<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended: March 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______ to _______
Commission File Number 0-25434
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 No.)
15 Elizabeth Drive
Chelmsford, Massachusetts
(Address of principal executive offices)
01824
(Zip Code)
Registrant's telephone number, including area code: (978) 262-2400
---------------------------------------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date (March 31, 2000):
Common stock, $0.01 par value 16,640,442 shares
<PAGE> 2
BROOKS AUTOMATION, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
-----------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 2000 (unaudited) and
September 30, 1999 3
Consolidated Statements of Operations for the three and six months
ended March 31, 2000 and 1999 (unaudited) 4
Consolidated Statements of Cash Flows for the six months ended
March 31, 2000 and 1999 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk 27
PART II. OTHER INFORMATION
- -------- -----------------
Item 2. Changes in Securities and Use of Proceeds 28
Item 4. Submission of Matters to a Vote of the Security Holders 28
Item 6. Exhibits and Reports on Form 8-K 29
Signatures 31
</TABLE>
<PAGE> 3
BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except per share data) (UNAUDITED)
MARCH 31, SEPTEMBER 30,
2000 1999
--------- -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 256,790 $ 66,366
Accounts receivable, net, including related party receivables of $5,557
and $3,384, respectively 67,287 32,904
Inventories 36,456 28,917
Prepaid expenses and other current assets 8,447 2,999
Deferred income taxes 5,539 6,542
--------- ---------
Total current assets 374,519 137,728
Fixed assets, net of accumulated depreciation of $36,233 and $24,119,
respectively 22,786 17,434
Intangible assets, net of accumulated amortization of $7,110 and $1,361,
respectively 56,881 13,719
Deferred income taxes 6,250 4,192
Other assets 4,531 4,072
--------- ---------
Total assets $ 464,967 $ 177,145
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 16,000 $ -
Current portion of long-term debt and capital lease obligations 516 537
Accounts payable 14,372 6,993
Deferred revenue 10,808 6,127
Accrued compensation and benefits 9,228 4,909
Accrued acquisition-related and restructuring costs 3,463 3,868
Accrued income taxes payable 6,481 2,093
Accrued expenses and other current liabilities 15,947 7,405
--------- ---------
Total current liabilities 76,815 31,932
Long-term debt and capital lease obligations 562 801
Deferred income taxes 395 174
Other long-term liabilities 739 632
--------- ---------
Total liabilities 78,511 33,539
--------- ---------
Commitments and contingencies
Minority interests 1,352 1,460
--------- ---------
Stockholders' equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none
issued and outstanding - -
Common stock, $0.01 par value, 21,500,000 shares authorized, 16,640,442
and 12,760,084 shares issued and outstanding, respectively 166 128
Additional paid-in capital 408,085 168,827
Deferred compensation (50) (65)
Accumulated other comprehensive loss (1,763) (1,093)
Accumulated deficit (21,334) (25,651)
--------- ---------
Total stockholders' equity 385,104 142,146
--------- ---------
Total liabilities and stockholders' equity $ 464,967 $ 177,145
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 4
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
2000 1999 (1) 2000 1999 (1)
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues
Product, including related party revenues of $8,554 and
$3,401 for the three month periods and $15,527 and
$4,139 for the six month periods, respectively $ 59,204 $ 18,710 $ 102,273 $ 34,108
Services 13,806 4,796 21,017 9,450
-------- -------- --------- --------
Total revenues 73,010 23,506 123,290 43,558
-------- -------- --------- --------
Cost of revenues
Product 30,202 9,853 52,377 18,840
Services 8,786 3,453 12,439 5,953
-------- -------- --------- --------
Total cost of revenues 38,988 13,306 64,816 24,793
-------- -------- --------- --------
Gross profit 34,022 10,200 58,474 18,765
-------- -------- --------- --------
Operating expenses
Research and development 9,770 5,179 16,910 10,109
Selling, general and administrative 15,208 6,386 27,709 12,427
Amortization of acquired intangible assets 4,804 - 5,599 -
-------- -------- --------- --------
Total operating expenses 29,782 11,565 50,218 22,536
-------- -------- --------- --------
Income (loss) from operations 4,240 (1,365) 8,256 (3,771)
Interest income 1,039 767 1,682 1,538
Interest expense 196 92 234 167
Other income (expense) 31 4 (10) (14)
-------- -------- --------- --------
Income (loss) before income taxes and minority interests 5,114 (686) 9,694 (2,414)
Income tax provision (benefit) 3,677 (78) 5,485 (275)
-------- -------- --------- --------
Income (loss) before minority interests 1,437 (608) 4,209 (2,139)
Minority interests in loss of consolidated subsidiary (15) - (108) -
-------- -------- --------- --------
Net income (loss) 1,452 (608) 4,317 (2,139)
Accretion and dividends on preferred stock - (162) - (387)
-------- -------- --------- --------
Net income (loss) attributable to common stockholders $ 1,452 $ (770) $ 4,317 $ (2,526)
======== ======== ========= ========
Earnings (loss) per share attributable to common
stockholders
Basic $ 0.10 $ (0.07) $ 0.32 $ (0.23)
Diluted $ 0.09 $ (0.07) $ 0.30 $ (0.23)
Shares used in computing earnings (loss) per share
Basic 14,002 11,113 13,386 11,096
Diluted 15,362 11,113 14,387 11,096
</TABLE>
(1) Amounts have been restated to reflect the acquisition of Smart Machines
Inc. in a pooling of interests transaction effective August 31, 1999.
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 5
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
2000 1999 (1)
---- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 4,317 $(2,139)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 10,092 3,524
Compensation expense related to common stock options 15 59
Deferred income taxes 651 (857)
Minority interests (108) -
(Gain)loss on fixed asset disposal 28 -
Changes in operating assets and liabilities:
Accounts receivable (24,219) (2,455)
Inventories (7,972) 3,225
Prepaid expenses and other current assets (4,176) 604
Accounts payable 6,767 21
Deferred revenue 2,083 387
Accrued acquisition-related and restructuring costs (405) (1,241)
Accrued expenses and other current liabilities 9,108 456
-------- -------
Net cash provided by (used in) operating activities (3,819) 1,584
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets (5,215) (2,137)
Purchase of businesses, net of cash acquired (24,004) -
Proceeds from sale of depreciable assets 313 -
Increase in other assets (791) (194)
-------- -------
Net cash used in investing activities (29,697) (2,331)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings - (95)
Proceeds from issuance of convertible notes - 1,500
Payments of long-term debt (260) (337)
Issuance of long-term debt - -
Proceeds from issuance of common stock, net of issuance
costs 223,912 401
-------- -------
Net cash provided by financing activities 223,652 1,469
-------- -------
Elimination of net cash activities of Smart Machines for
the three months ended December 31, 1998 - (63)
-------- -------
Effects of exchange rate changes on cash and cash
equivalents 288 116
-------- -------
Net increase (decrease) in cash and cash equivalents 190,424 775
Cash and cash equivalents, beginning of period 66,366 69,479
-------- -------
Cash and cash equivalents, end of period $256,790 $70,254
======== =======
</TABLE>
(1) Amounts have been restated to reflect the acquisition of Smart Machines Inc.
in a pooling of interests transaction effective August 31, 1999.
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE> 6
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements of Brooks Automation, Inc.
and its subsidiaries (the "Company") included herein have been prepared in
accordance with generally accepted accounting principles. In the opinion of
management, all material adjustments necessary for a fair presentation of
the results for the periods presented have been reflected.
The accompanying financial information should be read in conjunction with
the consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K, filed with the United States
Securities and Exchange Commission for the year ended September 30, 1999.
On January 6, 2000, the Company acquired Auto-Soft Corporation ("ASC") and
AutoSimulations, Inc. ("ASI") from Daifuku America Corporation ("Daifuku
America"), a U.S. subsidiary of Daifuku Co., Ltd. of Japan. The acquisition
was accounted for using the purchase method of accounting. Accordingly, the
Company's Consolidated Statements of Operations and of Cash Flows for the
three and six months ended March 31, 2000 include the results of these
acquired entities for the period subsequent to their acquisition.
The Company made several acquisitions during fiscal year 1999 which were
accounted for using the purchase method of accounting: the Infab Division
("Infab") of Jenoptik AG on September 30, 1999; Domain Manufacturing
Corporation ("Domain") on June 30, 1999 and Hanyon Technology, Inc.
("Hanyon") on April 2, 1999. Accordingly, the Company's Consolidated
Statements of Operations and of Cash Flows for the three and six months
ended March 31, 2000 include the results of these acquired entities.
In June 1999, the Company formed a joint venture in Korea with Samsung
Electronics ("Samsung"). This joint venture is 70% owned by the Company and
30% owned by Samsung. The Company consolidates fully the financial position
and results of operations of the joint venture and accounts for the
minority interest in the consolidated financial statements.
The consolidated financial statements for the three and six months ended
March 31, 1999 have been restated to reflect the acquisition of Smart
Machines Inc. ("Smart Machines") in a pooling of interests transaction
effective August 31, 1999.
In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation -- an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues
clarifies the following: the definition of an employee for purposes of
applying APB Opinion No. 25; the criteria for determining whether a plan
qualifies as a non-compensatory plan; the accounting consequence of various
modifications to the terms of previously fixed stock options or awards; and
the accounting for an exchange of stock compensation awards in a business
combination. FIN 44 is effective July 1, 2000, but certain conclusions in
FIN 44 cover specific events that occurred after either December 15, 1998
or January 12, 2000. The Company does not expect the application of FIN 44
to have a material impact on the Company's financial position or results of
operations.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes the SEC's views in applying
generally accepted accounting principles to selected revenue recognition
issues in financial statements. The application of the guidance in SAB 101
will be required in the Company's first quarter of fiscal 2001. The Company
is currently determining the impact that SAB 101 will have on its financial
position and results of operations.
2. BUSINESS ACQUISITIONS
On January 6, 2000, the Company completed the acquisition of the businesses
of ASC and ASI from Daifuku America. ASC is a leading material handling
software and systems integration company focusing on manufacturing and
distribution of logistic systems for the semiconductor industry. ASI is a
world leader in robotic and material handling simulation, scheduling and
real time dispatching software for the semiconductor industry. At closing,
the Company paid $27.0 million in cash, 535,404 shares of Brooks common
stock with a value of $14.7 million, and issued a $16.0 million promissory
note payable in one year, bearing interest at a rate of 4.0% per annum. The
acquisition was accounted for using the purchase method of accounting in
accordance with Accounting Principles Board Opinion No. 16, "Business
Combinations" ("APB 16").
<PAGE> 7
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Continued)
A summary of the acquisition follows (in thousands):
Consideration:
Cash $27,000
Common stock 14,727
Promissory note 16,000
Transaction costs 3,500
-------
Total consideration 61,227
Net tangible assets acquired 12,603
-------
Excess of purchase price over net tangible assets acquired $48,624
=======
The excess of the purchase price over the fair value of the net tangible
assets acquired has been recorded based on a preliminary purchase price
allocation. Finalization of the allocation of the purchase price to
tangible and identifiable intangible assets acquired will be made after the
completion of analyses of their fair values. The Company anticipates that
the weighted average useful life of the acquired intangible assets will be
three years. The assets are being amortized using the straight-line method.
The following pro forma results of operations have been prepared as though
the acquisition had occurred as of the beginning of the fiscal year prior
to the acquisition. This pro forma financial information does not purport
to be indicative of the results of operations that would have been attained
had the acquisition been made as of those dates or of results of operations
that may occur in the future (in thousands except per share data):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues $73,010 $32,049 $129,182 $ 62,940
Net income (loss) $ 1,214 $(5,000) $ (1,946) $(10,450)
Net income (loss) attributable to common stockholders $ 1,214 $(5,162) $ (1,946) $(10,837)
Net income (loss) per share applicable to common
stockholders $ 0.08 $ (0.44) $ (0.14) $ (0.93)
</TABLE>
3. REVOLVING CREDIT FACILITY
On January 7, 2000, the Company entered into an agreement for an unsecured
revolving credit facility with ABN AMRO Bank N.V. and other lending
institutions. The two-year facility provides for borrowings and letters of
credit of up to $30.0 million. The interest rates for borrowings and
letters of credit under the facility are expressed in relation to LIBOR and
a margin of 1.75% to 2.25%, or from 0.25% to 0.75% above a base rate. At
March 31, 2000, $1.0 million of the facility was in use, all of it for
letters of credit. This facility was subsequently replaced by a $10.0
million uncommitted demand promissory note credit facility with ABN AMRO
Bank N.V. ("ABN AMRO"). ABN AMRO is not obligated to extend loans or issue
letters of credit under this facility.
<PAGE> 8
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Continued)
4. COMMON STOCK OFFERING
On March 7, 2000, the Company completed a public offering of 3,250,000
shares of its common stock, of which 2,750,000 shares were offered by the
Company and 500,000 were offered by selling stockholders. The Company
realized proceeds, net of issuance costs, of approximately $220 million on
the sale of the initial 2,750,000 shares and the additional 320,500 shares
purchased by the underwriters from the Company on March 23, 2000 to cover
over-allotments of shares. The Company did not receive any proceeds from
the sale of shares by the selling stockholders. The Company intends to use
the net proceeds from the offering for working capital and general
corporate purposes.
5. EARNINGS PER SHARE
The following table is a summary of net income (loss) attributable to
common stockholders used in the calculation of basic and diluted loss per
share (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net income (loss) $ 1,452 $ (608) $ 4,317 $ (2,139)
Accretion and dividends on preferred stock -- (162) -- (387)
------- ------ ------- --------
Net income (loss) applicable to common stockholders for
basic and diluted earnings per share $ 1,452 $ (770) $ 4,317 $ (2,526)
======= ====== ======= ========
</TABLE>
The following table is a summary of shares used in calculating basic and
diluted earnings per share (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average number of shares used in computing basic
earnings per share 14,002 11,113 13,386 11,096
Dilutive securities:
Common stock options and warrants 1,360 -- 1,001 --
------ ------ ------ ------
Shares used in computing diluted earnings per share 15,362 11,113 14,387 11,096
====== ====== ====== ======
</TABLE>
Options and warrants to purchase approximately 780,000 and 637,000 shares
of common stock were excluded from the computation of diluted loss per
share for the three and six months ended March 31, 1999, respectively, as
their effect would be antidilutive.
6. COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) for the Company is computed as the sum of net
income (loss) and the change in the cumulative translation adjustment.
Comprehensive income was $899,000 and $3,647,000 for the three and six
month periods ended March 31, 2000, respectively. Comprehensive loss was
$578,000 and $2,034,000 for the three and six month periods ended March 31,
1999, respectively.
<PAGE> 9
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Continued)
7. SEGMENT AND GEOGRAPHIC INFORMATION
The Company has two reportable segments: tool automation and factory
automation. The tool automation segment provides a full complement of
semiconductor wafer and flat panel display substrate handling systems. Tool
automation product revenue is comprised of factory hardware and tool
control software products. Tool automation service revenue is comprised of
spare parts sales and tool control application consulting services. The
factory automation segment provides software products for the semiconductor
manufacturing execution system ("MES") market. Factory automation product
revenues include factory software and factory interface hardware products.
Factory automation service revenue primarily consists of revenues related
to consulting and software customization.
The Company evaluates performance and allocates resources based on revenues
and operating income. Operating income for each segment includes selling,
general and administrative expenses directly attributable to the segment.
Amortization of acquired intangible assets is excluded from the segments'
operating income. The Company's non-allocable overhead costs, which include
corporate general and administrative expenses, are allocated between the
segments based upon segment revenues.
Financial information for the Company's business segments is as follows (in
thousands):
<TABLE>
<CAPTION>
Tool Factory
Automation Automation Total
---------- ---------- -----
<S> <C> <C> <C>
THREE MONTHS ENDED MARCH 31, 2000
Revenue:
Product $ 37,111 $ 22,093 $ 59,204
Services 3,097 10,709 13,806
-------- -------- --------
Total $ 40,208 $ 32,802 $ 73,010
======== ======== ========
Gross margin $ 17,393 $ 16,629 $ 34,022
Operating income (loss) $ 6,694 $ 2,350 $ 9,044
THREE MONTHS ENDED MARCH 31, 1999
Revenue:
Product $ 16,791 $ 1,919 $ 18,710
Services 2,265 2,531 4,796
-------- -------- --------
Total $ 19,056 $ 4,450 $ 23,506
======== ======== ========
Gross margin $ 6,911 $ 3,289 $ 10,200
Operating income (loss) $ (976) $ (389) $ (1,365)
</TABLE>
<PAGE> 10
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (Continued)
<TABLE>
<CAPTION>
Tool Factory
Automation Automation Total
---------- ---------- -----
<S> <C> <C> <C>
SIX MONTHS ENDED MARCH 31, 2000
Revenue:
Product $ 65,308 $ 36,965 $ 102,273
Services 5,887 15,130 21,017
-------- -------- ---------
Total $ 71,195 $ 52,095 $ 123,290
======== ======== =========
Gross margin $ 29,636 $ 28,838 $ 58,474
Operating income (loss) $ 10,155 $ 3,700 $ 13,855
SIX MONTHS ENDED MARCH 31, 1999
Revenue:
Product $ 29,468 $ 4,640 $ 34,108
Services 4,890 4,560 9,450
-------- --------- ---------
Total $ 34,358 $ 9,200 $ 43,558
======== ========= =========
Gross margin $ 11,803 $ 6,962 $ 18,765
Operating income (loss) $ (3,293) $ (478) $ (3,771)
</TABLE>
A reconciliation of the Company's reportable segment operating income
(loss) to the corresponding consolidated amounts for the three and six
month periods ended March 31, 2000 and 1999 is as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
Segment operating income (loss) $9,044 $ (1,365) $ 13,855 $ (3,771)
Amortization of acquired intangibles 4,804 -- 5,599 --
------ -------- -------- --------
Total operating income (loss) $4,240 $ (1,365) $ 8,256 $ (3,771)
====== ======== ======== ========
</TABLE>
Net revenues by geographic area are as follows (in thousands):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
2000 1999 2000 1999
--------------------------------------------------------
<S> <C> <C> <C> <C>
North America $ 35,835 $ 15,501 $ 59,941 $ 23,546
Asia 22,997 6,325 37,283 13,975
Europe 14,178 1,680 26,066 6,037
-------- -------- --------- --------
$ 73,010 $ 23,506 $ 123,290 $ 43,558
======== ======== ========= ========
</TABLE>
8. SIGNIFICANT CUSTOMERS AND RELATED PARTY INFORMATION
One of the Company's directors is also a director of one of the Company's
customers. Net revenue recognized from this customer was $8,554,000 and
$3,401,000, or 11.7% and 14.5% of revenues, in the three months ended March
31, 2000 and 1999, respectively. Net revenue recognized from this customer
in the six months ended March 31, 2000 and 1999, was $15,527,000 and
$4,139,000, or 12.6% and 9.5% of revenues, respectively. Amounts due from
this customer included in accounts receivable at March 31, 2000 and
September 30, 1999 were $5,557,000 and $3,384,000, respectively. Related
party amounts included in accounts receivable are on standard terms and
manner of settlement.
