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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED SEPTEMBER 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
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 01824
(Address of Principal Executive Offices) (Zip Code)
978-262-2400
(Registrant's Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $0.01 PAR VALUE
RIGHTS TO PURCHASE COMMON STOCK
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 by check mark if disclosure of delinquent filers pursuant to Rule
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. [ ]
The aggregate market value of the registrant's Common Stock, $0.01 par
value, held by nonaffiliates of the registrant as of November 30, 2001, was
$576,558,732.75 based on the closing price per share of $36.75 on that date on
the Nasdaq Stock Market. As of November 30, 2001, 19,913,483 shares of the
registrant's Common Stock, $0.01 par value, were outstanding.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
directors and executive officers of Brooks. When used below, positions held with
Brooks include positions held with Brooks' predecessors and subsidiaries.
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
Robert J. Therrien...... 67 Director, President and Chief Executive Officer, Brooks
1989
Roger D. 62 Director, Brooks
Emerick(1)(2).........
1993
Amin J. Khoury(1)(2).... 62 Director, Brooks
1994
Juergen Giessmann....... 55 Director, Brooks
1999
Joseph R. Martin(2)..... 52 Director, Brooks
2001
Charles M. McKenna...... 56 Executive Vice President, Automation Systems Division
N/A
Michael W. Pippins...... 41 Senior Vice President, Factory Interface Division
N/A
Ellen B. Richstone...... 50 Senior Vice President, Finance and Administration and
Chief Financial Officer N/A
Jeffrey A. Cassis....... 48 Senior Vice President, Factory Automation Software
Division N/A
---------------
(1)Member of the Brooks compensation committee.
(2)Member of the Brooks audit committee.
Mr. Robert J. Therrien has been the president, chief executive officer and
a director of Brooks since its incorporation in 1989 when he initiated the
acquisition of the Brooks Automation Division of Aeronca Electronics, Inc. From
1983 to 1989, Mr. Therrien served as a consultant to Brooks and other firms in
the semiconductor industry. From 1972 until its sale to Schlumberger Industries
in 1983, Mr. Therrien cofounded and served as chairman and president of Accutest
Corporation, a semiconductor automatic test equipment company. Mr. Therrien is
currently a director of MKS Instruments, Inc., a supplier of measurement and
control components for laboratory and industrial applications throughout the
microelectronics industry. Mr. Therrien is also a director of Accent Optical
Technologies, Inc., a leading supplier of optoelectronics and silicon process
control systems, and All Wet Technologies, Inc., a manufacturer of advanced wet
processing systems for the wafer fabrication industry.
Mr. Roger D. Emerick has been a director of Brooks since October 1993. Mr.
Emerick served as a director of Lam Research Corporation, a semiconductor
equipment supplier, from 1982 until January 2001, and as chairman of the board
of directors of Lam from 1984 to 1997. Mr. Emerick served as president of Lam
from 1982 to 1989, and as its chief executive officer from 1982 to August 1997.
See "Item 13 -- Certain Relationships and Related Transactions -- Lam Research
Corporation." Mr. Emerick is also a director of Electroglas, Inc., a
manufacturer of automatic wafer probing equipment.
Mr. Amin J. Khoury has been a director of Brooks since July 1994. Since
1987, Mr. Khoury has served as chairman of the board of B/E Aerospace, Inc., a
designer, manufacturer and marketer of airline interior furnishings. Mr. Khoury
is also chairman of the board of Applied Extrusion Technologies, Inc., a
manufacturer of oriented polypropylene films and extruded polymer nets. In
addition, Mr. Khoury is a member of the board of directors of Synthes-Stratec
Inc., the world's leading orthopedic trauma company.
Mr. Juergen Giessmann has been a director of Brooks since October 1999. Mr.
Giessmann became a director pursuant to a stockholder agreement in connection
with Brooks' acquisition of the Infab division of Jenoptik AG. See "Item
13 -- Certain Relationships and Related Transactions -- Jenoptik Stockholder
Agreement." Since 1981, Mr. Giessmann has served M+W Zander Holding AG, a
company active in the semiconductor and pharmaceutical markets, in a variety of
positions. In 1992 he became its managing
1
director, in charge of sales and marketing, human resources and purchasing
divisions. Mr. Giessmann has also served as a member of the Jenoptik AG board of
management since M+W's acquisition by Jenoptik AG in October 1994, and in this
capacity has been responsible for the Jenoptik Group's semiconductor activities.
In January 2000, he was appointed chief executive officer of M+W Zander Holdings
AG.
Mr. Joseph R. Martin has been a director of Brooks since June 2001. Mr.
Martin is executive vice president and chief financial officer of Fairchild
Semiconductor International, Inc., a global supplier of multi-market products
for electronic devices. He began his career at Fairchild in 1979 as manager of
financial planning and analysis for the Logic Division and subsequently held
various senior financial positions. Prior to becoming executive vice president
and chief financial officer of Fairchild, Mr. Martin was vice president of
finance, worldwide operations, for National Semiconductor, with responsibilities
for all operating divisions, manufacturing sites, and corporate financial
planning. See "Item 13 -- Certain Relationships and Related
Transactions -- Fairchild Semiconductor International, Inc." Previously, Mr.
Martin was senior vice president and chief financial officer of VTC
Incorporated. In addition to his position as a director of Brooks, Mr. Martin is
also a member of the board of directors of Fairchild Semiconductor
International, Inc. and ChipPAC, Incorporated.
Mr. Charles M. McKenna, Ph.D., joined Brooks in July 2000 as executive vice
president, automation systems division. From April 1999 until January 2000, Mr.
