AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 19, 1997
REGISTRATION NO. 333-________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ZYGO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-0864500
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455-0448
(860) 347-8506
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
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GARY K. WILLIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ZYGO CORPORATION
LAUREL BROOK ROAD
MIDDLEFIELD, CONNECTICUT 06455-0448
(860) 347-8506
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------
Copies of all communications, including all communications sent to the agent for
service, should be sent to:
PAUL JACOBS, ESQ.
FULBRIGHT & JAWORSKI L.L.P.
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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, as amended, 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. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=============================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.10 par
value per share 287,400 $23.00 $6,610,200.00 $2,004.00
=============================================================================================
</TABLE>
(1) The price is estimated in accordance with Rule 457(c) under the Securities
Act of 1933, as amended, solely for the purpose of calculating the
registration fee and is $23.00, the average of the high and low prices
of the Common Stock of Zygo Corporation as reported on The Nasdaq Stock
Market on November 13, 1997.
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER 19, 1997
ZYGO CORPORATION
287,400 Shares of Common Stock
------------------------
This Prospectus relates to (i) the resale of 201,180 shares of Common
Stock, $.10 par value per share (the "Common Stock"), of Zygo Corporation (the
"Company" or "Zygo") from time to time for the account of David Grant ("Grant"),
(ii) the resale of 28,740 shares of Common Stock from time to time for the
account of Michael A. Mahoney ("Mahoney"), (iii) the resale of 28,740 shares of
Common Stock from time to time for the account of Steven Chan ("Chan") and (iv)
the resale of 28,740 shares of Common Stock from time to time for the account of
Fred M. Houston ("Houston," and together with Grant, Mahoney and Chan, the
"Selling Stockholders"). The Common Stock offered hereby was issued to the
Selling Stockholders by the Company on August 19, 1997 pursuant to a private
placement in connection with the acquisition by the Company of all the
outstanding capital stock of Sight Systems, Inc. See "Recent Developments--Sight
Systems, Inc. Acquisition." The Company will not receive any of the proceeds
from the sale of the Common Stock by the Selling Stockholders.
The distribution of the Common Stock by the Selling Stockholders (and their
respective donees and pledgees) may be effected from time to time in one or more
transactions (which may involve block transactions) in the over-the-counter
market (including the Nasdaq National Market) or any exchange on which the
Common Stock may then be listed, in negotiated transactions, through the writing
of options on shares (whether such options are listed on an options exchange or
otherwise), or a combination of such methods of sale, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Selling Stockholders (and their respective
donees and pledgees) may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholders and/or purchasers of shares for whom they may act as agent (which
compensation may be in excess of customary commissions). The Selling
Stockholders may also sell the shares of Common Stock pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the "Securities Act"),
or may pledge shares as collateral for margin accounts and such shares could be
resold pursuant to the terms of such accounts. The Selling Stockholders and any
broker-dealers that act in connection with the sale of Common Stock might be
deemed to be "underwriters" within the meaning of Section 2(11) of the
Securities Act and any commissions received by them and any profit on the resale
of the shares might be deemed to be underwriting discounts or commissions under
the Securities Act. The Selling Stockholders may agree to indemnify any agent,
dealer or broker-dealer that participates in transactions involving sales of the
Common Stock against certain liabilities, including liabilities arising under
the Securities Act.
The Common Stock trades on the Nasdaq National Market under the symbol
"ZIGO." On November 17, 1997, the closing sale price of the Common Stock was
$24.25 per share.
All expenses of the registration of securities covered by this Prospectus
are to be borne by the Company, except that the Selling Stockholders will pay
underwriting discounts, selling commissions, and fees and the expenses, if any,
of counsel or other advisers to the Selling Stockholders.
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 7
FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is November __, 1997
<PAGE>
No person has been authorized to give any information or to make any
representation in connection with this offering other than those contained in
this Prospectus or a supplement to this Prospectus, and, if given or made, such
other information or representations must not be relied upon as having been
authorized by the Company or any other person. Neither this Prospectus nor any
supplement to this Prospectus constitutes an offer to sell or the solicitation
of an offer to buy any securities other than the securities to which it relates
or an offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this Prospectus or a supplement to this Prospectus nor any sale made
hereunder or thereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof or thereof or that the information contained herein or therein is correct
as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 3
The Company................................................................ 5
Recent Developments........................................................ 6
Risk Factors............................................................... 7
Use of Proceeds............................................................ 12
Price Range of Common Stock.................................................12
Dividend Policy.............................................................12
Selling Stockholders........................................................12
Plan of Distribution....................................................... 13
Legal Matters.............................................................. 14
Experts.................................................................... 14
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Proxy statements, reports
and other information concerning the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices
of the Commission located at Seven World Trade Center, 13th Floor, New York, New
York 10048, and 500 West Madison Street, Chicago, Illinois 60661, and copies of
such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and its public
reference facilities in New York, New York and Chicago, Illinois, at prescribed
rates. Copies of such information may also be inspected at the reading room of
the library of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006. The Commission maintains a World Wide Web
site on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding the Company and other
registrants that file electronically with the Commission.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
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<PAGE>
information with respect to the Company and the Common Stock, reference is
hereby made to the Registration Statement. Statements contained herein
concerning the provisions of any contract, agreement or other document are not
necessarily complete, and in each instance reference is made to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. Copies of the Registration
Statement together with exhibits may be inspected at the offices of the
Commission as indicated above without charge and copies thereof may be obtained
therefrom upon payment of a prescribed fee.
