(ii) the Bylaws of the Company incorporated by reference as Exhibit 3.02 to
the Registration Statement;
(iii) the corporate minute books or other records of the Company;
<PAGE>
(iv) a specimen certificate for the Common Stock incorporated by reference
as Exhibit 4.01 to the Registration Statement; and
(v) the form of Underwriting Agreement.
The opinions expressed herein are based solely upon (i) our review of the
Documents, (ii) discussions with Robert J. Therrien, the Chief Executive
Officer, President and Treasurer of the Company and Stanley D. Piekos, the
Company's Vice President, Finance and Chief Financial Officer; (iii) the
representations and warranties of the Company and the Selling Stockholders
contained in the Underwriting Agreement and the exhibits thereto, (iv)
discussions with those of our attorneys who have devoted substantive attention
to the matters contained herein, and (v) such review of published sources of
law as we have deemed necessary.
Our opinions contained herein are limited to the laws of The Commonwealth of
Massachusetts, the general corporate laws of the State of Delaware and the
federal law of the United States of America.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company Shares to be sold by the Company under the circumstances
contemplated in the Registration Statement are duly authorized and, when
delivered pursuant to the Underwriting Agreement, will be validly
issued, fully paid and nonassessable.
2. The Selling Stockholder Shares to be sold by the Selling Stockholders
under the circumstances contemplated in the Registration Statement are
duly authorized, validly issued, fully paid and nonassessable.
We understand that this opinion is to be used in connection with the
Registration Statement. We consent to the filing of this opinion as an Exhibit
to said Registration Statement and to the reference to our firm wherever it
appears in the Registration Statement, including the prospectuses constituting
a part thereof and any amendments thereto. This opinion may be used in
connection with the offering of the Shares only while the Registration
Statement, as it may be amended from time to time, remains in effect.
Very truly yours,
Brown, Rudnick, Freed & Gesmer
By: Brown, Rudnick, Freed & Gesmer, P.C.
/s/ Lawrence M. Levy
By: _________________________________
Lawrence M. Levy, a
member duly authorized
LML/PJF/SPW
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated November 19, 1996
relating to the financial statements of Brooks Automation, Inc., which appears
in such Prospectus. We also consent to the application of such report to the
Financial Statement Schedule appearing on page 38 of the Brooks Automation,
Inc. Annual report on Form 10-K/A for the year ended September 30, 1996, which
is incorporated by reference in this Registration Statement, when such
schedule is read in conjunction with the financial statements referred to in
our report. The audits referred to in such report also included this schedule.
We also consent to the references to us under the headings "Experts" and
"Selected Consolidated Financial Data" in such Prospectus. However, it should
be noted that Price Waterhouse LLP has not prepared or certified such
"Selected Consolidated Financial Data."
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
August 26, 1997
<PAGE>
EXHIBIT 23.3
CONSENT OF PERMAN & GREEN, LLP
We hereby consent to the reference to our firm wherever it appears in this
Registration Statement, including the prospectus constituting a part hereof
and any amendments hereto.
PERMAN & GREEN, LLP
/s/ Clarence A. Green
By: _________________________________
Clarence A. Green,duly authorized
Fairfield, Connecticut
August 26, 1997
<PAGE>
Exhibit 99.1
Name: _________________________
SELLING STOCKHOLDER AGREEMENT
-----------------------------
AGREEMENT, dated as of August __, 1997 (the "Agreement"), among Brooks
Automation, Inc., a Delaware corporation (the "Company"), and each stockholder
of the Company listed on Exhibit A, attached hereto (collectively the "Selling
Stockholders").
W I T N E S S E T H:
-------------------
WHEREAS, the Board of Directors of the Company has determined that a
public offering (the "Public Offering") of the Company's Common Stock, $.01 par
value (the "Common Stock"), would be beneficial to the Company and its
stockholders and proposes to issue shares of Common Stock (the "Company Shares")
for such purpose; and
WHEREAS, the Company also has determined that it would be beneficial to
the Company and its stockholders for certain stockholders to have the
opportunity to sell in the Public Offering a portion of the shares of Common
Stock held by such stockholders; and
WHEREAS, the Company has offered such stockholders such opportunity and
the Selling Stockholders propose to accept such offer and sell in the Public
Offering an aggregate of up to _____ shares of Common Stock (the "Stockholder
Shares").
NOW THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter set forth and such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Payment of Expenses.
-------------------
(a) The Company shall pay (i) all of the expenses, other than
underwriting discounts, incurred in connection with the Public Offering
(including, but not limited to, all registration, filing and qualification fees,
transfer agent's fees, printing and engraving fees and legal and accounting
fees), and (ii) the Company's pro rata portion of all underwriting discounts
incurred in connection with the Public Offering, determined in accordance with
the number of Company Shares and Stockholder Shares actually sold by each
respective party in the Public Offering.
(b) Each Selling Stockholder shall pay such Selling
Stockholder's pro rata portion of all underwriting discounts incurred in
connection with the Public Offering, determined in accordance with the number of
Company Shares and Stockholder Shares actually sold by each respective party in
the Public Offering.
(c) Notwithstanding the provisions of this Section 1 or any
other agreement of the Company to pay certain expenses of the Public Offering,
if the payment of any such expenses by the Company shall be prohibited by any
state Blue Sky or securities regulatory
-1-
<PAGE>
commission in a jurisdiction in which Shares are offered, then each Selling
Stockholder agrees to pay his or its pro rata portion of any such expenses
determined in accordance with the number of Company Shares and Stockholder
Shares actually sold by each respective party in the Public Offering.
