AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 2004
REGISTRATION NO. 333-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TEGAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 2201 SOUTH MCDOWELL BOULEVARD 68-0370244
(STATE OR OTHER PETALUMA, CALIFORNIA 94954 (I.R.S. EMPLOYER
JURISDICTION OF (707) 763-5600 IDENTIFICATION
INCORPORATION OR (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER)
ORGANIZATION) NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
MICHAEL L. PARODI
CHAIRMAN OF THE BOARD, PRESIDENT & CHIEF EXECUTIVE OFFICER
TEGAL CORPORATION
2201 SOUTH MCDOWELL BOULEVARD
PETALUMA, CALIFORNIA 94954
(707) 763-5600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copy To:
CHRISTOPHER L. KAUFMAN, ESQ.
LATHAM & WATKINS LLP
135 COMMONWEALTH DRIVE
MENLO PARK, CALIFORNIA 94025
(650) 328-4600
FAX: (650) 463-2600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT PRICE FEE
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Common Stock, par value 2,385,632 $1.15 $2,743,476.80 $347.60
$0.01 per share, and the shares (2) (3)
associated preferred stock
purchase rights (1)
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(1) Attached to and trading with each share of common stock is a preferred
stock purchase right. Each right entitles the holder, under the
circumstances set forth in the Rights Agreement dated as of June 11, 1996
between the registrant and Chasemellon Shareholder Services, L.L.C., as
amended, to purchase 1/100th of a share of Series A Junior Participating
Preferred Stock. Value attributable to such preferred stock purchase
rights, if any, is reflected in the market price of the common stock. The
preferred stock purchase rights will be issued for no additional
consideration. Accordingly, no additional registration fee is required.
(2) Includes 975,000 shares of common stock issuable upon exercise of warrants
held by the selling stockholders.
(3) Estimated solely for the purpose of computing the registration fee
required by Section 6(b) of the Securities Act and computed pursuant to
Rule 457(c) under the Securities Act based upon the average ($1.15) of the
high ($1.18) and low ($1.12) prices of the common stock on August 25,
2004, as quoted on The Nasdaq SmallCap Market. It is not known how may
shares will be purchased under this registration statement or at what
price shares will be purchased.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED AUGUST 27, 2004
PROSPECTUS
TEGAL CORPORATION
2,385,632
SHARES OF COMMON STOCK
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These shares of common stock are being offered by the selling stockholders
identified in this prospectus. Of the 2,385,632 shares offered for sale under
this prospectus, 975,000 are reserved for issuance by us in the event certain of
the selling stockholders exercise warrants held by them. The shares issuable
upon exercise of the warrants will become eligible for sale by the selling
stockholders under this prospectus only as these warrants are exercised. The
selling stockholders may sell their shares of common stock in a number of
different ways and at varying prices. We provide more information about how the
selling stockholders may sell their shares in the section entitled "Plan of
Distribution" beginning on page 15.
We are not selling any shares of our common stock under this prospectus and will
not receive any proceeds from the sale of these shares. We will receive the
proceeds from the exercise of warrants entitling the selling stockholders to
purchase shares of our common stock.
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OUR COMMON STOCK IS QUOTED ON THE NASDAQ SMALLCAP MARKET UNDER THE SYMBOL
"TGAL." ON AUGUST 26, 2004, THE LAST REPORTED SALE PRICE FOR OUR COMMON STOCK ON
THE NASDAQ SMALLCAP MARKET WAS $1.21 PER SHARE.
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INVESTING IN OUR COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING ON
PAGE 2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND THE SELLING STOCKHOLDERS
ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
The date of this prospectus is , 2004
TABLE OF CONTENTS
Summary........................................................................1
Risk Factors...................................................................2
Forward-Looking Statements....................................................11
Use of Proceeds...............................................................11
Selling Stockholders..........................................................11
Plan of Distribution..........................................................15
Legal Matters.................................................................17
Experts.......................................................................17
Where You Can Find More Information...........................................17
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You should rely only on the information we have provided or incorporated by
reference in this prospectus. Neither we nor the selling stockholders have
authorized anyone to provide you with additional or different information. The
selling stockholders are not making an offer of these securities in any
jurisdiction where the offer is not permitted. You should assume that the
information in this prospectus is accurate only as of the date on the front of
the document and that any information we have incorporated by reference is
accurate only as of the date of the document incorporated by reference. In this
prospectus, unless otherwise indicated, "Tegal," "we," "us" or "our" refer to
Tegal and its subsidiaries.
i
SUMMARY
References in this prospectus to "us," "we," the "Company" or "Tegal"
shall mean Tegal Corporation and our consolidated subsidiaries, unless the
context indicates otherwise.
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, the selling stockholders may from time to time sell
their shares of our common stock in one or more offerings. This prospectus
provides you with a general description of the common stock being offered. You
should read this prospectus, including any documents incorporated herein by
reference, together with additional information described under the heading
"Where You Can Find More Information."
THE REGISTRATION STATEMENT THAT CONTAINS THIS PROSPECTUS, INCLUDING THE
EXHIBITS TO THE REGISTRATION STATEMENT, CONTAINS ADDITIONAL INFORMATION ABOUT US
AND THE SECURITIES OFFERED UNDER THIS PROSPECTUS. THAT REGISTRATION STATEMENT
CAN BE READ AT THE SECURITIES AND EXCHANGE COMMISSION'S OFFICES MENTIONED UNDER
THE HEADING "WHERE YOU CAN FIND MORE INFORMATION."
TEGAL CORPORATION
We design, manufacture, market and service plasma etch and deposition
systems that enable the production of integrated circuits ("ICs"), memory and
related microelectronics devices used in personal computers, wireless voice and
data telecommunications, contact-less transaction devices, radio frequency
identification devices ("RFID's"), smart cards, data storage and micro-level
actuators. Etching and deposition constitute two of the principal IC and related
device production process steps and each must be performed numerous times in the
production of such devices.
We were formed in December 1989 to acquire the operations of the former
Tegal Corporation, a division of Motorola, Inc. ("Motorola"). Our predecessor
company was founded in 1972 and acquired by Motorola in 1978. We completed our
initial public offering in October 1995.
Our executive offices are located at 2201 South McDowell Boulevard,
Petaluma, California 94954, and our telephone number is (707) 763-5600. All
service marks, brand names or trademarks appearing in this prospectus that do
not belong to us are the property of their respective holders.
SHARES OFFERED
On May 28, 2004, we closed a transaction in which we purchased
substantially all of the assets of First Derivative Systems, Inc. ("FDSI"), a
California corporation, for 1,410,632 shares of our common stock and
approximately $200,000 in assumed liabilities. All of the shares of common stock
are subject to a registration rights agreement in which we have agreed to
register the resale of the shares with the Securities and Exchange Commission.
The stockholders of FDSI agreed to the transaction as part of a plan of
dissolution in which FDSI has liquidated and distributed the shares received in
connection with the asset purchase to the stockholders of FDSI.
FDSI, a privately held development stage company based in Goleta,
California, had developed a high-throughput, low cost-of-ownership physical
vapor deposition ("PVD") system with highly differentiated technology for
leading edge memory and logic device production on 200 and 300 millimeter
wafers.
We are registering for resale by the selling stockholders an aggregate of
2,385,632 shares of our common stock consisting of: (i) up to 1,410,632 shares
of our common stock in connection with this transaction and (ii) up to 975,000
shares of our common stock issuable upon the exercise of warrants to purchase
common stock issued to certain of our consultants. As of August 27, 2004, there
are approximately 46,557,672 shares of our common stock outstanding. If all the
warrants held by the selling stockholders are exercised, there will be 975,000
additional shares of our common stock outstanding, in which case there will be
approximately 47,532,672 total shares of our common stock outstanding.
RISK FACTORS
Investing in our common stock involves a significant amount of risk. You
should carefully consider the following risk factors, in addition to the other
information set forth in this prospectus and incorporated in this prospectus by
reference to our Annual Report on Form 10-K for the fiscal year ended March 31,
2004 and our other filings with the SEC before deciding to purchase our common
stock.
WE HAVE INCURRED OPERATING LOSSES AND MAY NOT BE PROFITABLE IN THE FUTURE; OUR
PLANS TO MAINTAIN AND INCREASE LIQUIDITY MAY NOT BE SUCCESSFUL; THE REPORT OF
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM INCLUDES A GOING CONCERN
UNCERTAINTY EXPLANATORY PARAGRAPH; THE ACCOUNTING FOR THE 2% CONVERTIBLE
DEBENTURES RESULTED IN SIGNIFICANT EXPENSE AMOUNTS.