Private Securities Litigation Reform Act Safe Harbor Statement. This
Prospectus (including the documents incorporated by reference herein) contains
certain forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) and information relating to Zygo that
are based on the beliefs of the management of Zygo, as well as assumptions made
by and information currently available to the management of Zygo. When used in
this Prospectus, the words "estimate," "project," "believe," "anticipate,"
"intend," "expect" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the current views of Zygo
with respect to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those contemplated in such
forward-looking statements, including those discussed under "Risk Factors."
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Zygo does not undertake any
obligation to publicly release any revisions to these forward looking statements
to reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission (File No.
0-12944) pursuant to the Exchange Act are incorporated by reference and made a
part hereof:
(i) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997.
(ii) The Company's Current Reports on Form 8-K dated July 28, 1997,
August 19, 1997 and October 20, 1997.
(iii) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
(iv) The description of the Company's Common Stock contained in Item 1
of the Company's Registration Statement on Form 8-A, dated
October 26, 1984.
All documents and reports subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the securities
offered hereby shall be deemed incorporated by reference into this Prospectus
and to be a part hereof from the date of the filing of such documents or
reports. The information relating to the Company in this Prospectus should be
read together with the information in the documents incorporated by reference.
Any statement contained in a document incorporated by reference herein,
unless otherwise indicated therein, speaks as of the date of the document. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for all purposes to the extent that a
statement contained in this Prospectus modifies or replaces such statement.
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<PAGE>
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon request, a copy of any or all of the documents
described above, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Requests should be
addressed to: Zygo Corporation, Laurel Brook Road, Middlefield, Connecticut
06455-0448, Attention: Mark J. Bonney, Vice President, Finance and
Administration (Tel. No. (860) 347-8506). The Company furnishes its stockholders
with an annual report containing audited financial statements. In addition, the
Company may furnish such other reports as may be authorized, from time to time,
by the Board of Directors.
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<PAGE>
THE COMPANY
Zygo Corporation ("Zygo" or the "Company"), through its divisions and
wholly owned subsidiaries, Middlefield, Technical Instrument Company ("TIC"),
NexStar Automation, Inc. ("NexStar") and Sight Systems, Inc. ("SSI") designs,
develops, manufactures and markets high performance, noncontact electro-optical
measuring instruments and systems, automation systems, and components. The
Middlefield division also manufactures optical components to precise tolerances
both for sale and for use as key elements in its own products. Utilizing
proprietary laser and white light optical technology combined with advanced
software and electronics, Zygo's precision noncontact measuring instruments and
systems enable manufacturers in a variety of high technology industries,
including data storage, semiconductor, and precision optics, to increase
operating efficiencies and production yields by identifying and collecting
quantitative data on product defects, both during and after the manufacturing
process. Zygo's interferometric and confocal components are sold directly to
OEMs for incorporation into their products. Zygo's optical components are used
in many applications, including laser fusion research, semiconductor
manufacturing equipment, and aerospace optical systems, as well as being an
integral part of precision optical instruments.
Predominantly all of the Company's instruments, systems and accessories
employ either a laser or white light source to make noncontact measurements.
