Mattson Technology Inc · S-4 · On 9/25/0
Document 1 of 9 · S-4 · Form S-4
This document was filed as EDGAR "Text" and not EDGAR "HTML".
As filed with the Securities and Exchange Commission on September 25, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MATTSON TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
Delaware 3559 77-0208119
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Number)
organization)
2800 Bayview Drive
Fremont, California 94538
Telephone: (510) 657-5900
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Brad Mattson
Chief Executive Officer
Mattson Technology, Inc.
2800 Bayview Drive
Fremont, California 94538
Telephone: (510) 657-5900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
Bradley J. Rock Justin P. Klein
Diane Holt Frankle Michael J. Konowal
Gray Cary Ware & Freidenrich LLP Ballard Spahr Andrews & Ingersoll,
400 Hamilton Avenue LLP
Palo Alto, California 94301-1825 1735 Market Street, 51st Floor
(650) 833-2000 Philadelphia, PA 19103-7599
(215) 665-8500
Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective and all other
conditions to the proposed business combination and the merger described herein
have been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(a) under the Securities Act of 1933, as amended (the
"Securities Act"), check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective Registration Statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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Proposed
Proposed Maximum
Title of Each Class of Amount Maximum Aggregate Amount of
Securities to be to be Offering Price Offering Registration
Registered Registered(1) Per Share(2) Price(2) Fee(2)
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Common Stock Par Value
$0.001 per share...... 5,040,000 $16.79 $84,641,348 $22,346
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(1) Represents the number of shares of common stock of the Registrant which
may be issued to the former shareholders and optionholders of
CFM Technologies, Inc. ("CFM") pursuant to the transactions described
herein. The shares to be issued to STEAG Electronic Systems AG ("STEAG")
are not being registered hereunder. Pursuant to Rule 14a-6(j), no
registration fee with respect to the shares to be issued to STEAG is being
paid.
(2) Each share of common stock of CFM (and each option to purchase shares of
CFM) will be converted into the right to receive 0.5223 shares of common
stock of the Registrant pursuant to the merger with CFM described herein.
Pursuant to Rule 457(f)(1) under the Securities Act, the registration fee
has been calculated based on the average of the high and low prices per
share of the CFM common stock to be cancelled in the exchange as reported
on the Nasdaq National Market on September 19, 2000.
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this joint proxy statement-prospectus is not complete and +
+may be changed. Mattson may not issue the common stock to be issued in +
+connection with the transactions described in this joint proxy statement- +
+prospectus until the registration statement filed with the Securities and +
+Exchange Commission is effective. This joint proxy statement-prospectus is +
+not an offer to sell these securities and it is not soliciting an offer to +
+buy these securities in any state where the offer or sale is not permitted. +
+Any representation to the contrary is a criminal offense. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 2000.
[MATTSON LOGO]
[CFM LOGO]
TO THE STOCKHOLDERS OF MATTSON TECHNOLOGY, INC. AND
THE SHAREHOLDERS OF CFM TECHNOLOGIES, INC.
A BUSINESS COMBINATION AND MERGER PROPOSAL--YOUR VOTE IS VERY IMPORTANT!
Mattson Technology, Inc. ("Mattson") has entered into definitive agreements
to acquire from STEAG Electronic Systems AG ("STEAG") all the subsidiaries
comprising STEAG's semiconductor equipment division (the "STEAG Semiconductor
Division") and for a Mattson subsidiary to merge with CFM Technologies, Inc.
("CFM"). The transactions with each of STEAG and CFM (together referred to
herein as the "Transactions") are mutually conditioned on one another and are
required to close simultaneously. The combined company following the closing of
the Transactions, which will continue to operate under the name Mattson
Technology, Inc., will become one of the world's top 15 semiconductor industry
equipment suppliers, based on pro forma 2000 annual sales, thereby attaining a
critical size that is becoming an increasingly important element to
successfully compete in the semiconductor equipment industry. The combination
of the semiconductor equipment businesses of Mattson, STEAG, and CFM will also
give Mattson a leadership position in more than one product line: the STEAG
Semiconductor Division ranks second worldwide, based on annual sales, in rapid
thermal process (RTP) equipment systems, Mattson ranks first worldwide based on
annual sales in plasma-based (or so-called "dry") strip equipment systems, and
the combination of the chemical (or so-called "wet") strip processing
businesses of the STEAG Semiconductor Division and CFM will place the combined
company in the first tier of suppliers in that product market. Mattson plans to
organize the combined businesses into three product groups: plasma products,
thermal products, and wet processing products. Each product group will have a
division president reporting to company headquarters which will remain in
Fremont, California.
See "Risk Factors" beginning on page 12 for a discussion of certain risks
that the stockholders of Mattson and the shareholders of CFM should consider in
determining how to vote on the proposed Transactions.
This joint proxy statement-prospectus contains forward-looking statements.
See "Risk Factors-Special Note Regarding Forward Looking Statements."
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the shares of Mattson common stock to
be issued in connection with the Transactions nor determined whether this joint
proxy statement-prospectus is adequate or accurate. Any representation to the
contrary is a criminal offense.
This joint proxy statement-prospectus does not constitute an offer to sell,
or a solicitation of an offer to purchase, the securities covered by this joint
proxy statement-prospectus, or the solicitation of a proxy, in any
jurisdiction, to or from any person, to whom or from whom it is unlawful to
make such offer, solicitation of an offer, or proxy solicitation in such
jurisdiction. Neither the delivery of this joint proxy statement-prospectus nor
any distribution of securities pursuant to this joint proxy statement-
prospectus shall, under any circumstances, create any implication that there
has been no change in the information set forth or incorporated into this joint
proxy statement-prospectus by reference or in the affairs of Mattson, the STEAG
Semiconductor Division, or CFM, since the date of this joint proxy statement-
prospectus.
Under the Strategic Business Combination Agreement (the "Combination
Agreement") dated as of June 27, 2000 with STEAG, Mattson will acquire the
eleven subsidiaries which comprise the STEAG Semiconductor Division (the "STEAG
Semiconductor Subsidiaries") in exchange for issuing 11,850,000 shares of
Mattson common stock to STEAG upon the closing. As a result, STEAG will hold
approximately 32% of the outstanding common stock of Mattson following the
completion of the Transactions. At the closing, Mattson will also grant options
to purchase 850,000 shares of common stock to employees of the STEAG
Semiconductor Division. Mattson, STEAG, and Brad Mattson have also agreed to
enter into a Stockholder Agreement (the "Stockholder Agreement") providing for,
among other things, the expansion of Mattson's board of directors from five
members to seven, the election of two persons designated by STEAG to Mattson's
board of directors (Dr. Jochen Melchior, who will be the initial Chairman of
the Board of the combined company, and Dr. Hans-Georg Betz), restrictions on
future acquisitions or dispositions of Mattson common stock by STEAG, and
registration rights in favor of STEAG. The terms of the transaction with STEAG
are more fully described in this joint proxy statement-prospectus and in the
Combination Agreement and Stockholder Agreement, which are attached hereto as
Annex A and Annex B, and are incorporated herein by reference.
Under the Agreement and Plan of Merger (the "Merger Agreement") dated as of
June 27, 2000 with CFM, Mattson will acquire CFM in a stock-for-stock merger in
which Mattson will issue 0.5223 shares of Mattson's common stock for each share
of CFM common stock outstanding at the closing (which would represent
approximately 4,215,000 shares of Mattson common stock as of September 4,
2000). As a result of the merger, shareholders of CFM will hold in the
aggregate approximately 12% of the outstanding common stock of Mattson
following the completion of the Transactions. In addition to the share
issuance, Mattson will assume all outstanding CFM stock options, based on the
same 0.5223 exchange ratio. As of September , 2000, CFM had options to
purchase approximately 1,782,000 shares of CFM common stock outstanding, which
would become options to purchase approximately 930,740 shares of Mattson common
stock upon completion of the Transactions. Mattson has agreed, at the closing,
to issue additional options to purchase 500,000 shares of its common stock to
employees of CFM. Mr. James J. Kim, a current member of the board of directors
of CFM, will join Mattson's board of directors at the closing. The terms of the
transaction with CFM are more fully described in this joint proxy statement-
prospectus and in the Merger Agreement which is attached hereto as Annex C and
incorporated herein by reference.
The Transactions will be accounted for by Mattson as purchases. The merger
with CFM is intended to qualify as a tax-free reorganization for purposes of
U.S. tax law. Following the Transactions, Mattson's common stock will continue
to be listed on the Nasdaq National Market System under the symbol "MTSN."
The Transactions are subject to, among other things, the approval by the
stockholders of Mattson of the proposed share issuance in connection with the
Transactions (including an option plan share reserve increase to cover the
options to be issued in connection with the Transactions), the approval by the
shareholders of CFM of the Merger Agreement, and other customary closing
conditions. Clearance of the Transactions under U.S. and German antitrust laws
has already been obtained. The actual closing of the Transactions is expected
to occur in early January 2001. The parties agreed to close the Transactions
after January 1, 2001 because of certain German tax and accounting
considerations. However, after approval by Mattson stockholders and CFM
shareholders and the satisfaction of all other closing conditions not within
the control of the parties, the parties may, if prior to December 1, 2000, take
a pre-closing step at which all remaining closing conditions, other than the
exchange of the Mattson shares and arrival of January 1, 2001, will either be
considered fulfilled or irrevocably waived. This is intended to reduce any risk
that the Transactions will not close. This pre-closing step could take place as
early as November [ ], 2000.
The board of directors of Mattson has approved the proposed issuance of
shares of Mattson common stock and the grant of Mattson stock options pursuant
to the Transactions and unanimously recommends that its stockholders vote FOR
the proposed share issuance and increase in the option plan share reserve to
complete the Transactions. Likewise, the board of directors of CFM has approved
the Merger Agreement and merger with a subsidiary of Mattson and recommends
that CFM's shareholders vote FOR the approval of the Merger Agreement. Detailed
information about the Transactions is contained in this joint proxy statement-
prospectus. The boards of directors of both Mattson and CFM urge you to read
this document, including the section describing the risk factors that begins on
page 12.
In addition to voting on the proposed share issuance and option plan share
reserve increase in connection with the Transactions, the stockholders of
Mattson (and not the shareholders of CFM) are asked to approve a second
proposal to further increase the number of shares reserved for issuance under
the Mattson Amended and Restated 1989 Stock Option Plan (the "Stock Option
Plan") by 750,000 shares, to approve a third proposal to increase the number of
shares reserved for issuance under the Mattson 1994 Employee Stock Purchase
Plan (the "Purchase Plan") by 250,000 shares, to approve a fourth proposal to
amend Mattson's Certificate of Incorporation to increase the number of
authorized shares of common stock from 60 million shares to 120 million shares,
and to approve a fifth proposal to amend Mattson's Certificate of Incorporation
to increase the number of directors of Mattson from five to seven and to change
the procedure for filling board vacancies. However, the approval of none of
these four additional proposals is required in order to approve and effect the
Transactions. The increase in the number of shares reserved for issuance under
both the Stock Option Plan and the Purchase Plan will allow Mattson to continue
to provide meaningful equity incentives to attract, motivate, and retain
employees and officers following completion of the Transactions. The amendment
to Mattson's Certificate of Incorporation to increase the authorized number of
shares will provide the Mattson board of directors increased flexibility to
issue shares for various corporate purposes, including stock splits, issuances
of shares in connection with acquisitions of other businesses, or the raising
of additional capital through the sale of equity securities, actions that would
be significantly constrained under Mattson's current Certificate of
Incorporation following completion of the Transactions. However, Mattson's
board of directors has no current intent, plans, arrangements, or agreements to
issue any of the proposed additional authorized shares of common stock. The
amendment to Mattson's Certificate of Incorporation to increase the number of
directors from five to seven and to change the procedure for filling vacancies
is consistent with the terms of the Transactions and will provide room on
Mattson's board for the addition of two directors designated by STEAG.