We incurred net losses of $6,325,000 and $1,254,000 for the periods ended
June 30, 2004 and 2003, respectively, generated negative cash flows from
operations of $422,000 and $177,000 in these periods, and have a cash and cash
equivalents balance of $4,657,000 at June 30, 2004. Our past performance raised
substantial doubt as to our ability to continue as a going concern, and our
former independent registered public accounting firm included a going concern
uncertainty explanatory paragraph in their report dated June 25, 2004, which is
included in our Form 10-K for the year ended March 31, 2004. Management believes
that proceeds from the debenture financing in fiscal year 2004 and additional
funds which may be available to the Company through the issuance of stock under
the structured secondary financing with Kingsbridge Capital, Ltd., will be
adequate to fund operations through fiscal year 2005, including the continued
development of recently acquired products. However, projected sales may not
materialize and unforeseen costs may be incurred. If the projected sales do not
materialize, the Company will need to reduce expenses further and raise
additional capital through the issuance of debt or equity securities. If
additional funds are raised through the issuance of preferred stock or debt,
these securities could have rights, privileges or preferences senior to those of
common stock, and debt covenants could impose restrictions on the Company's
operations. The sale of equity or debt could result in additional dilution to
current stockholders, and such financing may not be available to the Company on
acceptable terms, if at all. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets or the amount or classification of liabilities or any other
adjustments that might be necessary should the Company be unable to continue as
a going concern.
THE EXERCISE OF OUTSTANDING WARRANTS, OPTIONS AND OTHER RIGHTS TO OBTAIN
ADDITIONAL SHARES WILL DILUTE THE VALUE OF THE SHARES.
As of June 30, 2004, there were debenture holder warrants exercisable for
approximately 1,685,682 shares and advisor warrants exercisable into 196,129
shares of our common stock. In addition, we have warrants outstanding from
previous offerings for approximately 2,378,840 shares of our common stock.
The exercise of these warrants and the issuance of the common stock will
result in dilution in the value of the shares of our outstanding common stock
and the voting power represented thereby. In addition, the exercise price of the
warrants may be lowered under the price adjustment provisions in the event of a
"dilutive issuance," that is, if we issue common stock at any time prior to
their maturity at a per share price below such conversion or exercise price,
either directly or in connection with the issuance of securities that are
convertible into, or exercisable for, shares of our common stock. A reduction in
the exercise price may result in the issuance of a significant number of
additional shares upon the exercise of the warrants.
The warrants do not establish a "floor" that would limit reductions in
such conversion price or exercise price. The downward adjustment of the exercise
price of these warrants could result in further dilution in the value of the
shares of our outstanding common stock and the voting power represented thereby.
2
SALES OF SUBSTANTIAL AMOUNTS OF OUR SHARES OF COMMON STOCK COULD CAUSE THE PRICE
OF OUR COMMON STOCK TO GO DOWN.
To the extent the holders of our convertible securities and warrants
convert or exercise such securities and then sell the shares of our common stock
they receive upon conversion or exercise, our stock price may decrease due to
the additional amount of shares available in the market. The subsequent sales of
these shares could encourage short sales by our stockholders and others which
could place further downward pressure on our stock price. Moreover, holders of
these convertible securities and warrants may hedge their positions in our
common stock by shorting our common stock, which could further adversely affect
our stock price. The effect of these activities on our stock price could
increase the number of shares issuable upon future conversions of our
convertible securities or exercises of our warrants.
We received stockholder approval to increase the number of authorized
shares of common stock to 100,000,000 shares. We may issue additional capital
stock, convertible securities and/or warrants to raise capital in the future. In
addition, to attract and retain key personnel, we may issue additional
securities, including stock options. All of the above could result in additional
dilution of the value of our common stock and the voting power represented
thereby. No prediction can be made as to the effect, if any, that future sales
of shares of our common stock, or the availability of shares for future sale,
will have on the market price of our common stock prevailing from time to time.
Sales of substantial amounts of shares of our common stock in the public market,
or the perception that such sales could occur, may adversely affect the market
price of our common stock and may make it more difficult for us to sell our
equity securities in the future at a time and price which we deem appropriate.
Public or private sales of substantial amounts of shares of our common stock by
persons or entities that have exercised options and/or warrants could adversely
affect the prevailing market price of the shares of our common stock.
THE SEMICONDUCTOR INDUSTRY IS CYCLICAL AND MAY EXPERIENCE PERIODIC DOWNTURNS
THAT MAY NEGATIVELY AFFECT CUSTOMER DEMAND FOR OUR PRODUCTS AND RESULT IN LOSSES
SUCH AS THOSE EXPERIENCED IN THE PAST.
Our business depends upon the capital expenditures of semiconductor
manufacturers, which in turn depend on the current and anticipated market demand
for integrated circuits. The semiconductor industry is highly cyclical and
historically has experienced periodic downturns, which often have had a
detrimental effect on the semiconductor industry's demand for semiconductor
capital equipment, including etch and deposition systems manufactured by us.
During periods of a prolonged industry slow-down, we would have to initiate a
substantial cost containment program and complete a corporate-wide restructuring
to preserve our cash. However, the need for continued investment in research and
development, possible capital equipment requirements and extensive ongoing
customer service and support requirements worldwide will continue to limit our
ability to reduce expenses in response to the any downturn.
OUR COMPETITORS HAVE GREATER FINANCIAL RESOURCES AND GREATER NAME RECOGNITION
THAN WE DO AND THEREFORE MAY COMPETE MORE SUCCESSFULLY IN THE SEMICONDUCTOR
CAPITAL EQUIPMENT INDUSTRY THAN WE CAN.
We believe that to be competitive, we will require significant financial
resources in order to offer a broad range of systems, to maintain customer
service and support centers worldwide and to invest in research and development.
Many of our existing and potential competitors, including, among others, Applied
Materials, Inc., Lam Research Corporation, Novellus and Tokyo Electron Limited,
have substantially greater financial resources, more extensive engineering,
manufacturing, marketing and customer service and support capabilities, larger
installed bases of current generation etch, deposition and other production
equipment and broader process equipment offerings, as well as greater name
recognition than we do. We cannot assure you that we will be able to compete
successfully against these companies in the United States or worldwide.
IF WE FAIL TO MEET THE CONTINUED LISTING REQUIREMENTS OF THE NASDAQ STOCK
MARKET, OUR STOCK COULD BE DELISTED.
Our stock is currently listed on The Nasdaq SmallCap Market. The Nasdaq
Stock Market's Marketplace Rules impose certain minimum financial requirements
on us for the continued listing of our stock. One such requirement is the
minimum bid price on our stock of $1.00 per share. Beginning in 2002, there have
been periods of time during which we have been out of compliance with the $1.00
minimum bid requirements of The Nasdaq SmallCap Market.
On September 6, 2002, we received notification from Nasdaq that for the 30
days prior to the notice, the price of our common stock had closed below the
minimum $1.00 per share bid price requirement for continued inclusion under
3
Marketplace Rule 4450(a)(5) (the "Rule"), and were provided 90 calendar days, or
until December 5, 2002, to regain compliance. Our bid price did not close above
the minimum during that period. On December 6, 2002, we received notification
from Nasdaq that our securities would be delisted from The Nasdaq National
Market, the exchange on which our stock was listed prior to May 6, 2003, on
December 16, 2002 unless we either (i) applied to transfer our securities to The
Nasdaq SmallCap Market, in which case we would be afforded additional time to
come into compliance with the minimum $1.00 bid price requirement; or (ii)
appealed the Nasdaq staff's determination to the Nasdaq's Listing Qualifications
Panel (the "Panel"). On December 12, 2002 we requested an oral hearing before
the Panel and such hearing took place on January 16, 2003 in Washington, D.C.
Our appeal was based, among other things, on our intention to seek stockholder
approval for a reverse split of our outstanding common stock. On April 28, 2003
at a special meeting of our stockholders, our board of directors was granted the
authority to effect a reverse split of our common stock within a range of
two-for-one to fifteen-for-one. This authority was reaffirmed by our
stockholders at the Annual Meeting on September 8, 2003. The timing and ratio of
a reverse split, if any, was at the sole discretion of our board of directors,
but it must have been completed on or before December 2, 2003. On May 6, 2003,
we transferred the listing of our common stock to The Nasdaq SmallCap Market. In
connection with this transfer, and by additional notice, Nasdaq granted us an
extension until December 31, 2003, to regain compliance with the Rule's minimum
$1.00 per share bid price requirement for continued inclusion on The Nasdaq
SmallCap Market. On September 16, 2003, the bid price for our stock had closed
at $1.00 or above for ten consecutive days. On September 17, 2003, we received a
letter from Nasdaq confirming that Tegal had regained compliance with the
minimum bid price requirement and that the question of its continued listing on
The SmallCap Market had been closed.
If we are out of compliance in the future with Nasdaq listing
requirements, we may take actions in order to achieve compliance, which actions
may include a reverse split of our common stock, which would require stockholder
approval. If an initial delisting decision is made by the Nasdaq's staff, we may
appeal the decision as permitted by Nasdaq rules. If we are delisted and cannot
obtain listing on another major market or exchange, our stock's liquidity would
suffer, and we would likely experience reduced investor interest. Such factors
may result in a decrease in our stock's trading price. Delisting also may
restrict us from issuing additional securities or securing additional financing.