<PAGE> 11
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
In the three months ended March 31, 2000, the Company had no other
customers that accounted for more than 10% of revenues. In the comparable
prior year period, one other customer accounted for more than 10% of
revenues; sales to this customer were 10.6% of revenues. In the six months
ended March 31, 2000, the Company had no other customers that accounted for
more than 10% of revenues. The Company had one other customer who accounted
for more than 10% of revenues in the six months ended March 31, 1999; sales
to this customer were 13.1% of revenues in the period.
9. ACCOUNTS RECEIVABLE
Accounts receivable consist of the following (in thousands):
March 31, September 30,
2000 1999
--------- -------------
Accounts receivable $ 69,527 $ 34,591
Less allowances 2,240 1,687
-------- --------
$ 67,287 $ 32,904
======== ========
10. INVENTORIES
Inventories consist of the following (in thousands):
March 31, September 30,
2000 1999
--------- -------------
Raw materials and purchased parts $ 19,580 $ 14,655
Work-in-process 11,142 10,154
Finished goods 5,734 4,108
-------- --------
$ 36,456 $ 28,917
======== ========
11. INTANGIBLE ASSETS
Intangible assets consist of the following (in thousands):
March 31, September 30,
2000 1999
--------- -------------
Patents $ 6,826 $ 7,127
Goodwill 57,165 7,953
-------- --------
63,991 15,080
Less accumulated amortization 7,110 1,361
-------- --------
$ 56,881 $ 13,719
======== ========
<PAGE> 12
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
12. ACQUISITION-RELATED AND RESTRUCTURING LIABILITIES
The activity related to the Company's acquisition-related and restructuring
liabilities during the six months ended March 31, 2000 is below (in
thousands):
Balance Balance
September 30, March 31,
1999 Utilization 2000
---------------------------------------
Facilities $ 1,145 $ (90) $ 1,055
Depreciable assets -- -- --
Workforce-related 2,512 (265) 2,247
Other 211 (50) 161
------- ----- -------
$ 3,868 $(405) $ 3,463
======= ===== =======
13. CONTINGENCIES
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 it is probable that the future events related to this
threatened matter would have an adverse effect on the Company's business.
14. SUBSEQUENT EVENTS
On May 5, 2000, the Company acquired Irvine Optical Company, L.L.C.
("Irvine Optical") in exchange for 307,493 shares of Common Stock.
Subsequently, the Company repaid a long-term debt obligation of Irvine
Optical in the amount of $7,089,000. The acquisition will be accounted for
as a pooling of interests. Irvine Optical, a California limited liability
company located in Burbank, California, is engaged principally in the
design, engineering and manufacturing of wafer handling and inspection
equipment for sale primarily to the semiconductor industry. Irvine Optical
had revenues of approximately $11 million in the year ended December 31,
1999.
On May 2, 2000 the Company terminated its $30.0 million unsecured revolving
credit facility for a $10.0 million uncommitted demand promissory note
credit facility with ABN AMRO. The new facility is payable on demand or on
December 31, 2001, whichever occurs first. ABN AMRO is not obligated to
extend loans or issue letters of credit under this facility. The interest
rates for borrowings and letters of credit under the facility are expressed
in relation to LIBOR and a margin of 1.75%, or at 0.75% above ABN AMRO's
base rate. Approximately $1.1 million in face amount of letters of credit
outstanding under the revolving credit facility were transferred to the
replacement facility.
<PAGE> 13
BROOKS AUTOMATION, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report constitute "forward-looking
statements" which involve known risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Brooks Automation, Inc.
("Brooks" or the "Company") to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. For a further discussion of the various risks affecting the
business, refer to "Factors That May Affect Future Results" appearing at the end
of this Management's Discussion and Analysis of Financial Condition and Results
of Operations. Precautionary statements made herein should be read as being
applicable to all related forward-looking statements wherever they appear in
this report.
OVERVIEW
The Company is a leading supplier of integrated tool and factory automation
solutions for the global semiconductor and related industries such as the data
storage and flat panel display manufacturing industries. The Company's product
revenues include sales of hardware and software products. The Company's service
revenues are primarily comprised of tool control application consulting
services, consulting, software customization and spare parts sales.
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. 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.
Conversely, losing a bid for a manufacturing execution system ("MES") does not
preclude the Company from securing optimization products to fit with a
competitor's MES.
A significant portion 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 Asia and Europe. Sales in Asia have occurred primarily in Japan
and South Korea, and, to a lesser extent, in Taiwan and Singapore.
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 under the caption "Accumulated other comprehensive
income (loss)". 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 risk of currency
fluctuation.
The Company's business is highly dependent upon the capital expenditures of
semiconductor and flat panel display manufacturers which historically have been
cyclical, 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 the volume, composition and
timing of orders, conditions in industries served by the Company, competition
and general economic conditions.
<PAGE> 14
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
BASIS OF PRESENTATION
On January 6, 2000, the Company completed the acquisition of the businesses of
Auto-Soft Corporation ("ASC") and AutoSimulations, Inc. ("ASI") from Daifuku
America Corporation ("Daifuku America"), a U.S. subsidiary of Daifuku Co., Ltd.
of Japan. The acquisition was accounted for using the purchase method of
accounting. Accordingly, the Company's Consolidated Statements of Operations and
of Cash Flows for the three and six months ended March 31, 2000 include the
results of ASC and ASI for the period subsequent to their acquisition.
The Company made several acquisitions during fiscal year 1999 which were
accounted for using the purchase method of accounting: the Infab Division
("Infab") of Jenoptik AG on September 30, 1999; Domain Manufacturing Corporation
("Domain") on June 30, 1999 and Hanyon Technology, Inc. ("Hanyon") on April 2,
1999. Accordingly, the Company's Consolidated Statements of Operations and of
Cash Flows for the three and six months ended March 31, 2000 include the results
of these acquired entities.
In June 1999, the Company formed a joint venture in Korea with Samsung
Electronics ("Samsung"). This joint venture is 70% owned by the Company and 30%
owned by Samsung. The Company consolidates fully the financial position and
results of operations of the joint venture and accounts for the minority
interest in the financial statements.
The financial statements for the three months and six months ended March 31,
1999 have been restated to reflect the acquisition of Smart Machines Inc.
("Smart Machines") in a pooling of interests transaction effective August 31,
1999.
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED MARCH 31, 2000, COMPARED TO THREE AND SIX MONTHS
ENDED MARCH 31, 1999
The Company reported net income of $1.5 million for the three months ended March
31, 2000, compared to a net loss of $0.6 million in the same prior year period.
Net income before amortization of acquired intangible assets, net of taxes, was
$6.0 million for the three months ended March 31, 2000. There was no
amortization of acquired intangible assets in the three months ended March 31,
1999. The Company reported net income of $4.3 million for the six months ended
March 31, 2000. This compares to a net loss of $2.1 million in the same period
of the prior year. Net income before amortization of acquired intangible assets,
net of taxes, was $9.3 million for the six months ended March 31, 2000. There
was no amortization of acquired intangible assets in the six months ended March
31, 1999.
REVENUES
The Company reported revenues of $73.0 million in the three months ended March
31, 2000, compared to $23.5 million in the same prior year period. For the six
months ended March 31, 2000, the Company reported revenues of $123.3 million.
This compares to revenues of $43.6 million in the six months ended March 31,
1999. Product revenues increased $40.5 million, or 216.4%, to $59.2 million, in
the three months ended March 31, 2000, compared to the three months ended March
31, 1999. Product revenues for the six months ended March 31, 2000, were $102.3
million, nearly three times greater than product revenues of $34.1 million in
the same prior year period. This growth is primarily attributable to
acquisitions, the overall strength in the original equipment manufacturer
("OEM") markets and software business growth. Service revenues for the three
months ended March 31, 2000 were $13.8 million, an increase of $9.0 million, or
187.9%, from the three months ended March 31, 1999. Service revenues for the six
months ended March 31, 2000 increased $11.6 million, or 122.4%, for the six
months ended March 31, 2000, from $9.4 million in the six months ended March 31,
1999. These increases are primarily the result of the Company's acquisitions and
the impact of those acquisitions on consulting services associated with factory
automation.
<PAGE> 15
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Foreign revenues were $37.2 million, or 50.9% of revenues, and $8.0 million, or
34.1% of revenues, in the three month periods ended March 31, 2000 and 1999,
respectively. For the six month periods ended March 31, 2000 and 1999, foreign
revenues were $63.3 million, or 51.4% of revenues, and $20.0 million, or 45.9%
of revenues, respectively. The Company expects that foreign revenues will
continue to account for a significant portion of total revenues.
GROSS PROFIT
Gross profit increased to 46.6% for the three months ended March 31, 2000,
compared to 43.4% for the same prior year period. Gross profit for the six
months ended March 31, 2000 was 47.4%, an increase from 43.1% for the comparable
prior year period.
Gross profit on product revenues increased to 49.0% for the three months ended
March 31, 2000, from 47.3% in the comparable prior year period. Gross profit on
product revenues increased to 48.8% for the six months ended March 31, 2000,
from 44.8% in the same prior year period. The increase in both the three and six
month periods is primarily attributable to improvements in manufacturing
capacity utilization and the acquisition of higher margin software product
businesses, partially offset by the Infab operations' lower margins. In future
periods, gross profit may be adversely affected by changes in product mix or
price competition.
Gross profit on service revenues was 36.4% for the three months ended March 31,
2000, an increase from 28.0% for the three months ended March 31, 1999. Gross
profit on service revenues increased to 40.8% for the six months ended March 31,
2000, from 37.0% in the same prior year period. The increase in both the three
and six month periods is primarily attributable to improved market conditions
and change in service mix. Included in the cost of services revenues are global
support customer costs, consisting primarily of personnel costs and travel
expenses.
RESEARCH AND DEVELOPMENT
Research and development expenses for the three months ended March 31, 2000 were
$9.8 million, an increase of $4.6 million, compared to $5.2 million in the three
months ended March 31, 1999. Research and development expenses for the six
months ended March 31, 2000 were $16.9 million, an increase of $6.8 million, or
67.3%, compared to the same prior year period. However, research and development
expenses decreased as a percentage of revenues in both the three and six month
periods ended March 31, 2000, to 13.4% and 13.7%, respectively. This compares to
22.0% and 23.2% of revenues in the three and six months ended March 31, 1999,
respectively. The increase in absolute spending is the result of the research
and development efforts related to the Company's recent acquisitions as well as
incremental spending associated with the launch of new atmospheric products and
the transition to next generation vacuum wafer handling products. These
increases were partially offset by the elimination of redundant research and
development programs. The Company expects to continue to invest in research and
development to enhance existing and develop new tool and factory hardware and
software automation solutions for the semiconductor, data storage and flat panel
display manufacturing industries.
<PAGE> 16
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were $15.2 million for the three
months ended March 31, 2000, an increase of $8.8 million, compared to $6.4
million in the same prior year period. Selling, general and administrative
expenses increased by $15.3 million, to $27.7 million for the six months ended
March 31, 2000, compared to $12.4 million in the six months ended March 31,
1999. However, selling, general and administrative expenses decreased as a
percentage of revenues in both the three and six month periods ended March 31,
2000, to 20.8% and 22.5%, respectively. This compares to 27.2% and 28.5% of
revenues in the three and six months ended March 31, 1999, respectively. The
increase in absolute spending is the result of expanded sales and marketing
activities as well as general and administration support costs associated with
the Company's recently completed acquisitions and infrastructure improvements,
while the improvement of these costs as a percentage of revenues reflects the
Company's efforts at expanding its product offerings and customer base.
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
Amortization expense for acquired intangible assets totaled $4.8 million and
$5.6 million in the three and six months ended March 31, 2000, and is related to
acquired intangible assets of the ASC and ASI acquisition, which was consummated
January 6, 2000, and the Infab, Domain and Hanyon acquisitions, all of which
occurred during the second half of fiscal 1999. Accordingly, there was no
amortization of acquired intangible assets recorded in the three or six months
ended March 31, 1999.
INTEREST INCOME AND EXPENSE
Interest income increased by 35.5%, to $1.0 million, in the three months ended
March 31, 2000, and by 9.4%, to $1.7 million, in the six months ended March 31,
2000, due primarily to higher cash and investment asset balances which resulted
from the Company's public offering of shares of common stock in March 2000.
Interest income was $0.8 million and $1.5 million in the three and six months
ended March 31, 1999. Interest expense was $0.2 million and $0.1 million in the
three months ended March 31, 2000 and 1999, respectively. Interest expense in
the three months ended March 31, 2000 relates primarily to the note payable
issued to Daifuku America in partial consideration for ASC and ASI. Interest
expense was $0.2 million in each of the six month periods ended March 31, 2000
and 1999.
INCOME TAX PROVISION (BENEFIT)
The Company recorded net income tax expense of $5.5 million and net tax benefits
of $0.3 million for the six months ended March 31, 2000 and 1999, respectively.
The tax provision is attributable to federal, state, foreign and withholding
taxes. Federal and state taxes have been reduced for net operating losses,
research and development tax credits and a foreign sales corporation benefit.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $256.8 million at March 31, 2000, an increase of
$190.4 million from September 30, 1999. The Company realized proceeds, net of
issuance costs, of approximately $220 million from a public offering of shares
of its common stock in March 2000. In connection with its acquisition of ASC and
ASI on January 6, 2000, the Company paid Daifuku America $27.0 million in cash
and issued Daifuku America a note in the amount of $16.0 million, which is due
on January 6, 2001.
<PAGE> 17
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Cash used in operations was $3.8 million, and is primarily attributable to
increases in accounts receivable, inventories and prepaid expenses and other
current assets of $24.2 million, $8.0 million and $4.2 million, respectively,
partially offset by depreciation and amortization of $10.1 million, and
increases of $6.8 million and $9.1 million in accounts payable and accrued
expenses and other current liabilities, respectively.
Cash used in investing activities was $29.7 million, and was principally
comprised of $24.0 million used for the purchase of businesses, net of cash
acquired (primarily the acquisition of ASC and ASI) and $5.2 million used for
capital additions, primarily in telecommunications, systems infrastructure and
for computer requirements. Cash provided by financing activities was $223.6
million, comprised of $223.9 million of proceeds from the issuance of common
stock, net of issuance costs and $0.3 million for payments of long-term debt.
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 capacity in its new Chelmsford facility
and acquire capital equipment and management information systems. The Company
may also use its resources to acquire companies, technologies or products that
complement the business of the Company.
Because of its strong cash position, the Company terminated its $30.0 million
unsecured revolving credit facility and replaced it with a $10.0 million
uncommitted demand promissory note facility with ABN AMRO Bank N.V. ("ABN AMRO")
on May 2, 2000. At March 31, 2000, $1.0 million of the original facility was in
use, all for letters of credit. The Company transferred all of its obligations
under the terminated facility, which consisted of outstanding letters of credit,
totaling approximately $1.1 million, to the new facility. ABN AMRO is not
obligated to extend loans or issue letters of credit under this new facility.
The Company believes that its existing resources, including the proceeds
received from its recent sale of common stock will be adequate to fund the
Company's currently planned working capital and capital expenditure requirements
for at least the next twelve months. The sufficiency of the Company's resources
to fund its needs for capital is subject to known and unknown risks,
uncertainties and other factors which may have a material adverse effect on the
Company's business, including, without limitation, the factors discussed under
"Factors That May Affect Future Results."
YEAR 2000 READINESS DISCLOSURE
The year 2000 issue is the potential for system and processing failure of
date-related data as the result of computer-controlled systems using two digits
rather than four digits to define the applicable year. For example, computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities. Problems associated with the year 2000
may not become apparent until some time after January 2000.
Internal infrastructure compliance. Brooks may be affected by year 2000
issues related to non-compliant information technology systems and other systems
operated or sold by Brooks or by third parties. Brooks has completed assessment
of its internal information technology systems and applications and believes
that all critical applications are year 2000 compliant. Brooks also has
evaluated its information technology hardware and its non-information technology
systems, including facilities and other operations, such as financial, security
and utility systems. As of the end of calendar year 1999, Brooks had completed
the remediation of all items identified as non-compliant.
<PAGE> 18
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Product compliance. Brooks has completed a year 2000 readiness
evaluation of its current generation of released products and believes that
products distributed after December 31, 1998 are year 2000 compliant. Brooks
cannot guarantee that product testing has identified all year 2000 related
issues that could have an adverse affect on Brooks' financial condition and
results of operations.
Acquisitions. Brooks has acquired eight businesses since September
1998: Irvine Optical, ASC, ASI, Infab, Smart Machines, FASTech, Hanyon and
Domain. Brooks is in various stages of negotiation with respect to the
acquisition of additional businesses. As part of Brooks' due diligence
examination of these businesses, Brooks conducted a limited evaluation of their
year 2000 readiness. Brooks believes there are no significant year 2000 related
issues arising from the companies that Brooks has acquired. Brooks cannot
guarantee that it has identified and properly evaluated year 2000 issues
relating to the acquired companies. Brooks also can give no assurance that it
will properly identify year 2000 issues relating to any companies acquired in
the future.