McKenna was chief operating officer and chief technology officer for Varian
Semiconductor Equipment Associates, a spin-off of Varian Associates, a
manufacturer of semiconductor production equipment. Prior to this, Mr. McKenna
served in a variety of positions at Varian Associates' Ion Implant Systems
business, including general manager from April 1989 to March 1999. From March
1981 to January 1984, Mr. McKenna held various positions at Hughes Research
Laboratory. Prior to 1981, Mr. McKenna held various positions at IBM
Corporation, Aitken Industries and Commonwealth Scientific Corporation.
Mr. Michael W. Pippins has served as senior vice president, factory
interface division since June 2000. From October 1998 to June 2000, Mr. Pippins
served as Brooks' vice president, global operations and business development.
Mr. Pippins joined Brooks in March 1992 as its director of sales and marketing
and in June 1993 was promoted to vice president, sales and marketing. From 1989
to 1992, Mr. Pippins served as strategic marketing manager for Varian
Associates.
Ms. Ellen B. Richstone joined Brooks in November 1998 as senior vice
president, finance and administration, and chief financial officer. From 1997 to
November 1998, Ms. Richstone served as executive vice president and chief
financial officer of The Frontier Group, a start-up health care provider. From
1992 to 1996, Ms. Richstone served as vice president and chief financial officer
of Augat, Inc., a manufacturer of telecommunications, electronics and automotive
products. In 1992, Ms. Richstone also served Rohr Inc. as senior vice president
and chief financial officer. From 1989 to 1992, Ms. Richstone served as
executive vice president and chief financial officer of Honeywell Bull
Information Systems, and from 1981 to 1989 she served in various management
positions and finally as vice president and treasurer of Data General
Corporation.
Mr. Jeffrey A. Cassis is the former vice president of worldwide sales and
marketing for FASTech Integration, Inc. Since the acquisition of FASTech by
Brooks in September 1998, Mr. Cassis has assumed all responsibility for the
factory automation software division within Brooks as the senior vice president.
Before joining FASTech, Mr. Cassis was director of sales and marketing for
Intellution, Inc., an industrial automation software company. From 1987 to 1989,
Mr. Cassis had marketing responsibility for the industrial automation division
at Analog Devices, and prior to that, product marketing management
responsibility at The Foxboro Company.
Each director holds office until the next annual election of directors and
until his successor is chosen and qualified or until he sooner dies, resigns, is
removed, or becomes disqualified. Each officer generally holds office until the
first meeting of the directors after the next annual election of directors and
until his successor is chosen and qualified or until he sooner dies, resigns, is
removed, or becomes disqualified.
2
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires Brooks'
executive officers and directors, and persons who own more than 10% of Brooks'
common stock, to file reports of ownership and changes in ownership on Forms 3,
4 and 5 with the SEC. Executive officers, directors and greater than 10%
stockholders are required to furnish Brooks with copies of all Forms 3, 4 and 5
they file.
Based solely on Brooks' review of the copies of such forms it has received
and written representations from certain reporting persons that they were not
required to file Forms 5 for the fiscal year ended September 30, 2001, Brooks
believes that all of its executive officers, directors and greater than 10%
stockholders complied with all Section 16(a) filing requirements applicable to
them during Brooks' fiscal year ended September 30, 2001.
ITEM 11. EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation during
the last three fiscal years of each of the chief executive officer, the
executive vice president, and the five other most highly compensated executive
officers of Brooks.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- -----------------
OTHER ANNUAL SECURITIES ALL OTHER
YEAR COMPENSATION UNDERLYING OPTION COMPENSATION
NAME AND PRINCIPAL POSITION ENDED SALARY($) BONUS($) ($)(1) (#)(2) ($)(3)
--------------------------- ------- --------- -------- ------------ ----------------- ------------
Robert J. Therrien............................. 9/30/01 467,662 -- 42,722 100,000 81,863
Chief Executive Officer and 9/30/00 421,108 218,000 40,309 270,000 47,750
President(5) 9/30/99 356,605 95,172 27,513 115,000 35,418
Charles M. McKenna............................. 9/30/01 271,095 -- 9,000 15,000 17,580
Executive Vice President, 9/30/00 56,058 27,500 2,063 60,000 1,843
Automation Systems Division(4) 9/30/99 -- -- -- -- --
Michael W. Pippins............................. 9/30/01 216,253 -- 11,663 20,000 10,420
Senior Vice President, Factory 9/30/00 204,615 63,000 12,309 27,800 9,857
Interface Division 9/30/99 177,500 33,250 10,587 17,000 7,264
Ellen B. Richstone............................. 9/30/01 263,967 -- 15,000 30,000 22,720
Senior Vice President, Finance and 9/30/00 246,298 114,000 26,182 41,000 19,673
Administration and Chief Financial 9/30/99 192,115 58,150 12,958 60,000 49,322
Officer(5)
Jeffrey A. Cassis.............................. 9/30/01 210,077 -- 8,850 30,000 16,838
Senior Vice President, Factory 9/30/00 -- -- -- -- --
Automation Software Division(6) 9/30/99 -- -- -- -- --
James A. Pelusi................................ 9/30/01 254,978 -- 12,500 15,000 13,607
Assistant to President(7) 9/30/00 239,039 100,000 13,399 85,000 13,811
9/30/99 189,940 45,000 9,538 49,000 6,610
David R. Beaulieu.............................. 9/30/01 211,571 -- 11,688 20,000 14,681
Vice President and General 9/30/00 204,615 63,000 15,231 27,800 13,861
Manager, Vacuum Business 9/30/99 178,269 33,250 9,890 19,000 10,617
Unit(8)
---------------
(1)Represents lease and insurance payments made for automobiles used by Messrs.