Zygo is a leader in interferometric and confocal metrology. Interferometric
metrology utilizes a process called interferometry, whereby a pattern of bright
and dark lines (called fringes) results from an optical path difference between
a reference and a measurement beam. Zygo's products then analyze these patterns
through a series of steps and generate quantitative three-dimensional surface
profiles, which are used to determine the conformity of a part to its
specifications, to detect product defects and, increasingly, to analyze and
enhance manufacturing processes. Interferometric measurement instruments are
used by a variety of industries, including by the data storage industry to
inspect and analyze the surface of computer hard disks and read/write heads, and
by the semiconductor industry for high precision distance measurement and motion
control. Confocal Scanning Optical Microscopy ("CSOM") is a key base technology
employed in TIC's products. The majority of TIC's microscope systems and
subsystems employ white light CSOM technology. In a microscope utilizing white
light CSOM imaging, a high-intensity white light illuminates a section of a
spinning disk containing pinholes arranged in multiple spiral patterns. Acting
as point illumination sources, the pinholes direct light to points on the
sample. The reflected light from the sample returns through the same section of
the disk. Only light from points on the sample near the focal plane will pass
through the pinholes for imaging. Zygo's NexStar Automation unit designs,
develops, manufactures, and markets comprehensive automated system solutions to
enable manufacturers in a variety of high technology industries, including the
data storage, semiconductor, and electronics industries, to enhance operation
efficiencies and product yields. NexStar's high speed production solutions
reduce downtimes, especially in manufacturing processes adaptable to the
manufacture of multiple products differing in size, features, and functionality.
Zygo's newly-acquired SSI unit is engaged in the business of designing,
developing, manufacturing and marketing application-specific machine vision
systems. These vision systems are unique in that they are configured from a vast
collection of software and hardware components into a system which meets
specific customer requirements. Examples of such applications in the data
storage industry, where SSI has sold the majority of its systems to date,
include: pole geometry measurements and gap width on various types of read/write
heads, straightness, and measurements of read/write heads mounted on row bars in
the manufacturing process.
The Company was incorporated in Delaware in 1970. The Company's
headquarters are located at Laurel Brook Road, Middlefield, Connecticut
06455-0448. The Company's telephone number is 860-347-8506.
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<PAGE>
RECENT DEVELOPMENTS
Subsequent to June 30, 1997, Zygo completed the acquisition of SSI, a
manufacturer of precision application-specific machine vision metrology systems,
and Syncotec Neue Technologien und Instrumente GmbH, a manufacturer of confocal
components and custom metrology tools for the German market. A brief description
of these businesses follows:
SIGHT SYSTEMS, INC. ACQUISITION
On August 19, 1997, the Company completed its acquisition (the "SSI
Acquisition") of all the outstanding capital stock SSI, a privately held
California corporation. In connection with the SSI Acquisition, the Company
issued to the Selling Stockholders an aggregate of 287,400 shares of Common
Stock in a private placement transaction. The SSI Acquisition will be accounted
for as a pooling-of-interests.
SSI, located in Newbury Park, California, employs approximately 20
persons. Approximately 50% of SSI's employees are engineers and are actively
involved in the design and development of configurable software and hardware
components which are customized into vision systems specific to customer needs.
SSI operates from a leased building where the manufacturing function is
essentially a systems and components integration and assembly function. SSI has
a number of suppliers for its hardware components and material availability has
not been a problem for SSI.
Sales are conducted on a direct basis to data storage industry customers
and through selected representatives, primarily selected for their proximity to
key geographic markets. Integration of the sales and marketing teams of Zygo and
SSI is intended to be accomplished during fiscal 1998.
SSI's sales in its fiscal year ended December 31, 1996 were approximately
$3.5 million.
SYNCOTEC NEUE TECHNOLOGIEN UND INSTRUMENTE GmbH ACQUISITION
On June 30, 1997, TIC and Syncotec Neue Technologien und Instrumente GmbH
("Syncotec"), a German corporation, completed all necessary legal requirements
allowing for the appropriate transfer and registration of a 50 percent ownership
interest in Syncotec. The conclusion of this transaction completed commitments
made by the former owners of TIC and enabled the Company to release $440,000 of
contingent proceeds recorded as a liability at the time of the TIC acquisition
by the Company. Effective September 1, 1997, the Company, through TIC, completed
the purchase of the remaining 50 percent of Syncotec for approximately $2.0
million (subject to adjustment based on the closing book value of Syncotec) in a
combination of cash and shares of Common Stock.
Syncotec, located in Asslar, Germany, is a small manufacturer of confocal
modules and systems principally for the European market. Syncotec has had a
long-term relationship with TIC. Employing approximately 10 persons, Syncotec is
focused on designing solutions for local customers for their specific
measurement problems utilizing the TIC confocal scanning optical microscopy
components, as well as other locally designed hardware and software.
Syncotec occupies a small leased facility in Asslar, near Frankfurt,
Germany. Syncotec's sales in its fiscal year ended December 31, 1996 were
approximately $2.9 million (DM4.9 million).
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RISK FACTORS
In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of Common Stock offered by this Prospectus. This Prospectus contains, in
addition to historical information, forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed below, as well as those discussed elsewhere in this
Prospectus.