Third Party Compliance. Although Brooks believes that its systems are
year 2000 compliant, Brooks utilizes third party equipment and software that may
not be year 2000 compliant. In addition, Brooks' products and software are often
sold integrated into or interfaced with third party equipment or software.
Failure of third party equipment or software to operate properly with regard to
the year 2000 and thereafter could require Brooks to incur unanticipated
expenses to remedy any problems, which could have a material adverse effect on
Brooks' business, results of operations and financial condition. Brooks may also
be vulnerable to any failures by its major suppliers, service providers and
customers to remedy their own internal information technology and
non-information technology system year 2000 issues which could, among other
things, have a material adverse effect on Brooks supplies and orders. At this
time, Brooks is unable to estimate the nature or extent of any potential adverse
impact resulting from the failure of third parties, such as its suppliers,
service providers and customers, to achieve year 2000 compliance. Moreover, such
third parties, even if year 2000 compliant, could experience difficulties
resulting from year 2000 issues that may affect their suppliers, service
providers and customers. As a result, although Brooks does not currently
anticipate, based upon surveys, discussions and actual experience to date in
2000, that it will experience any material shipment delays from its major
product suppliers or any material sales delays from its major customers due to
year 2000 issues, there can be no assurance that these third parties will not
experience year 2000 problems or that any problems would not have an adverse
material effect on Brooks' business, results of operations and financial
condition. Because the cost and timing of year 2000 compliance by third parties
such as suppliers, service providers and customers is not within Brooks'
control, Brooks cannot give any assurance with respect to the cost or timing of
such efforts or any potential adverse effects on Brooks of any failure by these
third parties to achieve year 2000 compliance.
Brooks relies on commercial or government suppliers for services
related to Brooks' infrastructure, including utilities, transportation,
financial, governmental, communications and other services. These suppliers pose
an undetermined risk to Brooks' facilities and operations worldwide. In some
cases, alternate suppliers of these services, such as electrical utilities, are
unavailable, and failure by a supplier could adversely impact Brooks.
Costs. Based on its investigation to date, Brooks does not expect the
total cost of its year 2000 assessment and planning to have a material adverse
effect on Brooks' business or financial results. On a cumulative basis, Brooks
has incurred approximately $800,000 in year 2000 compliance costs. Brooks has
not incurred material year 2000 compliance costs in fiscal 2000 and does not
anticipate the need for additional significant expenditures.
Contingency Plan. Brooks has developed contingency plans, as
appropriate, and believes its year 2000 compliance efforts to be materially
complete in the event year 2000 problems relating to its operations arise.
<PAGE> 19
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Worst Case Scenario. To the extent that Brooks does not identify any
material non-compliant information technology systems or non-information
technology systems operated by Brooks or by third parties, such as Brooks'
suppliers, service providers and customers, the most reasonably likely worst
case year 2000 scenario is a systemic failure beyond the control of Brooks, such
as a prolonged telecommunications or electrical failure, or a general disruption
in United States or global business activities that could result in a
significant economic downturn. Brooks believes that the primary business risks,
in the event of such failure or other disruption, would include but not be
limited to, loss of customers or orders, increased operating costs, inability to
obtain inventory on a timely basis, disruptions in product shipments, or other
business interruptions of a material nature, as well as claims of mismanagement,
misrepresentation, or breach of contract, any of which could have a material
adverse effect on Brooks' business, results of operations and financial
condition.
RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation -- an interpretation of APB Opinion No. 25" ("FIN 44"). FIN 44
clarifies the application of APB Opinion No. 25 and among other issues clarifies
the following: the definition of an employee for purposes of applying APB
Opinion No. 25; the criteria for determining whether a plan qualifies as a
non-compensatory plan; the accounting consequence of various modifications to
the terms of previously fixed stock options or awards; and the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain conclusions in FIN 44 cover specific events
that occurred after either December 15, 1998 or January 12, 2000. The Company
does not expect the application of FIN 44 to have a material impact on the
Company's financial position or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in Financial
Statements." SAB 101 summarizes the SEC's views in applying generally accepted
accounting principles to selected revenue recognition issues in financial
statements. The application of the guidance in SAB 101 will be required in the
Company's first quarter of fiscal 2001. The Company is currently determining the
impact that SAB 101 will have on its financial position and results of
operations.
FACTORS THAT MAY AFFECT FUTURE RESULTS
You should carefully consider the risks described below and the other
information in this report before deciding to invest in shares of our common
stock. While these are the risks and uncertainties we believe are most important
for you to consider, you should know that they are not the only risks or
uncertainties facing us or which may adversely affect our business. If any of
the following risks or uncertainties actually occur, our business, financial
condition and operating results would likely suffer. In that event, the market
price of our common stock could decline and you could lose all or part of the
money you paid to buy our common stock.
RISKS RELATING TO OUR OPERATIONS
The Cyclical Demand of Semiconductor Manufacturers Affects our
Operating Results. Our business is significantly dependent on capital
expenditures by semiconductor manufacturers. The level of semiconductor
manufacturers' capital expenditures is dependent on the current and anticipated
market demand for semiconductors. Demand for semiconductors is cyclical and has
historically experienced periodic downturns. During these downturns, our
revenues have dropped, and we have incurred losses. We believe that downturns in
the semiconductor manufacturing industry will occur in the future and will
result in decreased demand for our products. Despite the addition of our factory
automation business in fiscal 1999, our financial results will continue to be
dependent on capital expenditures by semiconductor manufacturers. Downturns in
the semiconductor business, when fewer new facilities are being built, could
harm our financial results as have downturns in the past.
Our Sales Volume Depends on the Sales Volume of our Original Equipment
Manufacturer Customers. We sell a majority of our tool automation products to
original equipment manufacturers who incorporate our products into their
equipment. Therefore, our revenues are directly dependent on the ability of
these customers to develop and market their equipment in a timely,
cost-effective manner.
<PAGE> 20
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
We Rely on a Small Number of Customers for a Large Portion of our
Revenues. We receive a significant portion of our revenues in each fiscal period
from a limited number of customers. The loss of one or more of these major
customers, or a decrease in orders by one or more customers, would adversely
affect our business. Sales to our ten largest customers accounted for
approximately 53% of total revenues in the six months ended March 31, 2000 and
63% of total revenues in fiscal 1999.
Delays in Shipment of a Few of our Large Orders Could Substantially
Decrease our Revenues. Historically, a substantial portion of our quarterly and
annual revenues came from sales of a small number of large orders. These orders
consist of products with high selling prices compared to our other products. As
a result, the timing of the recognition of revenue from one of these large
orders can have a significant impact on our total revenues and operating results
for a particular period. Our operating results could be harmed if orders for
even a small number of large orders are canceled or rescheduled by customers or
cannot be filled due to delays in manufacturing, testing, shipping or product
acceptance.
We Have Significant Fixed Costs Which Are Not Easily Reduced if
Revenues Fall Below Expectations. Our expense levels are based in part on our
future revenue expectations. Many of our expenses, particularly those relating
to capital equipment and manufacturing overhead, are relatively fixed. If we do
not meet our sales goals we may be unable to rapidly reduce these fixed costs.
Our ability to reduce expenses is further constrained because we must continue
to invest in research and development to maintain our competitive position to
maintain service and support for our existing global customer base. Accordingly,
if we suffer an unexpected downturn in revenue, our inability to reduce fixed
costs rapidly could increase the adverse impact on our results of operations.
Our Lengthy Sales Cycle Requires Us to Incur Significant Expenses With
No Assurance That We Will Generate Revenue. Our tool automation products are
generally incorporated into original equipment manufacturer equipment at the
design stage. To obtain new business from our original equipment manufacturer
customers, we must develop products for selection by a potential customer at the
design stage. This often requires us to make significant expenditures, without
any assurance of success. The original equipment manufacturer's design decisions
often precede the generation of volume sales, if any, by a year or more. We also
must complete successfully a lengthy evaluation period before we can achieve
volume sales of our manufacturing execution system software and process
optimization software to our factory automation customers. We cannot guarantee
that we will continue to achieve design wins or satisfy evaluations by our
factory automation customers of our software. We cannot guarantee that the
equipment manufactured by our original equipment manufacturing customers will be
commercially successful. If we or our original equipment manufacturing customers
fail to develop and introduce new products successfully and in a timely manner,
our business and financial results will suffer.
Our International Business Operations Expose Us to a Number of
Difficulties in Coordinating Our Activities Abroad and in Dealing with Multiple
Regulatory Environments. Approximately 51% of our total revenues in the six
months ended March 31, 2000, and 41% of our total revenues in fiscal 1999, were
derived from customers located outside North America. We anticipate that
international sales will continue to account for a significant portion of our
revenues. Our vendors are located in several different foreign countries. As a
result of our international business operations, we are subject to various
risks, including:
- difficulties in staffing and managing operations in multiple locations
in many countries;
- challenges presented by collecting trade accounts receivable in foreign
jurisdictions;
- possible adverse tax consequences;
- governmental currency controls;
- changes in various regulatory requirements;
- political and economic changes and disruptions; and
- export/import controls and tariff regulations.
<PAGE> 21
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
To support our international customers, we maintain locations in several
countries, including Japan, South Korea, Germany, United Kingdom, Malaysia,
Taiwan, Singapore and Canada. We cannot guarantee that we will be able to manage
these operations effectively. We cannot assure you that our investment in these
international operations will enable us to compete successfully in international
markets or to meet the service and support needs of our customers, some of whom
are located in countries where we have no infrastructure.
Although our international sales are primarily denominated in U.S. dollars,
changes in currency exchange rates can make it more difficult for us to compete
with foreign manufacturers on price. If our international sales increase
relative to our total revenues, these factors could have a more pronounced
effect on our operating results.
We Must Continually Improve Our Technology to Remain Competitive.
Technology changes rapidly in the semiconductor, data storage and flat panel
display manufacturing industries. We believe our success will depend upon our
ability to enhance our existing products and to develop and market new products
to meet customer needs. We cannot guarantee that we will identify and adjust to
changing market conditions or succeed in introducing commercially rewarding
products or product enhancements. The success of our product development and
introduction depends on a number of factors, including:
- accurately identifying and defining new products;
- completing and introducing new product designs in a timely manner;
- market acceptance of our products and our customers' products; and
- determining a comprehensive, integrated product strategy.
We Face Significant Competition Which Could Result in Decreased Demand
For Our Products or Services. The markets for our products are intensely
competitive and we may not be able to compete successfully. We believe that our
primary competition in the tool automation market is from integrated original
equipment manufacturers that satisfy their semiconductor and flat panel display
handling needs themselves rather than by purchasing systems or modules from an
independent supplier like us. Many of these original equipment manufacturers
have substantially greater resources than we do. Applied Materials, Inc., the
leading process equipment original equipment manufacturer, develops and
manufactures its own central wafer handling systems and modules. We may not be
successful in selling our products to original equipment manufacturers that
currently satisfy their wafer or substrate handling needs themselves, regardless
of the performance or the price of our products. Moreover, integrated original
equipment manufacturers may begin to commercialize their handling capabilities
and become our competitors.
We believe that the primary competitive factors in the end-user semiconductor
manufacturer market for factory automation software and process control software
are product functionality, price/performance, ease of use, hardware and software
platform compatibility, vendor reputation and financial stability. The relative
importance of these competitive factors may change over time. We directly
compete in this market with various competitors, including Applied
Materials-Consilium, PRI-Promis, IBM-Poseidon and numerous small, independent
software companies. We also compete with the in-house software staffs of
semiconductor manufacturers like NEC. Most of those manufacturers have
substantially greater resources than us.
We believe that the primary competitive factors in the factory interface market
are technical and technological capabilities, reliability, price/performance,
ease of integration and global sales and support capability. In this market, we
compete directly with Asyst, Fortrend, Kensington and Rorze. Some of these
competitors have substantial financial resources and extensive engineering,
manufacturing and marketing capabilities.
We believe our sale of products for the flat panel display process equipment
market is heavily dependent upon our penetration of the Japanese market. In
addressing the Japanese markets, we may be at a competitive disadvantage to
Japanese suppliers that, historically, have been the supplier of choice to these
markets.
<PAGE> 22
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Much of Our Success and Value Lies in Our Ownership and Use of
Intellectual Property and Our Failure to Protect That Property Could Adversely
Affect Our Future Growth. Our ability to compete is heavily affected by our
ability to protect our intellectual property. We rely primarily on trade secret
laws, confidentiality procedures, patents, copyrights, trademarks and licensing
arrangements to protect our intellectual property. The steps we have taken to
protect our technology may be inadequate. Existing trade secret, trademark and
copyright laws offer only limited protection. Our patents could be invalidated
or circumvented. The laws of certain foreign countries in which our products are
or may be developed, manufactured or sold may not fully protect our products or
intellectual property rights. This may make the possibility of piracy of our
technology and products more likely. We cannot guarantee that the steps we have
taken to protect our intellectual property will be adequate to prevent
misappropriation of our technology. There has been substantial litigation
regarding patent and other intellectual property rights in semiconductor-related
industries. We may engage in litigation to:
- enforce our patents;
- protect our trade secrets or know-how;
- defend ourselves against claims we infringe on the rights of others; or
- determine the scope and validity of the patents or intellectual
property rights of others.
Any litigation could result in substantial cost to us and divert the attention
of our management, which could harm our operating results.
Our Operations Could Infringe on the Intellectual Property Rights of
Others. Particular aspects of our technology could be found to infringe on the
intellectual property rights or patents of others. Other companies may hold or
obtain patents on inventions or may otherwise claim proprietary rights to
technology necessary to our business. We cannot predict the extent to which we
may be required to seek licenses or alter our products so that they no longer
infringe on the rights of others. We cannot guarantee that the terms of any
licenses we may be required to seek will be reasonable. Similarly, changing our
products or processes to avoid infringing on the rights of others may be costly
or impractical or could detract from the value of our products.
Our Business May Be Harmed by Infringement Claims of General Signal or
Applied Materials. We received notice from General Signal Corporation alleging
infringements of its patent rights by certain of our products. The notification
advised us that General Signal was attempting to enforce its rights to those
patents in litigation against Applied Materials, and that, at the conclusion of
that litigation, General Signal intended to enforce its rights against us and
others. According to a press release issued by Applied Materials in November
1997, Applied Materials settled its litigation with General Signal by acquiring
ownership of five General Signal patents. Although not verified by us, these
five patents would appear to be the patents referred to by General Signal in its
prior notice to us. Applied Materials has not contacted us regarding these
patents.
We Do Not Have Long-term Contracts With Our Customers and Our Customers
May Cease Purchasing Our Products at Any Time. We generally do not have
long-term contracts with our customers. As a result, our agreements with our
customers do not provide any assurance of future sales. Accordingly:
- our customers can cease purchasing our products at any time without
penalty;
- our customers are free to purchase products from our competitors;
- we are exposed to competitive price pressure on each order; and
- our customers are not required to make minimum purchases.
<PAGE> 23
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
Year 2000 Readiness; Year 2000 Problems Could Disrupt Our Business. The
year 2000 problem is the potential for system and processing failure of
date-related data as the result of computer-controlled systems using two digits
rather than four digits to define the applicable year. This could result in
system failure or miscalculations causing disruptions of operations, including,
among other things, temporary inability to process transactions, send invoices,
or engage in similar normal business activities. Problems associated with the
year 2000 may not become apparent until some time after January 2000.
We have evaluated our internal software and products for year 2000 problems. We
believe that our products and business will not be substantially affected by the
year 2000 problem and that we have no significant exposure to liabilities
related to the year 2000 problems for the products that we have sold. We have
also communicated with others, including suppliers and customers whose computer
systems' functionality could directly impact our operations.
Although we believe our planning efforts are adequate to address our year 2000
concerns, undetected year 2000 problems may cause use to experience negative
consequences or significant costs. We cannot be sure that our suppliers,
customers or businesses that we may acquire will not experience similar
consequences or costs. Such consequences or costs could adversely affect our
business.
RISKS RELATING TO OUR GROWTH
Rapid Growth is Straining Our Operations and Requiring Us to Incur
Costs to Upgrade Our Infrastructure. During the last three quarters, we have
experienced extremely rapid growth in our operations, the number of our
employees, our product offerings and the geographic area of our operations. Our
growth places a significant strain on our management, operations and financial
systems. Our future operating results will be dependent in part on our ability
to continue to implement and improve our operating and financial controls and
management information systems. If we fail to manage our growth effectively, our
financial condition, results of operations and business could be materially
adversely affected.
Our Operating Results Would Be Harmed If One of Our Key Suppliers Fails
to Deliver Components for Our Products. We currently procure many of our
components on an as needed, purchase order basis. We do not carry significant
inventories or have any long-term supply contracts with our vendors. With the
recent increased demand for semiconductor manufacturing equipment, our suppliers
are facing significant challenges in providing components on a timely basis. Our
inability to obtain components in required quantities or of acceptable quality
could result in significant delays or reductions in product shipments. This
would materially and adversely affect our operating results.
Our Business Could Be Harmed If We Fail to Adequately Integrate the
Operations of Our Acquisitions. Our management must devote substantial time and
resources to the integration of the operations of our acquired businesses with
our business and with each other. If we fail to accomplish this integration
efficiently, we may not realize the anticipated benefits of our acquisitions.
The process of integrating supply and distribution channels, research and
development initiatives, computer and accounting systems and other aspects of
the operation of our acquired businesses, presents a significant challenge to
our management. This is compounded by the challenge of simultaneously managing a
larger entity. We have completed a number of acquisitions in a short period of
time.
<PAGE> 24
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
These businesses have operations and personnel located in Asia, Europe and the
United States and present a number of additional difficulties of integration,
including:
- difficulties in the assimilation of products and designs into
integrated solutions;
- difficulties in informing customers, suppliers and distributors of the
effects of the acquisitions and integrating them into our overall
operations;
- difficulties integrating personnel with disparate business backgrounds
and cultures;
- difficulties in defining and executing a comprehensive product
strategy;
- difficulties in managing geographically remote units;
- difficulties associated with managing the risks of entering markets or
types of businesses in which we have limited or no direct experience;
and
- difficulties in minimizing the loss of key employees of the acquired
businesses.