No vote of the sole shareholder of STEAG is required in order to effect the
Transactions.
The dates, times and places of the two special meetings are as follows:
For CFM shareholders:
For Mattson stockholders:
1:00 p.m.
10:00 a.m. October , 2000
October , 2000 Sheraton Great Valley Hotel
Newark Hilton 707 East Lancaster Avenue
39900 Balentine Drive Frazer, Pennsylvania 19355
Newark, California 94560
Your vote is very important, regardless of the number of shares you own.
Whether or not you plan to attend either special meeting, please vote as soon
as possible to make sure that your shares are represented at the meeting.
Both Brad Mattson and Roger Carolin, the Chief Executive Officers of Mattson
and CFM, respectively, strongly support the Transactions and join with their
boards of directors in enthusiastically recommending that you vote, in the case
of Mattson stockholders, in favor of the issuance of shares and increase in the
Stock Option Plan share reserve in connection with the Transactions, and in the
case of CFM shareholders, in favor of the Merger Agreement and merger with
Mattson.
Roger A. Carolin
Brad Mattson President and Chief Executive
Chairman and Chief Executive Officer Officer
Mattson Technology, Inc. CFM Technologies, Inc.
This joint proxy statement-prospectus is dated October , 2000, and is first
being mailed to stockholders of Mattson and shareholders of CFM on or about
October , 2000.
ADDITIONAL INFORMATION
This joint proxy statement-prospectus incorporates important business and
financial information about Mattson and CFM from other documents that are not
included in or delivered with the joint proxy statement-prospectus. This
information is available to you without charge upon your written or oral
request. You can obtain the documents incorporated by reference in this joint
proxy statement-prospectus by requesting them in writing or by telephone or
over the Internet from the appropriate company at one of the following
addresses:
Mattson Technology, Inc. CFM Technologies, Inc.
Peter Brown, Corporate Marketing Jeff Randall, Chief Financial
Manager Officer
2800 Bayview Drive 150 Oaklands Boulevard
Fremont, California 94538 Exton, Pennsylvania 19341
Phone: (510) 657-5900 Phone: (610) 280-8509
E-Mail: Peter.Brown@mattson.com E-Mail: Jeff.Randall@cfmtech.com
Web Address: http://www.mattson.com Web Address: http://www.cfmtech.com
If you would like to request any documents, please do so by October , 2000
in order to receive them before the special meetings.
See "Where You Can Find More Information" that begins on page vii.
[LOGO OF MATTSON TECHNOLOGY, INC.]
MATTSON TECHNOLOGY, INC.
2800 Bayview Drive
FREMONT, CALIFORNIA 94538
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER , 2000
TO THE STOCKHOLDERS OF MATTSON TECHNOLOGY, INC.:
A Special Meeting of the stockholders of Mattson Technology, Inc.
("Mattson") will be held on , October , 2000, beginning at 10:00 A.M.,
local time, at the Newark Hilton, 39900 Balentine Drive, Newark, California
94560, to consider and vote upon the following proposals:
1. To authorize (A) the issuance by Mattson of an aggregate of
16,890,000 shares of its common stock pursuant to: (i) the Strategic
Business Combination Agreement (the "Combination Agreement") between
Mattson and STEAG Electronic Systems AG ("STEAG") under which Mattson will
directly or indirectly acquire 100% of the stock of all of the subsidiaries
comprising the semiconductor equipment division of STEAG, and (ii) the
Agreement and Plan of Merger (the "Merger Agreement") between and among
Mattson, M2C Acquisition Corporation, a wholly owned subsidiary of Mattson,
and CFM Technologies, Inc. ("CFM"), under which CFM will become a wholly
owned subsidiary of Mattson, including the assumption of outstanding
options to acquire CFM stock, and (B) an amendment to Mattson's Amended and
Restated 1989 Stock Option Plan (the "Stock Option Plan") to increase the
number of shares reserved for issuance thereunder by 1,350,000 shares to
support the issuance by Mattson of options upon the closing of the
transactions required by the Combination Agreement and the Merger Agreement
to the employees of the acquired businesses.
2. To approve an amendment to the Stock Option Plan to further increase
the number of shares reserved for issuance thereunder by 750,000 shares (in
addition to the Stock Option Plan reserve increase included in proposal 1).
3. To approve an amendment to Mattson's 1994 Employee Stock Purchase
Plan (the "Purchase Plan") to increase the number of shares reserved for
issuance thereunder by 250,000 shares.
4. To approve an amendment to Mattson's Certificate of Incorporation to
increase the authorized number of shares of common stock available for
issuance from 60 million shares to 120 million shares.
5. To approve an amendment to Mattson's Certificate of Incorporation to
increase the number of directors on Mattson's board from five to seven and
to change the procedure for filling board vacancies.
6. To act upon such other matters as may properly come before the
meeting.
The board of directors of Mattson unanimously recommends that stockholders
vote FOR the approval of the issuance of shares and increase in the Stock
Option Plan share reserve needed to complete the Transactions, FOR the
additional amendment of the Stock Option Plan, FOR the amendment of the
Purchase Plan, FOR the proposed increase in the authorized number of shares
under Mattson's Certificate of Incorporation, and FOR the proposed increase in
the size of Mattson's board and change in the procedure for filling board
vacancies as set forth in Mattson's Certificate of Incorporation.
Only stockholders of record at the close of business on September , 2000
will be entitled to vote at the meeting. A complete list of stockholders
entitled to vote on the above matters at the meeting, arranged in alphabetical
order, indicating the respective address of each such stockholder, and the
number of shares
registered in the name of each such stockholder, will be open to the
examination of any stockholder during ordinary business hours, at the offices
of Mattson, for a period of ten (10) days prior to the date of the meeting.
Such list shall also be produced and kept at the time and place of the meeting,
for the duration of such, and may be inspected by any stockholder who is
present at the meeting. Each of the stockholders of record is cordially invited
to be present and vote at the meeting in person.
By order of the board of directors,
Brad Mattson
Chief Executive Officer
Fremont, California
October , 2000
You are cordially invited to attend the meeting. However, whether or not you
plan to attend the meeting in person, please complete, date, and sign the
accompanying proxy and mail it promptly in the return envelope to assure
that your shares are represented at the meeting. If you later desire to
revoke your proxy, you may do so at any time before it is exercised.
[LOGO OF CFM TECHNOLOGIES, INC.]
CFM TECHNOLOGIES, INC.
150 Oaklands Blvd.
EXTON, PA 19341
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER , 2000
TO OUR SHAREHOLDERS:
You are invited to be present either in person or by proxy at the Special
Meeting of Shareholders of CFM Technologies, Inc. to be held at the Sheraton
Great Valley Hotel, 707 East Lancaster Avenue, Frazer, Pennsylvania 19355, on
, October , 2000, beginning at 1:00 P.M., for the following purposes:
1. To consider and vote on a proposal to approve and adopt the Agreement
and Plan of Merger, dated as of June 27, 2000, by and among Mattson
Technology, Inc., M2C Acquisition Corporation, a wholly owned subsidiary of
Mattson, and CFM Technologies, Inc.
2. To act upon such other matters as may properly come before the
meeting.
The board of directors of CFM unanimously recommends that the shareholders
vote FOR the proposal to approve and adopt the Agreement and Plan of Merger,
dated as of June 27, 2000, by and among Mattson Technology, Inc., M2C
Acquisition Corporation, and CFM Technologies, Inc.
The board of directors of CFM has fixed the close of business on October ,
2000 as the record date for determining shareholders entitled to notice of and
to vote at the meeting and any adjournments or postponements thereof.
The board of directors of CFM hopes that you will find it convenient to
attend the meeting in person, but whether or not you plan to attend, please
sign, date, and return the enclosed proxy promptly to ensure your shares are
represented at the meeting. Shareholders who execute proxies retain the right
to revoke them (in writing) at any time prior to the voting thereof. A return
envelope, which requires no postage if mailed in the United States, is enclosed
for your convenience.
By order of the board of directors,
Lorin J. Randall
Secretary
Exton, Pennsylvania
October , 2000
YOUR VOTE IS IMPORTANT.
PLEASE COMPLETE, SIGN, DATE, AND RETURN YOUR PROXY.
HOLDERS OF CFM COMMON STOCK SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR PROXY
CARDS.
TABLE OF CONTENTS
Page
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WHERE YOU CAN FIND MORE INFORMATION....................................... vii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... vii
WHO CAN HELP ANSWER YOUR QUESTIONS........................................ viii
QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS.............................. 1
SUMMARY OF THE JOINT PROXY STATEMENT-PROSPECTUS........................... 4
The Companies........................................................... 4
The Structure of the Transactions....................................... 5
Treatment of STEAG and CFM Stock Options................................ 6
Relative Percentages of Ownership....................................... 6
Tax Consequences........................................................ 6
Board Composition....................................................... 6
Reasons for the Transactions............................................ 7
Recommendation of the Boards of Directors............................... 7
Fairness Opinions of Financial Advisors................................. 7
Stockholder Approvals................................................... 8
The Special Meetings.................................................... 8
Interests of Directors and Officers of Mattson, STEAG, and CFM in the
Transactions........................................................... 8
Accounting Treatment.................................................... 10
Regulatory Approvals.................................................... 10
Dissenters' Rights...................................................... 10
RISK FACTORS.............................................................. 12
Special Note Regarding Forward-Looking Statements....................... 12
Risks Related to the Transactions....................................... 12
Risks Relating to Mattson's Business Following Consummation of the
Transactions........................................................... 17
MATTSON SELECTED HISTORICAL FINANCIAL INFORMATION......................... 25
STEAG SEMICONDUCTOR DIVISION SELECTED HISTORICAL FINANCIAL INFORMATION.... 26
CFM SELECTED HISTORICAL FINANCIAL INFORMATION............................. 27
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION........................ 29
Unaudited Pro Forma Combined Condensed Balance Sheet.................... 30
Unaudited Pro Forma Combined Condensed Statement of Operations ......... 31
Unaudited Pro Forma Combined Condensed Consolidated Statement of
Operations............................................................. 32
Notes to Unaudited Condensed Combined Pro Forma Financial Statements.... 33
COMPARATIVE PER SHARE DATA ............................................... 34
MARKET PRICE DATA AND DIVIDEND POLICY..................................... 35
THE MATTSON SPECIAL MEETING............................................... 37
Date, Time and Place of Meeting......................................... 37
Purpose of the Mattson Special Meeting.................................. 37
Record Date and Outstanding Shares...................................... 37
Share Ownership of Management and Certain Stockholders.................. 37
Vote Required........................................................... 37
Quorum; Abstentions..................................................... 38
Solicitation of Proxies; Expenses....................................... 38
Voting of Proxies....................................................... 38
Recommendation of the Board of Directors................................ 39
THE CFM SPECIAL MEETING................................................... 40
Date, Time and Place of Meeting......................................... 40
Purpose of the CFM Special Meeting...................................... 40
Record Date and Outstanding Shares...................................... 40
Share Ownership of Management and Certain Shareholders.................. 40
Vote Required........................................................... 40
i
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Quorum; Abstentions..................................................... 40
Solicitation of Proxies; Expenses....................................... 41
Voting of Proxies....................................................... 41
Rights of Dissenting Shareholders....................................... 41
Recommendation of the Board of Directors................................ 42
PROPOSAL ONE (FOR MATTSON STOCKHOLDERS): APPROVAL OF ISSUANCE OF SHARES
AND INCREASE IN OPTION PLAN SHARE RESERVE IN CONNECTION WITH THE
TRANSACTIONS.