CUSTOMER CONCENTRATION; RELATIONSHIP WITH CANON
Sales to Zygo's two largest customers in fiscal 1997 and fiscal 1996
accounted for an aggregate of approximately 25% and 50% of net sales,
respectively. During these fiscal years, sales to Canon Inc. and Canon Sales
Co., Inc. (collectively, "Canon"), Zygo's largest customer in those periods,
accounted for approximately 20% and 34%, respectively, of Zygo's net sales. Zygo
expects that sales to Canon, an original investor in Zygo which owns
approximately 11% of Zygo's outstanding shares of Common Stock and is a
distributor of certain Zygo products in the Japanese market, will continue to
represent a significant percentage of Zygo's net sales for the foreseeable
future. During fiscal 1997 and 1996, sales to Zygo's second largest customer, a
manufacturer of computer disk drives and related hardware and software,
accounted for approximately 5% and 16% of Zygo's net sales, respectively. Zygo's
customers generally do not enter into long-term agreements obligating them to
purchase Zygo's products. A reduction or delay in orders from either of these
two customers, including reductions or delays due to market, economic, or
competitive conditions in the semiconductor or computer disk drive industries,
could have a material adverse effect upon Zygo's results of operations.
RISKS ASSOCIATED WITH RECENT ACQUISITIONS
Zygo's growth strategy involves growth through acquisitions and internal
development and, as a result, Zygo is subject to various risks associated with
this growth strategy. The successful integration of acquired businesses,
including TIC, Nexstar, SSI and Syncotec is important to Zygo's future financial
performance. Zygo faces a significant challenge in integrating the acquired
businesses. The dedication of management resources to such integration may
detract attention from the day-to-day business of Zygo. The difficulties of
integration may be increased by the necessity of coordinating geographically
separated organizations, integrating personnel with disparate business
backgrounds and combining different corporate cultures. There can be no
assurance that there will not be substantial costs associated with such
activities or that there will not be other material adverse effects of these
integrating efforts. Further, there can be no assurance that management's
efforts to integrate the operations of Zygo and newly acquired companies will be
successful or that the anticipated benefits of the recent acquisitions will be
fully realized.
While there are currently no commitments with respect to any future
acquisitions, Zygo's business strategy includes the expansion of its products
and services, which may be effected through acquisitions. Zygo regularly reviews
various acquisition prospects of businesses, technologies or products
complementary to Zygo's business and periodically engages in discussions
regarding such possible acquisitions. Acquisitions involve numerous risks,
including difficulties in the assimilation of the operations and products of the
acquired companies, the ability to manage effectively geographically remote
units, the diversion of management's attention from other business concerns,
risks of entering markets in which Zygo
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has limited or no direct experience and the potential loss of key employees of
the acquired companies. In addition, acquisitions may result in dilutive
issuances of equity securities, the incurrence of debt, reduction of existing
cash balances, amortization expenses related to goodwill and other intangible
assets and other charges to operations that may materially adversely affect
Zygo's business, financial condition or results of operations. Although
management expects to carefully analyze any such opportunity before committing
Zygo's resources, there can be no assurance that any acquisition will result in
long-term benefits to Zygo or that Zygo's management will be able to manage
effectively the resulting businesses.
INDUSTRY CONCENTRATION AND CYCLICALITY
Zygo's business is significantly dependent on capital expenditures by
manufacturers of components for the computer disk drive industry and of
semiconductors. These industries are cyclical and have historically experienced
periods of oversupply, resulting in significantly reduced demand for capital
equipment, including the products manufactured and marketed by Zygo. For the
foreseeable future, Zygo's operations will continue to be dependent on the
capital expenditures in these industries which, in turn, is largely dependent on
the market demand for hard disk drives and products containing integrated
circuits. Zygo's net sales and results of operations may be materially adversely
affected if downturns or slowdowns in the computer disk drive or semiconductor
markets occur in the future.
TECHNOLOGICAL CHANGE AND NEW PRODUCT DEVELOPMENT
The market for Zygo's products is characterized by rapidly changing
technology. Zygo's future success will continue to depend upon its ability to
enhance its current products and to develop and introduce new products that keep
pace with technological developments and evolving industry standards, respond to
changes in customer requirements and achieve market acceptance. Zygo continually
redesigns and enhances its instruments, systems and components and upgrades its
proprietary software technology incorporated in its products. Any failure by
Zygo to anticipate or respond adequately to technological developments and
customer requirements, or any significant delays in product development or
introduction, could have a material adverse effect on Zygo's business, results
of operations, financial condition and liquidity. In order to develop new
products successfully, Zygo is dependent upon close relationships with its
customers and their willingness to share proprietary information about their
requirements and participate in collaborative efforts with Zygo. There can be no
assurance that Zygo's customers will continue to provide the Company with timely
access to such information or that Zygo will be successful in developing and
marketing new products and services or product and service enhancements on a
timely basis and respond effectively to technological changes or new product
announcements by others. In addition, there can be no assurance the new products
and services or product and service enhancements, if any, developed by Zygo will
achieve market acceptance.