WE DEPEND ON SALES OF OUR ADVANCED PRODUCTS TO CUSTOMERS THAT MAY NOT FULLY
ADOPT OUR PRODUCT FOR PRODUCTION USE.
We have designed our advanced etch and deposition products for customer
applications in emerging new films, polysilicon and metal which we believe to be
the leading edge of critical applications for the production of advanced
semiconductor and other microelectronic devices. Revenues from the sale of our
advanced etch and deposition systems accounted for 40%, 25% and 36% of total
revenues in fiscal 2004, 2003 and 2002, respectively. Our advanced systems are
currently being used primarily for research and development activities or low
volume production. For our advanced systems to achieve full market adoption, our
customers must utilize these systems for volume production. There can be no
assurance that the market for devices incorporating emerging films, polysilicon
or metal will develop as quickly or to the degree we expect.
If our advanced systems do not achieve significant sales or volume
production due to a lack of full customer adoption, our business, financial
condition, results of operations and cash flows will be materially adversely
affected.
OUR POTENTIAL CUSTOMERS MAY NOT ADOPT OUR PRODUCTS BECAUSE OF THEIR SIGNIFICANT
COST OR BECAUSE OUR POTENTIAL CUSTOMERS ARE ALREADY USING A COMPETITOR'S TOOL.
A substantial investment is required to install and integrate capital
equipment into a semiconductor production line. Additionally, we believe that
once a device manufacturer has selected a particular vendor's capital equipment,
that manufacturer generally relies upon that vendor's equipment for that
specific production line application and, to the extent possible, subsequent
generations of that vendor's systems. Accordingly, it may be extremely difficult
to achieve significant sales to a particular customer once that customer has
selected another vendor's capital equipment unless there are compelling reasons
to do so, such as significant performance or cost advantages. Any failure to
gain access and achieve sales to new customers will adversely affect the
successful commercial adoption of our products and could have a detrimental
effect on us.
4
OUR QUARTERLY OPERATING RESULTS MAY CONTINUE TO FLUCTUATE.
Our revenue and operating results have fluctuated and are likely to
continue to fluctuate significantly from quarter to quarter, and there can be no
assurance as to future profitability.
Our 900 series etch systems typically sell for prices ranging between
$250,000 and $600,000, while prices of our 6500 series critical etch systems and
our Endeavor deposition system typically range between $1.8 million and $3.0
million. To the extent we are successful in selling our 6500 and Endeavor series
systems, the sale of a small number of these systems will probably account for a
substantial portion of revenue in future quarters, and a transaction for a
single system could have a substantial impact on revenue and gross margin for a
given quarter.
Other factors that could affect our quarterly operating results include:
o our timing of new systems and technology announcements and releases
and ability to transition between product versions;
o seasonal fluctuations in sales;
o changes in the mix of our revenues represented by our various
products and customers;
o adverse changes in the level of economic activity in the United
States or other major economies in which we do business;
o foreign currency exchange rate fluctuations;
o expenses related to, and the financial impact of, possible
acquisitions of other businesses; and
o changes in the timing of product orders due to unexpected delays in
the introduction of our customers' products, due to lifecycles of
our customers' products ending earlier than expected or due to
market acceptance of our customers' products.
BECAUSE TECHNOLOGY CHANGES RAPIDLY, WE MAY NOT BE ABLE TO INTRODUCE OUR PRODUCTS
IN A TIMELY ENOUGH FASHION.
The semiconductor manufacturing industry is subject to rapid technological
change and new system introductions and enhancements. We believe that our future
success depends on our ability to continue to enhance our existing systems and
their process capabilities, and to develop and manufacture in a timely manner
new systems with improved process capabilities. We may incur substantial
unanticipated costs to ensure product functionality and reliability early in our
products' life cycles. There can be no assurance that we will be successful in
the introduction and volume manufacture of new systems or that we will be able
to develop and introduce, in a timely manner, new systems or enhancements to our
existing systems and processes which satisfy customer needs or achieve market
adoption.
SOME OF OUR SALES CYCLES ARE LENGTHY, EXPOSING US TO THE RISKS OF INVENTORY
OBSOLESCENCE AND FLUCTUATIONS IN OPERATING RESULTS.
Sales of our systems depend, in significant part, upon the decision of a
prospective customer to add new manufacturing capacity or to expand existing
manufacturing capacity, both of which typically involve a significant capital
commitment. We often experience delays in finalizing system sales following
initial system qualification while the customer evaluates and receives approvals
for the purchase of our systems and completes a new or expanded facility. Due to
these and other factors, our systems typically have a lengthy sales cycle (often
12 to 18 months in the case of critical etch and deposition systems) during
which we may expend substantial funds and management effort. Lengthy sales
cycles subject us to a number of significant risks, including inventory
obsolescence and fluctuations in operating results over which we have little or
no control.
5
WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY OR OBTAIN LICENSES FOR
THIRD PARTIES' INTELLECTUAL PROPERTY AND THEREFORE WE MAY BE EXPOSED TO
LIABILITY FOR INFRINGEMENT OR THE RISK THAT OUR OPERATIONS MAY BE ADVERSELY
AFFECTED.
Although we attempt to protect our intellectual property rights through
patents, copyrights, trade secrets and other measures, we may not be able to
protect our technology adequately and competitors may be able to develop similar
technology independently. Additionally, patent applications that we may file may
not be issued and foreign intellectual property laws may not protect our
intellectual property rights. There is also a risk that patents licensed by or
issued to us will be challenged, invalidated or circumvented and that the rights
granted thereunder will not provide competitive advantages to us. Furthermore,
others may independently develop similar systems, duplicate our systems or
design around the patents licensed by or issued to us.
Litigation could result in substantial cost and diversion of effort by us,
which by itself could have a detrimental effect on our financial condition,
operating results and cash flows. Further, adverse determinations in such
litigation could result in our loss of proprietary rights, subject us to
significant liabilities to third parties, require us to seek licenses from third
parties or prevent us from manufacturing or selling our systems. In addition,
licenses under third parties' intellectual property rights may not be available
on reasonable terms, if at all.
OUR CUSTOMERS ARE CONCENTRATED AND THEREFORE THE LOSS OF A SIGNIFICANT CUSTOMER
MAY HARM OUR BUSINESS.
Our top five customers accounted for 85%, 88% and 54% of our systems
revenues in fiscal 2004, 2003 and 2002, respectively. Three customers each
accounted for more than 10% of net systems sales in fiscal 2004. Although the
composition of the group comprising our largest customers may vary from year to
year, the loss of a significant customer or any reduction in orders by any
significant customer, including reductions due to market, economic or
competitive conditions in the semiconductor manufacturing industry, may have a
detrimental effect on our business, financial condition, results of operations
and cash flows. Our ability to increase our sales in the future will depend, in
part, upon our ability to obtain orders from new customers, as well as the
financial condition and success of our existing customers and the general
economy, which is largely beyond our ability to control.
WE ARE EXPOSED TO ADDITIONAL RISKS ASSOCIATED WITH INTERNATIONAL SALES AND
OPERATIONS.
International sales accounted for 67%, 66% and 67% of total revenue for
fiscal 2004, 2003 and 2002, respectively. International sales are subject to
certain risks, including the imposition of government controls, fluctuations in
the U.S. dollar (which could increase the sales price in local currencies of our
systems in foreign markets), changes in export license and other regulatory
requirements, tariffs and other market barriers, political and economic
instability, potential hostilities, restrictions on the export or import of
technology, difficulties in accounts receivable collection, difficulties in
managing representatives, difficulties in staffing and managing international
operations and potentially adverse tax consequences. There can be no assurance
that any of these factors will not have a detrimental effect on our operations,
financial results and cash flows.
We generally attempt to offset a portion of our U.S. dollar denominated
balance sheet exposures subject to foreign exchange rate remeasurement by
purchasing forward currency contracts for future delivery. There can be no
assurance that our future results of operations and cash flows will not be
adversely affected by foreign currency fluctuations. In addition, the laws of
certain countries in which our products are sold may not provide our products
and intellectual property rights with the same degree of protection as the laws
of the United States.
EVOLVING REGULATION OF CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE MAY RESULT IN
ADDITIONAL EXPENSES AND CONTINUING UNCERTAINTY.
Changing laws, regulations and standard relating to corporate governance
and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC
regulations and Nasdaq National Market rules are creating uncertainty for public
companies. We continually evaluate and monitor developments with respect to new
and proposed rules and cannot predict or estimate the amount of the additional
6
costs we may incur or the timing of such costs. These new or changed laws,
regulations and standards are subject to varying interpretations, in many cases
due to their lack of specificity, and as a result, their application in practice
may evolve over time as new guidance is provided by regulatory and governing
bodies. This could result in continuing uncertainty regarding compliance matters
and higher costs necessitated by ongoing revisions to disclosure and governance
practices. We are committed to maintaining high standards of corporate
governance and public disclosure. As a result, we have invested resources to
comply with evolving laws, regulations and standards, and this investment may
result in increased general and administrative expenses and a diversion of
management time and attention from revenue-generating activities to compliance
activities. If our efforts comply with new or changed laws, regulations and
standards differ from the activities intended by regulatory or governing bodies
due to ambiguities related to practice, regulatory authorities may initiate
legal proceedings against us and we may be harmed.