(FOR CFM SHAREHOLDERS): APPROVAL OF ADOPTION OF THE MERGER AGREEMENT AND
THE MERGER CONTEMPLATED THEREUNDER....................................... 43
Background of the Transactions.......................................... 43
Mattson's Reasons for the Transactions.................................. 49
Recommendation of Mattson's Board of Directors.......................... 51
Opinion of Mattson's Financial Advisor.................................. 51
Interests of Mattson's Directors, Officers, and Affiliates in the
Transactions............................................................ 56
CFM's Reasons for the Merger............................................ 57
Recommendation of CFM's Board of Directors.............................. 59
Opinion of CFM's Financial Advisor, UBS Warburg LLC..................... 60
Interests of CFM's Directors, Officers, and Affiliates in the
Transactions............................................................ 66
Material Federal Income Tax Consequences................................ 68
Anticipated Accounting Treatment of the Transactions.................... 69
Regulatory Filings and Approvals Required to Complete the Transactions.. 69
Appraisal or Dissenters' Rights......................................... 69
Restrictions on Sales of Shares by Affiliates........................... 70
THE STRATEGIC BUSINESS COMBINATION AGREEMENT.............................. 71
Result of Business Combination.......................................... 71
Organization of New German Corporation.................................. 71
Closing of the Business Combination; Consideration...................... 71
Time of Closing......................................................... 71
Post-Closing Cash Adjustments........................................... 72
Conditions to The Business Combination.................................. 73
Representations and Warranties.......................................... 74
Covenants; Conduct of Business Prior To The Business Combination........ 74
Limitation on Other Negotiations........................................ 78
Additional Agreements and Covenants..................................... 78
Termination............................................................. 80
Indemnification......................................................... 82
AGREEMENTS RELATED TO THE BUSINESS COMBINATION............................ 83
Stockholder Agreement................................................... 83
Voting Agreement Between STEAG and Brad Mattson......................... 86
Transition Services Agreement........................................... 87
THE MERGER AGREEMENT...................................................... 88
Effective Time of the Merger............................................ 88
Preliminary Closing..................................................... 88
Merger Consideration.................................................... 88
Conditions to the Merger................................................ 88
Representations and Warranties.......................................... 90
Covenants; Conduct of Business Prior to the Merger...................... 90
Limitation on Discussing or Negotiating Other Acquisition Proposals..... 93
Indemnification by CFM as the Surviving Corporation..................... 94
Employee Agreements and Benefit Plans................................... 94
ii
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Termination of the Merger Agreement..................................... 95
Agreements Related to the Merger Agreement.............................. 98
Voting Agreements....................................................... 99
COMPARISON OF RIGHTS OF HOLDERS OF MATTSON COMMON STOCK AND CFM COMMON
STOCK.................................................................... 101
Fiduciary Duties of Directors........................................... 108
Anti-Takeover Laws...................................................... 110
MANAGEMENT OF MATTSON AFTER THE TRANSACTIONS.............................. 113
Board of Directors of Mattson........................................... 113
Board Meetings and Committees........................................... 114
Compensation of Directors............................................... 115
Executive Officers...................................................... 116
DESCRIPTION OF MATTSON CAPITAL STOCK...................................... 118
Common Stock............................................................ 118
Preferred Stock......................................................... 118
PROPOSALS RELATING TO AMENDING MATTSON EQUITY COMPENSATIONS PLANS......... 119
Historical Executive Compensation....................................... 119
Stock Options Granted During Fiscal 1999................................ 120
Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values.. 121
Compensation Committee Interlocks and Insider Participation............. 121
Allocation of Benefits Under Stock Option and Stock Purchase Plans...... 122
PROPOSAL TWO (FOR MATTSON STOCKHOLDERS ONLY): APPROVAL OF INCREASE IN
SHARES RESERVED FOR ISSUANCE UNDER THE AMENDED AND RESTATED 1989 STOCK
OPTION PLAN.............................................................. 122
Description of Plan..................................................... 123
General................................................................. 123
Shares Subject to Plan.................................................. 123
Administration.......................................................... 123
Eligibility............................................................. 124
Terms and Conditions of Options......................................... 124
Terms and Conditions of Non-Employee Director Options................... 125
Transfer of Control..................................................... 125
Summary of United States Federal Income Tax Consequences................ 126
Incentive Stock Options............................................... 126
Non-Statutory Stock Options........................................... 126
Vote Required and Recommendation of the Board of Directors.............. 127
PROPOSAL THREE (FOR MATTSON STOCKHOLDERS ONLY): APPROVAL OF INCREASE IN
SHARES RESERVED FOR ISSUANCE UNDER 1994 EMPLOYEE STOCK PURCHASE PLAN..... 128
General................................................................. 128
Description of Plan..................................................... 128
Summary of United States Federal Income Tax Consequences................ 129
Recommendation of the Board of Directors................................ 130
PROPOSALS RELATING TO AMENDING MATTSON'S CERTIFICATE OF INCORPORATION..... 131
PROPOSAL FOUR (FOR MATTSON STOCKHOLDERS ONLY): APPROVAL OF AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK................................................... 131
Background.............................................................. 131
Purpose and Effect of The Amendment..................................... 131
Vote Required and Board of Directors' Recommendation.................... 132
iii
Page
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PROPOSAL FIVE (FOR MATTSON STOCKHOLDERS ONLY): APPROVAL OF AMENDMENT TO
THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF DIRECTORS OF
MATTSON.................................................................. 133
Background.............................................................. 133
Purpose and Effect of The Amendment..................................... 133
Vote Required and Board of Directors' Recommendation.................... 133
BUSINESS OF MATTSON....................................................... 135
General................................................................. 135
Overview................................................................ 135
Industry Background..................................................... 135
History of Increasing Semiconductor Manufacturing Productivity.......... 135
Equipment Productivity Has Declined..................................... 136
The Mattson Solution.................................................... 137
The Mattson Strategy.................................................... 138
Markets and Applications................................................ 139
The Aspen Strip......................................................... 141
The Aspen RTP (FR3)..................................................... 143
The Aspen LiteEtch...................................................... 143
EpiPro Systems.......................................................... 143
Customer Support........................................................ 144
Sales and Marketing..................................................... 144
Customers............................................................... 145
Backlog................................................................. 145
Research, Development, and Engineering.................................. 145
Competition............................................................. 146
Manufacturing........................................................... 147
Intellectual Property................................................... 147
Employees............................................................... 148
Properties.............................................................. 148
Legal Proceedings....................................................... 149
MATTSON MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.................................................... 150
Overview................................................................ 150
Results of Operations................................................... 151
Years Ended December 31, 1999 and 1998.................................. 151
Years Ended December 31, 1998, 1997..................................... 153
Quarterly Results of Operations......................................... 154
Three and Six Months Period Ended June 30, 2000 and 1999................ 155
Net Sales............................................................... 155
Gross Margin............................................................ 155
Research, Development and Engineering................................... 155
Selling, General and Administrative..................................... 155
Provision for Income Taxes.............................................. 156
Liquidity and Capital Resources......................................... 156
Recent Accounting Pronouncements........................................ 157
Quantitative and Qualitative Disclosures Regarding Market Risk.......... 157
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS............... 158
BUSINESS OF THE STEAG SEMICONDUCTOR DIVISION.............................. 159
General................................................................. 159
Rapid Thermal Processing (RTP).......................................... 159
Chemical Vapor Deposition (CVD)......................................... 161
Wet Cleaning Systems.................................................... 161
Copper Plating.......................................................... 163
iv
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Customers.............................................................. 163
Sales and Support...................................................... 163
Suppliers.............................................................. 164
Competition............................................................ 164
Intellectual Property.................................................. 165
Litigation............................................................. 165
Employees.............................................................. 166
Properties............................................................. 166
STEAG SEMICONDUCTOR DIVISION MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................... 167
Overview............................................................... 167
Recent Developments.................................................... 169
Results of Operations.................................................. 170
Fiscal Year Ended December 31, 1999 Compared to Fiscal Year Ended
December 31, 1998..................................................... 170
Liquidity and Capital Resources........................................ 172
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30,
1999.................................................................. 173
Liquidity and Capital Resources........................................ 174
Qualitative and Quantitative Disclosures Above Market Risk............. 175
Security Ownership..................................................... 175
BUSINESS OF CFM.......................................................... 176
General................................................................ 176
Industry Background.................................................... 176
The CFM Solution....................................................... 178
Strategy............................................................... 179
Products............................................................... 179
Customers.............................................................. 181
Sales and Marketing.................................................... 182
Customer Satisfaction.................................................. 182
Backlog................................................................ 182
Research, Development and Engineering.................................. 182
Competition............................................................ 183
Manufacturing.......................................................... 183
Regulatory Matters..................................................... 184
Intellectual Property.................................................. 184
Employees.............................................................. 184
Litigation............................................................. 185
CFM MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS................................................... 187
Overview............................................................... 187
Results of Operations.................................................. 188
Years Ended October 31, 1999, 1998, and 1997........................... 188
Three Month and Nine Month Period Ended July 31, 2000 and 1999......... 189
Backlog................................................................ 191
Liquidity and Capital Resources........................................ 191
Litigation............................................................. 192
Impact of Recently Issued Accounting Standards......................... 194
PRINCIPAL SHAREHOLDERS OF CFM............................................ 195
REGULATORY MATTERS AFFECTING MATTSON, STEAG AND CFM...................... 195
LEGAL MATTERS............................................................ 195
EXPERTS.................................................................. 196
v
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STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING............... 196
MATTSON INDEX TO FINANCIAL STATEMENTS...................................... F-1
STEAG SEMICONDUCTOR INDEX TO FINANCIAL STATEMENTS.......................... F-29
CFM INDEX TO CONSOLIDATED FINANCIAL STATEMENTS............................. F-56
APPENDIX:
Annex A--Strategic Business Combination Agreement........................ A-1
Annex B--Stockholder Agreement........................................... B-1
Annex C--Agreement and Plan of Merger.................................... C-1
Annex D--Fairness Opinions............................................... D-1
Annex D-2--Fairness Opinions.............................................
Annex E--Pennsylvania Dissenters' Rights................................. E-1
Annex F--Article Sixth of Mattson's Certificate of Incorporation......... F-1
vi
WHERE YOU CAN FIND MORE INFORMATION
Mattson and CFM each file annual, quarterly, and special reports, proxy
statements, and other information with the United States Securities and
Exchange Commission (the "SEC"). Mattson's common stock is traded on the Nasdaq
National Market ("Nasdaq") under the symbol "MTSN." CFM's common stock is
traded on the Nasdaq under the symbol "CFMT." You may read and copy any
document filed by Mattson or CFM at the SEC's public reference facilities or on
the SEC's website at http://www.sec.gov, as discussed in more detail below.
Neither STEAG nor any of the STEAG Semiconductor Subsidiaries is a reporting
company and therefore no additional reports or financial information about
STEAG or any of the STEAG Semiconductor Subsidiaries are publicly available.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows Mattson and CFM to "incorporate by reference" the information
they file with the SEC, which means that they can disclose important
information by referring you to documents previously filed with the SEC. The
information incorporated by reference is considered a part of this joint proxy
statement-prospectus, and any later information that Mattson or CFM file with
the SEC will automatically update and supersede this information. This joint
proxy statement-prospectus is part of a registration statement on Form S-4
filed by Mattson with the SEC.
Mattson incorporates by reference the documents listed below, and any
additional documents filed by Mattson with the SEC between the date of this
joint proxy statement-prospectus and the date of the Mattson special meeting.