DEPENDENCE ON KEY PERSONNEL
Zygo's success depends in large part upon the continued services of many
of its highly skilled personnel involved in management, research, development
and engineering, and sales and marketing, and upon its ability to attract and
retain additional highly qualified employees. Zygo's employees may voluntarily
terminate their employment with Zygo at any time. Competition for such personnel
is intense, and there can be no assurance that Zygo will be successful in
retaining its existing personnel or attracting and retaining additional
personnel. Gary K. Willis, Zygo's President and Chief Executive Officer, has
recently suffered a mild heart attack and is expected to continue to fulfill his
responsibilities as the chief executive officer while recuperating at his home
for the next several weeks.
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QUARTERLY FLUCTUATIONS
Zygo has experienced quarterly fluctuations in results of operations and
anticipates that these fluctuations may continue. These fluctuations have been
caused by various factors, including the capital procurement practices of its
customers and the industries into which its products are sold generally, the
timing and acceptance of new product introductions and enhancements and the
timing of product shipments and marketing. Future results of operations may
fluctuate as a result of these and other factors, including Zygo's ability to
continue to develop innovative products, the announcement or introduction of new
products by Zygo's competitors, Zygo's product and customer mix, the level of
competition and overall trends in the economy.
POSSIBLE VOLATILITY OF STOCK PRICE
Zygo believes that factors such as the announcement of new products or
technologies by Zygo or its competitors, market conditions in the precision
measurement, data storage and semiconductor industries generally and quarterly
fluctuations in financial results are expected to cause the market price of the
Common Stock to vary substantially. Further, Zygo's net sales or results of
operations in future quarters may be below the expectations of public market
securities analysts and investors. In such event, the price of the Common Stock
would likely decline, perhaps substantially. In addition, in recent years the
stock market has experienced price and volume fluctuations that have
particularly affected the market prices for many high technology companies and
which often have been unrelated to the operating performance of such companies.
The market volatility may adversely affect the market price of the shares of
Common Stock offered hereby. See "Price Range of Common Stock."
COMPETITION
Zygo faces competition from a number of companies in all its markets, some
of which have greater manufacturing and marketing capabilities, and greater
financial, technological and personnel resources. In addition, Zygo competes
with the internal development efforts of its current and prospective customers,
certain of which may attempt to become vertically integrated. Zygo's competitors
can be expected to continue to improve the design and performance of their
products and to introduce new products with competitive price/performance
characteristics. Competitive pressures may necessitate price reductions which
can adversely affect results of operations. Although Zygo believes that it has
certain technical and other advantages over certain of its competitors,
maintaining such advantages will require a continued high level of investment by
Zygo in research and development and sales, marketing and service. There can be
no assurance that Zygo will have sufficient resources to continue to make such
investment or that Zygo will be able to make the technological advances
necessary to maintain such competitive advantages. In addition, there can be no
assurance that the bases of competition in the industries in which Zygo competes
will not shift.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
Zygo's success is heavily dependent upon its proprietary technology. There
can be no assurance that the steps taken by Zygo to protect its proprietary
technology will be adequate to prevent misappropriation of its technology by
third parties or will be adequate under the laws of some foreign countries,
which may not protect Zygo's proprietary rights to the same extent as do laws of
the United States. In addition, there remains the possibility that others will
"reverse engineer" Zygo's products in order to determine their method of
operation and introduce competing products or that others will develop competing
technology independently. Any such adverse circumstances could have a material
adverse effect on Zygo's results of
-9-
<PAGE>
operations. Further, some of the markets in which Zygo competes are
characterized by the existence of a large number of patents and frequent
litigation for financial gain that is based on patents with broad, and often
questionable, application. As the number of its products increase, the markets
in which its products are sold expands, and the functionality of those products
grows and overlaps with products offered by competitors, Zygo believes that it
may become increasingly subject to infringement claims. Although Zygo does not
believe any of its products or proprietary rights infringe the rights of third
parties, there can be no assurance that infringement claims will not be asserted
against Zygo in the future or that any such claims will not require Zygo to
enter into royalty arrangements or result in costly litigation.
