SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 2 to Form 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
X SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended August 29, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from ________________ to
Commission File No. 0-45
SHELDAHL, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0758073
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1150 Sheldahl Road
Northfield, MN 55057
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (507) 663-8000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.25 par value
Preferred Stock Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES: X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. X
The aggregate market value of shares held by non-affiliates was approximately
$172,000,000 on November 6, 1997, when the last sales price of the
Registrant's Common Stock, as reported in the Nasdaq National Market System,
was $19.00.
As of November 6, 1997, the Company had outstanding 9,045,480 shares of Common
Stock, $.25 par value.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's definitive proxy statement for its annual meeting to
be held January 8, 1997, are incorporated by reference in Part III of this
Form 10-K.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
is hereby amended to include the following information pursuant to Item 701 of
Regulation S-K:
On August 19, 1997, the Board of Directors of the Company authorized a
private placement of its newly created Series B Convertible Preferred Stock,
$1.00 par value per share, and Warrants (the Warrants) to purchase shares of
the Company's Common Stock, $.25 par value per share (the Preferred Stock), to
a group of five accredited investors (the Investors). The Board also
authorized granting the Investors certain registration rights with regard to
the shares of Common Stock underlying the Preferred Stock and the Warrants.
The closing of the private placement occurred on August 29, 1997. Based on
the manner of sale and representations of the Investors, all of which were
accredited, the Company believes that pursuant to Rule 506 of Regulation D,
the private placement was a transaction not involving any public offering
within the meaning of section 4(2) of the Securities Act of 1933, as amended,
and was, therefore, exempt from the registration requirements thereof.
Preferred Stock.
The Company sold an aggregate of 15,000 shares of the Preferred Stock to
the Investors for an aggregate purchase price of $15,000,000, pursuant to the
Convertible Preferred Stock Purchase Agreement among the Company and the
Investors (the Agreement). Pursuant to the terms of the Agreement, the
Company has the right, subject to the satisfaction of certain conditions, to
require the Investors to purchase shares of Series C Convertible Preferred
Stock, par value $1.00 per share, with terms identical to the Preferred Stock
(Series C Preferred Stock), for an aggregate additional purchase price of up
to $15,000,000. If the Company exercises its right to sell any shares of the
Series C Preferred Stock, it may not sell less than $1,000,000 worth of the
Series C Preferred Stock.
The Preferred Stock is entitled to 5% dividends, payable upon
conversion, in shares of Common Stock or cash, at the option of the Company.
The Preferred Stock is convertible into shares of the Company's Common Stock
at any time. Each holder of Preferred Stock is entitled to convert each share
of Preferred Stock into that number of shares of Common Stock that equals
$1,000 plus accrued dividends divided by the Conversion Price. The Conversion
Price is (1) the lesser of 110% of the average per share market value of the
Company's Common Stock for five (5) business days immediately preceding August
28, 1997, or (2) 101% of the average of the five lowest consecutive per share
market values during the thirty (30) business days immediately preceding the
conversion date. The Conversion Price is subject to adjustment for certain
dilution and market price events.
Under certain circumstances, when the Company's Common Stock trades at
less than $20 per share for ten (10) consecutive business days, the conversion
rights of the holders of the Preferred Stock are limited pursuant to the
Agreement.
The Company may require holders of Preferred Stock to convert to Common
Stock provided that the Company's Common Stock trades at certain pre-set price
levels. The Company may also redeem the Preferred Stock under certain
circumstances. The Company is obligated to redeem the Preferred Stock, at the
option of the holders, in the event the Company defaults under certain
obligations which are part of the terms of the Preferred Stock.