The documents Mattson incorporates by reference are:
Mattson's annual report on Form 10-K for the fiscal year ended December 31,
1999;
Mattson's quarterly report on Form 10-Q for the quarter ended March 31,
2000; and
Mattson's quarterly report on Form 10-Q for the quarter ended June 30, 2000.
CFM incorporates by reference the documents listed below and any documents
that CFM may file with the SEC between the date of this joint proxy statement-
prospectus and the date of the CFM special meeting. The documents CFM
incorporates by reference are:
CFM's annual report on Form 10-K for the fiscal year ended October 31, 1999;
CFM's quarterly report on Form 10-Q for the quarter ended January 31, 2000;
CFM's amended quarterly report on Form 10-Q/A for the quarter ended January
31, 2000;
CFM's quarterly report on Form 10-Q for the quarter ended April 30, 2000;
and
CFM's quarterly report on Form 10-Q for the quarter ended July 31, 2000.
Documents incorporated by reference are available without charge, excluding
all exhibits unless such exhibits have been specifically incorporated by
reference in this joint proxy statement-prospectus. You may obtain documents
incorporated by reference by requesting them in writing or by telephone from
the appropriate company as follows:
Mattson Technology, Inc. CFM Technologies, Inc.
2800 Bayview Drive 150 Oaklands Boulevard
Fremont, California 94538 Exton, Pennsylvania 19341
Attention: Peter Brown, Corporate Marketing Manager
Attention: Jeff Randall, Chief
Phone Number: (510) 657-5900 Financial Officer
Phone Number: (610) 280-8509
vii
In order to ensure timely delivery of the documents, any requests should be
made by October , 2000.
In addition, copies of the documents incorporated by reference may be
inspected and copied at the following public reference facilities maintained
by the SEC:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 500 West Madison 13th Floor
450 Fifth Street, Street New York, New York 10048
N.W. Suite 1400
Washington, D.C. Chicago, Illinois
20549 60661
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330. The SEC
maintains a website that contains reports, proxy statements, and other
information regarding each of Mattson and CFM. The address of the SEC website
is http://www.sec.gov. Reports, proxy statements, and other information
concerning Mattson and CFM can also be inspected at the Nasdaq National
Market, Operations, 1735 K Street, N.W., Washington, D.C.
Mattson has filed a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with the SEC with respect to the
Mattson common stock to be issued under the Merger Agreement with CFM. This
joint proxy statement-prospectus constitutes the prospectus of Mattson filed
as part of the registration statement. This joint proxy statement-prospectus
does not contain all of the information set forth in the registration
statement because certain parts of the registration statement are omitted as
provided by the rules and regulations of the SEC. You may inspect and copy the
registration statement at any of the addresses listed above.
WHO CAN HELP ANSWER YOUR QUESTIONS
If you have additional questions about the Transactions, you should
contact:
For Mattson stockholders: For CFM shareholders:
Mattson Technology, Inc. CFM Technologies, Inc.
2800 Bayview Drive 150 Oaklands Boulevard
Fremont, California 94538 Exton, Pennsylvania 19341
Attention: Peter Brown, Attention: Jeff Randall, Chief
Corporate Financial Officer
Marketing Manager Phone Number: (610) 280-8509
Phone Number: (510) 657-5900
If you have additional questions about the solicitation of your proxy, you
should contact:
[Logo of MacKenzie Partners, Inc.]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
Call Toll Free (800) 322-2885
Mattson, the Mattson logo, Aspen, Aspen CVD, Aspen RTPFR\\3\\, Aspen
LiteEtch, ICPSM, and EpiPro are trademarks of Mattson used in this joint proxy
statement-prospectus. MARANGONI(R), Starfire(R), Poseidon STT(R), and
ElectroDep 2000(R) are registered trademarks of the STEAG Semiconductor
Subsidiaries used in this joint proxy statement-prospectus. Other product and
brand names are trademarks or registered trademarks of their respective
holders.
viii
QUESTIONS AND ANSWERS ABOUT THE TRANSACTIONS
Q: Why are Mattson, STEAG, and CFM engaging in the Transactions?
A: Mattson, STEAG, and CFM are engaging in the Transactions because they
believe the resultant synergy and combined strengths of their three companies's
semiconductor equipment businesses will enable them to build one of the world's
leading suppliers of semiconductor manufacturing process equipment. The
combined enterprise, which will continue to operate under the name Mattson
Technology, Inc., will become one of the world's top 15 semiconductor industry
equipment suppliers, based on pro forma 2000 annual sales, thereby attaining a
size or "critical mass" that is becoming increasingly important to successfully
compete in the semiconductor equipment industry. The integration of the
semiconductor equipment businesses of Mattson, STEAG, and CFM will also give
Mattson a leadership position in more than one product line: the STEAG
Semiconductor Division, which already ranks second worldwide in annual sales of
rapid thermal process (RTP) equipment systems, will add to Mattson's No. 1
worldwide market position in strip equipment systems, and the combination of
the wet processing businesses of the STEAG Semiconductor Division and CFM will
place Mattson in the first tier of suppliers in the market for semiconductor
wet processing equipment.
Q: What will I receive in the Transactions?
A: In connection with the merger, shareholders of CFM will receive 0.5223
shares of Mattson common stock for each share of CFM common stock they hold at
closing, which will result in their holding in the aggregate approximately 12%
of the outstanding common stock of Mattson following the Transactions. In
addition, Mattson will assume all outstanding CFM stock options, based on the
same 0.5223 exchange ratio. As of September 4 , 2000, CFM had 8,067,175
outstanding shares of common stock and 1,782,000 outstanding options to
purchase shares of CFM common stock. At the time of closing, Mattson has agreed
to issue additional options to purchase 500,000 shares of Mattson common stock
to employees of CFM.
Stockholders of Mattson will retain their existing shares of Mattson common
stock. As a result of the Transactions, current Mattson stockholders will hold
in the aggregate approximately 56% of the outstanding common stock of Mattson.
As a result of the business combination, STEAG, the sole owner of the STEAG
Semiconductor Division, will hold approximately 32% of the outstanding common
stock of Mattson.
Q: What stockholder approvals are needed for the Transactions?
A: For Mattson, the affirmative vote of the holders of a majority of the
votes present or represented by proxy and entitled to a vote at the special
meeting, at which a quorum is present, is required for approval of the share
issuances and the option plan reserve increase needed to complete the
Transactions. Each holder of common stock is entitled to one vote per share. As
of the record date, Mattson directors and officers and their affiliates owned
in the aggregate approximately 18.9% of the outstanding shares, and Brad
Mattson individually owned approximately 17.7% of the outstanding shares of
Mattson. Pursuant to the voting agreements with each of STEAG and CFM, Brad
Mattson has agreed to vote all of his shares in favor of the share issuances
under the Transactions.
For CFM, the affirmative vote of a majority of the votes cast by all
shareholders of CFM's common stock is required to adopt the Merger Agreement.
No vote shall be taken unless a quorum is present, in person or by proxy. If a
quorum is not present, however, those present may vote to adjourn the meeting
to such time and place as they may determine, at which time if a quorum is not
then present, and at least 15 days has elapsed since the adjournment for lack
of a quorum, those present shall constitute a quorum for the purpose of voting
upon the CFM proposal set forth in this joint proxy statement-prospectus. CFM
common shareholders are entitled to one vote per share. As of the record date,
CFM directors and officers and their affiliates owned in the aggregate
approximately 19.7% of the outstanding shares, and Christopher McConnell,
Chairman of CFM's Board of Directors, individually owned approximately 14.0% of
the outstanding shares. Pursuant to a voting agreement with Mattson,
Christopher McConnell has agreed to vote all of his shares in favor of adoption
of the Merger Agreement and approval of the merger.
1
Because STEAG is a privately-held corporation organized under the laws of
the Federal Republic of Germany, approval by STEAG's sole shareholder, STEAG
AG, is not required in order to effect the business combination. In accordance
with German law, the Supervisory Board (Aufsichtsrat) and the Management Board
(Vorstand) of STEAG previously approved the business combination.
Q: Are Mattson stockholders and CFM shareholders voting on the same thing?
No. Mattson stockholders are being asked to approve the proposed issuance by
Mattson of approximately 16.9 million shares and a 1,350,000 share increase in
the share reserve under the Stock Option Plan in connection with the
Transactions. Such approval is required because Mattson is proposing to issue
in aggregate approximately 44% of its total outstanding shares (based on the
total number of shares outstanding following the share issuance). Under Nasdaq
rules, Mattson is required to obtain stockholder approval to issue such a large
number of its shares and to reserve shares under any compensation plans in
which officers of Mattson may participate. CFM is not a party to the
Combination Agreement between Mattson and STEAG, and therefore CFM shareholders
are not required to vote to approve the business combination. CFM shareholders
will be voting only on the proposed Merger Agreement and merger with Mattson.
However, because the Transactions are mutually conditioned on one another and
are required to close simultaneously, the failure to approve the Merger
Agreement and merger between Mattson and CFM by the CFM shareholders would also
result in termination of the proposed business combination between Mattson and
the STEAG Semiconductor Division.
Q: Are Mattson stockholders voting on any other proposals in addition to the
Transactions?
A: Yes. Mattson stockholders (but not CFM shareholders) are also being asked
to approve a second proposal to increase the number of shares reserved for
issuance under Mattson's Stock Option Plan by 750,000 shares (in addition to
the 1,350,000 share reserve increase to be approved in connection with the
transactions), to approve a third proposal to increase the number of shares
reserved for issuance under Mattson's Purchase Plan by 250,000 shares, to
approve a fourth proposal to amend Mattson's Certificate of Incorporation to
increase the number of authorized shares of common stock from 60 million to 120
million shares, and to approve a fifth proposal to amend Mattson's Certificate
of Incorporation to increase the number of directors of Mattson from five to
seven and to change the procedure for filling board vacancies. However, it is
important to note that approval of these four additional proposals is not
required in order for the proposed share issuance and Stock Option Plan share
reserve increase in connection with the Transactions to be approved or for the
Transactions to be consummated. The further increase in the number of shares
reserved for issuance under the Stock Option Plan and Purchase Plan will allow
Mattson, on a going-forward basis, to continue to provide meaningful equity
incentives to attract, motivate, and retain employees and officers. The
amendment of Mattson's Certificate of Incorporation to increase the number of
authorized shares will provide the board of directors of Mattson increased
flexibility to issue shares for various corporate purposes, including stock
splits (which usually take the form of a stock dividend), issuances of shares
in connection with acquisitions of other businesses or the raising of
additional capital through the sale of equity securities, actions that would be
significantly constrained under Mattson's current Certificate of Incorporation.
However, Mattson's board of directors has no current intent, plans,
arrangements, or agreements to issue any of the proposed additional authorized
shares of common stock. The amendment of Mattson's Certificate of Incorporation
to increase the number of directors from five to seven and to change the
procedure for filling board vacancies is consistent with the terms of the
Transactions and will allow room on Mattson's board for the two director-
nominees of STEAG.
Q: What do I need to do now?
A: After carefully reading and considering the information contained in this
joint proxy statement-prospectus, please respond by completing, signing, and
dating your proxy card or voting instructions and returning it in the enclosed
postage paid envelope, or, if available, by submitting your proxy or voting
instructions by telephone or through the Internet as soon as possible so that
your shares may be represented at your company's special meeting.
Q: What if I do not vote?
A: If a Mattson stockholder fails to respond, the risk is increased that a
quorum, which is a
2
majority of the outstanding voting shares of Mattson common stock, may not be
obtained. If a quorum is not obtained at the special meeting or any
continuation of the special meeting, the share issuance under the Transactions
will not be approved.
If a CFM shareholder fails to respond, it will have the same effect as a
vote against the Merger Agreement.
Q: Can I change my vote after I have delivered my proxy?