DEPENDENCE ON THIRD-PARTY SUPPLIERS
Certain of the components and subassemblies included in Zygo's systems are
obtained from a single source or a limited group of suppliers. Although Zygo
seeks to reduce dependence on sole and limited source suppliers in some cases,
the partial or complete loss of certain of these sources could have at least a
temporary adverse effect on Zygo's results of operations and damage customer
relationships.
REVENUES DERIVED FROM INTERNATIONAL SALES AND FOREIGN OPERATIONS
Zygo's products are sold internationally by Zygo primarily to customers in
Japan and throughout the Pacific Rim. Net sales to customers outside the United
States accounted for 45% and 47% of Zygo's net sales in the fiscal years ended
June 30, 1997 and 1996, respectively, and are expected to continue to account
for a substantial percentage of Zygo's net sales. International sales and
foreign operations are subject to inherent risks, including longer payment
cycles, greater difficulty in accounts receivable collection, compliance with
foreign laws, changes in regulatory requirements, tariffs or other barriers,
difficulties in obtaining export licenses and in staffing and managing foreign
operations, exposure to currency exchange fluctuations, political instability,
transportation delays and potentially adverse tax consequences. Substantially
all Zygo's sales and costs are negotiated and paid in U.S. dollars. However,
changes in the values of foreign currencies relative to the value of the U.S.
dollar can render Zygo's products comparatively more expensive to the extent
locally produced alternative products are available. Such conditions could
negatively impact international sales of Zygo's products and Zygo's foreign
operations, as would changes in the general economic conditions in those
markets. Although these risks, including the risks associated with currency
exchange fluctuations, have not had any material adverse effect on Zygo to date,
there can be no assurance that risks inherent in international sales and foreign
operations will not have a material adverse effect on Zygo in the future.
RELIANCE ON MIDDLEFIELD MANUFACTURING FACILITY
The Company manufactures all of its optical components at its facility in
Middlefield, Connecticut. Any extended interruption of optical component
production at the Middlefield manufacturing facility could have a material
adverse effect on the business of the Company.
CONTROL OF COMPANY
The Company's executive officers and directors, through their affiliation
with certain stockholders and their stock option holdings, may be deemed to
beneficially own approximately 31% of the outstanding shares of Common Stock. As
a result, these individuals may have the ability to control the Company and
direct its affairs and business, including the election of all of the directors.
-10-
<PAGE>
DIVIDEND POLICY
The Company has never declared or paid cash dividends on its capital stock.
The Company currently intends to retain all its earnings to finance the
expansion and development of its business and, therefore, does not anticipate
paying any cash dividends in the foreseeable future. See "Dividend Policy."
-11-
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
PRICE RANGE OF COMMON STOCK
The Common Stock is quoted on the Nasdaq National Market under the symbol
ZIGO. The following table sets forth, for the periods indicated, high and low
last reported sale prices for the Common Stock on the Nasdaq National Market.
Market price data for 1997 and 1996 have been adjusted for the effect of the
3-for-2 stock split which was effective on August 21, 1995 and the 2-for-1 stock
split which was effective on February 27, 1997.
HIGH LOW
------- -------
YEAR ENDED JUNE 30, 1996:
First quarter.................................. $14.625 $10.333
Second quarter................................. 17.750 12.000
Third quarter.................................. 20.125 10.250
Fourth quarter................................. 31.063 17.688
YEAR ENDED JUNE 30, 1997:
First quarter.................................. $21.500 $14.000
Second quarter................................. 26.000 12.250
Third quarter.................................. 29.875 21.000
Fourth quarter. ............................... 31.500 21.500
YEAR ENDING JUNE 30, 1998:
First quarter.................................. $38.500 $28.500
Second quarter (through November 17, 1997)..... 22.250 33.500
As of September 30, 1997, there were 515 holders of record of the Common
Stock and the Company estimates that there were approximately 4,500 beneficial
holders. The last reported sale price of the Common Stock on the Nasdaq National
Market on November 17, 1997 was $24.25.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its Common
Stock. The Company anticipates that all future earnings will be retained by the
Company for the development of its business. Accordingly, the Company does not
anticipate paying cash dividends on the Common Stock in the foreseeable future.
The payment of any future dividends will be at the discretion of the Company's
Board of Directors and will depend upon, among other things, future earnings,
operations, capital requirements, the general financial condition of the Company
and general business conditions.
SELLING STOCKHOLDERS
The following table sets forth information as of November 1, 1997 except
as otherwise noted, with respect to the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders. All of the shares
offered hereby were acquired by the Selling Stockholders from the Company
pursuant to the SSI Acquisition. See "Recent Developments--Sight Systems, Inc.
Acquisition." The Selling Stockholders each own less than one percent of the
outstanding Common Stock.