Therrien, Beaulieu, and Pippins, and automobile allowances for Messrs.
Cassis, McKenna and Pelusi and Ms. Richstone. Represents reimbursement of
interest and associated tax costs related to security transactions for Mr.
Beaulieu, Mr. Pelusi and Ms. Richstone in fiscal 2000. Represents tax return
preparation fees paid on behalf of Mr. Therrien and Ms. Richstone in fiscal
2000 and Messrs. Therrien, Beaulieu, Cassis, Pelusi and Pippins in fiscal
2001.
3
(2)Brooks did not make any restricted stock awards, grant any stock appreciation
rights or make any long-term incentive payments to the executive officers
named in the table above during fiscal 1999, 2000 or 2001.
(3)"All Other Compensation" above consists of the following:
YEAR ENDED SEPTEMBER 30,
----------------------------
2001 2000 1999
-------- ------- -------
Robert J. Therrien
401(k) matching contributions................ $ 5,063 $ 2,196 $ 1,639
Life insurance premiums...................... 76,800 45,554 33,779
-------- ------- -------
$ 81,863 $47,750 $35,418
Charles M. McKenna
401(k) matching contributions................ $ 3,250 $ -- --
Life insurance premiums...................... 14,330 43 --
Consulting fees.............................. -- 1,800 --
-------- ------- -------
$ 17,580 $ 1,843 --
Michael W. Pippins
401(k) matching contributions................ $ 5,518 $ 4,926 $ 2,319
Life insurance premiums...................... 4,902 4,931 4,945
-------- ------- -------
$ 10,420 $ 9,857 $ 7,264
Ellen B. Richstone
401(k) matching contributions................ $ 5,028 $ 3,489 $ 1,243
Life insurance premiums...................... 17,692 16,184 8,079
Signing bonus (see "Employment Contracts")... -- -- 40,000
-------- ------- -------
$ 22,720 $19,673 $49,322
Jeffrey A. Cassis
401(k) matching contributions................ $ 5,702 -- --
Life insurance premiums...................... 11,136 -- --
-------- ------- -------
$ 16,838 -- --
James A. Pelusi
401(k) matching contributions................ $ 4,990 $ 5,173 $ 2,271
Life insurance premiums...................... 8,617 8,638 4,339
-------- ------- -------
$ 13,607 $13,811 $ 6,610
David R. Beaulieu
401(k) matching contributions................ $ 5,498 $ 5,507 $ 2,674
Life insurance premiums...................... 9,183 8,354 7,943
-------- ------- -------
$ 14,681 $13,861 $10,617
(4)Mr. McKenna joined Brooks in July 2000.
(5)See "Employment Contracts" below. Ms. Richstone's $10,000 guaranteed annual
bonus was paid ratably over the fiscal year with her salary.
(6)Mr. Cassis was promoted to senior vice president of factory automation
software division on July 2, 2001. Prior to his promotion, Mr. Cassis was not
considered an executive officer of Brooks, and therefore his compensation for
that period is not provided, except that Brooks has disclosed Mr. Cassis'
compensation for all of fiscal 2001.
(7)Mr. Pelusi assumed a reduced role and a change in title at Brooks on July 2,
2001.
(8)Mr. Beaulieu assumed a reduced role with Brooks on August 13, 2001.
4
COMPENSATION OF DIRECTORS
Nonemployee directors of Brooks receive $1,000 cash compensation annually,
in addition to expenses reasonably incurred, for service on the board.
Nonemployee directors who are members of the audit or compensation committees
receive $4,000 per year for their services on each committee. If the merger with
PRI is approved, the annual cash compensation for nonemployee directors will
increase to $20,000 for service on the board, and $5,000 for service on each
committee. Each nonemployee director is granted options to purchase 10,000
shares of Brooks common stock on the date he is first elected a director and
options to purchase 5,000 shares of common stock on July 1 of each year
thereafter pursuant to Brooks' 1993 nonemployee director stock option plan. The
board of directors has amended the directors plan to increase the initial and
annual grants thereunder to 25,000 and 10,000 shares, of Brooks common stock,
respectively, and to provide an additional one-time grant of 15,000 shares to
existing nonemployee directors, subject to stockholder approval. Employee
directors may elect to participate in Brooks' 1995 employee stock purchase plan
and may be granted options under Brooks' 1992 combination stock option plan or
Brooks' 2000 combination stock option plan. Nonemployee directors may be granted
options under the 1992 combination stock option plan.
INDEMNIFICATION AGREEMENTS
Brooks has entered into indemnification agreements with each of its
directors and anticipates that it will enter into similar agreements with any
future directors. Generally, the indemnification agreements attempt to provide
the maximum protection permitted by Delaware law with respect to indemnification
of the director.
The indemnification agreements provide that Brooks will pay certain amounts
incurred by a director in connection with any civil or criminal action or
proceeding, specifically including actions by or in the name of Brooks
(derivative suits) where the individual's involvement is by reason of the fact
that he is or was a director or officer. Such amounts include, to the maximum
extent permitted by law, attorney's fees, judgments, civil or criminal fines,
settlement amounts, and other expenses customarily incurred in connection with
legal proceedings. Under the indemnification agreements, a director will receive
indemnification unless he is found not to have acted in good faith and in a
manner he reasonably believed to be in the best interests of Brooks.