A: Yes. You can change your vote at any time before your proxy is voted at
the relevant special meeting. You can do this in one of three ways. First, you
can revoke your proxy. Second, you can submit a new proxy. If you choose
either of these two methods, you must submit your notice of revocation or your
new proxy to the Secretary of Mattson or CFM, as appropriate, before the
relevant special meeting. If your shares are held in an account at a brokerage
firm or bank, you should contact your brokerage firm or bank to change your
vote. Third, if you are a holder of record, you can attend the special meeting
and vote in person. If you submit your proxy or voting instructions
electronically through the Internet or by telephone, you can change your vote
by submitting a proxy at a later date, using the same procedures, in which
case your later submitted proxy will be recorded and your earlier proxy
revoked.
Q: If I am a CFM shareholder, should I send in my stock certificates to be
exchanged now?
A: No. After the merger between Mattson and CFM is completed, you will
receive written instructions from the exchange agent on how to exchange your
CFM stock certificates for shares of Mattson. Please do not send in your CFM
stock certificates with your proxy.
Q: Who is the exchange agent for the merger?
A: Chase Mellon Shareholder Services LLP is the exchange agent. Its address
and phone number is:
85 Challenger Road
Ridgefield Park, NJ 07660
(201) 329-8285
Q: Where will my shares of Mattson common stock be listed?
A. Shares of Mattson common stock will continue to be listed on the Nasdaq
under the symbol "MTSN."
Q: When do you expect the Transactions to be completed?
A: The actual closing of the Transactions is expected to occur in early
January 2001. The parties agreed that the closing would occur no earlier than
January 1, 2001 because of certain German tax and accounting considerations
applicable to STEAG. However, in order to reduce the risk that the
Transactions will not close if approval by Mattson stockholders and CFM
shareholders has been obtained and all other closing conditions that are
beyond the parties' control have been satisfied by December 1, 2000, the
parties will take a pre-closing step at which all remaining conditions other
than the arrival of January 1, 2001, will either be fulfilled or irrevocably
waived. This pre-closing step could take place as early as November 2000.
Q. Who can help answer my questions?
A. If you have any questions about either of the Transactions or how to
submit your proxy, or if you need additional copies of this joint proxy
statement-prospectus or the enclosed proxy card or voting instructions, you
should contact the individuals listed below:
If you are a Mattson stockholder, you should contact:
Mattson Technology Inc.
2800 Bayview Drive
Fremont, California 94538
Attention: Peter Brown, Corporate Marketing Manager
Phone Number: (510) 657-5900
If you are a CFM shareholder, you should contact:
CFM Technologies, Inc.
150 Oaklands Boulevard
Exton, Pennsylvania 19341
Attention: Jeff Randall, Chief Financial Officer
Phone Number: (610) 280-8509
3
SUMMARY OF THE JOINT PROXY STATEMENT-PROSPECTUS
This summary highlights selected information from this document and may not
contain all of the information that is important to you. To understand the
Transactions fully and for a more complete description of the legal terms of
the Transactions, you should read carefully this entire document and the other
available information referred to in "Where You Can Find More Information" in
the forepart of this joint proxy statement-prospectus. The Combination
Agreement and the Merger Agreement are attached to this joint proxy statement-
prospectus as Annex A and Annex C, respectively. Whether you are a stockholder
of Mattson or a shareholder of CFM, both Mattson and CFM encourage you to read
both the Combination Agreement and the Merger Agreement, as they are the main
legal documents that govern the Transactions.
Mattson has provided the information in this joint proxy statement-
prospectus about Mattson, CFM has provided the information in this joint proxy
statement-prospectus about CFM, and STEAG has provided the information in this
joint proxy statement-prospectus about the STEAG Semiconductor Division.
The risk factors beginning on page 12 should be considered carefully by the
Mattson stockholders and the CFM shareholders in evaluating whether to approve,
in the case of Mattson's stockholders, the share issuance and Stock Option Plan
share reserve increase in connection with the Transactions, and, in the case of
CFM's shareholders, the Merger Agreement and merger. These factors should be
considered along with any additional risk factors in documents incorporated by
reference in this joint proxy statement-prospectus and any other information
included or incorporated by reference herein, including in conjunction with
forward-looking statements made herein.
THE COMPANIES
Mattson
Mattson is a leading supplier of semiconductor process equipment for
photoresist strip/etch, chemical vapor deposition, epitaxial and rapid thermal
processing. Mattson's products combine advanced process technology on a high
productivity platform. In addition, through Mattson's international technical
support organization and comprehensive warranty program, Mattson provides world
class customer support. Nearly all of Mattson's tools are built on a single
platform, known as the Aspen system. Each tool in the Aspen system shares the
same principal architecture, including the main mechanical design, robotics,
systems software, wafer handling interfaces, and wafer flow design. Mattson's
Aspen platform is designed to deliver high throughput and low cost of
ownership, enhancing the ability of manufacturers to achieve productivity
gains.
Mattson's product offerings include:
. photoresist stripping systems that remove photoresist and residue from
semiconductor wafers after photolithography and other processing steps such
as etch;
. isotropic etching systems that perform a variety of etch processes on
semiconductor wafers;
. plasma enhanced chemical vapor deposition (CVD) systems that deposit
insulating or conducting films on semiconductor wafers;
. rapid thermal processing (RTP) systems that heat semiconductor wafers during
the manufacturing process; and
. epitaxial processing systems that deposit a thin silicon film onto
semiconductor wafers.
Mattson's systems offer improvements in wafer manufacturing productivity and
throughput over conventional single wafer systems and cluster tools. Mattson's
unique multi-station, multi-chamber architecture significantly increases
throughput without sacrificing process control. Mattson's systems also provide
innovative technology to address technical or manufacturing problems of the
semiconductor equipment industry, where traditional technologies have been
unable to satisfy emerging process requirements. For example, Mattson's
proprietary plasma strip source technology is capable of removing residues
without the need for multiple acid steps, as required by traditional stripping
systems. Mattson's Aspen III CVD system
4
has one of the first process chambers that can process either 200 or 300
millimeter wafers with only minor modifications.
Mattson's objective is to enhance its market position as a leading supplier
of advanced, high productivity manufacturing equipment to the worldwide
semiconductor industry. To achieve this objective, Mattson seeks to deliver
high productivity, cost-effective systems by leveraging the unique benefits of
its Aspen platform, and Mattson intends to provide technology innovations to
address the unmet needs of the semiconductor manufacturing industry. In
addition, Mattson plans to increase its global market penetration, capitalize
on its diversified product line, and take a leadership position in the emerging
300 millimeter market.
Mattson markets its systems on a global basis, with sales support and
service support offices in thirteen domestic and international locations.
Mattson delivers superior customer support and service to enhance its long-term
customer relationships. Mattson offers an extensive warranty, provides broad
access to training, and maintains a global customer support infrastructure with
local support personnel. Mattson's customers include nine of the top ten
semiconductor manufacturers worldwide.
Mattson's principal executive offices are located at 2800 Bayview Drive,
Fremont, California 94538. Mattson's telephone number is (510) 657-5900.
CFM
CFM is a leading manufacturer of advanced cleaning equipment for the
semiconductor industry. Its systems provide superior contamination control and
processing capabilities using a totally enclosed processing chamber. Watermarks
and other drying defects are eliminated through CFM's Direct-Displace(TM) IPA
vapor drying technology. CFM believes that its patented Full-Flow(TM)
technology and direct-displacement drying enable it to provide wet processing
systems that address a variety of limitations inherent in conventional
semiconductor wet processing systems, including wet benches and spray tools,
resulting in significantly lower cost of ownership.
CFM's principal executive offices are located at 150 Oaklands Boulevard,
Exton, Pennsylvania 19341. CFM's telephone number is (610) 280-8300.
STEAG
Through the STEAG Semiconductor Division, STEAG is one of the world's
leading suppliers of capital equipment for the semiconductor industry. The
STEAG Semiconductor Division's broad technology portfolio includes rapid
thermal processing (RTP), clean process, chemical vapor deposition (CVD), and
copper plating. The STEAG Semiconductor Subsidiaries own manufacturing, sales,
and support facilities located throughout the United States, Asia, and Europe.
STEAG is also engaged in the optical storage and photomask businesses, neither
of which is included in the business combination with Mattson. STEAG is a
wholly owned subsidiary of STEAG AG, a power generation and electronics company
based in Essen, Germany.
STEAG's principal executive offices are located at Ruttenscheider Strasse 1-
3, 45128 Essen, Germany. STEAG's telephone number is 011-49-201-801-0.
THE STRUCTURE OF THE TRANSACTIONS
Under the Combination Agreement, Mattson will acquire the stock of those
eleven subsidiaries comprising the STEAG Semiconductor Division. In
consideration for all the equity interests in the STEAG Semiconductor
Subsidiaries, Mattson will issue 11,850,000 shares of common stock to STEAG
upon the closing. Mattson and STEAG have agreed to enter into a Stockholder
Agreement on or before the Closing Date providing for, among other things, the
expansion of Mattson's board of directors from five members to seven, the
election of two persons designated by STEAG to Mattson's board of directors
(Dr. Jochen Melchior, who will serve as initial Chairman of the Board of the
combined company, and Dr. Hans-Georg Betz), certain restrictions on future
acquisitions or dispositions of Mattson common stock by STEAG, and registration
rights in favor of STEAG. The terms of the transaction with STEAG are more
fully described in the Combination Agreement, which is attached hereto as Annex
A, and in the Stockholder Agreement, which is attached hereto as Annex B.
5
Under the Merger Agreement with CFM, Mattson will acquire CFM in a stock-
for-stock merger in which Mattson will issue 0.5223 shares of Mattson common
stock for each share of CFM common stock issued and outstanding at the closing
(which would represent approximately 4,215,000 shares of Mattson common stock
as of September 4, 2000). A representative of CFM, James J. Kim, will join
Mattson's board of directors at closing. The terms of the transaction with CFM
are more fully described in the Merger Agreement, which is attached hereto as
Annex C.
The Transactions are mutually conditioned on one another and are required to
close simultaneously. The Transactions are subject to, among other things, the
approval of the share issuance and Stock Option Plan share reserve increase in
connection with the Transactions by the stockholders of Mattson, the approval
of the Merger Agreement and merger by the shareholders of CFM, clearance under
the U.S. and German antitrust laws (each of which has already been obtained),
and other customary closing conditions. The closing of the Transactions is
expected to occur in early January 2001. The parties agreed that the closing
would take place after January 1, 2001 because of certain German tax and
accounting considerations applicable to STEAG. However, in order to reduce the
risk that the transactions will not close if approval by Mattson stockholders
and CFM shareholders has been obtained and all the other closing conditions
beyond the control of the parties have been satisfied prior to December 1,
2000, the parties will take a pre-closing step at which all remaining
conditions, other than the exchange of the Mattson shares and the arrival of
January 1, 2001, either will be irrevocably waived or deemed fulfilled. This
pre-closing step could take place as early as November , 2000.
TREATMENT OF STEAG AND CFM STOCK OPTIONS
None of the STEAG Semiconductor Subsidiaries has any outstanding stock
options, and thus no stock options of any STEAG Semiconductor Subsidiary will
be assumed by Mattson pursuant to the business combination. Pursuant to the
merger, Mattson will assume all outstanding CFM stock options, based on the
same merger exchange ratio of 0.5223. As of September 4, 2000, CFM had
outstanding options to purchase approximately 1,782,000 shares of CFM common
stock.
At the closing, Mattson has agreed to issue options to purchase 850,000
shares of Mattson common stock to employees of the STEAG Semiconductor
Division. Mattson has also agreed at the closing to issue options to purchase
500,000 shares of common stock to employees of CFM. Therefore, as an integral
part of the approval by Mattson stockholders of the share issuance in
connection with the Transactions, Mattson is also requesting that stockholders
approve an increase in the number of shares reserved for issuance under the
Stock Option Plan by 1,350,000 shares.