-12-
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================
NUMBER OF SHARES
NUMBER OF SHARES OF COMMON NUMBER OF SHARES OF COMMON STOCK
STOCK BENEFICIALLY OWNED PRIOR OF COMMON STOCK BENEFICIALLY OWNED
SELLING STOCKHOLDER TO OFFERING REGISTERED HEREIN AFTER OFFERING
=============================================================================================
<S> <C> <C> <C>
David Grant (1) 201,180 201,180 0
=============================================================================================
Michael A. 28,740 28,740 0
Mahoney (2)
=============================================================================================
Steven Chan (3) 28,740 28,740 0
=============================================================================================
Fred M. Houston 28,740 28,740 0
(4)
=============================================================================================
</TABLE>
(1) David Grant is the President of SSI, a Zygo subsidiary.
(2) Michael A. Mahoney is the Manager of Applications Engineering of SSI.
(3) Steven Chan is the Manager of Image Processing of SSI.
(4) Fred M. Houston is the Marketing Manager of SSI.
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered hereby on
behalf of the Selling Stockholders. All expenses of the registration of
securities in connection with the registration of the shares offered hereby are
to be borne by the Company, except that the Selling Stockholders will pay
underwriting discounts, selling commissions, and fees and expenses, if any, of
counsel or other advisers to the Selling Stockholders.
The distribution of the shares of Common Stock by the Selling Stockholders
(or their respective donees and pledgees) may be effected from time to time in
one or more transactions (which may involve block transactions) in the
over-the-counter market (including the Nasdaq National Market) or any exchange
on which the Common Stock may then be listed, in negotiated transactions,
through the writing of options on shares (whether such options are listed on an
options exchange or otherwise), or a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders (or
their respective donees and pledgees) may effect such transactions by selling
shares to or through broker-dealers, and such broker-dealer may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or purchasers of shares for whom they may act
as agent (which compensation may be in excess of customary commissions). The
Selling Stockholders (or their respective donees and pledgees) may also sell
such shares of Common Stock pursuant to Rule 144 promulgated under the
Securities Act, or may pledge shares as collateral for margin accounts and such
shares could be resold pursuant to the terms of such accounts. The Selling
Stockholders and any broker-dealers that act in connection with the sale of the
Common Stock might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act and any commission received by them and any profit
on the resale of the shares of Common Stock as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
-13-
<PAGE>
Because the Selling Stockholders may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act, the Selling Stockholders
will be subject to prospectus delivery requirements under the Securities Act.
Furthermore, in the event of a "distribution" of the shares, such Selling
Stockholders, any selling broker or dealer and any "affiliated purchasers" may
be subject to Regulation M under the Exchange Act, which Regulation prohibits,
with certain exceptions, any such person from bidding for or purchasing any
security which is the subject of such distribution until his participation in
that distribution is completed. In addition, Regulation M under the Exchange Act
prohibits, with certain exceptions, any "stabilizing bid" or "stabilizing
purchase" for the purpose of pegging, fixing or stabilizing the price of Common
Stock in connection with this offering.
The Selling Stockholders have agreed with the Company not to effect any
sale or distribution of Common Stock (i) during any period that is designated by
Zygo as "restricted" under Zygo's normal policies governing sales of Common
Stock by its directors, officers and employees, (ii) until after financial
results covering at least thirty (30) days of combined operations of Zygo and
SSI after August 19, 1997 are published, and otherwise during any period of time
or in a manner which would call into question the accounting treatment of Zygo's
acquisition of SSI as a "pooling of interests" or (iii) within thirty (30) days
prior to the anticipated effective date of any registration statement covering
the distribution of any shares of Common Stock or within ninety (90) days after
the effective date of such registration statement or, to the extent the
registration statement relates to an underwritten public offering, such greater
period of time as the underwriters request as being applicable to Zygo's
officers and directors (but in no event greater than one hundred and twenty
(120) days).
In order to comply with certain state securities laws, if applicable, the
Common Stock will not be sold in a particular state unless the Common Stock has
been registered or qualified for sale in such state or an exemption from
registration or qualification is available and complied with.
LEGAL MATTERS
Legal matters relating to the Common Stock have been passed upon for the
Company by Fulbright & Jaworski L.L.P., New York, New York 10103. Paul Jacobs, a
partner in Fulbright & Jaworski L.L.P., is Secretary of the Company and, as of
November 1, 1997, beneficially owned 15,000 shares of Common Stock.