WE MUST INTEGRATE OUR ACQUISITIONS OF SIMPLUS SYSTEMS CORPORATION AND FIRST
DERIVATIVE SYSTEMS, INC., AND WE MAY NEED TO MAKE ADDITIONAL FUTURE ACQUISITIONS
TO REMAIN COMPETITIVE. THE PROCESS OF IDENTIFYING, ACQUIRING AND INTEGRATING
FUTURE ACQUISITIONS MAY CONSTRAIN VALUABLE MANAGEMENT RESOURCES, AND OUR FAILURE
TO EFFECTIVELY INTEGRATE FUTURE ACQUISITIONS MAY RESULT IN THE LOSS OF KEY
EMPLOYEES AND THE DILUTION OF STOCKHOLDER VALUE AND HAVE AN ADVERSE EFFECT ON
OUR OPERATING RESULTS.
On November 11, 2003, we acquired substantially all of the assets of
Simplus Systems Corporation, and on May 28, 2004, we acquired substantially all
of the assets of First Derivative Systems, Inc. We may in the future seek to
acquire or invest in additional businesses, products or technologies that we
believe could complement or expand our business, augment our market coverage,
enhance our technical capabilities or that may otherwise offer growth
opportunities. We may encounter problems with the assimilation of Simplus or
businesses, products or technologies acquired in the future including:
o difficulties in assimilation of acquired personnel, operations,
technologies or products;
o unanticipated costs associated with acquisitions;
o diversion of management's attention from other business concerns and
potential disruption of our ongoing business;
o adverse effects on our existing business relationships with our
customers;
o potential patent or trademark infringement from acquired
technologies;
o adverse effects on our current employees and the inability to retain
employees of acquired companies;
o use of substantial portions of our available cash as all or a
portion of the purchase price;
o dilution of our current stockholders due to the issuance of
additional securities as consideration for acquisitions; and
o inability to complete acquired research and development projects.
If we are unable to successfully integrate our acquired companies or to
create new or enhanced products and services, we may not achieve the anticipated
benefits from our acquisitions. If we fail to achieve the anticipated benefits
from the acquisitions, we may incur increased expenses and experience a
shortfall in our anticipated revenues and we may not obtain a satisfactory
return on our investment. In addition, if a significant number of employees of
acquired companies fail to remain employed with us, we may experience
difficulties in achieving the expected benefits of the acquisitions.
Completing any potential future acquisitions could cause significant
diversions of management time and resources. Financing for future acquisitions
may not be available on favorable terms, or at all. If we identify an
appropriate acquisition candidate for any of our businesses, we may not be able
to negotiate the terms of the acquisition successfully, finance the acquisition
7
or integrate the acquired business, products, technologies or employees into our
existing business and operations. Future acquisitions may not be well-received
by the investment community, which may cause our stock price to fall. We have
not entered into any agreements or understanding regarding any future
acquisitions and cannot ensure that we will be able to identify or complete any
acquisition in the future.
If we acquire businesses, new products or technologies in the future, we
may be required to amortize significant amounts of identifiable intangible
assets and we may record significant amounts of goodwill that will be subject to
annual testing for impairment. If we consummate one or more significant future
acquisitions in which the consideration consists of stock or other securities,
our existing stockholders' ownership could be significantly diluted. If we were
to proceed with one or more significant future acquisitions in which the
consideration included cash, we could be required to use a substantial portion
of our available cash.
OUR FINANCIAL PERFORMANCE MAY ADVERSELY AFFECT THE MORALE AND PERFORMANCE OF OUR
PERSONNEL AND OUR ABILITY TO HIRE NEW PERSONNEL.
Our common stock has declined in value below the exercise price of many
options granted to employees pursuant to our stock option plans. Thus, the
intended benefits of the stock options granted to our employees, the creation of
performance and retention incentives, may not be realized. As a result, we may
lose employees whom we would prefer to retain. As a result of these factors, our
remaining personnel may seek employment with larger, more established companies
or companies perceived as having less volatile stock prices.
PROVISIONS IN OUR AGREEMENTS, CHARTER DOCUMENTS, STOCKHOLDER RIGHTS PLAN AND
DELAWARE LAW MAY DETER TAKEOVER ATTEMPTS, WHICH COULD DECREASE THE VALUE OF YOUR
SHARES.
Our certificate of incorporation and bylaws and Delaware law contain
provisions that could make it more difficult for a third party to acquire us
without the consent of our board of directors. Our board of directors has the
right to issue preferred stock without stockholder approval, which could be used
to dilute the stock ownership of a potential hostile acquirer. Delaware law
imposes some restrictions on mergers and other business combinations between us
and any holder of 15% or more of our outstanding common stock. In addition, we
have adopted a stockholder rights plan that makes it more difficult for a third
party to acquire us without the approval of our board of directors. These
provisions apply even if the offer may be considered beneficial by some
stockholders.
OUR STOCK PRICE IS VOLATILE AND COULD RESULT IN A MATERIAL DECLINE IN THE VALUE
OF YOUR INVESTMENT IN TEGAL.
We believe that factors such as announcements of developments related to
our business, fluctuations in our operating results, sales of our common stock
into the marketplace, failure to meet or changes in analysts' expectations,
general conditions in the semiconductor industry or the worldwide economy,
announcements of technological innovations or new products or enhancements by us
or our competitors, developments in patents or other intellectual property
rights, developments in our relationships with our customers and suppliers,
natural disasters and outbreaks of hostilities could cause the price of our
common stock to fluctuate substantially. In addition, in recent years the stock
market in general, and the market for shares of small capitalization stocks in
particular, have experienced extreme price fluctuations, which have often been
unrelated to the operating performance of affected companies. There can be no
assurance that the market price of our common stock will not experience
significant fluctuations in the future, including fluctuations that are
unrelated to our performance.
POTENTIAL DISRUPTION OF OUR SUPPLY OF MATERIALS REQUIRED TO BUILD OUR SYSTEMS
COULD HAVE A NEGATIVE EFFECT ON OUR OPERATIONS AND DAMAGE OUR CUSTOMER
RELATIONSHIPS.
Materials delays have not been significant in recent years. Nevertheless,
we procure certain components and sub-assemblies included in our systems from a
limited group of suppliers, and occasionally from a single source supplier. For
example, we depend on MECS Corporation, a robotic equipment supplier, as the
sole source for the robotic arm used in all of our 6500 series systems. We
currently have no existing supply contract with MECS Corporation, and we
currently purchase all robotic assemblies from MECS Corporation on a purchase
order basis. Disruption or termination of certain of these sources, including
our robotic sub-assembly source, could have an adverse effect on our operations
and damage our relationship with our customers.
8
ANY FAILURE BY US TO COMPLY WITH ENVIRONMENTAL REGULATIONS IMPOSED ON US COULD
SUBJECT US TO FUTURE LIABILITIES.
We are subject to a variety of governmental regulations related to the
use, storage, handling, discharge or disposal of toxic, volatile or otherwise
hazardous chemicals used in our manufacturing process. We believe that we are
currently in compliance in all material respects with these regulations and that
we have obtained all necessary environmental permits generally relating to the
discharge of hazardous wastes to conduct our business. Nevertheless, our failure
to comply with present or future regulations could result in additional or
corrective operating costs, suspension of production, alteration of our
manufacturing processes or cessation of our operations.
THE STRUCTURED SECONDARY OFFERING FACILITY WE ENTERED INTO IN FEBRUARY 2004 AND
AMENDED IN MAY 2004 MAY HAVE A DILUTIVE IMPACT ON OUR STOCKHOLDERS, AND THE
POTENTIAL UNAVAILABILITY OF THIS FACILITY WOULD NEGATIVELY IMPACT OUR FINANCING
ACTIVITIES.
On February 11, 2004, we entered into a structured secondary offering
facility (the "Structured Secondary") with Kingsbridge Capital Limited
("Kingsbridge"), which was amended on May 19, 2004. Under the terms of an
Amended and Restated Common Stock Purchase Agreement (the "Purchase Agreement")
entered into by the Company and Kingsbridge on May 19, 2004 with respect to the
Structured Secondary, we may, at our sole discretion, sell to Kingsbridge, and
Kingsbridge would be obligated to purchase, up to $25 million of shares of our
common stock, par value $0.01 per share. The price at which we may sell shares
of common stock under the Purchase Agreement is based on a discount to the
volume weighted average market price of the common stock for a specified number
of trading days following each of our respective elections to sell shares
thereunder. The lowest threshold price at which our stock may be sold is at the
sole discretion of the Company, but in no case may be lower than $1.00 per
share, and in the event the price of our common stock falls below this $1.00
threshold, the Structured Secondary will not be an available source of
financing. We may utilize the Structured Secondary through July 7, 2006 from
time to time in our sole discretion, subject to various conditions and terms
contained in the Purchase Agreement. Among the terms of the Purchase Agreement
is a "Material Adverse Effect" clause which permits Kingsbridge to terminate the
Structured Secondary if Kingsbridge determines that an event has occurred that
results in any effect on the business, operations, properties or financial
condition of the Company and its subsidiaries that is material and adverse to
the Company and such subsidiaries, taken as a whole, and/or any condition,
circumstance, or situation that would prohibit or otherwise interfere with our
ability to perform any of our obligations under the Purchase Agreement.