EMPLOYMENT CONTRACTS
Robert J. Therrien. Effective October 1, 2001, Brooks entered into an
employment agreement with Robert J. Therrien, its president and chief executive
officer, that replaced Mr. Therrien's former agreement, which expired on
September 30, 2001. Under the agreement, Mr. Therrien will continue in his role
as president and chief executive officer of Brooks for four years. If Mr.
Therrien identifies his successor as president and chief executive officer, then
Mr. Therrien may become chairman of the board of directors.
The agreement entitles Mr. Therrien to a minimum annual salary of $500,000.
Mr. Therrien's minimum salary will increase to $615,000 upon completion of the
proposed merger with PRI. The agreement entitles Mr. Therrien to annual
discretionary bonuses determined by the compensation committee.
The agreement provides that Mr. Therrien will receive monthly supplemental
retirement benefits equal to Mr. Therrien's monthly salary in effect as of the
date he terminates employment with Brooks. The monthly supplemental retirement
benefits will be paid for a period equal to one and one-half times the number of
months Mr. Therrien serves Brooks after October 1, 1994. For purposes of
calculating these benefits the contract generally provides that Mr. Therrien's
annual salary will be no less than $500,000 ($41,667 monthly). As of September
30, 2001, Mr. Therrien had seven years, or 84 months, of credited service. In
the event of Mr. Therrien's death or permanent disability, he or his estate has
the option of receiving his supplemental retirement compensation over a period
of not less than four years. If the merger with PRI is completed, Mr. Therrien's
minimum annual salary for purposes of calculating his supplemental retirement
benefits will increase to $615,000 ($51,250 monthly) and his supplemental
retirement benefit will be paid in a single, lump-sum payment.
5
The table below describes the annual supplemental retirement benefits Mr.
Therrien would receive given different assumptions regarding his minimum annual
salary and time of service after October 1, 1994.
SUMMARY RETIREMENT BENEFITS TABLE
MONTHS OF SERVICE SINCE 10/1/94
-------------------------------
86 MONTHS 96 MONTHS 108 MONTHS 120 MONTHS
ANNUAL SALARY AT (MINIMUM AS OF
TIME OF RETIREMENT 11/30/01)
------------------------------------------------------------------------------------------------------------------------
$500,000 $41,667 $41,667 $41,667 $41,667
(minimum as of payable for 129 months payable for 144 months payable for 162 months payable for 180 months
10/1/01)
$550,000 $45,833 $45,833 $45,833 $45,833
payable for 129 months payable for 144 months payable for 162 months payable for 180 months
$600,000 $50,000 $50,000 $50,000 $50,000
payable for 129 months payable for 144 months payable for 162 months payable for 180 months
$615,000 $51,250 $51,250 $51,250 $51,250
(minimum if merger is payable for 129 months payable for 144 months payable for 162 months payable for 180 months
completed)
$650,000 $54,167 $54,167 $54,167 $54,167
payable for 129 months payable for 144 months payable for 162 months payable for 180 months
Brooks has established a rabbi trust in connection with Mr. Therrien's
supplemental retirement benefits and purchased two insurance policies to fund
the payment of the supplemental retirement benefits. Currently, the rabbi trust
holds two whole life insurance policies with combined death benefits of
$5,000,000 and a combined cash surrender value of approximately $2,300,000. The
rabbi trust assets are unsecured and subject to the claims of creditors.
In addition, Mr. Therrien will participate in all employee welfare and
benefit plans normally offered to other Brooks executives, except that he will
not participate in any retirement plan other than Brooks' 401(k) plan and will
only receive the supplemental retirement benefits. Mr. Therrien is entitled to
the use of an automobile during the term of his agreement.
The employment agreement provides that if Mr. Therrien's employment is
terminated without "cause," or if Mr. Therrien terminates his employment for
"good reason," he will be entitled to receive his annual salary and bonus for
the remaining term of the agreement, continued life insurance coverage until
October 1, 2005 and medical, dental and vision insurance for life. The
employment agreement provides that cause means Mr. Therrien has: (i) habitually
neglected his material duties under the agreement; (ii) perpetrated fraud or
embezzlement; or (iii) been finally adjudicated to have committed a felony. The
agreement provides that good reason means Mr. Therrien has suffered, without his
consent, a reduction in his status at Brooks either through a demotion in his
duties or a change in his title.
If Mr. Therrien is terminated for cause, he will only be entitled to
receive his then accrued salary and accrued vacation days and will forfeit all
benefits payable under the supplemental retirement benefit.
In addition, if Mr. Therrien's employment is terminated or he resigns
following a change of control, as defined in the agreement, then Brooks is
obligated to pay Mr. Therrien a lump sum severance payment equal to three times
his base salary and bonus. Mr. Therrien is also entitled to receive other
payments and benefits including continuation of life insurance coverage until
October 1, 2005 and medical, dental and vision insurance for life.
In the event of Mr. Therrien's termination or resignation following a
change of control, his resignation for good reason or his termination without
cause, his stock options will immediately vest and remain exercisable until the
earlier of 24 months following his termination or the expiration of the option
term. However, the extension of the option exercise period will not apply to any
options granted prior to September 30, 2001, if such extension would result in a
charge to earnings or other adverse accounting consequence.
Mr. Therrien is entitled to reimbursement of any "parachute" excise tax
imposed on payments under the employment agreement.
6
Mr. Therrien's employment agreement also contains noncompetition,
nonsolicitation and confidentiality provisions. The noncompetition and
nonsolicitation provisions prohibit Mr. Therrien from directly or indirectly
competing with, or soliciting employees of, Brooks so long as he is an employee
of Brooks and for a period of two years thereafter.