RELATIVE PERCENTAGES OF OWNERSHIP
Once the Transactions close, STEAG will hold approximately 32% of the
outstanding common stock of Mattson on a non-diluted basis, and shareholders of
CFM prior to the closing will hold in the aggregate approximately 12% of the
outstanding common stock of Mattson on a non-diluted basis. Mattson
stockholders prior to the closing will hold in the aggregate the remaining
approximately 56% of the outstanding common stock on a non-diluted basis after
the closing.
TAX CONSEQUENCES
The parties have structured the merger so that CFM and its shareholders who
exchange their shares solely for shares of Mattson common stock will not
recognize gain or loss for United States federal income tax purposes in
connection with the merger. Mattson's stockholders also will not recognize gain
or loss for United States federal income tax purposes in connection with the
Transactions.
BOARD COMPOSITION
Following the Transactions, Mattson's board of directors will be composed of
four of the five current directors of Mattson, with two new additional
directors to be designated by STEAG (Dr. Jochen Melchior, who will serve as the
initial Chairman of the Board of the combined company, and Dr. Hans-Georg
Betz), and one of the existing directors of Mattson to be replaced by a
director designated by CFM (James J. Kim), for a total of
6
seven directors. Senior management of Mattson will be comprised of personnel
from each of Mattson, the STEAG Semiconductor Division, and CFM.
REASONS FOR THE TRANSACTIONS
Mattson, STEAG, and CFM have agreed to engage in the Transactions because of
the synergy and market strength that would result by their combining their
businesses. Following the consummation of the Transactions, Mattson would
immediately become one of the top 15 semiconductor industry equipment
suppliers, based on pro forma 2000 annual sales. This would represent the
attainment of a critical mass that semiconductor equipment buyers are
increasingly demanding from their vendors.
In addition, Mattson would hold a market leadership position in multiple
product lines. The STEAG Semiconductor Division currently ranks second
worldwide in rapid thermal process (RTP) equipment systems. Mattson ranks first
worldwide in plasma-based strip process equipment systems, and fifth in RTP.
The combination of the wet processing businesses of the STEAG Semiconductor
Division and CFM would also place Mattson in the first tier of suppliers in the
market for semiconductor wet processing equipment. Thus, Mattson would become a
multi-product, multi-technology company providing "one-stop shopping" to
semiconductor equipment buyers. These complementary product lines will give
Mattson the opportunity to gain market share in each. Mattson intends to become
a "vendor of choice" to customers who are among the Top 20 semiconductor
equipment buyers.
Further, the consummation of the Transactions would give Mattson a truly
global presence and reach. Both Mattson and CFM have a significant presence in
Asia, and the STEAG Semiconductor Division has a strong presence in Asia and
Europe.
Finally, the settlement in connection with the proposed Transactions of the
ongoing patent litigation between one of the STEAG Semiconductor Subsidiaries
and CFM relating to one of CFM's patents relieves the combined wet processing
business of the costs of that lawsuit and opens opportunities for sales of wet
processing products of the STEAG Semiconductor Division in the U.S.
RECOMMENDATION OF THE BOARDS OF DIRECTORS
To Mattson stockholders: The Mattson board of directors believes that the
proposed issuance of shares pursuant to the Transactions is fair to you and in
your best interest and voted to approve the terms and provisions of both the
Combination Agreement and the Merger Agreement, and unanimously recommends that
you vote FOR the approval of the issuance of shares and increase in the Stock
Option Plan share reserve in connection with the Combination Agreement and the
Merger Agreement. The Mattson board of directors also unanimously recommends
that you vote FOR the approval of the amendment to Mattson's Stock Option Plan
and Purchase Plan to further increase the number of shares reserved for
issuance thereunder by 750,000 shares and by 250,000 shares, respectively, FOR
the amendment of Mattson's Certificate of Incorporation to increase the
authorized number of shares of common stock available for issuance from 60
million shares to 120 million shares, and FOR the amendment of Mattson's
Certificate of Incorporation to increase the designated number of directors of
Mattson from five to seven and change the procedure for filling board
vacancies.
To CFM shareholders: The CFM board of directors believes that the merger is
fair to you and in your best interest and unanimously voted to approve the
Merger Agreement, and unanimously recommends that you vote FOR the adoption of
the Merger Agreement.
FAIRNESS OPINIONS OF FINANCIAL ADVISORS
Opinion of Mattson's Financial Advisor. In deciding to approve the
Transactions, the Mattson board of directors considered the opinion of its
financial advisor, Alliant Partners, that, as of the date of its opinion, and
subject to and based on the considerations referred to in its opinion, the
total consideration to be provided by Mattson in connection with the
Transactions is fair, from a financial point of view, to Mattson's
stockholders. The full text of this opinion is attached as Annex D-1 to this
joint proxy statement-prospectus. Mattson urges its stockholders to read the
opinion of Alliant Partners in its entirety.
7
Opinion of CFM's Financial Advisor. In deciding to approve the merger, the
CFM board of directors considered the opinion of its financial advisor, UBS
Warburg LLC (formerly known as Warburg Dillon Read LLC), that, as of the date
of its opinion, and subject to and based on the considerations referred to in
its opinion, the ratio to exchange CFM common stock for Mattson common stock is
fair, from a financial point of view, to the holders of CFM common stock. The
full text of this opinion is attached as Annex D-2 to this joint proxy
statement-prospectus. CFM urges its shareholders to read the opinion of UBS
Warburg LLC in its entirety.
STOCKHOLDER APPROVALS
For Mattson, the affirmative vote of the holders of a majority of the shares
present or represented by proxy and entitled to vote at the special meeting, at
which a quorum is present and voting, by proxy or in person, is required for
approval of the proposed share issuance and the increase in the reserve under
the Stock Option Plan needed to complete the Transactions, and for approval of
the separate proposals to amend the Stock Option Plan and the Purchase Plan to
increase the number of shares reserved for issuance thereunder by 750,000
shares and 250,000 shares, respectively. The affirmative vote of a majority of
the outstanding shares of common stock is required for approval of the
amendment of Mattson's Certificate of Incorporation to increase the authorized
number of shares available for issuance from 60 million shares to 120 million
shares. The affirmative vote of at least two-thirds of the outstanding shares
of common stock is required for approval of the amendment of Mattson's
Certificate of Incorporation to increase the designated number of directors
from five to seven and to change the procedure for filling board vacancies.
Each holder of common stock is entitled to one vote per share. As of the record
date, Mattson directors and officers and their affiliates owned in the
aggregate approximately 18.9% of the outstanding shares, and Brad Mattson
individually owned approximately 17.7% of the outstanding shares. Pursuant to
voting agreements with each of STEAG and CFM, Brad Mattson has agreed to vote
all of his shares in favor of the share issuance under the Transactions.
For CFM, the affirmative vote of a majority of the votes cast by all
shareholders of CFM's common stock is required to adopt the Merger Agreement.
No vote shall be taken unless a quorum is present, in person or by proxy.
However, if a quorum is not present, those present may vote to adjourn the
meeting to such time and place as they may determine, at which time if a quorum
is not then present and at least 15 days has passed since the adjournment for
lack of a quorum, those present shall constitute a quorum for the purpose of
voting upon the CFM proposals set forth herein. CFM common shareholders are
entitled to one vote per share. As of the record date, the directors and
executive officers of CFM owned in the aggregate approximately 19.7% of the
outstanding shares, and Christopher McConnell individually owned approximately
14.0% of the outstanding shares. Pursuant to a voting agreement with Mattson,
Christopher McConnell has agreed to vote all of his shares in favor of the
adoption of the Merger Agreement.
Because STEAG is a privately-held corporation organized under the laws of
the Federal Republic of Germany, approval of STEAG's sole shareholder, STEAG
AG, is not required in order to effect the business combination. In accordance
with German law, both the Supervisory Board (Aufsichtsrat) and the Management
Board (Vorstand) of STEAG previously approved the business combination.
THE SPECIAL MEETINGS
The special meeting of the stockholders of Mattson will be held on ,
October , 2000, at 10:00 am, local time, at the Newark Hilton, 39900
Balentine Drive, Newark, California 94560.
The special meeting of the shareholders of CFM will be held on ,
October , 2000, at 1:00 pm, local time, at the Sheraton Great Valley Hotel,
707 East Lancaster Avenue, Frazer, Pennsylvania 19355.
INTERESTS OF DIRECTORS AND OFFICERS OF MATTSON, STEAG, AND CFM IN THE
TRANSACTIONS
As of the record date, Brad Mattson, the Chief Executive Officer and current
chairman of the board of Mattson, held options to purchase 21,163 shares
8
of CFM common stock exercisable within 60 days. These options were granted in
connection with Mr. Mattson's previous service on the board of directors of
CFM. These options will become options to purchase Mattson common stock under
the terms of the Merger Agreement. Mr. Mattson took no part in the
deliberations of the CFM board regarding the proposed merger, and Mr. Mattson
resigned from the CFM board effective April 26, 2000.
John Savage, a director of Mattson, is also a partner at Alliant Partners,
the technology merger and acquisition advisory firm that has provided Mattson
with its opinion regarding the fairness of the proposed Transactions to
Mattson's stockholders from a financial point of view. Mattson has entered into
a Financial Advisory Agreement with Alliant Partners, dated as of May 17, 2000,
(the "Alliant Partners Agreement"), providing for Alliant Partners to act as
financial advisor in connection with the Transactions. Under the Alliant
Partners Agreement, Mattson has agreed to pay Alliant Partners a fee of
$300,000 to render an opinion as to the fairness from a financial point of view
to Mattson and its stockholders of the consideration to be provided by Mattson
in connection with the Transactions. The Alliant Partners Agreement further
provides for a "success fee" of $2 million in the event the Transactions close,
with the $300,000 fairness opinion fee being applied against such amount. Under
the terms of the Alliant Partners Agreement, Mattson has also agreed to
reimburse Alliant Partners reasonable expenses, and to indemnify Alliant
Partners against any losses, claims, damages, or liabilities to which Alliant
Partners may become subject in connection with its use of information that is
provided to Alliant Partners by Mattson that is inaccurate in any respect or
any other aspect of its rendering such services, unless it is finally
judicially determined that such losses, claims, damages, or liabilities
relating thereto arose only out of the gross negligence or willful misconduct
of Alliant Partners. The Alliant Partners Agreement was determined based on
arm's length negotiation and Mattson believes the terms of the Alliant Partners
Agreement are no less favorable than could have been obtained from third party
consultants and investment bankers.
Christopher F. McConnell, the Chairman of the Board of CFM, is party to a
Change of Control and Severance Agreement dated as of April 10, 2000 with CFM
(the "McConnell Severance Agreement"). In connection with the proposed merger,
the Severance Agreement of Roger Carolin dated April 10, 2000 was amended
pursuant to Amendment No. 1, Change of Control and Severance Agreement dated as
of June 27, 2000 (as amended, the "Carolin Severance Agreement" and
collectively the "Severance Agreements"). The Severance Agreements provide,
among other things, that following any Change of Control Event (as defined
therein), if employment is terminated by the employer Without Cause or by
employee for a Good Reason Event (as such terms are defined in the Severance
Agreements): any options to purchase common stock of the employer shall vest
immediately as of the date of such termination; the employer shall pay the
employee his annual target bonus for the then-current fiscal year on a pro rata
basis and 24 monthly payments equal to one-twelfth of the employee's then-
current annual base salary plus annual target bonus.