In connection with our entering into the Structured Secondary, we issued
to Kingsbridge a warrant (the "Warrant") to purchase 300,000 shares of common
stock at an exercise price of $4.11 per share. The Warrant will not be
exercisable until August 11, 2004, and will expire on August 11, 2009.
On August 5, 2004, we sold 2,372,689 shares of our common stock to
Kingsbridge pursuant to the Structured Secondary at an average price of $1.119
per share for $2,600,000 in net proceeds. There are 6,778,972 shares of our
common stock that remain reserved for issuance under the Structured Secondary
with Kingsbridge, 300,000 of which are issuable under the Warrant we granted to
Kingsbridge. The issuance of shares under the Structured Secondary and upon
exercise of the Warrant will have a dilutive impact on other stockholders and
the issuance or even potential issuance of such shares could have a negative
effect on the market price of our common stock. In addition, if we draw down the
Structured Secondary, we will issue shares to Kingsbridge at a discount of 10%
of the daily volume weighted average prices of our common stock during a
specified period of trading days after initiation of each respective draw down.
Issuing shares at such a discount will further dilute the interests of other
stockholders.
To the extent that Kingsbridge sells shares of our common stock issued
under the Structured Secondary to third parties, our stock price may decrease
due to the additional selling pressure in the market. The perceived risk of
dilution from sales of stock to or by Kingsbridge may cause holders of our
common stock to sell their shares, or it may encourage short sales. This could
contribute to a decline in our stock price.
9
THE STRUCTURED SECONDARY IMPOSES CERTAIN LIMITATIONS ON OUR ABILITY TO ISSUE
EQUITY OR EQUITY-LINKED SECURITIES.
During the two-year term of the Structured Secondary, we may not engage in
certain equity or equity-linked financings without the prior written consent of
Kingsbridge, which consent will not be unreasonably withheld, conditioned or
delayed. However, we may engage in the following capital raising transactions
without Kingsbridge's consent: (1) establish stock option or award plans or
agreements (for directors, employees, consultants and/or advisors) and amend
such plans or agreements, including increasing the number of shares available
thereunder, (2) use equity securities to finance the acquisition of other
companies, equipment, technologies or lines of business, (3) issue shares of
common stock and/or preferred stock in connection with our option or award
plans, stock purchase plans, rights plans, warrants or options, (4) issue shares
of common stock and/or preferred stock in connection with the acquisition of
products, licenses, equipment or other assets and strategic partnerships or
joint ventures (the primary purpose of which is not to raise equity capital);
(5) issue shares of common and/or preferred stock to consultants and/or advisors
as consideration for services rendered, (6) issue and sell shares in an
underwritten public offering of common stock, and (7) issue shares of common
stock to Kingsbridge under any other agreement entered into between our company
and Kingsbridge.
In addition, we may not issue securities that are, or may become,
convertible or exchangeable into shares of common stock where the purchase,
conversion or exchange price for such common stock is determined using a
floating or otherwise adjustable discount to the market price of the common
stock (including pursuant to an equity line or other financing that is
substantially similar to an equity line with an investor other than Kingsbridge)
during the two-year term of our agreement with Kingsbridge.
WE MAY ISSUE ADDITIONAL SHARES AND DILUTE YOUR OWNERSHIP PERCENTAGE.
Certain events over which you have no control could result in the issuance
of additional shares of our common stock, which would dilute your ownership
percentage in our company. As of June 30, 2004, there were 44,183,297 shares of
our common stock issued and outstanding and there were 31,094 shares of common
stock reserved for issuance under our equity incentive and stock purchase plans.
In addition, as of June 30, 2004, there were outstanding options, warrants and
other rights to acquire up to approximately 12,115,046 (7,854,395 in equity
compensation plans and 4,260,651 in warrants) shares of common stock. We may
also issue additional shares of common stock or preferred stock:
o to raise additional funds for working capital, commercialization,
production and marketing activities;
o upon the exercise or conversion of additional outstanding options
and warrants; and
o in lieu of cash payment of dividends.
Moreover, although the issuance of our common stock under the Structured
Secondary will have no effect on the rights or privileges of existing holders of
common stock, the economic and voting interests of each stockholder will be
diluted as a result of such issuance. Although the number of shares of common
stock that stockholders presently own will not decrease, such shares will
represent a smaller percentage of our total shares that will be outstanding
after such events. If we satisfy the conditions that allow us to draw down the
entire $25 million available under the Structured Secondary, and we choose to do
so, then generally, as the market price of our common stock decreases, the
number of shares we will have to issue upon each draw down on the Structured
Secondary increases, to a maximum of 8,851,661 shares. Therefore drawing down
upon the Structured Secondary when the price of our common stock is decreasing
will have an additional dilutive effect to your ownership percentage and may
result in additional downward pressure on the price of our common stock.
10
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Forward-looking statements, which are based on
assumptions and describe our future plans, strategies and expectations, are
generally identifiable by the use of the words "anticipate," "believe,"
"estimate," "expect," "intend," "project," or similar expressions. These
forward-looking statements are subject to risks, uncertainties and assumptions
about us. Important factors that could cause actual results to differ materially
from the forward-looking statements we make in this prospectus are set forth
under the caption "Risk Factors" and elsewhere in this prospectus and the
documents incorporated by reference in this prospectus. If one or more of these
risks or uncertainties materialize, or if any underlying assumptions prove
incorrect, our actual results, performance or achievements may vary materially
from any future results, performance or achievements expressed or implied by
these forward-looking statements. All forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirely by
the cautionary statements in this paragraph.
USE OF PROCEEDS
The selling stockholders will receive all of the proceeds from the sale
under this prospectus of the common stock. We will not receive any proceeds from
these sales. We will receive the proceeds from the exercise of warrants
entitling the selling stockholders to purchase shares of our common stock.
SELLING STOCKHOLDERS
The shares of common stock offered by the selling stockholders were
originally issued, or will be issued upon the exercise of outstanding warrants,
pursuant to transactions exempt from the registration requirements of the
Securities Act. The shares are being registered to permit public secondary
trading of the shares, and the selling stockholders, including their
transferees, pledges, donees or their successors, may offer the shares for
resale from time to time. See "Plan of Distribution." In accordance with
registration rights granted to the selling stockholders, we have filed with the
Securities and Exchange Commission, under the Securities Act, a registration
statement on Form S-3, of which this prospectus forms a part, with respect to
the resales of the shares from time to time on The Nasdaq SmallCap Market, in
privately-negotiated transactions, or otherwise, and have agreed to prepare and
file such amendments and supplements to the registration statement as may be
necessary to keep such registration statement effective until the shares are no
longer required to be registered for the sale thereof by the selling
stockholders.
The following table sets forth information as of August 24, 2004 the
shares of common stock beneficially owned by each selling stockholder that may
be offered pursuant to this prospectus. The information is based on information
provided by or on behalf of the selling stockholders. The selling stockholders
may offer all, some or none of the common stock. Because the selling
stockholders may offer all or some portion of the common stock, we cannot
estimate the amount of the common stock that will be held by the selling
stockholders upon termination of any of these sales. In addition, the selling
stockholders identified below may have sold, transferred or otherwise disposed
of all or a portion of their common stock since the date on which they provided
the information regarding their common stock in transactions exempt from the
registration requirements of the Securities Act.
Information concerning other selling stockholders will be set forth in
prospectus supplements or post-effective amendments to this prospectus from time
to time, if required. Information concerning the stockholders may change from
time to time and any changed information will be set forth in prospectus
supplements or post-effective amendments to this prospectus if and when
necessary. Except as disclosed in the footnotes to the selling stockholder
table, Tegal has no relationship with the selling stockholders prior to the
issuance of the common stock.