SECTION 2. Indemnification; Contribution.
-----------------------------
(a) The Company shall indemnify each of the Selling
Stockholders, and each person (if any) who controls such Selling Stockholder
within the meaning of Section 15 of the Securities Act of 1933, as amended (the
"Act"), against all losses, claims, damages and liabilities and expense
(including all reasonable fees and disbursements of counsel incurred in
defending against any such claim, damage or liability) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement filed or to be filed with the Securities and Exchange
Commission (the "Commission"), in connection with the Public Offering, as the
same may be amended or supplemented from time to time (the "Registration
Statement") or in any prospectus filed with, or delivered to, the Commission in
connection with the Public Offering, or caused by any omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading; provided, however, insofar as such losses, claims,
-------- -------
damages, or liabilities are caused by an untrue statement of a material fact
contained in, or any material fact omitted from, information relating to a
Selling Stockholder furnished in writing to the Company by such Selling
Stockholder for use in the Registration Statement or any amendment or supplement
thereto, or any such prospectus, then the Company shall have no obligation
hereunder to indemnify the Selling Stockholder furnishing such information.
(b) Each Selling Stockholder shall indemnify each of the Company
and the other Selling Stockholders, and each person (if any) who controls the
Company or such other Selling Stockholder within the meaning of Section 15 of
the Act against all losses, claims, damages and liabilities and expense
(including all reasonable fees and disbursements of counsel incurred in
defending against any such claim, damage or liability) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or in any prospectus filed with, or delivered to, the
Commission in connection with the Public Offering, or caused by any omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading, but only with respect to information
relating to such Selling Stockholder furnished in writing by or on behalf of
such Selling Stockholder expressly for use in the Registration Statement or any
amendment or supplement thereto, or any such prospectus, provided, however, no
-------- -------
Selling Stockholder shall be liable in an amount that exceeds the aggregate
initial public offering price of the Stockholder Shares sold by the Selling
Stockholder, net of the underwriting discount.
(c) The indemnity agreements of the Company and the Selling
Stockholders contained in this Section 2 shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive delivery of shares of Common Stock pursuant
to the Public Offering.
-2-
<PAGE>
(d) In order to provide for just and equitable contribution in
circumstances in which indemnification provided for in paragraph (a) of this
Section 2 is unavailable, the Company and each of the Selling Stockholders shall
contribute to the aggregate losses, claims, damages, liabilities and expenses
(including all reasonable fees and disbursements of counsel incurred in
defending against any claim, damage, or liability), to which one or more of the
Selling Stockholders may be subject in such proportion as is appropriate to
reflect the relevant fault of the Company and the respective Selling
Stockholders in connection with the statements or omissions that resulted in
such losses, claims, damages, liabilities and expenses as well as any other
relevant equitable considerations; provided, however, that:
-------- -------
(i) in any case where any Selling Stockholder is
seeking contribution hereunder such Selling Stockholder shall be entitled to
contribution from the remaining Selling Stockholders pursuant to this Agreement
only after first seeking contribution from the Company;
(ii) no Selling Stockholder shall in any case be
required to contribute or make any payments under this paragraph (d) which in
the aggregate exceed his pro rata share of such losses, claims, damages,
liabilities and expenses determined in accordance with the total number of
Company Shares and Stockholder Shares sold by each respective party hereto
provided, however, that, except as set forth in subparagraph (iii) of this
- -------- -------
paragraph (d), no Selling Stockholder shall be liable to contribute an amount
that exceeds the aggregate public offering price of the Stockholder Shares sold
by the Selling Stockholder, net of the underwriting discount;
(iii) in the event the Company or any Selling Stockholder
defaults on its obligation to make any contribution pursuant to this paragraph
(d), the amount by which each of the remaining parties is obligated to
contribute hereunder shall be increased in accordance with the relation of the
number of shares of Common Stock being sold by each such remaining party to the
aggregate number of shares of Common Stock being sold by all such remaining
parties;
(iv) neither the Company nor any Selling Stockholder
will be required to make any contribution to another Selling Stockholder with
respect to matters for which the other Selling Stockholder would not otherwise
be entitled to be indemnified under paragraph (a) of this Section 2 had such
indemnification been available; and
(v) for purposes of this paragraph (d), each person, if
any, who controls a Selling Stockholder within the meaning of Section 15 of the
Act, and each director, officer or partner (if any) of such Selling Stockholder,
shall have the same rights to contribution under this Agreement as such Selling
Stockholder.
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<PAGE>
SECTION 3. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
SECTION 4. Invalidity.
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If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, such determination shall
not affect the remaining provisions of the Agreement, all of which shall remain
in full force and effect.
SECTION 5. Counterparts.
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This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
SECTION 6. Notices.
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Any notice given pursuant to this Agreement shall be sent by certified
mail, return receipt requested, to the address set forth under each party's name
on the signature page of this Agreement, or to such other address as may be
designated by notice given to each party pursuant to the provisions hereof.
SECTION 7. Headings.
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The headings contained in this Agreement are for descriptive purposes
only and shall not be given substantive effect.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement under seal as of the day and year first written above.
BROOKS AUTOMATION, INC., a Delaware
corporation
By:
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Robert J. Therrien, President
SELLING STOCKHOLDER
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Address:
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<PAGE>
EXHIBIT A
SELLING STOCKHOLDERS
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