Ellen B. Richstone. In October 1998, Brooks entered into an employment
agreement with Ellen B. Richstone, its Senior Vice President, Finance and
Administration and Chief Financial Officer, which entitles Ms. Richstone to a
base salary of $225,000 per year, and to participation in the discretionary
executive bonus program, as well as a guaranteed annual bonus of $10,000 and a
one-time "signing" bonus of $40,000. In the event Ms. Richstone's employment
with Brooks is terminated for reasons other than cause, the agreement provides
that Ms. Richstone will receive either one year of her then current base salary
or $250,000, whichever is greater, and the acceleration of all of her
outstanding options.
The agreement also provides Ms. Richstone with certain other benefits,
including an automobile allowance of $15,000 per year, the opportunity to
participate in insurance plans, and other employment benefits as may be
generally available to senior executives of Brooks. Brooks has entered into an
indemnification agreement with Ms. Richstone on the same terms as Brooks'
directors. See "-- Indemnification Agreements."
CHANGE IN CONTROL ARRANGEMENTS
On November 11, 1999, Brooks entered into change of control agreements with
certain key employees, including each of its named executive officers other than
Mr. Therrien, whose employment contract offers change of control benefits. The
board of directors determined that it was in the best interests of Brooks and
its stockholders to assure that Brooks have the continued dedication of these
persons, notwithstanding the possibility, threat, or occurrence of a change in
control of Brooks. The purpose of the agreements is to diminish the inevitable
distraction for these persons caused by the personal uncertainties and risks
created by a pending or threatened change of control and to encourage their full
attention and dedication to Brooks currently and in the event of any threatened
or pending change of control. The agreements have terms of five years and
automatically renew in five-year increments unless a party to the agreement
objects in writing in advance of the renewal. The agreements provide that in the
event of a change of control these persons will retain their then current
compensation and benefits for the lesser of one year or until terminated for
cause. The agreements also provide that the position of such person upon a
change of control shall be at least commensurate with the highest position held
by such person prior to the change of control, after completion of a six month
transitional period. Under the agreements, if the employee is terminated other
than for cause, disability or death or if the employee resigns for good reason
the employee is entitled to one year of salary in a lump sum payment and the
continuation of certain benefits for 18 months. Under Ms. Richstone's change of
control agreement, all of her options will vest immediately and she will receive
a lump sum payment equal to the greater of $250,000 or her then current base
salary if she is terminated other than for cause, disability or death or resigns
for good reason in connection with a change of control of Brooks. For purposes
of the agreements, cause means willful acts of dishonesty, repeated breaches by
the employee of the agreement or the conviction of a felony involving moral
turpitude. Good reason includes diminution of the responsibility or position of
the employee, Brooks' breach of the agreement or the involuntary relocation of
the employee.
INDEMNIFICATION AGREEMENTS
In February 2000, Brooks entered into indemnification agreements with each
of its executive officers not previously covered by such agreements. The
indemnification agreements provide that Brooks will pay certain amounts incurred
by an officer in connection with any civil or criminal action or proceeding,
specifically including actions by or in the name of Brooks where the
individual's involvement is by reason of the fact that he is or was an officer.
Such amounts include, to the maximum extent permitted by law, attorney's fees,
judgments, civil or criminal fines, settlement amounts, and other expenses
customarily incurred in connection with legal proceedings. Under the
indemnification agreements, an officer will receive indemnification unless he or
she is found not to have acted in good faith and in a manner he or she
reasonably believed to be in the best interests of Brooks.
7
BONUS PLAN
Brooks maintains a bonus program for employees, including executive
officers, under which such employees may be awarded cash bonuses based upon
Brooks' overall financial performance.
STOCK PURCHASE PLAN
In February 1996, Brooks adopted the 1995 employee stock purchase plan to
provide employees of Brooks with additional incentives by permitting them to
acquire an equity interest in Brooks through the purchase of shares of Brooks
common stock. The stock purchase plan is intended to qualify as an "employee
stock purchase plan" under Section 423 of the Internal Revenue Code.
STOCK OPTION PLANS
The following tables set forth certain information with respect to the
stock options granted to and exercised by the named executive officers during
fiscal 2001 and the aggregate number of and value of options exercisable and
unexercisable held by the named executive officers during fiscal 2001.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO TERM($)(2)
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION -----------------------
GRANTED(#)(1) FISCAL YEAR PRICE DATE 5% 10%
------------- ---------------- --------- ---------- ---------- ----------
($/SHARE)
Robert J. Therrien.... 100,000 6.5 27.563 1/2/08 1,122,091 2,614,949
Charles M. McKenna.... 15,000 1.0 27.563 1/2/08 168,314 392,242
Michael W. Pippins.... 20,000 1.3 27.563 1/2/08 224,418 522,990
Ellen B. Richstone.... 30,000 1.9 27.563 1/2/08 336,627 784,485
Jeffrey A. Cassis..... 10,000 0.6 40.030 7/16/11 251,747 637,975
20,000 1.3 27.563 1/2/08 224,418 522,990
James A. Pelusi....... 15,000 1.0 27.563 1/2/08 168,314 392,242
David R. Beaulieu..... 20,000 1.3 27.563 1/2/08 224,418 522,990
---------------
(1)Stock options become exercisable at the rate of 25% per year over a four year
period commencing one year from the date of grant.