If we delay integrating or fail to integrate an acquired business or experience
other unforeseen difficulties, the integration process may require a
disproportionate amount of our management's attention and financial and other
resources. Our failure to adequately address these difficulties could harm our
business and financial results.
Our Business May Be Harmed by Acquisitions We Complete in the Future.
We plan to continue to pursue additional acquisitions of related businesses. Our
identification of suitable acquisition candidates involves risks inherent in
assessing the values, strengths, weaknesses, risks and profitability of
acquisition candidates, including the effects of the possible acquisition on our
business, diversion of our management's attention and risks associated with
future acquisitions, we will be required to expend significant funds, incur
additional debt or issue additional securities, which may negatively affect our
results of operations and be dilutive to our stockholders. If we spend
significant funds or incur additional debt, our ability to obtain financing for
working capital or other purposes could decline and we may be more vulnerable to
economic downturns and competitive pressures. We cannot guarantee that we will
be able to finance additional acquisitions or that we will realize any
anticipated benefits from acquisitions that we complete. Should we successfully
acquire another business, the process of integrating acquired operations into
our existing operations may result in unforeseen operating difficulties and may
require significant financial resources that would otherwise be available for
the ongoing development or expansion of our existing business.
We May Not Be Able to Recruit and Retain Necessary Personnel Because of
Intense Competition for Highly Skilled Personnel. We need to hire and retain
substantial numbers of employees with technical backgrounds for both our
hardware and software engineering and support staffs. The market for these
employees is intensely competitive, and we have occasionally experienced delays
in hiring these personnel. Due to the cyclical nature of the demand for our
products, we have had to reduce our workforce and then rebuild our workforce as
our business has gone through downturns followed by upturns. We currently need
to hire a number of highly skilled employees, especially in manufacturing, to
meet customer demand. Due to the competitive nature of the labor markets in
which we operate, this type of employment cycle increases our risk of not being
able to retain and recruit key personnel. Our inability to recruit, retain and
train adequate numbers of qualified personnel on a timely basis could adversely
affect our ability to develop, manufacture, install and support our products.
<PAGE> 25
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
RISKS RELATING TO OUR COMMON STOCK
Our Operating Results Fluctuate Significantly, Which Could Negatively
Impact Our Business and Our Stock Price. Our margins, revenues and other
operating results can fluctuate significantly from quarter to quarter depending
upon a variety of factors, including:
- the level of demand for semiconductors in general;
- cycles in the market for semiconductor manufacturing equipment and
automation software;
- the timing and size of orders from our customer base;
- our ability to manufacture, test and deliver products in a timely and
cost-effective manner;
- our success in winning competitions for orders;
- the timing of our new product announcements and releases and those of
our competitors;
- the mix of products sold by us;
- competitive pricing pressures; and
- the level of automation required in fab extensions, upgrades and new
facilities.
We entered into the factory automation software business in fiscal 1999. We
believe a substantial portion of our revenues from this business will be
dependent on achieving project milestones. As a result, our revenue from this
business will be subject to fluctuations depending upon a number of factors,
including whether we can achieve project milestones on a timely basis, if at
all, as well as the timing and size of projects.
The Volatility of Our Stock Price Could Adversely Affect an Investment
in Our Stock. The market price of our common stock has fluctuated widely. For
example, between February 11, 2000 and February 22, 2000, the price of our
common stock dropped from approximately $67.75 to $56.38 per share. Between
March 30, 2000 and April 19, 2000, the price of our common stock rose from
approximately $58.25 to $85.56 per share. Consequently, the current market price
of our common stock may not be indicative of future market prices, and we may
not be able to sustain or increase the value of an investment in our common
stock. Factors affecting our stock price may include:
- variations in operating results from quarter to quarter;
- changes in earnings estimates by analysts or our failure to meet
analysts' expectations;
- changes in the market price per share of our public company customers;
- market conditions in the industry;
- general economic conditions;
- low trading volume of our common stock; and
- the number of firms making a market in our common stock.
In addition, the stock market has recently experienced extreme price and volume
fluctuations. These fluctuations have particularly affected the market prices of
the securities of high technology companies like us. These market fluctuations
could adversely affect the market price of our common stock.
Provisions of Our Certificate of Incorporation, Bylaws and Contracts
May Discourage Takeover Offers and May Limit the Price Investors Would Be
Willing to Pay for Our Common Stock. Our certificate of incorporation and bylaws
contain provisions that may make an acquisition of us more difficult and
discourage changes in our management. These provisions could limit the price
that certain investors might be willing to pay in the future for shares of our
common stock. In addition, we have adopted a rights plan. In many potential
takeover situations, rights issued under the plan become exercisable to purchase
our common stock at a price substantially discounted from the then applicable
market price of our common stock. Because of its possible dilutive effect to a
potential acquirer, the rights plan would generally discourage third parties
from proposing a merger with or initiating a tender
<PAGE> 26
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
offer for us that is not approved by our board of directors. Accordingly, the
rights plan could have an adverse impact on our stockholders who might want to
vote in favor of the merger or participate in the tender offer. In addition,
shares of our preferred stock may be issued upon terms the board of directors
deems appropriate without stockholder approval. Our ability to issue preferred
stock in such a manner could enable our board of directors to prevent changes in
our management or control.
<PAGE> 27
BROOKS AUTOMATION, INC.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
INTEREST RATE EXPOSURE
Based on Brooks' overall interest exposure at March 31, 2000, including all
interest rate-sensitive instruments, a near-term change in interest rates within
a 95% confidence level based on historical interest rate movements would not
materially affect the consolidated results of operations or financial position.
CURRENCY RATE EXPOSURE
Brooks' 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 Brooks' international subsidiaries are generally denominated in
currencies other than the United States dollar. However, since the functional
currency of Brooks' international subsidiaries is the local currency, foreign
currency translation adjustments do not impact operating results, but instead
are reflected as a component of stockholders' equity under the caption
"Accumulated other comprehensive income (loss)". To the extent Brooks expands
its international operations or changes its pricing practices to denominate
prices in foreign currencies, Brooks will be exposed to increased risk of
currency fluctuation.
STOCK PRICE
The stock prices of semiconductor equipment companies are subject to significant
fluctuations. Brooks' stock price may be affected by a variety of factors that
could cause the price of Brooks' common stock to fluctuate, perhaps
substantially, including: announcements of developments related to Brooks'
business; quarterly fluctuations of Brooks' 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 Brooks or its competitors;
developments in patents or other intellectual property rights and litigation;
and developments in Brooks' relationships with its customers and suppliers. In
addition, in recent years, both the stock market in general and the 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 Brooks'
common stock. There can be no assurance that the market price of the common
stock of Brooks will not decline.
<PAGE> 28
BROOKS AUTOMATION, INC.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Amendment to Certificate of Incorporation -- Following receipt of
stockholder approval at the special meeting of stockholders of the Company on
February 24, 2000, the Company amended its certificate of incorporation to
increase the authorized shares of its Common Stock from 21,500,000 shares to
43,000,000 shares. This amendment to the Company's certificate of incorporation
did not otherwise affect the rights of the holders of the Company's Common
Stock. All of the additional shares resulting from the increase in the Company's
authorized Common Stock are of the same class, with the same dividend, voting
and liquidation rights, as the shares of Common Stock previously outstanding.
Recent sales of unregistered securities--Pursuant to the terms of an
Agreement and Plan of Merger dated as of December 16, 1999 among the Company,
ASC Merger Corp., ASI Merger Corp., Daifuku America and Daifuku Co., Ltd., the
Company acquired the businesses of Auto-Soft Corporation ("ASC") and
AutoSimulations, Inc. ("ASI"). The Company issued an aggregate of 535,404 shares
of its Common Stock on January 6, 2000 as part of the purchase price to acquire
the businesses of ASC and ASI. The Company reported this transaction on Form 8-K
filed on January 19, 2000. The issuance of the Common Stock pursuant to the
acquisition of ASI and ASC was exempt from registration under the Securities Act
of 1933, as amended, pursuant to Section 4(2) thereof.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
The Annual Meeting of Stockholders of the Company was held on February
24, 2000, at which the stockholders voted to (i) elect directors to the
Company's board of directors for terms of office expiring at the 2001 Annual
Meeting of Stockholders; (ii) approve the Company's 2000 Combination Stock
Option Plan; (iii) approve an amendment to the Company's 1995 Employee Stock
Option Plan to increase the number of shares of Common Stock available under the
1995 Plan by an additional 500,000 shares of Common Stock; and (iv) approve an
amendment to the Company's Certificate of Incorporation to increase the number
of authorized shares of the Company's Common Stock from 21,500,000 shares to
43,000,000 shares. The Company's stockholders voted on these matters as follows:
(i) Election of Directors
Robert J. Therrien, with 10,998,373 shares voting for and 492,166
shares withheld;
Roger D. Emerick with 10,903,111 shares voting for and 587,428 shares
withheld;
Amin J. Khoury with 10,885,391 shares voting for and 605,148 shares
withheld;
Juergen Giessmann with 10,899,365 shares voting for and 591,174 voting
withheld;
(ii) to amend the Company's 2000 Combination Stock Option Plan with
6,218,984 shares voting for, 3,305,956 shares voting against, 16,111
shares abstaining and 1,949,488 broker non-votes;
(iii) to amend the Company's 1995 Employee Stock Option Plan with 9,061,449
shares voting for, 467,097 shares voting against, 12,505 shares
abstaining and 1,949,488 broker non-votes;
(iv) to amend the Company's Certificate of Incorporation with 10,425,868
shares voting for, 1,058,086 broker non-votes and 6,585 shares
abstaining.
<PAGE> 29
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
Exhibit No. Description
----------- -----------
3.01 Certificate of Incorporation as Amended
10.1 Demand Promissory Note Agreement dated as of
May 2, 2000, between Brooks Automation, Inc. and
ABN AMRO Bank N.V.
27.1 Financial Data Schedule for the quarterly period
ended March 31, 2000
27.2 Financial Data Schedule for the quarterly period
ended March 31, 1999, restated to reflect the
acquisition of Smart Machines Inc. in a pooling
of interests transaction effective August 31,
1999
99.3 1995 Employee Stock Purchase Plan as amended
January 6, 2000
99.4 1998 Employee Equity Incentive Plan
99.7 2000 Combination Stock Option Plan
(b) The following reports on Form 8-K were filed during the quarterly
period ended March 31, 2000:
(1) Current report on Form 8-K filed on January 19, 2000,
relating to the acquisition of Auto-Soft Corporation and
AutoSimulations, Inc. from Daifuku America Corporation, a
U.S. subsidiary of Daifuku Co., Ltd.
(2) Amended current report on Form 8-K/A filed on February 14,
2000, relating to the acquisition of Auto-Soft Corporation
and AutoSimulations, Inc. from Daifuku America Corporation,
a U.S. subsidiary of Daifuku Co., Ltd.
The following audited (except where noted) financial
statements of AutoSimulations, Inc. and Subsidiaries
together with the report thereon by PricewaterhouseCoopers
LLP were filed with the Form 8-K/A:
AUTOSIMULATIONS, INC. AND SUBSIDIARIES
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1999
(unaudited) and March 31, 1999 and 1998
Consolidated Statements of Operations for the nine months
ended December 31, 1999 and 1998 (unaudited) and the
years ended March 31, 1999 and 1998, the period from
November 27, 1996 to March 31, 1997 and the period from
April 1, 1996 to November 26, 1996
Consolidated Statement of Changes in Stockholder's Equity
for the nine months ended December 31, 1999 (unaudited),
the years ended March 31, 1999 and 1998, the period from
November 27, 1996 to March 31, 1997 and the period from
April 1, 1996 to November 26, 1996
Notes to Consolidated Financial Statements
<PAGE> 30
The following audited (except where noted) financial
statements of Auto-Soft Corporation and Subsidiary together
with the report thereon by PricewaterhouseCoopers LLP were
filed with the Form 8-K/A:
AUTO-SOFT CORPORATION AND SUBSIDIARY
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1999
(unaudited) and March 31, 1999 and 1998
Consolidated Statements of Operations for the nine months
ended December 31, 1999 and 1998 (unaudited), the years
ended March 31, 1999 and 1998, the period from September
6, 1996 to March 31, 1997 and the period from April 1,
1996 to September 5, 1996
Consolidated Statements of Changes in Stockholder's Equity
for the nine months ended December 31, 1999 (unaudited),
the years ended March 31, 1999 and 1998, the period from
September 5, 1996 to March 31, 1997 and the period from
April 1, 1996 to September 5, 1996
Consolidated Statements of Cash Flows for the nine months
ended December 31, 1999 and 1998 (unaudited), the years
ended March 31, 1999 and 1998, the period from September
6, 1996 to March 31, 1997 and the period from April 1,
1996 to September 5, 1996
Notes to Consolidated Financial Statements
The following unaudited pro forma combined condensed financial
statements of the Company, AutoSimulations, Inc. and
Subsidiaries and Auto-Soft Corporation and Subsidiary were
filed with the Form 8-K/A:
Unaudited Pro Forma Combined Condensed Balance Sheet as of
December 31, 1999
Unaudited Pro Forma Combined Condensed Statement of
Operations for the three months ended December 31, 1999
Unaudited Pro Forma Combined Condensed Statement of
Operations for the year ended September 30, 1999
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BROOKS AUTOMATION, INC.
DATE: May 12, 2000 /s/ Robert J. Therrien
----------------------
Robert J. Therrien
Director and President
(Principal Executive Officer)
DATE: May 12, 2000 /s/ Ellen B. Richstone
----------------------
Ellen B. Richstone
Senior Vice President of Finance and
Administration and Chief Financial Officer
(Principal Financial Officer)
<PAGE> 32
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
3.01 Certificate of Incorporation as Amended
10.1 Demand Promissory Note Agreement dated as of May
2, 2000, between Brooks Automation, Inc. and ABN
AMRO Bank N.V.
27.1 Financial Data Schedule for the quarterly period
ended March 31, 2000
27.2 Financial Data Schedule for the quarterly period
ended March 31, 1999, restated to reflect the
acquisition of Smart Machines Inc. in a pooling
of interests transaction effective August 31,
1999
99.3 1995 Employee Stock Purchase Plan as amended
January 6, 2000
99.4 1998 Employee Equity Incentive Plan
99.7 2000 Combination Stock Option Plan
<PAGE> 1
EXHIBIT 3.01
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BROOKS AUTOMATION, INC.
Brooks Automation, Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), pursuant to Section 242 of
the Delaware General Corporation Law, DOES HEREBY CERTIFY:
FIRST: That, the Board of Directors of the Corporation, by unanimous
written consent dated January 6, 2000, in accordance with the provisions of
Section 141(f) of the General Corporation Law of the State of Delaware, duly
adopted a resolution setting forth a proposed amendment to the Corporation's
Certificate of Incorporation. The resolution setting forth the proposed
amendment is as follows:
RESOLVED: To amend, subject to the approval by the stockholders of
the Corporation, the Corporation's Certificate of
Incorporation to increase the number of shares of the
Corporation's common stock authorized thereunder from
21,500,000 to 43,000,000 and to submit the amendment to
the Corporation's Certificate of Incorporation to the
stockholders of the Corporation for their consideration,
with a recommendation for approval of the amendment.
SECOND: The foregoing amendment to the Certificate of Incorporation was
duly adopted by the stockholders at a meeting duly held, at which a quorum was
present and acting throughout and in accordance with the provisions of Section
242 of the General Corporation Law of Delaware, on February 24, 2000.
THIRD: That the Certificate of Incorporation be amended by deleting
the first paragraph of Article Fourth in its entirety and replacing it as
follows:
"The total number of shares of all classes of stock which
the Corporation shall have authority to issue is (i)
43,000,000 shares of Common Stock, $.01 par value per
share (the "Common Stock"), and (ii) 1,000,000 shares of
Preferred Stock, $.01 par value per share (the "Preferred
Stock")."
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 2
CERTIFICATE OF INCORPORATION
OF
BROOKS AUTOMATION, INC.
The undersigned, a natural person, for the purposes of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the requirements of the
laws of the State of Delaware (particularly Chapter 1, Title 8 of the Delaware
Code and the acts amendatory thereof and supplemental thereto, and generally
known as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the
"Corporation") is Brooks Automation, Inc.
SECOND: The address, including street, number, city, and county,
of the registered office of the Corporation in the State of Delaware is 32
Loockerman Square, Suite L-100, Dover, County of Kent, Delaware 19901; and the
name of the registered agent of the Corporation in the State of Delaware at such
address is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purposes to be
conducted and promoted by the Corporation, shall be (a) to create, design,
develop, manufacture, buy, sell, hold, act as agent for the sale of, process,
store, repair, modify, service, and otherwise deal in and with atmospheric and
vacuum valves and robots, other goods and systems related to atmospheric and
vacuum applications and electrical, mechanical and other goods, wares,
merchandise, and personal property of every kind and description, including
without limitation patent rights for inventions and designs of any description;
(b) to provide technical and scientific consultation services; (c) to deal in
matters concerned with conversion of energies and research and development in
all fields of science; and (d) any lawful business, to promote any lawful
purpose, and to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware.
FOURTH: A statement of the designations and powers, preferences
and rights, and the qualifications, limitations or restrictions of the classes
of capital stock of the Corporation shall be as follows:
(i) 20,000,000 shares of Common Stock, $.01 par value per
share (the "Common Stock");
(ii) 1,500,000 shares of Class A Common Stock, $.01 par value
per share (the "Class A Common Stock"); and
-1-
<PAGE> 3
(iii) 1,000,000 shares of Preferred Stock, $.01 par value per
share (the "Preferred Stock").
The classes of stock of the Corporation authorized by this
Article Fourth hereof shall have the preferences, voting rights, qualifications
and special or relative rights or privileges as to each class thereof and any
series now established as set forth in this Article Fourth. Stock of any class
or series authorized pursuant hereto may be issued from time to time by
authority of the Board of Directors for such consideration as from time to time
may be fixed by vote of the Board of Directors.
COMMON STOCK
SECTION 1. DESIGNATION OF CLASSES. The authorized classes of
common stock of the Corporation shall be designated as Common Stock and Class A
Common Stock, respectively. Except as otherwise hereafter provided, the
preferences, voting rights, qualifications and special or relative rights or
privileges as to each class shall be identical.