11
- ------------------------------ ---------------------- --------------------- ---------------------
SHARES OF COMMON PERCENTAGE OF
STOCK BENEFICIALLY TOTAL SHARES OF OUTSTANDING STOCK
OWNED AND OFFERED COMMON STOCK BENEFICIALLY OWNED
FOR RESALE UNDER BENEFICIALLY OWNED PRIOR TO THIS
NAME OF SELLING STOCKHOLDER THIS PROSPECTUS AS OF 8/24/04 OFFERING (1)
- ------------------------------ ---------------------- --------------------- ---------------------
FDSI Shareholder Trust 66,029 66,029 *
- ------------------------------ ---------------------- --------------------- ---------------------
Steve Bernhardt 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tony Bernhardt 31,863 31,863 *
- ------------------------------ ---------------------- --------------------- ---------------------
Bigelow Asset Management 5,928 5,928 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tim Bigelow 4,445 4,445 *
- ------------------------------ ---------------------- --------------------- ---------------------
David Boydston 5,895 5,895 *
- ------------------------------ ---------------------- --------------------- ---------------------
Chris Brown 24,302 24,302 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tan Bui 303 303 *
- ------------------------------ ---------------------- --------------------- ---------------------
Don Burkman 8,150 8,150 *
- ------------------------------ ---------------------- --------------------- ---------------------
James Cameron 17,041 17,041 *
- ------------------------------ ---------------------- --------------------- ---------------------
CDE ResMap 11,202 11,202 *
- ------------------------------ ---------------------- --------------------- ---------------------
Alain Chardon 22,227 22,227 *
- ------------------------------ ---------------------- --------------------- ---------------------
Andy Clarke (2) 235,580 235,580 *
- ------------------------------ ---------------------- --------------------- ---------------------
Benjamin Clarke 606 606 *
- ------------------------------ ---------------------- --------------------- ---------------------
Carole Clarke 2,582 1,455,174 (3) 3.13%
- ------------------------------ ---------------------- --------------------- ---------------------
Jean - Francois Daviet 303 303 *
- ------------------------------ ---------------------- --------------------- ---------------------
Ray Degner 1,515 1,515 *
- ------------------------------ ---------------------- --------------------- ---------------------
James Diller 16,152 16,152 *
- ------------------------------ ---------------------- --------------------- ---------------------
Harald Durr 6,224 6,224 *
- ------------------------------ ---------------------- --------------------- ---------------------
Jeff Farni 53,346 53,346 *
- ------------------------------ ---------------------- --------------------- ---------------------
Paul Franzon 303 303 *
- ------------------------------ ---------------------- --------------------- ---------------------
Rob Furst 69,794 69,794 *
- ------------------------------ ---------------------- --------------------- ---------------------
Elie Galimidi 140,582 140,582 *
- ------------------------------ ---------------------- --------------------- ---------------------
Garage Securities,Inc. 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Bob Gehlen 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Jerry Giles Living Trust 6,149 6,149 *
- ------------------------------ ---------------------- --------------------- ---------------------
Birger Gneuss (4) 509,637 509,637 1.08%
- ------------------------------ ---------------------- --------------------- ---------------------
Joachim Gneuss 14,818 14,818 *
- ------------------------------ ---------------------- --------------------- ---------------------
Oliver Gneuss 5,928 5,928 *
- ------------------------------ ---------------------- --------------------- ---------------------
Adam Haron 681 681 *
- ------------------------------ ---------------------- --------------------- ---------------------
Jack Harris 38,107 38,107 *
- ------------------------------ ---------------------- --------------------- ---------------------
Karl Heiman 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tom Jacobs 4,445 4,445 *
- ------------------------------ ---------------------- --------------------- ---------------------
Robert Johnson 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Sam Kano 18,671 18,671 *
- ------------------------------ ---------------------- --------------------- ---------------------
Gaal Karp 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tony Kazmakites 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Brian Kelly 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Shin Kimura 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Michael Lachaise 3,705 3,705 *
- ------------------------------ ---------------------- --------------------- ---------------------
Mitch Lashman 303 303 *
- ------------------------------ ---------------------- --------------------- ---------------------
ICOM Technology International
Pte Ltd (MAC LOH) 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Noel MacDonald 17,776 17,776 *
- ------------------------------ ---------------------- --------------------- ---------------------
Kurt Myataki 303 303 *
- ------------------------------ ---------------------- --------------------- ---------------------
Jeff Myers 703 703 *
- ------------------------------ ---------------------- --------------------- ---------------------
John Newman 6,149 6,149 *
- ------------------------------ ---------------------- --------------------- ---------------------
Nida & Maloney LLP 2,008 2,008 *
- ------------------------------ ---------------------- --------------------- ---------------------
12
- ------------------------------ ---------------------- --------------------- ---------------------
SHARES OF COMMON PERCENTAGE OF
STOCK BENEFICIALLY TOTAL SHARES OF OUTSTANDING STOCK
OWNED AND OFFERED COMMON STOCK BENEFICIALLY OWNED
FOR RESALE UNDER BENEFICIALLY OWNED PRIOR TO THIS
NAME OF SELLING STOCKHOLDER THIS PROSPECTUS AS OF 8/24/04 OFFERING (1)
- ------------------------------ ---------------------- --------------------- ---------------------
Joe Nida 6,421 6,421 *
- ------------------------------ ---------------------- --------------------- ---------------------
Craig Olroyd (5) 1,971 1,971 *
- ------------------------------ ---------------------- --------------------- ---------------------
Richard Ortale 3,030 3,030 *
- ------------------------------ ---------------------- --------------------- ---------------------
Rod Palmborg 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tom Parks 371 371 *
- ------------------------------ ---------------------- --------------------- ---------------------
Lou Perrone 13,160 13,160 *
- ------------------------------ ---------------------- --------------------- ---------------------
Dan Petersen 3,409 3,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Paul Poenisch 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Richard Powers 34,082 34,082 *
- ------------------------------ ---------------------- --------------------- ---------------------
Simon Rack 5,928 5,928 *
- ------------------------------ ---------------------- --------------------- ---------------------
Oliver Radl 2,223 2,223 *
- ------------------------------ ---------------------- --------------------- ---------------------
Robert Rumsey 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Isabel Salinas (5) 606 606 *
- ------------------------------ ---------------------- --------------------- ---------------------
Markus Seitz 4,149 4,149 *
- ------------------------------ ---------------------- --------------------- ---------------------
Mike Sohn 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tim Stultz 9,090 9,090 *
- ------------------------------ ---------------------- --------------------- ---------------------
Bob Sutton (5) 13,635 13,635 *
- ------------------------------ ---------------------- --------------------- ---------------------
Timberline Opportunity
Partners, L.P. 17,041 17,041 *
- ------------------------------ ---------------------- --------------------- ---------------------
Drew Traver 502 502 *
- ------------------------------ ---------------------- --------------------- ---------------------
Trust Automation (6) 14,818 14,818 *
- ------------------------------ ---------------------- --------------------- ---------------------
Allen Vexler 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Tom Voehl 69,690 69,690 *
- ------------------------------ ---------------------- --------------------- ---------------------
Richard Vogt 6,018 6,018 *
- ------------------------------ ---------------------- --------------------- ---------------------
Gordon Whitlock 2,963 2,963 *
- ------------------------------ ---------------------- --------------------- ---------------------
Richard Wideman 83,486 83,486 *
- ------------------------------ ---------------------- --------------------- ---------------------
Lorance Wilson 12,431 12,431 *
- ------------------------------ ---------------------- --------------------- ---------------------
Edward Yoon 14,818 14,818 *
- ------------------------------ ---------------------- --------------------- ---------------------
Larry Yoshida 14,818 14,818 *
- ------------------------------ ---------------------- --------------------- ---------------------
Shoji Yoshii 7,409 7,409 *
- ------------------------------ ---------------------- --------------------- ---------------------
Zohar Ziv 4,545 4,545 *
- ------------------------------ ---------------------- --------------------- ---------------------
M.S. Howells & Co. (7) 105,797 105,797 *
- ------------------------------ ---------------------- --------------------- ---------------------
Ferdinand Seemann (8) 15,000 21,000 *
- ------------------------------ ---------------------- --------------------- ---------------------
Se2quel Partners, LLC (9) 480,000 480,000 1.02%
- ------------------------------ ---------------------- --------------------- ---------------------
TOTAL (10) 2,385,632 3,844,224 8.09%
========= ========= =====
- ------------------------------ ---------------------- --------------------- ---------------------
* Represents beneficial ownership of less than 1%.
(1) Based on Rule 13d-3(d)(i) under the Securities Exchange Act of 1934 using
46,557,672 shares of common stock outstanding on August 24, 2004. The number of
shares of common stock outstanding used in calculating the percentage for each
selling stockholder includes common stock underlying a warrant held by the
selling stockholder, but excludes common stock underlying warrants held by any
other selling stockholder.
(2) Andy Clarke is our Director of 300-mm PVD Technology.
(3) Carole Clarke is the trustee for the Clarke Decedents Trust (726,296
shares), Clarke Marital Trust (458,712 shares) and Clarke Survivors Trust
(267,584 shares).
(4) Under a consulting arrangement, Birger Gneuss acts as Country Manager for
Tegal Europe. Shares include 480,000 shares of common stock issuable upon
exercise of warrants at an exercise price of $1.64 per share.
(5) Employee of Tegal.
13
(6) Contractors to Tegal.
(7) M.S. Howells & Co. acted as financial advisors to FDSI in our acquisition of
FDSI's assets.