Pursuant to the terms of the Agreement, the Company's Chief Executive
Officer and Vice President, Finance have executed a lock-up agreement,
pursuant to which each of them committed not to sell more than 10% of the
shares of the Company's Common Stock beneficially owned by him for a period of
forty-five (45) days following August 29, 1997, and for the forty-five (45)
day period following any closing for the Series C Preferred Stock. The Lock
Up period expires prior to the end of the 45-day period if a registration
statement covering the Preferred Stock and Warrants or Series C Preferred, as
the case may be, is declared effective. The Lock-Up Agreements exclude the
exercise and sale of shares issued to the officers under the Company's stock
option or similar plans.
The Agreement between the Company and the Investors, and the Certificate
of Designation for the Preferred Stock, are incorporated herein by reference
as Exhibits 4.1 and 4.2 to the Company's Report on Form 8-K filed on September
10, 1997. The foregoing description of the Agreement and the Preferred Stock
does not purport to be complete and is qualified in its entirety by reference
to such exhibits.
Warrant.
In connection with the issuance of the Preferred Stock, the Company also
granted to each Investor a Warrant to purchase shares of the Company's Common
Stock. The aggregate amount of shares of Common Stock the Company is
obligated to issue under the Warrants is 67,812 at an exercise price of $27.65
per share. The form of Warrant issued by the Company to the Investors is
incorporated herein by reference as Exhibit 4.3 to the Company's Report on
Form 8-K filed on September 10, 1997.
Registration Rights.
The Company granted the Investors certain registration rights. The
registration rights cover all shares of Common Stock issuable to the Investors
upon conversion of the Preferred Stock, whether Series B or Series C, and upon
exercise of the Warrants. The Company is obligated to file a shelf
Registration Statement within twenty-five (25) days of August 29, 1997 on Form
S-3. If the Company issues to the Investors any Series C Preferred Stock, the
Company is obligated to file an additional shelf Registration Statement within
twenty-five (25) days of the closing date for the sale of such Series C
Preferred Stock.
The Registration Rights Agreement between the Company and the Investors
specifying the terms of the registration rights is incorporated herein by
reference as Exhibit 4.4 to the Company's Report on Form 8-K filed on
September 10, 1997. The foregoing description of the Registration Rights
does not purport to be complete and is qualified in its entirety by reference
to such Exhibit.
Use of Proceeds.
The proceeds from the private placement will be used by the Company to
pay expenses associated with operations at the Longmont Facility and for
capital expenditures. The Company will not receive any proceeds from the
resale of the shares of Common Stock issuable to the Investors upon conversion
of the Preferred Stock. If the Warrants are exercised in full, the Company
will receive approximately $1,875,000. Such amount is intended to be used by
the Company for working capital purposes. There can be no assurance, however,
that the Warrants will be exercised.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: November 4, 1998 SHELDAHL, INC.
By: /s/James E. Donaghy
James E. Donaghy
Chief Executive Officer
By: /s/Edward L. Lundstrom
Edward L. Lundstrom
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant on November 4, 1998 and in the capacities indicated.
(Power of Attorney)
Each person whose signature appears below constitutes and appoints James
E. Donaghy and John V. McManus as such person's true and lawful
attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubmission, for such person and in such person's name,
place and stead, in any and all capacities, to sign any of all amendments to
this Annual Report on Form 10-K 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, each
acting alone, 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 such person might or could do in person,
hereby ratifying and confirming all said attorneys-in-fact an agents, each
acting alone, or such person's substitute or substitutes may lawfully do or
cause to be done by virtue thereof.
By * Chairman of the Board and Director
James S. Womack
By /s/ James E. Donaghy Chief Executive Officer and
James E. Donaghy Director (principal executive officer)
By * President
Edward L. Lundstrom
By /s/ John V. McManus Vice President - Finance
John V. McManus (principal financial & accounting officer)
By * Director
John G. Kassakian
By * Director
Gerald E. Magnuson
By * Director
William B. Miller
By * Director
Kenneth J. Roering
By * Director
Richard S. Wilcox
By * Director
Beekman Winthrop
By /s/ John V. McManus
John V. McManus
Attorney-in-fact
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