SECTION 2. VOTING RIGHTS. The holders of Common Stock shall have
one vote per share upon all matters. The holders of Class A Common Stock shall
have no vote.
Notwithstanding the foregoing, the approval of the holders of
two-thirds of the outstanding shares of any class, voting separately as a class,
shall be required for any amendment of these Articles which would adversely
affect the rights of such class.
SECTION 3. DIVIDENDS, ETC. The holders of each class of stock
shall share equally, share for share, in all dividends and distributions,
without regard to class. In all recapitalizations, the holders of each class
shall receive identical treatment, share for share, without regard to class,
except that in connection with any stock dividend or stock split the holders of
shares of any class shall receive additional shares of the same class held by
them.
SECTION 4. LIQUIDATION. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
each class of stock shall receive identical treatment, share for share, without
regard to class.
SECTION 5. CONVERSION.
(a) On the vote of the directors of the Corporation, all of the
authorized shares of all classes of common stock of the Corporation shall be
convertible, on any one occasion, into a like number of shares of a single class
of voting Common Stock.
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<PAGE> 4
(b) Upon the sale by the Corporation of shares of its Common
Stock pursuant to a registration statement filed with the Securities and
Exchange Commission resulting in gross proceeds of not less than $10,000,000,
each share of the Corporation's Class A Common Stock shall automatically, and
without further action, be converted into one share of the Corporation's Common
Stock.
PREFERRED STOCK
The Preferred Stock may be issued and designated by the Board of
Directors, in one or more classes or series and with such rights, powers,
preferences and terms and at such times and for such consideration as the Board
of Directors shall determine, without further stockholder action. With respect
to each class or series of Preferred Stock, prior to issuance, the Board of
Directors by resolution shall designate that class or series to distinguish it
from other classes and series of stock of the Corporation, shall specify the
number of shares to be included in the class or series, and shall fix the
rights, powers, preferences and terms of the shares of the class or series,
including, but without limitation: (i) the dividend rate, which may be fixed or
variable, its preference as to any other class or series of capital stock, and
whether dividends will be cumulative or noncumulative; (ii) whether the shares
are to be redeemable and, if so, at what times and prices (which price or prices
may, but need not, vary according to the time or circumstances of such
redemption) and on what other terms and conditions; (iii) the terms and amount
of any sinking fund provided for the purchase or redemption of the shares; (iv)
whether the shares shall be convertible or exchangeable and, if so, the times,
prices, rates, adjustments and other terms of such conversion or exchange; (v)
the voting rights, if any, applicable to the shares in addition to those
prescribed by law; (vi) the restrictions and conditions, if any, on the issue or
reissue of any additional shares of such class or series or of any other class
or series of Preferred Stock ranking on a parity with or prior to the shares of
such class or series; (vii) whether, and the extent to which, any of the rights,
powers, preferences and terms of any such class or series may be made dependent
upon facts ascertainable outside of the Certificate of Incorporation or outside
the resolution or resolutions providing for the issuance of such class or series
by the Board of Directors, provided that the manner in which such facts shall
operate is clearly set forth in the resolution or resolutions providing for the
issuance of such class or series adopted by the Board of Directors; and (viii)
the rights of the holders of such shares upon voluntary or involuntary
liquidation, dissolution or winding up of the Corporation.
FIFTH: The name and the mailing address of the incorporator is
as follows:
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<PAGE> 5
NAME ADDRESS
---- -------
Samuel P. Williams c/o Brown, Rudnick, Freed & Gesmer
One Financial Center
Boston, MA 02111
SIXTH: The Corporation shall have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or between
this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 29l of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agrees to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the Corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided
that:
(a) The business of the Corporation shall be
conducted by the officers of the Corporation under the supervision of the Board
of Directors.
(b) The number of directors which shall constitute
the whole Board of Directors shall be fixed by, or in the manner provided in,
the Bylaws. No election of Directors need be by written ballot.
(c) The Board of Directors of the Corporation may
adopt, amend or repeal the Bylaws of the Corporation at any time after the
original adoption of the Bylaws according to Section
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<PAGE> 6
109 of the General Corporation Law of the State of Delaware; provided, however,
that any amendment to provide for the classification of directors of the
Corporation for staggered terms pursuant to the provisions of subsection (d) of
Section 141 of the General Corporation Law of the State of Delaware shall be set
forth in an amendment to this Certificate of Incorporation, in an initial
By-Law, or in a By-Law adopted by the stockholders of the Corporation entitled
to vote.
(d) Notwithstanding any other provision of law, all
action required to be taken by the stockholders of the Corporation shall be
taken at a meeting duly called and held in accordance with law and with the
Certificate of Incorporation and the Bylaws, and not by written consent.
NINTH:
(a) The Corporation may, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said section, and the indemnification provided for herein shall
not be deemed exclusive of any other rights to which a person indemnified may be
entitled under any By-Law, agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a Director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
(b) No director shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for breach
of the Director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from which
the director derived an improper personal benefit. No amendment to or repeal of
this paragraph (b) of this Article Ninth shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such Director occurring prior to such
amendment.
TENTH: From time to time, subject to the provisions of this
Certificate of Incorporation (including without limitation the provisions of
paragraph (d) of Article Eleventh and of
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<PAGE> 7
Article Twelfth), any of the provisions of this Certificate of Incorporation may
be amended, altered or repealed, and other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted in the
manner and at the time prescribed by said laws, and all rights at any time
conferred upon the stockholders of the Corporation by this Certificate of
Incorporation are granted subject to the provisions of this Article Tenth.
ELEVENTH:
(a) Any direct or indirect purchase or other
acquisition in one or more transactions by the Corporation or any Subsidiary of
any of the outstanding Voting Stock of any class from any one or more
individuals or entities known by the Corporation to be a Related Person, who has
beneficially owned such security or right for less than two years prior to the
date of such purchase, at a price in excess of the Fair Market Value shall,
except as hereinafter provided, require the affirmative vote of the holders of
at least two-thirds of the shares of Voting Stock, voting as a single class,
excluding any votes cast with respect to shares of Voting Stock beneficially
owned by such Related Person. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified by law or any agreement with any national securities
exchange, or otherwise, but no such affirmative vote shall be required with
respect to any purchase or other acquisition of securities made as part of (i) a
tender or exchange offer by the Corporation to purchase securities of the same
class made on the same terms to all holders of such securities and complying
with the applicable requirements of the Exchange Act and the rules and
regulations thereunder, or any successor rule or regulation or (ii) pursuant to
an open-market purchase program conducted in accordance with the requirements of
Rule 10b-18 promulgated by the Securities and Exchange Commission pursuant to
the Exchange Act or any successor rule or regulation.
(b) A majority of the Continuing Directors shall
have the power and duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Article Eleventh including, without limitation, (i) whether a person is a
Related Person, (ii) the number of shares of Voting Stock beneficially owned by
any person and (iii) whether a price is in excess of Fair Market Value.
(c) Nothing contained in this Article Eleventh
shall be construed to relieve any Related Person from any fiduciary obligation
imposed by law.
(d) Notwithstanding anything contained in this
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least two-thirds of the outstanding
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<PAGE> 8
shares of Voting Stock, voting together as a single class, shall be required to
alter, change, amend, repeal or adopt any provision inconsistent with this
Article Eleventh.
TWELFTH: Except as otherwise provided in this Certificate of
Incorporation, the Bylaws and any designation of terms pursuant to Section 151
of the General Corporation Law of the State of Delaware, any vote required by
stockholders pursuant to said General Corporation Law, other than the election
of directors (which shall not be affected by this provision), shall be effective
if recommended by a majority of the Continuing Directors and the vote of a
majority of each class of stock outstanding and entitled to vote thereon; and if
not recommended by a majority of the Continuing Directors, then by the vote of
80% of each class of stock outstanding and entitled to vote thereon.
THIRTEENTH:
DEFINITIONS
The following definitions shall apply for the purposes of
this Article and of Articles Eleventh and Twelfth only:
(a) "Affiliate" shall have the meaning given such term
in Rule 12b-2 under the Exchange Act.
(b) "Associate" shall have the meaning given such term
in Rule 12b-2 under the Exchange Act.
(c) "Continuing Director" shall mean any member of the
Board of Directors who is not an Affiliate of any Related Person or who was a
member of the Board of Directors prior to the time that any such Related Person
became a Related Person, and any successor of a Continuing Director who is
unaffiliated with any Related Person and is recommended to succeed a Continuing
Director by a majority of the Continuing Directors then on the Board of
Directors. Notwithstanding the above, a majority of the then existing Continuing
Directors can deem a new director to be a Continuing Director, even though such
person is Affiliated with a Related Person.
(d) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, from time to time.
(e) "Fair Market Value" shall mean: (i) in the case of
stock, the highest closing sale price during the 30-day period immediately
preceding the date in question of a share of such stock on the principal United
States securities exchange registered under the Exchange Act on which such stock
is listed, or, if such stock is not listed on any such exchange, the highest
closing bid quotation with respect to a share of such stock during the 30-day
period preceding the date in question on the
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<PAGE> 9
National Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use or, if no such quotations are available, the fair market
value on the date in question of a share of such stock as determined by the
Board of Directors in good faith; and (ii) in the case of property other than
cash or stock, the fair market value of such property on the date in question as
determined by the Board of Directors in good faith.
(f) "Massachusetts Predecessor" shall mean Brooks
Automation, Inc., a Massachusetts Corporation.
(g) "Merger Date" shall mean the date upon which the
Massachusetts Predecessor merges with and into the Corporation.
(h) "Person" shall mean any individual, firm,
Corporation or other entity.
(i) "Related Person" shall mean any Person (other than
the Corporation, any Subsidiary or any individual who is a stockholder of the
Corporation on the Merger Date) which, together with its Affiliates and
Associates and with any other Person (other than the Corporation, any Subsidiary
or any individual who is a stockholder of the Corporation on the Merger Date)
with which it or they have entered into, after the Merger Date, any agreement,
arrangement or understanding with respect to acquiring, holding or disposing of
Voting Stock, acquires beneficial ownership (as defined in Rule 13d-3 of the
Exchange Act, except that such term shall include any Voting Stock which such
person has the right to acquire, whether or not such right may be exercised
within 60 days), directly or indirectly of more than 5% of the voting power of
the outstanding Voting Stock after the Merger Date.
(j) "Subsidiary" shall mean any Corporation in which a
majority of the capital stock entitled to vote generally in the election of
directors is owned, directly or indirectly, by the Corporation.
(k) "Voting Stock" shall mean all of the then
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors.
Signed on the 14th day of November, 1994.
/s/ Samuel P. Williams
---------------------------------
Samuel P. Williams, Incorporator
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<PAGE> 1
DEMAND PROMISSORY NOTE
$10,000,000 dated as of May 2, 2000
FOR VALUE RECEIVED, the undersigned, BROOKS AUTOMATION, INC. (the
"Borrower"), a Delaware corporation having its principal place of business at 15
Elizabeth Drive, Chelmsford, Massachusetts 01824, by this promissory note
(hereinafter called "this Note"), absolutely and unconditionally promises to pay
to the order of ABN AMRO BANK N.V. (hereinafter, together with its successors in
title and assigns, called the "Lender"), at its office at 135 South LaSalle
Street, Chicago, Illinois, ON DEMAND AT ANY TIME, or, if no demand is made prior
thereto, on December 31, 2001, the principal sum of TEN MILLION DOLLARS, or so
much thereof as shall have been advanced by the Lender to the Borrower by way of
loans under this Note and shall remain outstanding together with all amounts
which are owed or which may become due upon the Lender's honoring of any letter
of credit issued by the Lender for the Borrower's account (the "Letter of Credit
Exposure"), and to pay interest on the principal sum outstanding hereunder from
time to time from the date hereof until the said principal sum or the unpaid
portion thereof shall have become due and payable as hereinafter provided. This
Note evidences, among other things, the obligation of the Borrower to repay
loans made hereunder by the Lender to the Borrower together with the Letter of
Credit Exposure.
From time to time prior to the maturity of this Note (whether upon demand
or, if no demand is made prior thereto, on December 31, 2001) the Lender may, in
its sole and absolute discretion, make loans or otherwise extend credit to the
Borrower subsequent to the date hereof, and the Borrower may borrow, repay and
reborrow the funds available hereunder, PROVIDED that the aggregate principal
amount of all loans outstanding together with the Letter of Credit Exposure
hereunder shall in no event exceed ten million dollars ($10,000,000). All loans
made by the Lender to the Borrower pursuant to this Note and all repayments of
principal made hereunder shall be recorded by the Lender on the schedule annexed
hereto.
The entire unpaid principal (not at the time overdue) of this Note
outstanding shall bear interest at an annual rate which shall at all times be
equal to the Base Rate (as hereinafter defined) in effect from time to time plus
three quarters of one percent (3/4%) during the period beginning on the date
hereof and ending on the date on which the entire unpaid principal amount of
this Note shall be paid in full; provided, however, that if a LIBOR Rate option
is in effect with respect to any principal amount outstanding hereunder, such
principal amount shall bear interest in accordance with the LIBOR Rate
provisions set forth in the next paragraph.
<PAGE> 2
-2-
At the option of the Borrower, all or any portion of the unpaid principal
(not at the time overdue) of this Note outstanding shall bear interest at the
rates quoted by the Lender as the Lender's 1, 2 or 3 month reserve-adjusted
LIBOR Rate plus one and three quarters percent (1 3/4%), the LIBOR Rate being
determined by the Lender at 11:00 a.m. three Business Days (as hereinafter
defined) prior to the requested borrowing date or conversion date. Requests for
the initial borrowings at or conversions to this pricing option must be received
at least one hour before the time for determining the relevant rate. LIBOR Rate
loans may be requested for interest periods of one, two or three months and
interest on all such loans shall be payable on the last day of such interest
period. All LIBOR Rates will be adjusted for reserves. A borrowing under the
LIBOR Rate pricing options must be in minimum increments of $100,000 or greater
multiples of $100,000 and the Borrower's ability to prepay such loans is subject
to the requirement that the Borrower compensate the Lender for any losses
resulting from the liquidation or reemployment of deposits or other funds
acquired by the Lender to maintain the obligation at the LIBOR Rate option. In
addition, the Borrower agrees to indemnify the Lender and to hold the Lender
harmless from and against any losses resulting from the liquidation or
reemployment of deposits or other funds acquired by the Lender to maintain the
obligation at the LIBOR Rate option that the Lender may sustain or incur as a
consequence of (a) the failure by the Borrower to pay the principal amount of or
any interest on any LIBOR Rate borrowing as and when due and payable, including
any such loss or expense arising from interest or fees payable by the Lender to
lenders of funds obtained by it in order to maintain the LIBOR Rate borrowings
or (b) the failure of the Borrower to make the initial borrowing (if the initial
borrowing is to bear interest at the LIBOR Rate) or conversion after the
Borrower has given (or is deemed to have given) a loan or conversion request
relating thereto in accordance with this paragraph. The Lender's willingness to
offer the LIBOR Rate option hereunder is subject to the availability of funding
sources and the continued legality of the Lender offering such pricing options.
The Borrower agrees to reimburse the Lender for any increased costs (taxes,
regulatory reserves or assessments) incurred by the Lender in connection with
borrowings at such pricing option.
In addition, the Borrower hereby agrees that to the extent the Lender
issues any letter of credit for the account of the Borrower, the Borrower agrees
to pay a fee (in each case, a "Letter of Credit Fee") to the Lender in respect
of each such letter of credit in an amount equal to one and three quarters
percent (1 3/4%) per annum of the face amount of such letter of credit. Such
Letter of Credit Fee shall be due and payable quarterly in arrears. In respect
of each such letter of credit, the Borrower shall also pay to the Lender at such
other time or times as such charges are customarily made by the Lender, the
Lender's customary issuance, amendment, negotiation or document examination and
other administrative fees as in effect from time to time.
Beginning May 31, 2000, and on the last Business Day (as hereinafter
defined) of each successive calendar month, there shall become absolutely due
and payable hereunder, and the Borrower promises to pay to the holder hereof,
all of the unpaid interest accrued to the date of payment on the unpaid
principal hereof not at the time overdue and not at the time bearing interest at
the LIBOR Rate option set forth in the preceding paragraph which is payable at
the end of each interest period.
<PAGE> 3
-3-
On the earlier to occur of DEMAND, or, if no demand has been made prior
thereto, on December 31, 2001, there shall become absolutely due and payable by
the Borrower hereunder (without regard to the length of any interest period in
effect), and the Borrower hereby promises to pay to the holder hereof, the
balance (if any) of the principal hereof then remaining unpaid, all of the
unpaid interest accrued hereon and all (if any) other amounts payable on or in
respect of this Note or the indebtedness evidenced hereby.
Each overdue amount (whether of principal, interest or otherwise) payable
on or in respect of this Note or the indebtedness evidenced hereby shall (to the
extent permitted by applicable law) bear interest, from the date on which such
amount shall have first become due and payable in accordance with the terms
hereof to the date on which such amount shall be paid to the holder of this Note
(whether before or after judgment), at the annual rate of interest which shall
(to the extent permitted by applicable law) at all times be two percent (2%)
above the Base Rate (as hereinafter defined) in effect from time to time. The
unpaid interest accrued on each overdue amount in accordance with the foregoing
terms of this paragraph shall become absolutely due and payable by the Borrower
to the holder hereof on demand by the holder of this Note at any time. Interest
on each overdue amount will continue to accrue, as provided by the foregoing
terms of this paragraph until the obligations of the Borrowers in respect of the
payment of such overdue amount shall be discharged (whether before or after
judgment).
The Borrower absolutely and unconditionally agrees to reimburse the Lender,
on demand, whether or not all or any of the transactions contemplated by the
Note are ultimately consummated, for all its reasonable out-of-pocket expenses,
including but not limited to (a) the reasonable attorney's fees and
disbursements of the Lender's Special Counsel (as hereinafter defined) and
disbursements, incurred or expended in connection with the preparation,
negotiation and interpretation of this Note or any ancillary documentation
contemplated thereby, or any amendment thereof, or the making of loans, (b) all
reasonable attorneys' fees and disbursements incurred and expended in connection
with the making of loans, and (c) all reasonable attorneys' fees relating to the
enforcement of any obligations under this Note or the satisfaction of any
indebtedness of the Borrower hereunder, or in connection with any litigation
proceeding or dispute hereunder in any way related to the credit hereunder.