EXPERTS
The audited financial statements incorporated by reference in this
Prospectus and elsewhere in the Registration Statement have been audited by KPMG
Peat Marwick LLP, independent certified public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
-14-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses payable by the Registrant in connection with the issuance and
distribution of the securities being registered (other than underwriting
accounts and commissions) are estimated to be as follows:
SEC Registration Fee..................................... $ 2,004
Accountants' Fees and Expenses........................... 2,000*
Legal Fees and Expenses.................................. 25,000*
Miscellaneous............................................ 3,000*
-------
Total.............................................. $32,004*
=======
- ----------
* estimated
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article VI of the By-Laws
of the Registrant contains provision for the indemnification of directors,
officers and employees within the limitations permitted by Section 145. In
addition, the Company has entered into Indemnity Agreements with its directors
and officers which provide the maximum indemnification allowed by Section 145.
The Company's officers and directors are insured against losses arising from any
claim against them as such for wrongful acts or omissions, subject to certain
limitations.
Item 16. EXHIBITS
5 Opinion of Fulbright & Jaworski L.L.P. regarding legality.
23 (a) Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5).
(b) Consent of KPMG Peat Marwick LLP
24 Power of Attorney (on signature page).
II-1
<PAGE>
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 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;
(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;
(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 section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be 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 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 of the Registrant in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Middlefield, State of Connecticut, on November 17,
1997.
ZYGO CORPORATION
By: /s/ GARY K. WILLIS
----------------------------------------
(Gary K. Willis, President and CEO)
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints GARY K. WILLIS and MARK J. BONNEY, 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 all documents in connection therewith, with the Securities
and Exchange Commission, granting said attorney-in-fact and agent 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 and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-3
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/GARY K. WILLIS President, Chief Eexecutive
- ------------------------ Officer, and Director
(Gary K. Willis) (Principal Executive Officer) November 17, 1997
/s/MARK J. BONNEY Vice President, Finance and November 17, 1997
- ------------------------ Administration, Treasurer and
(Mark J. Bonney) Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/PAUL F. FORMAN Chairman of the Board November 17, 1997
- ------------------------
(Paul F. Forman)
/s/MICHAEL A. CORBOY Director November 17, 1997
- ------------------------
(Michael A. Corboy)
/s/SEYMOUR E. LIEBMAN Director November 17, 1997
- ------------------------
(Seymour E. Liebman)
/s/ROBERT G. McKELVEY Director November 17, 1997
- ------------------------
(Robert G. McKelvey)
/s/PAUL W. MURRILL Director November 17, 1997
- ------------------------
(Paul W. Murrill)
/s/JOHN R. ROCKWELL Director November 17, 1997
- ------------------------
(John R. Rockwell)
/s/ROBERT B. TAYLOR Director November 17, 1997
- ------------------------
(Robert B. Taylor)
/s/CARL A. ZANONI Director November 17, 1997
- ------------------------
(Carl A. Zanoni)
II-4
<PAGE>
EXHIBIT INDEX
Item 16. EXHIBITS
5 Opinion of Fulbright & Jaworski L.L.P. regarding legality.
23 (a) Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5).
(b) Consent of KPMG Peat Marwick LLP
24 Power of Attorney (on signature page).
Exhibit 5
FULBRIGHT & JAWORSKI
L.L.P.
A REGISTERED LIMITED LIABILITY PARTNERSHIP
666 FIFTH AVENUE
NEW YORK, NEW YORK 10103-3198
HOUSTON
WASHINGTON, D.C.
AUSTIN
SAN ANTONIO
DALLAS
TELEPHONE: 212/318-3000 NEW YORK
FACSIMILE: 212/752-5958 LOS ANGELES
LONDON
WRITER'S DIRECT DIAL NUMBER: HONG KONG
November 18, 1997
Zygo Corporation
Laurel Brook Road
Middlefield, Connecticut 06455-0448
Dear Sirs:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement"), filed by Zygo Corporation (the "Company") on behalf of certain
selling stockholders (the "Selling Stockholders") with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
287,400 shares of the Company's Common Stock, $.10 par value (the "Shares").
As counsel for the Company, we have examined such corporate records,
documents and such questions of law as we have considered necessary or
appropriate for the purposes of this opinion and, upon the basis of such
examination, advise you that in our opinion the Shares will be legally issued,
fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and the reference to this firm under the caption "Legal Matters" in
the prospectus contained therein and elsewhere in the Registration Statement and
prospectus. This consent is not to be construed as an admission that we are a
party whose consent is required to be filed with the Registration Statement
under the provisions of the Securities Act of 1933, as amended.
Very truly yours,
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Stockholders of
Zygo Corporation:
We consent to the use of our reports incorporated herein by reference and
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Hartford, Connecticut
November 12, 1997