Lorin J. Randall, the Secretary and Chief Financial Officer of CFM, is a
party to an Employment Agreement with CFM dated October 25, 1999 which was
amended by Amendment No. 1 dated as of April 10, 2000 (as amended, the
"Employment Agreement"). The Employment Agreement provides, among other things,
that following any Change of Control Event (as defined therein), if Mr.
Randall's employment is terminated (1) by the employer Without Cause (as
defined in the Employment Agreement): the employer will pay Mr. Randall twelve
monthly payments equal to one-twelfth of Mr. Randall's then current annual base
salary plus annual target bonus; his annual target bonus for the current fiscal
year on a pro rata basis; monthly compensation equal to one-twelfth of
Mr. Randall's then current annual base salary plus annual target bonus for a
period of 18 months following the date of termination; and if the change of
control occurs within a year following termination, fully vested options to
purchase a number of shares of common stock of the employer equal to the number
of unvested options held by Mr. Randall and cancelled at the time of
termination; or (2) by Mr. Randall upon a Good Reason Event: any options to
purchase common stock of the employer and held by Mr. Randall shall
9
vest immediately as of the date of such termination; and the employer will pay
Mr. Randall his annual target bonus for the current fiscal year on a pro rata
basis.
ACCOUNTING TREATMENT
Mattson will account for the Transactions as purchases of the STEAG
Semiconductor Subsidiaries and CFM by Mattson under the purchase method of
accounting. Under purchase accounting, Mattson will record the fair value of
the consideration given for the stock of the STEAG Semiconductor Subsidaries,
as well as the fair value of the consideration given for the CFM common stock
and for options to purchase CFM common stock assumed by Mattson, plus the
amount of direct transaction costs, as the cost of acquiring the STEAG
Semiconductor Subsidaries and CFM. Mattson will allocate these costs to the
individual assets and liabilities of the companies being acquired, including
various identifiable intangible assets such as acquired technology, acquired
trademarks and trade names and acquired workforce, and to in-process research
and development, based on their respective fair values. Intangible assets,
including goodwill, will be generally amortized over a three- to seven-year
period.
REGULATORY APPROVALS
Mattson, STEAG, and CFM have already received the required clearances with
respect to the Transactions under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 (the "HSR Act") and the German Act Against Restraints on
Competition of 1958 (Gesetz gegen Wettbewerbsbeschraenkungen) (the "German
Cartel Act").
DISSENTERS' RIGHTS
Delaware corporate law, which governs Mattson as a Delaware corporation,
does not afford dissenters' or appraisal rights to holders of shares that are
quoted on Nasdaq, as are Mattson's shares. In addition, Delaware law does not
provide dissenters' or appraisal rights to stockholders of a surviving
corporation in a merger if the surviving corporation's stockholders were not
required to approve the merger. Mattson's stockholders are not required to
approve the Transactions, but rather are required to approve the issuance of
shares that are proposed to be issued in connection with the Transactions.
Therefore, Mattson stockholders shall have no dissenters' or appraisal rights
with respect to the Transactions.
Pennsylvania corporate law, which governs CFM as a Pennsylvania corporation,
entitles CFM shareholders to dissent from the merger and instead demand payment
from CFM of the fair value of their shares.
To claim dissenters' rights, a CFM shareholder must deliver to CFM prior to
the vote written notice of the shareholder's intent to demand payment for the
shareholder's shares if the merger is effected and not vote the shareholder's
shares in favor of the merger at the CFM special meeting. CFM will then send
the shareholder written notice after the completion of the merger, indicating
when and how to demand payment for the shareholder's shares. After receiving
the notice, the shareholder must demand payment for the shareholder's shares in
the manner required by the notice sent by CFM. The shareholder must also
certify to CFM the date shareholder acquired beneficial ownership of the
shareholder's shares. If the shareholder does not comply with the requirements
outlined above, the shareholder will not be entitled to receive payment for the
shareholder's shares under the dissenters' rights provisions of Pennsylvania
law and will be entitled to 0.5223 shares of Mattson common stock for each of
the shareholder's shares of CFM common stock. If the shareholder complies with
the outlined requirements, promptly following the later of the date of
effectiveness of the merger or the date CFM received the shareholder's demand
for payment, CFM will pay to the shareholder the amount CFM estimates to be the
fair value of the shareholder's shares of CFM common stock. Within 30 days of
the shareholder's receipt of CFM's remittance or estimate of fair value, if the
shareholder believes CFM's estimate of the fair value of the shareholder's
shares is incorrect, the shareholder may notify CFM in writing of the
shareholder's own estimate of the fair value of the shareholder's shares of CFM
common stock and demand payment of the shareholder's estimate. Within 60 days
of the later to occur of the effectuation of the merger, timely receipt of the
shareholder's demand for payment and timely receipt of an estimate of fair
value from the shareholder, if the demand for payment of the shares
10
remains unsettled, CFM may request the fair value be determined by a court. The
shareholder's dissenters' rights are set out in their entirety in Sections
1571-1580 of the Pennsylvania Business Corporation Law, which is attached to
this joint proxy statement-prospectus as Annex E.
11
RISK FACTORS
You should carefully consider the risks described below regarding the
Transactions and Mattson's business following the Transactions, together with
all of the other information included in or annexed to this joint proxy
statement-prospectus, before making a decision about voting on the proposals
submitted for your consideration.
By voting in favor of the Merger Agreement CFM shareholders will be choosing
to exchange their current investment in CFM common stock for an investment in
Mattson common stock. By voting in favor of the share issuances and Stock
Option Plan share reserve increase in connection with the Transactions, Mattson
stockholders will be choosing to permit Mattson to engage in the Transactions,
which will affect the risks to Mattson's business. An investment in Mattson
common stock involves a high degree of risk.
If any of the following risks actually occur, Mattson's business, financial
condition, or results of operations could be materially harmed. If Mattson's
business is harmed, the trading price of Mattson's common stock could decline,
and Mattson stockholders (including former CFM shareholders following the
Transactions) may lose all or part of their investment.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the information in this joint proxy statement-prospectus and in the
documents that are incorporated by reference, including the risk factors in
this section, contains forward-looking statements that involve risks and
uncertainties. These statements relate to future events or Mattson's future
financial performance. In many cases, you can identify forward-looking
statements by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," or "continue,"
or the negative of these terms and other comparable terminology. These
statements are only predictions. Mattson's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of a number of factors, including, but not limited to, the risks faced
by Mattson following completion of the Transactions described below, elsewhere
in this joint proxy statement-prospectus, and in Mattson's periodic filings
incorporated herein by reference.
Mattson believes it is important to communicate its expectations to
investors. However, there may be events in the future that it is not able to
predict accurately or over which it has no control. The risk factors listed
below, as well as any cautionary language in this joint proxy statement-
prospectus, provide examples of risks, uncertainties, and events that may cause
Mattson's actual results to differ materially from the expectations it
describes in its forward-looking statements. Before making your decision
regarding the Transactions, you should be aware that the occurrence of the
events described in these risk factors and elsewhere in this joint proxy
statement-prospectus could have a material adverse effect on Mattson's
business, operating results, and financial condition.
RISKS RELATED TO THE TRANSACTIONS
The ability of Mattson to integrate successfully the businesses of the STEAG
Semiconductor Division and CFM with each other and with its own business is
uncertain.
After the Transactions, Mattson, the STEAG Semiconductor Division, and CFM,
each of which had previously operated independently of each other, will need to
integrate their operations. The integration of the three businesses will be
complex, time consuming and expensive. The integration will require significant
efforts from each company, including the coordination of their research and
development and sales and marketing efforts. Mattson may find it difficult to
integrate the operations of the STEAG Semiconductor Division and CFM, and vice
versa. The combined company will have a large number of employees in widely
dispersed operations in California, Germany, Pennsylvania, and other locations,
which will increase the difficulty of integrating operations. Current personnel
may leave Mattson, the STEAG Semiconductor Division or CFM
12
because of the business combination or the merger. The challenges involved in
this integration include, but are not limited to, the following:
. Retaining existing customers of each company;
. Retaining and integrating management and other key employees of each of
Mattson, the STEAG Semiconductor Division, and CFM;
. Coordinating research and development activities to enhance introduction
of new products and technologies;
. Integrating purchasing and procurement operations in multiple locations;
. Combining product offerings and product lines effectively and quickly;
. Integrating sales and marketing efforts so that customers can understand
and do business easily with the combined company;
. Coordinating manufacturing operations in a rapid and efficient manner;
. Transitioning all world-wide facilities to common accounting and
information technology systems;
It is not certain that Mattson, the STEAG Semiconductor Division, and CFM
can be successfully integrated in a timely manner or at all or that any of the
anticipated benefits will be realized. Risks from unsuccessful integration of
the companies include:
. The impairment of relationships with employees, customers, and suppliers;
. The potential disruption of the combined company's ongoing business and
distraction of its management;
. Delay in introducing new product offerings by the combined company; and
. Unanticipated expenses related to integration of the three companies.
The combined company may not succeed in addressing these risks. Further,
neither Mattson nor CFM can assure you that the growth rate of the combined
company will equal the historical growth rates experienced by Mattson, the
STEAG Semiconductor Division, or CFM, individually.
The Transactions between Mattson, STEAG, and CFM may fail to achieve beneficial
synergies.
The managements of Mattson, STEAG, and CFM have entered into the
Transactions with the expectation that they will result in beneficial synergies
between and among the three parties' semiconductor equipment businesses.
Achieving these anticipated synergies and the potential benefits underlying
their reasons for entering into the Transactions will depend on a number of
factors, some of which include:
. Mattson's ability to timely develop new products and integrate the
products and sales efforts of the combined company;
. The risk that the customers of Mattson, the STEAG Semiconductor Division,
or CFM may defer purchasing decisions;
. The risk that it may be more difficult to retain key management,
marketing, and technical personnel after the Transactions; and
. Competitive conditions and cyclicality in the semiconductor manufacturing
process equipment market.
Even if the companies are able to integrate operations, there can be no
assurance that the anticipated synergies will be achieved. The failure to
achieve such synergies could have a material adverse effect on the business,
results of operations, and financial condition of the combined company.
13
The STEAG Semiconductor Subsidiaries and CFM have experienced financial losses
and may require significant financial support from Mattson.
The STEAG Semiconductor Subsidiaries and CFM have suffered losses from
operations in recent periods. After consummation of the Transactions, the
acquired businesses may experience further losses that would affect the
financial results of Mattson, reduce Mattson earnings per share, and would
require funding by Mattson to sustain their operations. If losses continue at
historic levels for the STEAG Semiconductor Subsidiaries and CFM, the
Transactions may require Mattson to use a significant portion of its cash
balances.
The ratio for the exchange of CFM shares for Mattson shares is fixed.
The ratio of the number of shares of Mattson common stock to be exchanged
for each share of CFM common stock will not change. Upon completion of the
merger, each share of CFM common stock will be exchanged for 0.5223 shares of
Mattson common stock. There will be no adjustment to this exchange ratio for
changes in the market price of either Mattson common stock or CFM common stock.
In addition, neither Mattson nor CFM may terminate the Merger Agreement or
"walk away" from the merger solely because of changes in the market price of
either company's common stock. Therefore, if the market value of Mattson common
stock or CFM common stock changes relative to the market value of the other,
there will be no change, either upward or downward, in the aggregate number of
shares of Mattson common stock to be issued to CFM shareholders in the merger.
The share prices of Mattson common stock and CFM common stock are by nature
subject to the general price fluctuations in the market for publicly traded
equity securities, and in particular fluctuations in the market prices of
equity securities of semiconductor equipment companies have experienced
significant volatility. You should obtain recent market quotations for Mattson
common stock and CFM common stock in order to accurately assess the market
value of the Mattson shares that will be issued in exchange for the CFM shares.