Each payment of principal, interest or other sums payable on or in respect
of this Note or the indebtedness evidenced hereby shall be made by the Borrower
directly to the Lender in U.S. Dollars, for the account of the holder of this
Note, at the Lender's Office, not later than 1:00 p.m., Chicago time, on the due
date of such payment, and in immediately available and freely transferable
funds.
All payments on or in respect of this Note or any other document,
instrument or agreement executed in connection therewith (including without
limitation any documentation pertaining to any letter of credit issued by the
Lender for the Borrower's account) (a "Loan Document") or the indebtedness
evidenced hereby shall be made to the holder of this Note without recoupment,
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other
<PAGE> 4
-4-
authority therein unless the Borrower is compelled by law to make such deduction
or withholding. If any such obligation is imposed upon the Borrower with respect
to any amount payable by it hereunder or under any of the other Loan Documents,
the Borrower will pay to the Lender, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Lender or any holder hereof to
receive the same net amount which the Lender or such holder would have received
on such due date had no such obligation been imposed upon the Borrower. The
Borrower will deliver promptly to the Lender certificates or other valid
vouchers for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan Document.
This Note evidences the obligations of the Borrower (a) to repay the
principal amount of all loans made by the Lender to the Borrower hereunder, (b)
to pay interest, as herein provided, on the principal amount hereof remaining
unpaid from time to time, or other amounts which may become due and payable
hereunder as herein provided and (c) to repay all amounts owing to the Lender in
respect of any letter of credit issued by the Lender for the Borrower's account
(the "Obligations").
No reference herein to any collateral for this Note shall impair the
obligations of the Borrower, which are absolute, unconditional and irrevocable,
to pay the principal of and the interest on this Note and to pay all (if any)
other amounts which may become due and payable on or in respect of this Note or
the indebtedness evidenced hereby, strictly in accordance with the terms and the
tenor of this Note.
For all purposes of this Note, the following terms shall have the
respective meanings set forth below:
(a) "Base Rate" means the greater of (i) annual rate of interest from time
to time announced by ABN AMRO Bank N.V. at its head office as its base rate or
its prime rate or (ii) the rate equal to the weighted average of the published
rates on overnight Federal Funds transactions with members of the Federal
Reserve System plus 1/2%. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
Changes in the rate of interest resulting from changes in the Base Rate shall
take place immediately without notice or demand of any kind.
(b) "Business Day" means a day, other than a Saturday or Sunday, on which
banks are open for business in Chicago, Illinois and, in the case of a LIBOR
Rate borrowing, also a day on which commercial banks are open for international
business (including dealing in Dollar deposits) in London or such other
eurodollar interbank market as may be selected by the Lender in its sole
discretion acting in good faith.
(c) "holder" means the Lender in possession of this Note or any other
person who is at the time the lawful holder in possession of this Note.
(d) "Lender's Office" means the office of the Lender located at 135 South
LaSalle Street, Chicago, Illinois.
(e) "Lender's Special Counsel" means Bingham Dana LLP.
<PAGE> 5
-5-
The Borrower will have the right to prepay at any time the unpaid principal
of this Note in full or in part, subject to the requirement that the Borrower
compensate the Lender for any funding losses resulting from the liquidation or
reemployment of deposits or other funds acquired by the Lender to maintain the
obligation at the LIBOR Rate option incurred as a result of such prepayment of a
LIBOR Rat borrowing prior to the end of the interest period applicable to such
borrowing. There shall become and be absolutely due and payable by the Borrower
on the date of each prepayment of principal of this Note, and the Borrower
hereby promises to pay on the date of each such prepayment of this Note, all of
the unpaid interest accrued to such date on the amount of principal of this Note
being prepaid on such date and, with respect to any principal which bears
interest based upon the LIBOR Rate, any amounts required to be paid pursuant to
the fourth paragraph of this Note.
Any partial payment of the indebtedness evidenced by this Note shall be
applied by the holder hereof (a) first, to the payment of all of the interest
due and payable on the unpaid principal of this Note at the time of such partial
payment, (b) then, to the payment of all (if any) other amounts (except
principal) due and payable at the time of such partial payment on or in respect
of this Note or the indebtedness evidenced by this Note, and (c) finally, to the
repayment or (as the case may be) the prepayment of the unpaid principal of this
Note due and payable at the time of such partial payment.
Upon demand by the holder of this Note of the entire unpaid principal of
this Note, or, if no demand is made prior thereto, on December 31, 2001, all of
the interest accrued on the unpaid principal of this Note and all (if any) other
amounts payable on or in respect of this Note or the indebtedness evidenced
hereby (without regard to the length of any interest period in effect), the
entire unpaid principal of this Note, all of the interest accrued on the unpaid
principal of this Note and all (if any) other amounts payable on or in respect
of this Note or the indebtedness evidenced hereby (without regard to the length
of any interest period in effect), shall forthwith become and be due and payable
to the holder of this Note without presentment, further demand, protest, notice
of protest or any other formalities of any kind, all of which are hereby
expressly and irrevocably waived by the Borrower.
All computations of interest payable as provided in this Note shall be made
by the holder hereof on the basis of the actual number of days elapsed divided
by 360. The holder of this Note shall determine the Base Rate in effect from
time to time. Any change in the Base Rate shall, for all purposes of this Note,
become effective on, and from the beginning of, the day on which such change
shall first be made public by the Lender in accordance with the Lender's usual
practice.
If any sum would, but for the provisions of this paragraph, become due and
payable on or in respect of this Note or the indebtedness evidenced hereby on a
day which is not a Business Day, then such sum shall become due and payable on
the Business Day next succeeding the day on which such sum would otherwise have
become due and payable hereunder, and interest payable hereunder to the holder
hereof shall be adjusted by the holder hereof accordingly.
<PAGE> 6
-6-
The failure of the holder of this Note to exercise all or any of its
rights, remedies, powers or privileges hereunder in any instance shall not
constitute a waiver thereof in that or in any other instance.
The Borrower hereby irrevocably waives notice of acceptance, presentment,
notice of nonpayment, protest, notice of protest, suit and all other conditions
precedent in connection with the delivery, acceptance, collection and/or
enforcement of this Note or any collateral or security therefor. The Borrower
hereby absolutely and irrevocably consents and submits to the jurisdiction of
the Courts of the Commonwealth of Massachusetts and of any Federal Court located
in the said Commonwealth in connection with any actions or proceedings brought
against the Borrower by the holder hereof arising out of or relating to this
Note.
The Borrowers represents and warrants to the Lender that: (a) the Borrower
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware; (b) the Borrower has adequate power and authority
and full legal right to carry on the business in which it is presently engaged
and will be engaged upon consummation of the transactions contemplated hereby;
and (c) all necessary corporate action has been taken to execute and deliver
this Note and to make the borrowings hereunder.
The Borrower hereby agrees, at the Borrower's own expense, to execute and
deliver, from time to time, any and all further, or other, instruments, and to
perform such acts, as the Lender may reasonably request to effect the
transactions contemplated by this Note and to provide to the Lender the benefits
of all rights, authorities and remedies conferred upon the Lender by the terms
of this Note.
The Borrower shall use the proceeds of the loans made by the Lender to the
Borrower pursuant to this Note for general corporate purposes. No portion of
this loan is to be used for the purpose of purchasing or carrying any "margin
stock" or "margin security" as such terms are used in Regulations U and X of the
Board of Governors of the Federal Reserve System (2 C.F.R. Parts 221 and 224).
This Note may be assigned by the Lender upon the prior written consent of
the Borrower, which consent shall not be unreasonably withheld. Anything
contained in this Note to the contrary notwithstanding, the Lender may at any
time pledge all or any portion of its interest and rights under any of the Loan
Documents (including all or any portion of this Note) to any of the twelve
Federal Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C.
ss.341. No such pledge or the enforcement thereof shall release the pledgor
Lender from its obligations hereunder or under any of the other Loan Document.
THIS NOTE IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT. THIS NOTE AND
THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED
AND DETERMINED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
<PAGE> 7
-7-
IN WITNESS WHEREOF, this DEMAND PROMISSORY NOTE has been duly executed by
the undersigned, BROOKS AUTOMATION, INC., as of the day and in the year first
above written.
The Borrower:
-------------
BROOKS AUTOMATION, INC.
Witness: By:
----------------------- ------------------------------
May _,2000 Title:
---------------------------
<PAGE> 8
-8-
REPAYMENTS OF PRINCIPAL
-----------------------
Advances and payments of principal of this Note were made on the dates and
in the amounts specified below:
Amount Amount of Balance of
and Type Principal Principal Notation
Date of Loan Repaid Unpaid Made by:
- ---- -------- --------- ---------- --------
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF OPERATIONS AND NOTE
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10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 256,790
<SECURITIES> 0
<RECEIVABLES> 69,527
<ALLOWANCES> 2,240
<INVENTORY> 36,456
<CURRENT-ASSETS> 374,519
<PP&E> 59,019
<DEPRECIATION> 36,233
<TOTAL-ASSETS> 464,967
<CURRENT-LIABILITIES> 76,815
<BONDS> 17,078
0
0
<COMMON> 166
<OTHER-SE> 384,938
<TOTAL-LIABILITY-AND-EQUITY> 464,967
<SALES> 102,273
<TOTAL-REVENUES> 123,290
<CGS> 52,377
<TOTAL-COSTS> 64,816
<OTHER-EXPENSES> 22,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 234
<INCOME-PRETAX> 9,694
<INCOME-TAX> 5,485
<INCOME-CONTINUING> 4,317
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,317
<EPS-BASIC> 0.32
<EPS-DILUTED> 0.30
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 0
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0
0
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<SALES> 34,108
<TOTAL-REVENUES> 43,558
<CGS> 18,840
<TOTAL-COSTS> 24,793
<OTHER-EXPENSES> 10,109
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,538
<INCOME-PRETAX> (2,414)
<INCOME-TAX> (275)
<INCOME-CONTINUING> (2,139)
<DISCONTINUED> 0
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<NET-INCOME> (2,139)
<EPS-BASIC> (0.23)
<EPS-DILUTED> (0.23)
</TABLE>
<PAGE> 1
EXHIBIT 99.3
BROOKS AUTOMATION, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED JANUARY 6, 2000)
1. PURPOSE.
The Brooks Automation, Inc. 1995 Employee Stock Purchase Plan (the "Plan")
is intended to provide a method whereby employees of Brooks Automation, Inc.
(the "Company") will have an opportunity to acquire a proprietary interest in
the Company through the purchase of shares of the Company's $.01 par value
common stock (the "Common Stock"). It is the intention of the Company to have
the Plan qualify as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall, accordingly, be construed so as to extend and limit participation in
a manner consistent with the requirements of that Section of the Code.
2. ELIGIBLE EMPLOYEES.
(a) All employees of the Company or any of its participating subsidiaries
shall be eligible to receive options under this Plan to purchase the Company's
Common Stock. In no event may an employee be granted an option if such employee,
immediately after the option is granted, owns stock possessing five (5%) percent
or more of the total combined voting power or value of all classes of stock of
the Company or of its parent corporation or subsidiary corporation as the terms
"parent corporation" and "subsidiary corporation" are defined in Section 424(e)
and (f) of the Code. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply and stock which
the employee may purchase under outstanding options shall be treated as stock
owned by the employee.
(b) For the purpose of this Plan, the term employee shall not include an
employee whose customary employment is for not more than twenty (20) hours per
week or is for not more than five (5) months in any calendar year.
3. STOCK SUBJECT TO THE PLAN.
The stock subject to the options granted hereunder shall be shares of the
Company's authorized but unissued Common Stock or shares of Common Stock
reacquired by the Company, including shares purchased in the open market. The
aggregate number of shares which may be issued pursuant to the Plan is 750,000,
subject to increase or decrease by reason of stock split-ups, reclassifications,
stock dividends, changes in par value and the like. If the number of shares of
Common Stock reserved and available for any Offering Period (as defined
hereafter) is insufficient to satisfy all purchase requirements for that
Offering Period, the reserved and available shares for that Offering Period
shall be apportioned among participating employees in proportion to their
options.
4. OFFERING PERIODS AND STOCK OPTIONS.
(a) Six month periods during which payroll deductions will be accumulated
under the Plan ("Offering Periods") will commence on January 1 and July 1 of
each year and end on the June 30 or December 31 next following the commencement
date. The first Offering Period shall commence on January 2, 1996 and end on
June 30, 1996. Each Offering Period includes only regular pay days falling
within it. The Offering
1
<PAGE> 2
Commencement Date is the first day of each Offering Period. The Offering
Termination Date is the applicable date on which an Offering Period ends under
this Section.
(b) On each Offering Commencement Date, the Company will grant to each
eligible employee who is then a participant in the Plan an option to purchase on
the Offering Termination Date at the Option Exercise Price, as provided in this
paragraph (b), that number of full shares of Common Stock reserved for the
purpose under the Plan as his or her accumulated payroll deductions on the
Offering Termination Date (including any amount carried forward pursuant to
Article 8 hereof) will pay for at the Option Exercise Price; provided that such
employee remains eligible to participate in the Plan throughout such Offering
Period. The Option Exercise Price for each Offering Period shall be the lesser
of (i) eighty-five percent (85%) of the fair market value of the Common Stock on
the Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair
market value of the Common Stock on the Offering Termination Date, in either
case rounded up to avoid fractions other than multiples of 1/8. In the event of
an increase or decrease in the number of outstanding shares of Common Stock
through stock split-ups, reclassifications, stock dividends, changes in par
value and the like, an appropriate adjustment shall be made in the number of
shares and Option Exercise Price per share provided for under the Plan, either
by a proportionate increase in the number of shares and proportionate decrease
in the Option Exercise Price per share, or by a proportionate decrease in the
number of shares and a proportionate increase in the Option Exercise Price per
share, as may be required to enable an eligible employee who is then a
participant in the Plan to acquire on the Offering Termination Date that number
of full shares of Common Stock as his accumulated payroll deductions on such
date will pay for at the Option Exercise Price, as so adjusted.
(c) For purposes of this Plan, the term "fair market value" on any date
means, if the Common Stock is listed on a national securities exchange or on the
Nasdaq National Market, the average of the high and low sales prices of the
Common Stock on such date on such exchange or as reported on Nasdaq National
Market or, if the Common Stock is traded in the over-the-counter securities
market, but not on the Nasdaq National Market, the average of the high and low
bid quotations for the Common Stock on such date, each as published in the Wall
Street Journal. If no shares of Common Stock are traded on the Offering
Commencement Date or Offering Termination Date, the fair market value will be
determined by taking the average of the fair market values on the immediately
preceding and the next following business days on which shares of Common Stock
are traded.
(d) For purposes of this Plan the term "business day" as used herein means
a day on which there is trading on a national securities exchange or the Nasdaq
National Market on which the Common Stock is listed.
(e) No employee shall be granted an option which permits his rights to
purchase Common Stock under the Plan and any similar plans of the Company or any
parent or participating subsidiary corporations to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding at
any time. The purpose of the limitation in the preceding sentence is to comply
with and shall be construed in accordance with Section 423(b)(8) of the Code.
5. EXERCISE OF OPTION.
Each eligible employee who continues to be a participant in the Plan on the
Offering Termination Date shall be deemed to have exercised his or her option on
such date and shall be deemed to have purchased from the Company such number of
full shares of Common Stock reserved for the purpose of the Plan as his or her
accumulated payroll deductions on such date, plus any amount carried forward
pursuant to Article 8 hereof, will pay for at the Option Exercise Price, but in
no event may an employee purchase shares of Common Stock
2
<PAGE> 3
in excess of 1,500 shares of Common Stock on any Offering Termination Date. If a
participant is not an employee on the Offering Termination Date and throughout
an Offering Period, he or she shall not be entitled to exercise his or her
option. All options issued under the Plan shall, unless exercised as set forth
herein, expire at the end of the Offering Termination Date with respect to the
Offering Period during which such options were issued.
6. AUTHORIZATION FOR ENTERING PLAN.
(a) An eligible employee may enter the Plan by filling out, signing and
delivering to the Chief Financial Officer of the Company or his or her designee
an authorization ("Authorization"):
(i) stating the amount to be deducted regularly from his or her pay;
(ii) authorizing the purchase of stock for him or her in each Offering
Period in accordance with the terms of the Plan;
(iii) specifying the exact name in which Common Stock purchased for him or
her is to be issued in accordance with Article 11 hereof; and
(iv) at the discretion of the employee in accordance with Article 14,
designating a beneficiary who is to receive any Common Stock and/or
cash in the event of his or her death.
Such Authorization must be received by the Chief Financial Officer of the
Company or his or her designee at least ten (10) business days before an
Offering Commencement Date.
(b) The Company will accumulate and hold for the employee's account the
amounts deducted from his or her pay. No interest will be paid thereon.
Participating employees may not make any separate cash payments into their
account.
(c) Unless an employee files a new Authorization or withdraws from the
Plan, his or her deductions and purchases under the Authorization he or she has
on file under the Plan will continue as long as the Plan remains in effect. An
employee may increase or decrease the amount of his or her payroll deductions as
of the next Offering Commencement Date by filling out, signing and delivering to
the Chief Financial Officer of the Company or his or her designee a new
Authorization. Such new Authorization must be received by the Chief Financial
Officer of the Company or his designee at least ten (10) business days before
the date of such next Offering Commencement Date.
7. ALLOWABLE PAYROLL DEDUCTIONS.
An employee may authorize payroll deductions in any even dollar amount up
to but not more than ten percent (10%) of his or her base pay; provided,
however, that the minimum deduction in respect of any payroll period shall be
one percent (1%) of his or her base pay but in no event less than five dollars
($5); and provided further that the maximum percentage shall be reduced to meet
the requirements of Section 4(e) hereof. Base pay means regular straight-time
earnings and, if applicable, commissions, but excluding payments for overtime,
bonuses, and other special payments.