(2)The 5% and 10% assumed rates of annual compounded stock price appreciation
are mandated by the rules of the SEC and do not represent Brooks' estimate or
projection of future prices of its common stock.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
SHARES OPTIONS AT 9/30/01(#) 9/30/01($)(2)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------------- ----------- ------------- ----------- -------------
Robert J. Therrien... 40,500 577,939 58,250 360,000 -- 687,988
Charles M. McKenna... -- -- 15,000 60,000 -- --
Michael W. Pippins... 10,000 345,370 40,550 49,350 624,629 101,703
Ellen B. Richstone... 2,000 88,325 23,250 90,750 173,420 400,200
Jeffrey A. Cassis.... 9,309 253,803 11,250 72,628 169,650 339,300
James A. Pelusi...... 16,997 585,516 31,269 103,538 116,818 379,006
David R. Beaulieu.... 12,737 564,995 20,930 52,600 198,052 144,808
---------------
(1)The "value realized" reflects the appreciation on the date of exercise (based
on the excess of the fair market value of the Brooks common stock on the date
of exercise over the exercise price). However, because the named executive
officers may keep the shares they acquired upon the exercise of the options
(or sell them at a different price), these amounts do not necessarily reflect
cash realized upon the sale of those shares.
(2)Based on the closing price of the Brooks common stock on September 28, 2001
on the Nasdaq National Market of $26.59, minus the respective option exercise
prices.
1992 COMBINATION STOCK OPTION PLAN
Under Brooks' 1992 combination stock option plan, which is administered by
the compensation committee of the Brooks board of directors, Brooks may grant
both incentive stock options intended to qualify under Section 422 of the
Internal Revenue Code, and other options which are not qualified as incentive
stock options. Incentive stock options may only be granted to persons who are
employees of Brooks at the time of grant, which may include officers and
directors who are also employees. Nonqualified stock options may be granted to
persons who are officers, directors or employees of or consultants or advisors
to Brooks, or persons who are in a position to contribute to the long-term
success and growth of Brooks at the time of grant. Options granted under the
1992 plan generally vest over a period of four years. A total of 1,950,000
shares of Brooks common stock were reserved for issuance under the 1992 plan. Of
these shares, options on 727,305 shares have been granted and are outstanding
and 1,884 shares remain available for grant as of December 7, 2001. In order to
align the 1992 plan with its current practices, in January 2000 the board of
directors amended the 1992 plan to eliminate Brooks' ability to grant restricted
stock under the 1992 plan and to require that all options be granted with
exercise prices not less than fair market value.
1993 NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
The purpose of the 1993 nonemployee director stock option plan is to
attract and retain the services of experienced and knowledgeable independent
directors of Brooks for the benefit of Brooks and its stockholders and to
provide additional incentives for such independent directors to continue to work
for the best interests of Brooks and its stockholders.
1998 EMPLOYEE EQUITY INCENTIVE PLAN
The purpose of the 1998 employee equity incentive plan, adopted by the
board of directors of Brooks in April 1998, is to attract and retain employees
and provide an incentive for them to assist Brooks to achieve long-range
performance goals, and to enable them to participate in the long-term growth of
Brooks. All employees of Brooks, other than its officers and directors,
(including contractors, consultants, service providers or others) who are in a
position to contribute to the long-term success and growth of Brooks, are
eligible to participate in the 1998 plan. As of September 30, 2001, 3,550,000
shares of Brooks common stock were reserved for issuance under the 1998 plan. On
October 1, 2001, the board amended the 1998 plan to increase
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the total number of shares reserved for issuance thereunder to 4,750,000. On
that date, the board granted options to purchase 1,605,440 shares under the 1998
plan. Of the shares reserved for issuance under the 1998 plan, options on
4,243,859 shares have been granted and are outstanding and 248,419 shares remain
available for grant as of December 7, 2001. In order to align the 1998 plan with
its current practices, in January 2000, the board of directors amended the 1998
plan to eliminate Brooks' ability to award nonqualified stock options with
exercise prices at less than fair market value.
2000 COMBINATION STOCK OPTION PLAN
The purposes of the 2000 combination stock option plan are to attract and
retain employees and to provide an incentive for them to assist Brooks to
achieve long-range performance goals and to enable them to participate in the
long-term growth of Brooks. Under the 2000 plan Brooks may grant (i) incentive
stock options intended to qualify under Section 422 of the Internal Revenue
Code, and (ii) options that are not qualified as incentive stock options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee of the board of directors consists of Messrs.
Emerick and Khoury. Neither Mr. Emerick nor Mr. Khoury is or was formerly an
officer or employee of Brooks. Mr. Therrien, the president and chief executive
officer of Brooks, has been delegated the authority to grant options to purchase
not more than 9,000 shares of Brooks common stock per employee per fiscal year
to employees who are not executive officers on terms that are consistent with
the 1992 plan, the 1998 plan and the 2000 plan. Mr. Therrien granted options to
purchase an aggregate of 6,750 shares of Brooks common stock in fiscal 2001.
Prior to November 1994, all decisions regarding compensation of executive
officers were made by the entire board of directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information regarding the beneficial ownership
of Brooks common stock as of December 7, 2001 by:
- each director of Brooks;
- each nominee for director of Brooks;
- each person known by Brooks to be the beneficial owner of more than 5% of
its common stock;
- Brooks' named executive officers;
- all current executive officers and directors of Brooks as a group; and
- each of Mitchell G. Tyson and Kenneth M. Thompson (if the merger with PRI
is completed, Brooks plans to appoint Messrs. Tyson and Thompson to its
board of directors).
Beneficial ownership is determined according to the rules of the SEC.
Except as indicated by footnotes and subject to community property laws, where
applicable, the persons named below have sole voting and investment power with
respect to all shares shown as beneficially owned by them. The "right to
acquire" column reflects beneficial ownership of shares subject to options that
may be exercised within 60 days after December 7, 2001.