(8) Shares are issuable upon exercise of warrants at an exercise price of $1.32
per share.
(9) Ferdinand Seemann and Ed Chan are principals of Se2quel Partners, LLC.
240,000 shares are issuable upon exercise of warrants at an exercise price of
$1.60 per share and 240,000 shares are issuable upon exercise of warrants at an
exercise price of $1.08 per share.
(10) Assumes the exercise of all warrants held by the selling stockholders.
14
PLAN OF DISTRIBUTION
The selling stockholders, which term includes their transferees, pledgees
or donees or their successors, may sell the common stock directly to purchasers
or through underwriters, broker-dealers or agents, who may receive compensation
in the form of discounts, concessions or commissions from the selling
stockholders or the purchasers. These discounts, concessions or commissions as
to any particular underwriter, broker-dealer or agent may be in excess of those
customary in the types of transactions involved.
The common stock may be sold in one or more transactions at:
o fixed prices;
o prevailing market prices at the time of sale;
o prices related to the prevailing market prices;
o varying prices determined at the time of sale; or
o negotiated prices.
These sales may be effected in transactions:
o on any national securities exchange or quotation service on
which our common stock may be listed or quoted at the time of
sale, including The Nasdaq SmallCap Market;
o in the over-the-counter market;
o otherwise than on such exchanges or services or in the
over-the-counter market;
o through the writing of options, whether the options are listed
on an options exchange or otherwise; or
o through the settlement of short sales.
These transactions may include block transactions or crosses. Crosses are
transactions in which the same broker acts as agent on both sides of the trade.
In connection with the sale of the common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions. These broker-dealers or financial institutions may in
turn engage in short sales of the common stock in the course of hedging the
positions they assume with selling stockholders. The selling stockholders may
also sell the common stock short and deliver these securities to close out such
short positions, or loan or pledge the common stock to broker-dealers that in
turn may sell these securities.
The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them hereby will be the purchase price of the common
stock less discounts and commissions, if any. Each of the selling stockholders
reserves the right to accept and, together with their agents from time to time,
to reject, in whole or in part, any proposed purchase of common stock to be made
directly or through agents. We will not receive any of the proceeds from this
offering.
Our outstanding common stock is listed for trading on The Nasdaq SmallCap
Market.
In order to comply with the securities laws of some states, if applicable,
the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain jurisdictions, the common
stock may not be offered or sold unless they have been registered or qualified
for sale or an exemption is available and complied with.
15
Broker-dealers or agents that participate in the sale of the common stock
may be deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act. Selling stockholders that participate in the sale of the common
stock may also be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act. Profits on the sale of the common stock by selling
stockholders and any discounts, commissions or concessions received by any
broker-dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act. Selling stockholders who are deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act. To the
extent the selling stockholders may be deemed to be "underwriters," they may be
subject to statutory liabilities, including, but not limited to, Sections 11, 12
and 17 of the Securities Act.
The selling stockholders and any other person participating in a
distribution will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder. Regulation M of the Exchange Act may limit
the timing of purchases and sales of any of the securities by the selling
stockholders and any other person. In addition, Regulation M may restrict the
ability of any person engaged in the distribution of the securities to engage in
market-making activities with respect to the particular securities being
distributed for a period of up to five business days before the distribution.
The selling stockholders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and the rules
thereunder relating to stock manipulation, particularly Regulation M, and have
agreed that they will not engage in any transaction in violation of such
provisions.
To our knowledge, there are currently no plans, arrangements or
understandings between any selling stockholder and any underwriter,
broker-dealer or agent regarding the sale of the common stock by the selling
stockholders.
A selling stockholder may decide not to sell any common stock described in
this prospectus. We cannot assure holders that any selling stockholder will use
this prospectus to sell any or all of the common stock. Any securities covered
by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of
the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant
to this prospectus. In addition, a selling stockholder may transfer, devise or
gift the common stock by other means not described in this prospectus.
With respect to a particular offering of the common stock, to the extent
required, an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement of which this prospectus
is a part will be prepared and will set forth the following information:
o the specific common stock to be offered and sold;
o the names of the selling stockholders;
o the respective purchase prices and public offering prices and
other material terms of the offering;
o the names of any participating agents, broker-dealers or
underwriters; and
o any applicable commissions, discounts, concessions and other
items constituting, compensation from the selling
stockholders.
We entered into a registration rights agreement for the benefit of holders
of our common stock to register their common stock under applicable federal and
state securities laws under certain circumstances and at certain times. The
registration rights agreement provides that the selling stockholders and Tegal
will indemnify each other and their respective directors, officers and
controlling persons against specific liabilities in connection with the offer
and sale of the common stock, including liabilities under the Securities Act, or
will be entitled to contribution in connection with those liabilities. We will
pay all of our expenses and specified expenses incurred by the selling
16
stockholders incidental to the registration, offering and sale of the common
stock to the public, but each selling stockholder will be responsible for
payment of commissions, concessions, fees and discounts of underwriters,
broker-dealers and agents.
LEGAL MATTERS
Certain legal matters relating to the offering will be passed upon for
Tegal by Latham & Watkins LLP, San Francisco, California. Certain legal matters
will be passed upon for any agents or underwriters by counsel for such agents or
underwriters identified in the applicable prospectus supplement.
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended March 31, 2004 have been so
incorporated in reliance on the report (which contains an explanatory paragraph
relating to the ability of Tegal Corporation to continue as a going concern, as
described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP,
our former independent registered public accounting firm, given on the authority
of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended. Accordingly, we file annual, quarterly and periodic
reports, proxy statements and other information with the SEC relating to our
business, financial statements and other matters. You may read and copy any
documents we have filed with the SEC at prescribed rates at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, DC 20549. You can obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Our SEC filings are also available to you free of charge at the
SEC's web site at http://www.sec.gov and at our web site at
http://www.tegal.com. Information contained in our web site is not part of this
prospectus.
This prospectus is only part of a registration statement on Form S-3 that
we have filed with the SEC under the Securities Act, and therefore omits certain
information contained in the registration statement. We have also filed exhibits
with the registration statement that are not included in this prospectus, and
you should refer to the applicable exhibit for a compete description of any
statement referring to any contract or other document. A copy of the
registration statement, including the exhibits thereto, may be inspected without
charge at the Public Reference Room of the SEC described above, and copies of
such material may be obtained from such office upon payment of the fees
prescribed by the SEC.
We have elected to "incorporate by reference" certain information into
this prospectus. By incorporating by reference, we can disclose important
information to you by referring you to another document we have filed with the
SEC. The information incorporated by reference is deemed to be part of this
prospectus, except for information incorporated by reference that is superseded
by information contained in this prospectus. This prospectus incorporates by
reference the documents set forth below that we have previously filed with the
SEC:
TEGAL CORPORATION SEC FILINGS PERIOD ENDED
------------------------------ ------------
Annual Report on Form 10-K (including information
specifically incorporated by reference into our
Form 10-K from our 2004 Annual Report to
Stockholders and Proxy Statement for our 2004
Annual Meeting of Stockholders)................. March 31, 2004
Quarterly Report on Form 10-Q...................... June 30, 2004
Current Report on Form 8-K......................... filed on July 14, 2004
The description of our common stock as set forth
in our Registration Statement on Form 8-A....... filed on September 21, 1995
All documents that we file with the SEC pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act from the date of this prospectus to the end of
the offering of the common stock under this prospectus shall also be deemed to
be incorporated in this prospectus by reference.
17
You may obtain copies of these documents from us without charge (other
than exhibits to such documents, unless such exhibits are specifically
incorporated by reference into such documents) by writing to us at Tegal
Corporation, 2201 South McDowell Boulevard, Petaluma, California 94954 or
calling us at (707) 763-5600.
18
2,385,632 SHARES OF COMMON STOCK
TEGAL CORPORATION
PROSPECTUS
WE HAVE NOT AUTHORIZED ANY DEALER, SALESMAN OR OTHER PERSON TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND ANY APPLICABLE SUPPLEMENT TO
THIS PROSPECTUS. YOU MUST NOT RELY UPON ANY INFORMATION OR REPRESENTATION NOT
CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY APPLICABLE
SUPPLEMENT TO THIS PROSPECTUS. NEITHER THIS PROSPECTUS NOR ANY APPLICABLE
SUPPLEMENT TO THIS PROSPECTUS CONSTITUTES AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE REGISTERED COMMON STOCK TO
WHICH IT RELATES, NOR DOES THIS PROSPECTUS OR ANY SUPPLEMENT TO THIS PROSPECTUS
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THIS PROSPECTUS OR ANY SUPPLEMENT TO THIS PROSPECTUS IS ACCURATE ON
ANY DATE SUBSEQUENT TO THE DATE SET FORTH ON THE FRONT OF THIS PROSPECTUS OR ANY
SUPPLEMENT TO THIS PROSPECTUS OR THAT ANY INFORMATION WE HAVE INCORPORATED BY
REFERENCE IS CORRECT ON ANY DATE SUBSEQUENT TO THE DATE OF THE DOCUMENT
INCORPORATED BY REFERENCE, EVEN THOUGH THIS PROSPECTUS AND ANY APPLICABLE
SUPPLEMENT TO THIS PROSPECTUS IS DELIVERED OR SECURITIES ISSUED ON A LATER DATE.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
registrant in connection with the registration for resale of our common stock.