8. UNUSED PAYROLL DEDUCTIONS.
Only full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Offering Period. However, in no event will the
amount of the unused payroll deductions carried forward from a payroll period
exceed the Option Exercise Price per share for the immediately preceding
Offering Period. If for any Offering
3
<PAGE> 4
Period the amount of unused payroll deductions should exceed the Option Exercise
Price per share, the amount of the excess for any participant shall be refunded
to such participant, without interest.
9. CHANGE IN PAYROLL DEDUCTIONS.
Deductions may not be increased or decreased during an Offering Period.
10. WITHDRAWAL FROM THE PLAN.
(a) An employee may withdraw from the Plan and withdraw all but not less
than all of the payroll deductions credited to his or her account under the Plan
at any time prior to the Offering Termination Date by delivering a notice to the
Chief Financial Officer of the Company or his or her designee (a "Withdrawal
Notice") in which event the Company will promptly refund without interest the
entire balance of such employee's deductions not theretofore used to purchase
Common Stock under the Plan.
(b) If employee withdraws from the Plan, the employee's rights under the
Plan will be terminated and no further payroll deductions will be made. To
reenter, such an employee must file a new Authorization at least ten (10)
business days before the next Offering Commencement Date. Such Authorization
will become effective for the Offering Period that commences on such Offering
Commencement Date. Notwithstanding the foregoing, employees who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended, who withdraw from
the Plan may not reenter the Plan until the next Offering Commencement Date
which is at least six months following the date of such withdrawal.
11. ISSUANCE OF STOCK.
Upon written request, certificates for Common Stock will be issued and
delivered to participants as soon as practicable after each Offering Period.
Common Stock purchased under the Plan will be issued only in the name of the
employee, or in the case of employees who are not subject to Section 16 of the
Securities Exchange Act of 1934, as amended, if the employee's Authorization so
specifies, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship.
12. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.
An employee's rights under the Plan are his or hers alone and may not be
transferred or assigned to, or availed of by, any other person. Any option
granted to an employee may be exercised only by him or her, except as provided
in Article 13 in the event of an employee's death.
13. TERMINATION OF EMPLOYEE'S RIGHTS.
(a) Except as set forth in the last paragraph of this Article 13, an
employee's rights under the Plan will terminate when he or she ceases to be an
employee because of retirement, resignation, lay-off, discharge, death, change
of status, failure to remain in the customary employ of the Company for greater
than twenty (20) hours per week, or for any other reason. A Withdrawal Notice
will be considered as having been received from the employee on the day his or
her employment ceases, and all payroll deductions not used to purchase Common
Stock will be refunded.
(b) If an employee's payroll deductions are interrupted by any legal
process, a Withdrawal Notice will be considered as having been received from him
or her on the day the interruption occurs.
(c) Upon termination of the participating employee's employment because of
death, the employee's beneficiary (as defined in Article 14) shall have the
right to elect, by written notice given to the Chief Financial Officer of the
Company or his or her designee prior to the expiration of the thirty (30) day
period
4
<PAGE> 5
commencing with the date of the death of the employee, either (i) to withdraw,
without interest, all of the payroll deductions credited to the employee's
account under the Plan, or (ii) to exercise the employee's option for the
purchase of shares of Common Stock on the next Offering Termination Date
following the date of the employee's death for the purchase of that number of
full shares of Common Stock reserved for the purpose of the Plan which the
accumulated payroll deductions in the employee's account at the date of the
employee's death will purchase at the applicable Option Exercise Price (subject
to the maximum number set forth in Article 5), and any excess in such account
will be returned to said beneficiary. In the event that no such written notice
of election shall be duly received by the Chief Financial Officer of the Company
or his or her designee, the beneficiary shall automatically be deemed to have
elected to withdraw the payroll deductions credited to the employee's account at
the date of the employee's death and the same will be paid promptly to said
beneficiary, without interest.
14. DESIGNATION OF BENEFICIARY.
A participating employee may file a written designation of a beneficiary
who is to receive any Common Stock and/or cash in case of his or her death. Such
designation of beneficiary may be changed by the employee at any time by written
notice. Upon the death of a participating employee and upon receipt by the
Company of proof of the identity and existence at the employee's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Common Stock and/or cash to such beneficiary. In the event of the death of
a participating employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such employee's death, the Company
shall deliver such Common Stock and/or cash to the executor or administrator of
the estate of the employee, or if, to the knowledge of the Company, no such
executor or administrator has been appointed, the Company, in the discretion of
the Committee, may deliver such Common Stock and/or cash to the spouse or to any
one or more dependents of the employee as the Committee may designate. No
beneficiary shall, prior to the death of the employee by whom he or she has been
designated, acquire any interest in the Common Stock or cash credited to the
employee under the Plan.
15. TERMINATION AND AMENDMENTS TO PLAN.
(a) The Plan may be terminated at any time by the Company's Board of
Directors, effective on the next following Offering Termination Date.
Notwithstanding the foregoing, it will terminate when all of the shares of
Common Stock reserved for the purposes of the Plan have been purchased. Upon
such termination or any other termination of the Plan, all payroll deductions
not used to purchase Common Stock will be refunded without interest.
(b) The Board of Directors reserves the right to amend the Plan from time
to time in any respect; provided, however, that no amendment shall be effective
without stockholder approval if the amendment would (a) except as provided in
Articles 3, 4, 24 and 25, increase the aggregate number of shares of Common
Stock to be offered under the Plan, or (b) change the class of employees
eligible to receive options under the Plan; provided, further, that so long as
there is a requirement under Rule 16b-3 under the Securities Exchange Act of
1934, as amended, for stockholder approval of the Plan and certain amendments
thereto, any such amendment which (a) materially increases the number of shares
of Common Stock which may be issued under the Plan, (b) materially increases the
benefits accruing to participants in the Plan or (c) materially modifies the
requirements as to eligibility for participation in the Plan, shall be subject
to stockholder approval.
16. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN.
Common Stock purchased under the Plan by employees who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended, may not be sold
for six (6) months after the Offering Termination Date
5
<PAGE> 6
on which such shares were purchased, unless such transaction shall be exempt
from Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Thereafter, such employees may sell Common Stock purchased under the Plan at any
time. Notwithstanding the foregoing, because of certain Federal tax
requirements, all employees will agree by entering the Plan, promptly to give
the Company notice of any such Common Stock disposed of within two years after
the Offering Commencement Date on which the related option was granted showing
the number of such shares disposed of. The employee assumes the risk of any
market fluctuations in the price of such Common Stock. Certificates representing
shares of Common Stock purchased under the Plan will bear a legend reflecting
the restrictions on transfer set forth herein.
17. COMPANY'S PAYMENT OF EXPENSES RELATED TO PLAN.
The Company will bear all costs of administering and carrying out the Plan.
18. PARTICIPATING SUBSIDIARIES.
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Committee (as defined in Article 19) to
participate in the Plan. The Committee shall have the power to make such
designation before or after the Plan is approved by the stockholders.
19. ADMINISTRATION OF THE PLAN.
(a) The Plan shall be administered by a committee of "disinterested"
directors as that term is defined in Rule 16b-3 under the Securities Exchange
Act of 1934, as amended, appointed by the Board of Directors of the Company,
which shall be the Company's Compensation Committee (the "Committee"). The
Committee shall consist of not less than two members of the Company's Board of
Directors. The Board of Directors may from time to time remove members from, or
add members to, the Committee. Vacancies on the Committee, howsoever caused,
shall be filled by the Board of Directors. No member of the Committee shall be
eligible to participate in the Plan while serving as a member of the Committee.
(b) The Committee shall select one of its members as chairman, and shall
hold meetings at such times and places as it may determine. Acts by a majority
of the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
(c) The interpretation and construction by the Committee of any provisions
of the Plan or of any option granted under it shall be final. The Committee may
from time to time adopt such rules and regulations for carrying out the Plan as
it may deem best. With respect to persons subject to Section 16 of the
Securities and Exchange Act of 1934, as amended, transactions under the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under said Act. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by that Committee.
(d) Promptly after the end of each Offering Period, the Committee shall
prepare and distribute to each participating employee in the Plan a report
containing the amount of the participating employee's accumulated payroll
deductions as of the Offering Termination Date, the Option Exercise Price for
such Offering Period, the number of shares of Common Stock purchased by the
participating employee with the participating employee's accumulated payroll
deductions, and the amount of any unused payroll deductions either to be carried
forward to the next Offering Period, or returned to the participating employee
without interest.
(e) No member of the Board of Directors or the Committee shall be liable
for any action or determination made in good faith with respect to the Plan or
any option granted under it. The Company shall indemnify each member of the
Board of Directors and the Committee to the fullest extent permitted by law
6
<PAGE> 7
with respect to any claim, loss, damage or expense (including counsel fees)
arising in connection with their responsibilities under this Plan.
20. OPTIONEES NOT STOCKHOLDERS.
Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a stockholder of the Company with
respect to the shares covered by such option until such shares have been
purchased by and issued to him or her.
21. APPLICATION OF FUNDS.
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan may be used for any corporate purposes, and
the Company shall not be obligated to segregate participating employees' payroll
deductions.
22. GOVERNMENTAL REGULATION.
(a) The Company's obligation to sell and deliver shares of the Company's
Common Stock under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance or sale of
such stock.
(b) In this regard, the Board of Directors may, in its discretion, require
as a condition to the exercise of any option that a Registration Statement under
the Securities Act of 1933, as amended, with respect to the shares of Common
Stock reserved for issuance upon exercise of the option shall be effective.
23. TRANSFERABILITY.
Neither payroll deductions credited to an employee's account nor any rights
with regard to the exercise of an option or to receive stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
employee. Any such attempted assignment, transfer, pledge, or other disposition
shall be without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Article 10.
24. EFFECT OF CHANGES OF COMMON STOCK.
If the Company should subdivide or reclassify the Common Stock which has
been or may be optioned under the Plan, or should declare thereon any dividend
payable in shares of such Common Stock, or should take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.
25. MERGER OR CONSOLIDATION.
If the Company should at any time merge into or consolidate with another
corporation, the Board of Directors may, at its election, either (i) terminate
the Plan and refund without interest the entire balance of each participating
employee's payroll deductions, or (ii) entitle each participating employee to
receive on the Offering Termination Date upon the exercise of such option for
each share of Common Stock as to which such option shall be exercised the
securities or property to which a holder of one share of the Common Stock was
entitled upon and at the time of such merger or consolidation, and the Board of
Directors shall take such steps in connection with such merger or consolidation
as the Board of Directors shall deem necessary to assure that the provisions of
this Article 25 shall thereafter be applicable, as nearly as reasonably
possible. A sale of all or
7
<PAGE> 8
substantially all of the assets of the Company shall be deemed a merger or
consolidation for the foregoing purposes.
26. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX.
The Company will undertake such withholding in connection with the Plan as
it determines is appropriate, in its sole discretion.
27. APPROVAL OF STOCKHOLDERS.
The Plan shall not take effect until approved by the holders of a majority
of the outstanding shares of Common Stock of the Company, which approval must
occur no later than the end of the first Offering Period after the date the Plan
is adopted by the Board of Directors. Options may be granted under the Plan
prior and subject to such stockholder approval. If the Plan is not so approved
by the stockholders, all payroll deductions from participating employees shall
be returned without interest and all options so granted shall terminate.
Dates of Approval by the Board of Directors: November 1, 1995, December
10, 1997, and January 6, 2000.
Dates of Approval by the Stockholders: February 22, 1996, February 26,
1998, and .
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EXHIBIT 99.4
BROOKS AUTOMATION, INC.
1998 EMPLOYEE EQUITY INCENTIVE PLAN
(a) NAME AND PURPOSE
This plan shall be known as the Brooks Automation, Inc. 1998 Employee
Equity Incentive Plan (the "Plan"). The purpose of the Plan is to attract and
retain employees and provide an incentive for them to assist Brooks Automation,
Inc. (the "Company") to achieve long-range performance goals, and to enable them
to participate in the long-term growth of the Company.
(b) DEFINITIONS
(a) "Award" means any Option awarded under the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
(d) "Committee" means the Stock Option Committee of the Board, or such
other committee of not less than three members of the Board appointed
by the Board to administer the Plan.
(e) "Common Stock" or "Stock" means the Common Stock, par value $.01 per
share, of the Company.
(f) "Company" means Brooks Automation, Inc. and any business entity in
which Brooks Automation, Inc. owns directly or indirectly 50% or more
of the total combined voting power or has a significant financial
interest as determined by the Committee.
(g) "Designated Beneficiary" means the beneficiary designated by a
Participant, in a manner determined by the Board, to receive amounts
due or exercise rights of the Participant in the event of the
Participant's death. In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's
estate.
(h) "Fair Market Value" means, with respect to Common Stock or any other
property, the fair market value of such property as determined by the
Board in good faith or in the manner established by the Board from time
to time.
(i) "Nonqualified Stock Option" means an option to purchase shares of
Common Stock, awarded to a Participant under Section 6, which is not
intended to comply as an incentive stock option under Section 422 of
the Code or any successor provision.
(j) "Option" means a Nonqualified Stock Option.
(k) "Participant" means a person eligible pursuant to Section 4 hereof and
selected by the Board to receive an Award under the Plan.
(c) ADMINISTRATION
The Plan shall be administered by the Committee. The Board shall have
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the operation of the Plan as it shall from time to time
consider advisable, and to interpret the provisions of the Plan. The Board's
decisions shall be final and binding. To
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the extent permitted by applicable law, the Board may delegate to the Committee
the power to make Awards to Participants and all determinations under the Plan
with respect thereto.
(d) ELIGIBILITY
All employees of the Company, other than officers and directors of the
Company, are eligible to be Participants in the Plan.
(e) STOCK AVAILABLE FOR AWARDS
(a) Subject to adjustment under subsection (b), Awards may be made under
the Plan of Options to acquire not in excess of 1,800,000 shares of
Common Stock. If any Award in respect of shares of Common Stock expires
or is terminated unexercised or is forfeited for any reason or settled
in a manner that results in fewer shares outstanding than were
initially awarded, including without limitation the surrender of shares
in payment for the Award or any tax obligation thereon, the shares
subject to such Award or so surrendered, as the case may be, to the
extent of such expiration, termination, forfeiture or decrease, shall
again be available for award under the Plan. Common Stock issued
through the assumption or substitution of outstanding grants from an
acquired Company shall not reduce the shares available for Awards under
the Plan. Shares of Common Stock issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.
(b) In the event that the Board determines that any stock dividend,
extraordinary cash dividend, creation of a class of equity securities,
recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination, exchange of shares, warrants or rights offering
to purchase Common Stock at a price substantially below fair market
value, or other similar transaction affects the Common Stock such that
an adjustment is required in order to preserve the benefits or
potential benefits intended to be made available under the Plan, then
the Board, shall equitably adjust any or all of (i) the number and kind
of shares in respect of which Awards may be made under the Plan, (ii)
the number and kind of shares subject to outstanding Awards, and (iii)
the award, exercise or conversion price with respect to any of the
foregoing, and if considered appropriate, the Board may make provision
for a cash payment with respect to an outstanding Award, provided that
the number of shares subject to any Award shall always be a whole
number.
(f) STOCK OPTIONS
(a) Subject to the provisions of the Plan, the Board may award Nonqualified
Stock Options and determine the number of shares to be covered by each
Option, the Option Price therefor and the conditions and limitations
applicable to the exercise of the Option.
(b) The Board shall establish the Option Price at the time each Option is
awarded, provided, however, that the Option Price shall not be less
than the Fair Market Value of the Stock on the date of the grant of the
Option.
(c) Each Option shall be exercisable at such times and subject to such
terms and conditions as the Board may specify in the applicable Award
or thereafter. The Board may impose such conditions with respect to the
exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or
advisable.
(d) No shares shall be delivered pursuant to any exercise of an Option
until payment in full of the Option Price therefor is received by the
Company. Such payment may be made in whole or in part in cash or, to
the extent permitted by the Board at or after the award of the Option,
by delivery of a note or shares of Common Stock owned by the
optionholder, including Restricted Stock, valued at their Fair Market
Value on the date of delivery, by the reduction of the shares of Common
Stock that the optionholder would be entitled to receive upon exercise
of the Option, such shares to be valued at their Fair Market Value on
the date of exercise, less their Option Price (a so-called "cashless
exercise"), or such other lawful consideration as the Board may
determine. In addition, an optionholder may engage in a successive
exchange (or series of exchanges) in which
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the shares of Common Stock that such optionholder is entitled to
receive upon the exercise of an Option may be simultaneously utilized
as payment for the exercise of an additional Option or Options.
(e) The Board may provide for the automatic award of an Option upon the
delivery of shares to the Company in payment of an Option for up to the
number of shares so delivered.
(g) GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) DOCUMENTATION. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and
conditions thereof and containing such other terms and conditions not
inconsistent with the provisions of the Plan as the Board considers
necessary or advisable to achieve the purposes of the Plan or comply
with applicable tax and regulatory laws and accounting principles.
(b) BOARD DISCRETION. The terms of each Award need not be identical, and
the Board need not treat Participants uniformly. Except as otherwise
provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Board at the time of award or at
any time thereafter. Without limiting the foregoing, an Award may be
made by the Board, in its discretion, to any 401(k), savings, pension,
profit sharing or other similar plan of the Company in lieu of or in
addition to any cash or other property contributed or to be contributed
to such plan.
(c) SETTLEMENT. The Board shall determine whether Awards are settled in
whole or in part in cash, Common Stock, other securities of the
Company, Awards or other property. The Board may permit a Participant
to defer all or any portion of a payment under the Plan, including the
crediting of interest on deferred amounts denominated in cash and
dividend equivalents on amounts denominated in Common Stock.
(d) TERMINATION OF EMPLOYMENT. The Board shall determine the effect on an
Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period
during which, the Participant's legal representative, guardian or
Designated Beneficiary may receive payment of an Award or exercise
rights thereunder.