The percentage beneficially owned by each person is based upon 19,923,724
shares of Brooks common stock outstanding as of December 7, 2001. The shares
that a person has the right to acquire are deemed to be outstanding solely for
purposes of calculating that person's percentage ownership.
The current directors and executive officers of Brooks have entered into
voting agreements with PRI in which they agreed to vote all of their shares of
Brooks common stock in favor of the approval and adoption of the merger
agreement and have executed irrevocable proxies with respect to their shares in
favor of PRI. Likewise, the current directors and executive officers of PRI have
entered into voting agreements with Brooks in which they agreed to vote all of
their shares of PRI common stock in favor of the approval and adoption of the
merger agreement and have executed irrevocable proxies with respect to their
shares in favor of Brooks.
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Unless otherwise noted below, the address of each person listed in the
table is c/o Brooks Automation, Inc., 15 Elizabeth Drive, Chelmsford,
Massachusetts 01824.
NUMBER OF SHARES BENEFICIALLY OWNED
------------------------------------ PERCENTAGE
RIGHT TO BENEFICIALLY
NAME OF BENEFICIAL OWNER OUTSTANDING ACQUIRE TOTAL OWNED
------------------------ ----------- -------- --------- ------------
Robert J. Therrien.............................. 1,013,848 121,250 1,135,098 5.7%
Charles M. McKenna.............................. 561 18,750 19,311 *
Michael W. Pippins(1)........................... 40,815 34,800 75,615 *
Ellen B. Richstone.............................. 8,567 52,000 60,567 *
Jeffrey A. Cassis............................... 205 32,500 32,705 *
James A. Pelusi................................. 17,545 51,269 68,814 *
David R. Beaulieu............................... 712 35,680 36,392 *
Roger D. Emerick................................ 9,000 31,000 40,000 *
Amin J. Khoury.................................. 0 10,000 10,000 *
Juergen Giessmann(2)............................ 0 5,000 5,000 *
Joseph R. Martin................................ 0 0 0 *
Mitchell G. Tyson(3)............................ 91,542 97,858 189,400 *
Kenneth M. Thompson(4).......................... 0 13,000 13,000 *
Mellon Financial Corporation (5)................ 1,346,922 0 1,346,922 6.8%
One Mellon Center
Pittsburgh, PA 15258
Kopp Investment Advisors, Inc.(6)............... 1,228,897 0 1,228,897 6.2%
7701 France Avenue South, Suite 500
Edina, Minnesota 55435
T. Rowe Price Associates, Inc.(7)............... 1,026,600 0 1,026,600 5.2%
100 East Pratt Street
Baltimore, Maryland 21202
All directors and executive officers as a
group(1)(2)(3)(4)(15 persons)................. 1,193,023 530,732 1,723,755 8.4%
---------------
* Represents beneficial ownership of less than 1%.
(1)Includes 700 shares held by Mr. Pippins' minor children.
(2)Excludes 791,072 shares held by M+W Zander Holding GmbH, as to which Mr.
Giessmann disclaims beneficial ownership. Mr. Giessmann is the chief
executive officer of M+W Zander.
(3)For purposes of determining beneficial ownership, assumes the merger is
completed, that therefore each share of PRI common stock held by Mr. Tyson is
converted to 0.52 shares of Brooks common stock and that options to purchase
PRI common stock held by Mr. Tyson have been assumed by Brooks and are
exercisable for shares of Brooks common stock. The percentage beneficially
owned continues to be based upon 19,923,724 shares of Brooks common stock and
does not give effect to the completion of the merger.
(4)For purposes of determining beneficial ownership, assumes the merger is
completed and that therefore options to purchase PRI common stock held by Mr.
Thompson have been assumed by Brooks and are exercisable for shares of Brooks
common stock. The percentage beneficially owned continues to be based upon
19,923,724 shares of Brooks common stock and does not give effect to the
completion of the merger.
(5)Mellon Financial Corporation filed a Schedule 13G with the SEC on January 19,
2001 on behalf of itself and Mellon Bank N.A. indicating beneficial ownership
of this amount. Mellon Financial Corporation has sole voting power with
respect to 1,273,639 shares and shared voting power with respect to 58,583
shares. It has sole dispositive power with respect to 1,329,939 shares and
shared dispositive power with respect to 16,983 shares. Mellon Bank N.A. has
sole voting power with respect to 878,239 shares, sole dispositive power with
respect to 884,639 shares, and shared voting and dispositive power with
respect to 13,483 shares.
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(6)Kopp Investment Advisors, Inc. filed a Schedule 13G with the SEC on January
31, 2001 on behalf of itself, Kopp Holding Company and LeRoy C. Kopp
indicating beneficial ownership of this amount. Of this amount, Kopp
Investment Advisors has sole voting power with respect to 450,200 shares and
sole dispositive power with respect to 260,000 shares. It exercises
investment discretion as to 865,897 shares, although it does not own such
shares. Kopp Investment Advisors is wholly owned by Kopp Holding Company,
which is wholly owned by LeRoy C. Kopp. Mr. Kopp has sole voting and
dispositive power with respect to 103,000 shares.
(7)T. Rowe Price Associates, Inc. filed a Schedule 13G with the SEC on February
6, 2001 indicating beneficial ownership of this amount. Of this amount, T.
Rowe Price Associates, Inc. has sole voting power as to 174,900 shares and
sole dispositive power as to 1,026,600 shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LAM RESEARCH CORPORATION
Purchases by Lam accounted for approximately 12%, 11% and 7% of Brooks'
revenues during fiscal 1999, 2000 and 2001, respectively. From 1982 until
January 2001, Roger D. Emerick, who serves on Brooks' board of directors, served
as a director on Lam's board of directors. There is no agreement or arrangement
requiring the election of Mr. Emerick or any other representative of Lam to
serve as a director of Brooks.