Mattson cannot predict or give any assurances as to the relative market prices
of Mattson or CFM common stock before the closing of the merger.
The combined company's reported financial results will suffer as a result of
purchase accounting treatment and the impact of amortization of goodwill and
other intangibles, and restructuring charges relating to the Transactions.
Mattson will account for the Transactions as purchases of the STEAG
Semiconductor Subsidiaries and CFM by Mattson under the purchase method of
accounting. Under purchase accounting, Mattson will record the fair value of
the consideration given to STEAG in exchange for the stock of the STEAG
Semiconductor Subsidiaries, as well as the fair value of the consideration
given in exchange for the outstanding CFM common stock and for the outstanding
options to purchase CFM common stock assumed by Mattson, plus the amount of
direct transaction costs, as the cost of acquiring the STEAG Semiconductor
Subsidiaries and CFM. Mattson will allocate these costs to the individual
assets and liabilities of the companies being acquired, including various
identifiable intangible assets such as acquired technology, acquired trademarks
and trade names and acquired workforce, and to in-process research and
development, based on their respective fair values. Intangible assets,
including goodwill, will be generally amortized over a three- to seven-year
period.
As described in the Unaudited Pro Forma Condensed Combined Financial
Statements, the amount of purchase cost allocated to goodwill and other
intangibles is estimated to be approximately $400 million. Assuming goodwill
and other intangible assets were amortized in equal quarterly amounts over 5
years following completion of the Transactions, the accounting charge
attributable to these items would be approximately $20 million per quarter or
$80 million per fiscal year. As a result, purchase accounting treatment of the
Transactions could have a material adverse effect on the market value of
Mattson common stock following completion of the Transactions.
Mattson may incur restructuring costs in order to achieve desired synergies
after the Transactions, which will adversely impact future financial results.
These restructure costs could be a result of, but not limited to, the
following:
. Severance costs associated with possible headcount reductions due to
duplication; and
. Asset write-offs associated with manufacturing and facility
consolidations.
14
Uncertainty related to the Transactions could harm the combined company.
In response to the announcement of the Transactions, customers or suppliers
of Mattson, the STEAG Semiconductor Division, and CFM may delay or defer
product purchase or other decisions. Any delay or deferral in product purchase
or other decisions by customers or suppliers could have a material adverse
effect on the business of the relevant party, regardless of whether the
Transactions are ultimately completed. Similarly, current and prospective
Mattson, STEAG Semiconductor Division, and/or CFM employees may experience
uncertainty about their future roles with Mattson until the Transactions are
completed and Mattson's strategies with regard to the integration of operations
of Mattson, the STEAG Semiconductor Division, and CFM are announced or
executed. This may adversely affect Mattson's, the STEAG Semiconductor
Division's, and/or CFM's ability to attract and retain key management, sales,
marketing, and technical personnel.
The Transactions could adversely affect combined financial results.
Mattson, the STEAG Semiconductor Division, and CFM are expected to incur
direct transaction costs of approximately $4.7 million in connection with the
Transactions. If the benefits of the Transactions do not exceed the costs
associated with the Transactions, including any dilution to Mattson
stockholders and CFM shareholders resulting from the issuance of shares in
connection with the Transactions, the combined company's financial results,
including earnings per share, could be adversely affected.
The rights of holders of CFM common stock will be changed as a result of the
merger.
Following the merger, holders of CFM common stock outstanding on the date of
the merger will become holders of Mattson common stock. Certain differences
exist between the rights of Mattson stockholders under Mattson's Certificate of
Incorporation, Bylaws and the corporate law of Delaware, its state of
incorporation and the rights of CFM shareholders under CFM's Articles of
Incorporation, Bylaws and the corporate law of Pennsylvania, its state of
incorporation. See "Comparison of Rights of Holders of Mattson Common Stock and
CFM Common Stock." Certain rights that CFM shareholders currently have under
CFM's Articles of Incorporation and bylaws and under Pennsylvania law may cease
to exist following the merger.
Officers and directors of Mattson and CFM have certain conflicts of interest
that may influence them to support or approve the Transactions.
Some of the directors and officers of Mattson and CFM participate in
arrangements and have continuing indemnification against liabilities that give
them interests in the Transactions that are different from the interests of
other Mattson stockholders or CFM shareholders interests, including the
following:
. John Savage, a director of Mattson, is also a partner at Alliant
Partners, the technology merger and acquisition advisory firm that
provided Mattson with its opinion regarding the fairness of the proposed
Transactions, from a financial point of view, to Mattson's stockholders.
Mattson has paid Alliant Partners a fee of $300,000 for rendering an
opinion as to the fairness from a financial point of view to Mattson's
stockholders of the consideration to be provided by Mattson in connection
with the Transactions. Mattson has agreed to pay Alliant Partners a
success fee of $2,000,000 in the event the Transactions close, against
which the fairness opinion fee will be credited.
. Brad Mattson was formerly a member of the board of directors of CFM. As
of the record date, Brad Mattson held options to purchase 21,163 shares
of CFM common stock exercisable within 60 days. These options will become
options to purchase Mattson common stock under the terms of the Merger
Agreement.
. Some officers of CFM will be entitled to severance payments and
additional accelerated vesting of options if they are terminated or
constructively terminated by Mattson after completion of the merger.
. Mattson and CFM have agreed that Mr. James Kim will be designated by CFM
to serve on Mattson's board of directors upon completion of the
Transactions.
For the above reasons, the directors and officers of Mattson and CFM could
be more likely to vote to approve the terms of the Transactions than if they
did not have these interests. Mattson stockholders and CFM
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shareholders should consider whether these interests may have influenced these
directors and officers to support or recommend the Transactions.
Failure to complete the Transactions could have a negative impact on Mattson's
and/or CFM's stock price, future business and operations, or financial results.
If the Transactions are not completed for any reason, Mattson and CFM may be
subject to a number of material risks, including the following:
. Depending on the reasons for termination, Mattson may be required to pay
CFM, or CFM may be required to pay Mattson, a termination fee of
$7,110,000;
. Depending on the reasons for termination, Mattson may be required to pay
STEAG either a termination fee of $20,000,000, STEAG's fees and expenses
in connection with the Combination Agreement up to $5,000,000, or one-
half of a $40,000,000 lump sum payment which may be required to be made
by STEAG to CFM under the Interim Patent License Agreement dated June 28,
2000 between CFM, CFMT, Inc., and STEAG;
. The price of Mattson and/or CFM common stock may decline to the extent
that the relevant current market price reflects a market assumption that
the Transactions will be completed;
. Some costs related to the Transactions, such as legal, accounting,
financial advisor, and financial printing fees, must be paid even if the
Transactions are not completed; and
. There may be substantial disruption to the businesses of Mattson and CFM
and distraction of their workforces and management teams.
The Transactions may be challenged by regulatory authorities.
Mattson, STEAG, and CFM have obtained regulatory clearance under both the
HSR Act and the German Cartel Act with respect to the Transactions. However,
even though these regulatory clearances have been obtained, any federal, state,
or foreign governmental agency or private person may still challenge the
Transactions at any time before, or even after, their completion.
STEAG may terminate the business combination, and therefore the Transactions,
if Mattson's common stock is trading at less than $15.78 at the time of
closing.
As set forth in the Combination Agreement, STEAG may terminate the
Combination Agreement if the 20- trading-day average closing price of Mattson's
common stock measured two business days prior to the proposed closing of the
business combination is below $15.78 per share. In addition, STEAG may
terminate the Combination Agreement if the 20 trading day average closing price
of Mattson's common stock measured two business days prior to the proposed
closing of the business combination is below $20.00 per share, unless Mattson
elects to pay, in the form of a 3-year promissory note, the product obtained by
multiplying 11,850,000 by the difference between $20.00 and such 20-trading-day
average common stock closing price. See "The Strategic Business Combination
Agreement--Termination."
Because the Transactions are mutually conditioned on each other, in the
event the Combination Agreement is terminated, the Merger Agreement will
automatically be terminated as well.
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RISKS RELATING TO MATTSON'S BUSINESS FOLLOWING CONSUMMATION OF THE TRANSACTIONS
In addition to the risk factors set forth above with respect to the
Transactions, following the consummation of the Transactions, Mattson's
combined business will be subject to risk factors including the following:
The combined companies' sales have reflected the cyclicality of the
semiconductor industry. Such continued cyclicality following the consummation
of the Transactions may cause Mattson's operating results to fluctuate
significantly and could cause Mattson to fail to achieve anticipated sales.
The business of each of Mattson, the STEAG Semiconductor Division, and CFM
has depended in significant part upon capital expenditures by manufacturers of
semiconductor devices, including manufacturers that are opening new or
expanding existing fabrication facilities. Mattson will continue to depend on
these factors after the consummation of the Transactions. The level of capital
expenditures by these manufacturers of semiconductor devices depends upon the
current and anticipated market demand for such devices and the products
utilizing such devices. The semiconductor industry is highly cyclical. The
industry has in the past, and will likely in the future, experience periods of
oversupply that result in significantly reduced demand for capital equipment,
including Mattson's systems in each of the post-combination product lines. When
these periods occur, Mattson's operating results and financial condition may be
adversely affected. Mattson anticipates that a significant portion of new
orders will continue to depend upon demand from semiconductor manufacturers and
independent foundries that build or expand large fabrication facilities. If
existing fabrication facilities are not expanded or new facilities are not
built, demand for Mattson's systems may not develop or increase, and Mattson
may be unable to generate significant new orders for Mattson's systems. If
Mattson is unable to develop new orders for Mattson's systems, Mattson will not
achieve anticipated net sales levels. Any future downturns or slowdowns in the
semiconductor industry will materially and adversely affect Mattson's net sales
and operating results. Following the Transactions, Mattson will be a larger,
more geographically diverse company and may be less able to react quickly to
the cyclicality of the semiconductor business, particularly in Europe and in
other regions with restrictive laws relating to termination of employees.
Most of Mattson's revenue will come from a small number of large sales, and any
delay in the timing of individual sales could cause Mattson's operating results
to fluctuate from quarter to quarter.
A delay in a shipment near the end of a quarter may cause net sales in that
quarter to fall below Mattson's expectations and the expectations of market
analysts or investors. Currently, each of Mattson, the STEAG Semiconductor
Division, and CFM derives most of its revenues from the sale of a relatively
small number of expensive systems and Mattson will continue to depend on a
small number of sales after the consummation of the Transactions. The list
prices on these systems range from $500,000 to over $4 million. Following the
Transactions, each sale, or failure to make a sale, could have a material
effect on Mattson. Mattson's lengthy sales cycle for each of its systems,
coupled with customers' competing capital budget considerations, make the
timing of customer orders uneven and difficult to predict. In addition,
Mattson's backlog at the beginning of a quarter is not expected to include all
orders required to achieve Mattson's sales objectives for that quarter. As a
result, Mattson's net sales and operating results for a quarter depend on
Mattson's shipping orders as scheduled during that quarter as well as obtaining
new orders for systems to be shipped in that same quarter. Any delay in
scheduled shipments or in shipments from new orders would materially adversely
affect Mattson's operating results for that quarter, which could cause
Mattson's stock price to decline.
In the past, Mattson has experienced cancellation of orders, and there can
be no assurance that further order cancellations or reductions in order growth
or the level of overall orders for semiconductor capital equipment will not
have a further material adverse effect upon Mattson's business or results of
operations. The need for continued investment in research, development and
engineering, marketing, and customer satisfaction activities may limit
Mattson's ability to reduce expenses in response to continued or future
downturns in the semiconductor industry. Mattson's net sales and results of
operations could be materially adversely affected if other downturns or
slowdowns in the semiconductor markets occur in the future.
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Mattson's quarterly financial results fluctuate significantly and may fall