All of the amounts shown are estimates except the Securities and Exchange
Commission (the "Commission") registration fee.
AMOUNT
------------
Commission Registration Fee...................................... $ 347.60
*Costs of Printing............................................... 10,000.00
*Legal Fees and Expenses......................................... 50,000.00
*Accounting Fees and Expenses.................................... 30,000.00
*Miscellaneous Expenses.......................................... 10,000.00
------------
*Total....................................................... $ 100,347.60
*Estimated
ITEM 15. LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS.
We are a Delaware corporation. Subsection (b)(7) of Section 102 of the
Delaware General Corporation Law (the "DGCL"), enables a corporation in its
original certificate of incorporation or an amendment thereto to eliminate or
limit the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of the director's fiduciary duty,
except (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) pursuant to
Section 174 of the DGCL (providing for liability of directors for unlawful
payment of dividends or unlawful stock purchases or redemptions) or (iv) for any
transaction from which the director derived an improper personal benefit.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any present or former director, officer, employee or agent of the
corporation, or any individual serving at the corporation's request as a
director, officer, employee or agent of another organization, who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding provided that such director, officer, employee
or agent acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, provided further that such director, officer,
employee or agent had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
present or former director, officer, employee or agent who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred by the person in connection with the defense or settlement of such
action or suit provided that such director, officer, employee or agent acted in
good faith and in a manner reasonably believed to be in, or not opposed to, the
best interests of the corporation, except that no indemnification may be made in
respect to any claim, issue or matter as to which such director, officer,
employee or agent shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all of the circumstances of the
case, such director or officer is fairly and reasonably entitled to indemnity
for such expenses which the Court of Chancery or such other court shall deem
proper.
II-1
Section 145 further provides that to the extent a director, officer,
employee or agent has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification and advancement of expenses provided
for, by, or granted pursuant to, Section 145 shall not be deemed exclusive of
any other rights to which the indemnified party may be entitled; and empowers
the corporation to purchase and maintain insurance on behalf of a present or
former director, officer, employee or agent of the corporation, or any
individual serving at the corporation's request as a director, officer or
employee of another organization, against any liability asserted against him or
incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liabilities under Section 145.
Our Certificate of Incorporation provides that to the fullest extent
permitted by the Delaware General Corporation Law ("DGCL"), a director of Tegal
shall not be liable to Tegal or its stockholders for monetary damages for breach
of fiduciary duty as a director.
ITEM 16. INDEX TO EXHIBITS.
Number Exhibit
------ -------
2.1 Asset Acquisition Agreement by and between Tegal Corporation and
First Derivative Systems, Inc., dated as of April 28, 2004, filed as
Exhibit 2.1 to Tegal's Quarterly Report on Form 10-Q for the period
ended June 30, 2004 (SEC File No. 000-26824) filed on August 16, 2004
and incorporated herein by reference.
4.1 Tegal's Certificate of Incorporation, as amended, filed as Exhibits
3(i)1 and 3(i)2 to Tegal's Registration Statement on Form S-1 (SEC
File No. 033-84702) filed on October 3, 1994 and incorporated herein
by reference.
4.2 Tegal's Certificate of Amendment to the Certificate of Incorporation,
filed as Exhibit 4.2 to Tegal's Registration Statement on Form S-3
(SEC File. No. 333-108921), filed on September 18, 2003 and
incorporated herein by reference.
4.3 Tegal's By-Laws, as amended, filed as Exhibit 3(ii) to Tegal's
Registration Statement on Form S-1 (SEC File No. 033-84702) filed on
October 3, 1994 and incorporated herein by reference.
4.4 Rights Agreement between Tegal and ChaseMellon Shareholder Services,
LLC, as Rights Agent, dated as of June 11, 1996, filed as Exhibit 4.1
to Tegal's Current Report on Form 8-K (SEC File No. 000-26824) filed
on June 28, 1996 and incorporated herein by reference.
4.5 First Amendment to Rights Agreement between Tegal and ChaseMellon
Shareholder Services, LLC, as Rights Agent, dated as of January 15,
1999, filed as Exhibit 99.1 to Tegal's Current Report on Form 8-K
(SEC File No. 000-26824) filed on January 15, 1999 and incorporated
herein by reference.
4.6 Registration Rights Agreement by and among Tegal Corporation, First
Derivative Systems, Inc. and Andy Clarke, as representative of the
stockholders and creditors of First Derivative Systems, Inc., dated
as of May 28, 2004.*
4.7 Form of Certificate for Common Stock filed as Exhibit 4.1 to Tegal's
Registration Statement on Form S-1 (SEC File No. 033-84702), filed on
October 3, 1994 and incorporated herein by reference.
5.1 Opinion of Latham & Watkins LLP.*
23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1).*
23.2 Consent of PricewaterhouseCoopers LLP, former Independent Registered
Public Accounting Firm.*
24.1 Power of Attorney (included on signature page).*
- ----------------------
* Filed herewith.
II-2
ITEM 17. UNDERTAKINGS.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
II-3
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Petaluma, state of California, on this 27th day of
August, 2004.
TEGAL CORPORATION
By /s/ Michael L. Parodi
--------------------------
Michael L. Parodi
Chairman of the Board, President &
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael L. Parodi, and Thomas R. Mika,
and each or either of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitutes or substitute, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the 27th day of August, 2004.
SIGNATURE TITLE
--------- -----
Chairman of the Board, President
/s/ Michael L. Parodi & Chief Executive Officer
- --------------------------------- (Principal Executive Officer)
Michael L. Parodi
Executive Vice President
/s/ Thomas R. Mika & Chief Financial Officer
- --------------------------------- (Principal Financial and Accounting Officer)
Thomas R. Mika
/s/ Edward A. Dohring
- ---------------------------------
Edward A. Dohring Director
/s/ Jeffrey M. Krauss
- ---------------------------------
Jeffrey M. Krauss Director
/s/ H. Duane Wadsworth
- ---------------------------------
H. Duane Wadsworth Director
II-5
EXHIBIT INDEX
Number Exhibit
------ -------
2.1 Asset Acquisition Agreement by and between Tegal Corporation and
First Derivative Systems, Inc., dated as of April 28, 2004, filed as
Exhibit 2.1 to Tegal's Quarterly Report on Form 10-Q for the period
ended June 30, 2004 (SEC File No. 000-26824) filed on August 16, 2004
and incorporated herein by reference.
4.1 Tegal's Certificate of Incorporation, as amended, filed as Exhibits
3(i)1 and 3(i)2 to Tegal's Registration Statement on Form S-1 (SEC
File No. 033-84702) filed on October 3, 1994 and incorporated herein
by reference.
4.2 Tegal's Certificate of Amendment to the Certificate of Incorporation,
filed as Exhibit 4.2 to Tegal's Registration Statement on Form S-3
(SEC File. No. 333-108921), filed on September 18, 2003 and
incorporated herein by reference.
4.3 Tegal's By-Laws, as amended, filed as Exhibit 3(ii) to Tegal's
Registration Statement on Form S-1 (SEC File No. 033-84702) filed on
October 3, 1994 and incorporated herein by reference.
4.4 Rights Agreement between Tegal and ChaseMellon Shareholder Services,
LLC, as Rights Agent, dated as of June 11, 1996, filed as Exhibit 4.1
to Tegal's Current Report on Form 8-K (SEC File No. 000-26824) filed
on June 28, 1996 and incorporated herein by reference.
4.5 First Amendment to Rights Agreement between Tegal and ChaseMellon
Shareholder Services, LLC, as Rights Agent, dated as of January 15,
1999, filed as Exhibit 99.1 to Tegal's Current Report on Form 8-K
(SEC File No. 000-26824) filed on January 15, 1999 and incorporated
herein by reference.
4.6 Registration Rights Agreement by and among Tegal Corporation, First
Derivative Systems, Inc. and Andy Clarke, as representative of the
stockholders and creditors of First Derivative Systems, Inc., dated
as of May 28, 2004.*
4.7 Form of Certificate for Common Stock filed as Exhibit 4.1 to Tegal's
Registration Statement on Form S-1 (SEC File No. 033-84702), filed on
October 3, 1994 and incorporated herein by reference.
5.1 Opinion of Latham & Watkins LLP.*
23.1 Consent of Latham & Watkins LLP (included in Exhibit 5.1).*
23.2 Consent of PricewaterhouseCoopers LLP, former Independent Registered
Public Accounting Firm.*
24.1 Power of Attorney (included on signature page).*
_________________________
* Filed herewith.
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