Sales to Lam have been made in the ordinary course of Brooks' business, and
Brooks believes that the terms of its transactions with Lam have not been less
favorable to Brooks than could have been obtained from a party unaffiliated with
Brooks purchasing products of similar types and at comparable volumes.
FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.
On June 11, 2001, Brooks appointed Joseph Martin to its board of directors.
Mr. Martin also serves on the board of Fairchild Semiconductor International, a
customer of Brooks. Revenues generated from Fairchild Semiconductor for the
period from June 11, 2001 through September 30, 2001 were not material to
Brooks' consolidated results for fiscal 2001. There is no agreement or
arrangement requiring the election of Mr. Martin or any other representative of
Fairchild Semiconductor to serve as a director of Brooks.
Sales to Fairchild Semiconductor have been made in the ordinary course of
Brooks' business, and Brooks believes that the terms of the transactions with
Fairchild Semiconductor have not been less favorable to Brooks than could have
been obtained from a party unaffiliated with Brooks purchasing products of
similar types and at comparable volumes.
JENOPTIK STOCKHOLDER AGREEMENT
On September 30, 1999, Brooks acquired substantially all of the assets and
assumed certain of the liabilities of the Infab Division of Jenoptik AG in
exchange for 914,286 shares of Brooks common stock issued to Jenoptik's
subsidiary M+W, subject to a 5% holdback and to adjustment. As part of this
acquisition, Brooks appointed Juergen Giessmann, a member of the board of
directors of Jenoptik, to Brooks' board of directors pursuant to a stockholder
agreement dated September 30, 1999 among Brooks, Jenoptik, M+W, and Robert J.
Therrien. Under the stockholder agreement, until Jenoptik no longer holds all
its shares purchased from Brooks in this transaction, or until September 30,
2004, whichever occurs first, Brooks agreed to nominate a reasonably acceptable
candidate of Jenoptik to Brooks' board of directors in each election of Brooks'
directors, and Robert J. Therrien agreed to vote all his shares in favor of such
nominees for election to the board of directors. These voting obligations of
Brooks and Mr. Therrien expired in fiscal 2001 when Jenoptik sold some of its
shares of Brooks common stock. Jenoptik agreed to cause M+W to vote in favor of
the other candidates to Brooks' board of directors nominated by Brooks' existing
board. Jenoptik also agreed to cause M+W to vote for other matters in accordance
with the recommendation of a majority of the Brooks board. Jenoptik agreed not
to buy or sell shares of the common stock except in specified circumstances.
Jenoptik further agreed to share certain information with Brooks regarding
upcoming factory automation projects, to give Brooks a right of first refusal as
a supplier and to award Brooks an exclusive supply contract with guaranteed,
minimum gross margin of at least $15 million in connection with an upcoming
project.
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Jenoptik and Brooks also entered into a one year transitional services
agreement, pursuant to which Jenoptik agreed to allow Brooks to occupy space at
its Jena, Germany manufacturing facility and to receive support services from
Jenoptik. Brooks agreed to reimburse Jenoptik for the provision of space and
support services at cost. This transitional services agreement was extended
through December 2002.
On October 16, 2000, the parties amended the agreement to permit the
removal of the transfer restrictions with respect to an aggregate of 868,572
shares of Brooks common stock held by Jenoptik, and the grant by Brooks of
certain registration rights under the Securities Act of 1933, as amended, with
respect to such shares. In consideration for a payment of $5.1 million, Brooks
released certain claims for indemnification against Jenoptik and agreed as soon
as commercially reasonable after January 15, 2001 to register 434,286 shares of
Brooks common stock held by Jenoptik. Brooks has further agreed to register an
additional 434,286 shares as soon as commercially reasonable after October 15,
2002. The amendment released Jenoptik from the requirement to award Brooks the
exclusive contract with guaranteed gross margins and Jenoptik released its
claims to the 5% holdback.
DAIFUKU STOCKHOLDER AGREEMENT
On January 6, 2000, Brooks completed the acquisition of Auto-Soft
Corporation and AutoSimulations, Inc. from their sole stockholder, Daifuku
America Corporation, the U.S. affiliate of Daifuku Co., Ltd., for $27 million in
cash, 535,404 shares of Brooks common stock and issuance of a note in the amount
of $16 million which was repaid on January 5, 2001. The note was unsecured and
bore interest at 4% per year. As part of the transaction, Daifuku America
Corporation and Daifuku Co., Ltd. entered into a stockholder agreement with
Brooks under which they agreed to take such action as may be required so that
all voting securities of Brooks owned by them and their affiliates (i) are
represented at all meetings and (ii) are voted in accordance with the
recommendation of Brooks' board of directors. The stockholder agreement also
restricted Daifuku from buying or selling shares of Brooks common stock except
in specified circumstances. A separate registration rights agreement granted
Daifuku certain registration rights for the stock it received in the
transaction. The parties also entered into a series of technology
cross-licensing arrangements related to the technology of the two acquired
companies and Daifuku which, in some cases, provide most favored customer terms.
Daifuku America Corporation has sold all its shares of Brooks common stock.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BROOKS AUTOMATION, INC.
Date: January 28, 2002 /s/ ELLEN B. RICHSTONE
--------------------------------------------------------
Ellen B. Richstone
Senior Vice President of
Finance and Administration
and Chief Financial Officer
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