(e) CHANGE IN CONTROL. In order to preserve a Participant's rights under an
Award in the event of a change in control of the Company, the Board in
its discretion may, at the time an Award is made or at any time
thereafter, take one or more of the following actions: (i) provide for
the acceleration of any time period relating to the exercise of the
Award, (ii) provide for the purchase of the Award upon the
Participant's request for an amount of cash or other property that
could have been received upon the exercise of the Award had the Award
been currently exercisable, (iii) adjust the terms of the Award in a
manner determined by the Board to reflect the change in control, (iv)
cause the Award to be assumed, or new rights substituted therefor, by
another entity, or (v) make such other provision as the Board may
consider equitable and in the best interests of the Company.
(f) WITHHOLDING. The Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required
by law to be withheld in respect of Awards under the Plan no later than
the date of the event creating the tax liability. In the Board's
discretion, such tax obligations may be paid in whole or in part in
shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value on the
date of delivery. The Company and its affiliates may, to the extent
permitted by law, deduct any such tax obligations from any payment of
any kind otherwise due to the Participant.
(g) AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the
same or a different type, changing the date of exercise, provided that
the Participant's consent to such action shall be required unless the
Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
(h) MISCELLANEOUS
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(a) NO RIGHT TO EMPLOYMENT. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as
giving a Participant the right to continued employment. The Company
expressly reserves the right at any time to dismiss a Participant free
from any liability or claim under the Plan, except as expressly
provided in the applicable Award.
(b) NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights
as a shareholder with respect to any shares of Common Stock to be
distributed under the Plan until he or she becomes the holder thereof.
(c) GOVERNING LAW. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
(d) INDEMNITY. Neither the Board nor the Committee, nor any members of
either, nor any employees of the Company or any parent, subsidiary, or
other affiliate, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with
their responsibilities with respect to this Plan, and the Company
hereby agrees to indemnify the members of the Board, the members of the
Committee, and the employees of the Company and its parent or
subsidiaries in respect of any claim, loss, damage, or expense
(including reasonable counsel fees) arising from any such act,
omission, interpretation, construction or determination to the full
extent permitted by law.
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EXHIBIT 99.7
BROOKS AUTOMATION, INC.
2000 COMBINATION STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of this Brooks Automation, Inc. Combination Stock Option Plan
(the "Plan") is to attract and retain employees and to provide an incentive for
them to assist Brooks Automation, Inc. (the "Company") to achieve long-range
performance goals, and to enable them to participate in the long-term growth of
the Company.
SECTION 2. DEFINITIONS
As used herein, the following terms have the indicated meanings:
"Affiliate" means any business entity in which the Company owns
directly or indirectly 50% or more of the total combined voting power or
has a significant financial interest as determined by the Committee.
"Award" means any Option awarded under the Plan.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means a committee of not less than two nonemployee
directors appointed by the Board to administer the Plan or, alternatively,
if the Board so determines, the whole Board of Directors.
"Common Stock" or "Stock" means the Common Stock, $.01 par value, of
the Company.
"Company" means Brooks Automation, Inc., a Delaware corporation.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute.
"Fair Market Value" means the fair market value of Common Stock as
determined in accordance with Section 10 of this Plan.
"Incentive Stock Option" means an option to purchase shares of Common
Stock awarded to a Participant under Section 6 which is intended to meet
the requirements of Section 422 of the Code or any successor provision.
"Nonqualified Stock Option" means an option to purchase shares of
Common Stock awarded to a Participant under Section 6 which is not intended
to be an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Nonqualified Stock
Option.
"Parent Corporation" has the meaning specified in Section 425(e) of
the Code.
"Participant" means a person selected by the Committee to receive an
Award under the Plan.
"Permanent Disability" has the meaning in Section 22(e)(3) of the
Code.
"Plan" means this Brooks Automation, Inc. 2000 Combination Stock
Option Plan.
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"Subsidiary Corporation" has the meaning specified in Section 425(f)
of the Code.
"Ten Percent Stockholder" means an individual who owns (within the
meaning of Section 425(d) of the Code) capital stock possessing more than
10% of the total combined voting power of all classes of capital stock of
the Company or any Parent Corporation or Subsidiary Corporation at the time
an Incentive Stock Option is granted under this Plan.
SECTION 3. ELIGIBILITY
All employees of the Company or any Affiliate capable of contributing
significantly to the successful performance of the Company, other than a person
who has irrevocably elected not to be eligible, are eligible to be Participants
in the Plan.
SECTION 4. STOCK SUBJECT TO PLAN
(a) Subject to adjustment under Section 9, the maximum aggregate number of
shares of the Company's Common Stock that may be issued under this Plan shall be
1,000,000 shares.
(b) The shares to be issued under this Plan may be made available, at the
discretion of the Board of Directors, from: (i) authorized but unissued shares;
(ii) shares previously reserved for issuance upon exercise of Options which have
expired or been terminated; or (iii) treasury shares and shares reacquired by
the Company for the purpose, including shares purchased in the open market.
(c) If any Award in respect of shares of Common Stock expires or is
terminated unexercised or is forfeited for any reason or settled in a manner
that results in fewer shares outstanding than were initially awarded, including
without limitation the surrender of shares in payment for the Award or any tax
obligation thereon, the shares subject to such Award or so surrendered, as the
case may be, to the extent of such expiration, termination, forfeiture or
decrease, shall again be available for award under the Plan, subject, in the
case of Incentive Stock Options, to any limitation required under the Code.
(d) Common Stock issued through the assumption or substitution of
outstanding grants from an acquired company shall not reduce the shares
available for Awards under the Plan.
SECTION 5. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Committee. Except where the full
Board of Directors serves as the Committee, the Committee shall serve at the
pleasure of the Board, which may from time to time appoint additional members of
the Committee, remove members and appoint new members in substitution for those
previously appointed, and fill vacancies however caused. A majority of the
Committee shall constitute a quorum and the acts of a majority of the members
present at any meeting at which a quorum is present shall be deemed the action
of the Committee. The Committee may act by unanimous written consent in lieu of
a meeting.
(b) Subject to the express provisions of this Plan and provided that all
actions taken shall be consistent with the purposes of the Plan, the Committee
shall have full and complete authority and the sole discretion to: (i) determine
those persons eligible under Section 3; (ii) select those persons to whom Awards
shall be granted under the Plan; (iii) determine the number of shares covered by
and the form of the Awards to be granted; (iv) determine the time or times when
Awards shall be granted; (v) establish the terms and conditions upon which
Options may be exercised; (vi) alter any restrictions or conditions upon any
Awards; and (vii) adopt rules and regulations, establish, define and/or
interpret any other terms and conditions, and make all other determinations
(which may be on a case-by-case basis) deemed necessary or desirable for the
administration of the Plan.
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(c) The terms of each type of Award need not be identical, and the
Committee need not treat Participants uniformly. Except as otherwise provided by
the Plan or a particular Award, any determination with respect to an Award may
be made by the Committee at the time of award or at any time thereafter.
(d) In making its determinations hereunder, the Committee shall take into
account the nature of the services rendered or to be rendered by the recipient,
their present and potential contributions to the success of the Company, and
such other factors as the Committee, in its discretion, shall deem relevant in
order to accomplish the purposes of the Plan.
SECTION 6. STOCK OPTIONS
(a) General. Subject to the provisions of the Plan, the Board may award
Incentive Stock Options and Non-Qualified Stock Options and determine the number
of shares to be covered by each Option, the option price therefor and the
conditions and limitations applicable to the exercise of the Option. Any Option
granted under this Plan shall be upon such terms and conditions not inconsistent
with this Plan as the Committee may determine. At the time of grant of any
Option, the Committee shall specify whether the Option is intended to be an
Incentive Stock Option or a Non-Qualified Stock Option. If the Option is not
intended to be an Incentive Stock Option but otherwise qualifies to be such, the
agreement will include a specific statement that it is not intended to qualify
as an Incentive Stock Option.
(b) Price. The price at which any shares of Stock may be purchased
pursuant to the exercise of an Option shall be determined by the Committee but
may not be less than the greater of (i) the minimum legal consideration required
under the laws of the jurisdiction in which the Company is then organized or
(ii) the Fair Market Value of the Stock on the date of grant of the Option (or,
in the case of Incentive Stock Options granted to Ten Percent Stockholders, 110%
of the Fair Market Value on such date).
(c) Period of Option. Each Option granted under this Plan shall continue
in effect for such period not exceeding seven years as the Committee shall
determine; provided, that any Incentive Stock Option must be granted within ten
years from the date of establishment of this Plan or the date the Plan is
approved by stockholders, whichever is earlier, and must have a term of not more
than five years from the date of grant in the case of Incentive Stock Options
granted to Ten Percent Stockholders.
(d) Additional Provisions For ISOs. In the case of Incentive Stock
Options, the following additional conditions shall apply:
(i) Incentive Stock Options shall be granted only to employees of the
Company;
(ii) No Incentive Stock Option shall be exercisable beyond three months
after the date upon which the Option holder ceases to be an employee
of the Company or a Parent Corporation or Subsidiary Corporation,
except that the Committee may provide in the Incentive Stock Option
that in the event of termination of employment by reason of death or
Permanent Disability of the holder, the Option may be exercised by
the holder or his estate for a period of up to one year after
termination of employment;
(iii) Each Incentive Stock Option shall, by its terms, be transferable by
the optionee only by will or the laws of descent and distribution,
and shall be exercisable only by such employee during his lifetime;
and
(iv) The terms and conditions of Incentive Stock Options shall be subject
to and comply with Section 422 of the Code, or any successor
provision, and any regulations thereunder.
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SECTION 7. EXERCISE OF OPTIONS; PAYMENT
(a) Options may be exercised in whole or in part at such time and in such
manner as the Committee may determine and as shall be prescribed in the written
agreement with each holder.
(b) The purchase price of shares of Stock upon exercise of an Option shall
be paid by the Option holder in full upon exercise and may be paid as the
Committee may determine in its sole discretion in any combination of: (i) cash
or check payable to the order of the Company; (ii) delivery of a promissory
note; (iii) delivery of shares of Common Stock (valued at Fair Market Value at
the date of purchase of the Common Stock subject to the Option); or (iv) such
other means as the Committee may permit; provided, however, that payment of the
exercise price by delivery of shares of Common Stock of the Company owned by the
Option holder may be made only if such payment does not result in a charge to
earnings for financial accounting purposes, as determined by the Committee.
(c) With the consent of the Committee, payment of the exercise price may
also be made by delivery of a properly executed exercise notice to the Company,
together with a copy of irrevocable instructions to a broker to deliver promptly
to the Company the amount of sale or loan proceeds to pay the exercise price. To
facilitate such arrangements, the Company may enter into agreements for
coordinating procedures with one or more securities brokerage firms. The date of
delivery of such exercise notices shall be deemed the date of exercise.
(d) The Committee may impose such conditions with respect to the exercise
of Options, including conditions relating to applicable federal or state
securities laws, as it considers necessary or advisable, including making the
Common Stock issued upon exercise subject to restrictions on vesting or
transferability, or to risk of forfeiture upon the happening of such events as
the Committee may determine, any of which may be accelerated or waived in the
Committee's sole discretion.
(e) No shares of Common Stock shall be issued upon exercise of any Option
under this Plan until full payment in the form approved by the Committee has
been made and all other legal requirements applicable to the issuance or
transfer of such shares and such other requirements as are consistent with the
Plan have been complied with to the satisfaction of the Committee.
SECTION 8. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) Documentation. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or comply with applicable laws and accounting
principles.
(b) Date of Award. The date of any Award hereunder shall be the date upon
which such Award is voted by the Committee (or approved by the full Board if
such approval is legally required), unless the vote expressly provides
otherwise.
(c) Termination of Employment. The Committee shall determine the effect
on an Award of the disability, death, retirement or other termination of
employment of a Participant and the extent to which, and the period during
which, the Participant's legal representative, guardian or Designated
Beneficiary may receive payment of an Award or exercise rights thereunder.
(d) Withholding. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award
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creating the tax obligation, valued at their Fair Market Value on the date of
delivery. The Company and its Affiliates may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Participant.
(e) Foreign Nationals. Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or comply with applicable laws.
(f) Amendment of Award. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise, or conversion of an Incentive
Stock Option to a Non-Qualified Stock Option; provided, that the Participant's
consent to such action shall be required unless the Committee determines that
the action, taking into account any related action, would not materially and
adversely affect the Participant.
(g) Loans. The Company may make loans to Participants to permit them to
exercise Options. If any such loans are made, the requirements of applicable
Federal and State law regarding such loans shall be met.
SECTION 9. ADJUSTMENTS
Upon the occurrence of any of the following events, a Participant's rights
with respect to Awards granted to him or her hereunder shall be adjusted as
hereinafter provided, unless otherwise specifically provided in the written
agreement between the Participant and the Company.
(a) Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Consolidation or Mergers. If the Company is to be consolidated with
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or otherwise (an "Acquisition"), the Committee or the Board
of Directors of any entity assuming the obligations of the Company hereunder
shall, as to outstanding Awards, make appropriate provision for the continuation
of such Awards by substituting on an equitable basis for the shares then subject
to such Awards the consideration payable with respect to the outstanding shares
of Common Stock in connection with the Acquisition and by adjusting on an
equitable basis the exercise price of such Awards to reflect such Acquisition.
(c) Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than an Acquisition)
pursuant to which securities of the Company or of another corporation are issued
with respect to the outstanding shares of Common Stock, a Participant upon
exercising rights under an Award shall be entitled to receive what he would have
received if he had exercised prior to such recapitalization or reorganization.
(d) Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs (a), (b) or (c) with respect to Incentive Stock
Options shall be made only after the Committee, after consulting with counsel
for the Company, determines whether such adjustments would constitute a
"modification" of such Incentive Stock Options (as that term is defined in
Section 424 of the Code) or would cause any adverse tax consequences for the
holders of such Incentive Stock Options. If the Committee determines that any
such adjustments made with respect to Incentive Stock Options would constitute a
modification of such Incentive Stock Options, it may refrain from making such
adjustments.
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(e) Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior to
the consummation of such proposed action or at such other time and subject to
such other conditions as shall be determined by the Committee.
(f) Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(g) Fractional Shares. No fractional shares shall be issued under the
Plan and the optionee shall receive from the Company cash in lieu of such
fractional shares.
(h) Adjustments. Upon the happening of any of the events described in
subparagraphs (a), (b) or (c) above, the class and aggregate number of shares
set forth in Section 4 hereof that are subject to Awards which previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events described in such subparagraphs. The Committee
shall determine the specific adjustments to be made under this Section 9 and,
subject to Section 5, its determination shall be conclusive.
SECTION 10. FAIR MARKET VALUE
(a) If the Common Stock is then traded on any national securities exchange
or automated quotation system which has sale price reporting, the Fair Market
Value of the Common Stock shall be the closing sales price, if any, on such
exchange or system on the date as of which Fair Market Value is being determined
or, if none, shall be determined by taking the closing sales price on the
nearest date before that date in accordance with applicable regulations under
the Code.
(b) If the Common Stock is then traded on an exchange or system which does
not have sale price reporting, the Fair Market Value of the Common Stock shall
be the mean between the average of the "Bid" and the average of the "Ask"
prices, if any, as reported for such the date as of which Fair Market Value is
being determined, or, if none, shall be determined by taking a weighted average
of the means between the highest and lowest sales prices on the nearest date
before and the nearest date after such date in accordance with applicable
regulations under the Code.
(c) With respect to Common Stock if it is not publicly traded and with
respect to any other property, the Fair Market Value of such property shall be
determined in good faith by the Committee or in the manner otherwise provided by
the Committee from time to time.
SECTION 11. MISCELLANEOUS
(a) No Right To Employment. No person shall have any claim or right to be
granted an Award, and the grant of an Award shall not be construed as giving a
Participant the right to continued employment. The Company expressly reserves
the right at any time to dismiss a Participant free from any liability or claim
under the Plan, except as expressly provided in the applicable Award.
(b) No Rights Other Than Those Expressly Created. No person eligible to
receive Awards under this Plan shall have any claim or right to be granted an
Award hereunder. Neither this Plan nor any action taken hereunder shall be
construed as (i) giving any Award holder any right to continue to be affiliated
with the Company, (ii) giving any Award holder any equity or interest of any
kind in any assets of the Company, or (iii) creating a trust of any kind or a
fiduciary relationship of any kind between the Company and any such person. As
to any claim for any unpaid amounts under this Plan, any person having a claim
for payments shall be an unsecured creditor. No Award holder shall have any of
the rights of a stockholder with respect to shares of Stock covered by an Award
until such time as the stock has been issued.
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(c) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of The Commonwealth of Massachusetts.
(d) Effective Date of Plan. The effective date of this Plan shall be the
date of adoption by the Board of Directors. If the Plan is subject to the
approval of the stockholders under paragraph (e) below, upon such approval it
shall be effective as of the date of adoption by the Board of Directors. The
Committee may grant Awards under the Plan prior to any such required shareholder
approval, and any such Awards which are of a type that require shareholder
approval shall become effective as of the date of grant upon receipt of such
approval.
(e) Stockholder Approval. The adoption of this Plan, or any amendment
hereto, shall be subject to approval by stockholders only to the extent required
by (i) the Code, (ii) the rules under Section 16 of the Exchange Act, (iii)
rules of any stock exchange or over-the-counter stock market, or (iv) as
otherwise required by law. Any such approval shall be obtained within the time
required by such law or rule. Any stockholder approval of this Plan or any
amendment so required shall mean the affirmative vote of at least a majority of
the shares of capital stock present and entitled to vote at a duly held meeting
of stockholders, unless a greater vote is required by state corporation law or
the law or rule requiring stockholder approval, in which case such greater
requirement shall apply.
(f) Amendment of Plan. The Board of Directors of the Company may at any
time, and from time to time, amend, suspend or terminate this Plan in whole or
in part; provided, however, that the Board of Directors may not modify the Plan
in a manner requiring the approval of stockholders under paragraph (e) above
unless such approval is obtained to the extent required.
(g) Term of Plan. This Plan shall terminate ten years from the date of
adoption by the Board of Directors, and no Award shall be granted under this
Plan thereafter, but such termination shall not affect the validity of Awards
granted prior to the date of termination.
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