As filed with the Securities and Exchange Commission on April 9, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
________________________
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, Minnesota 55057
(507) 663-8000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
______________________
Edward L. Lundstrom
President and Chief Executive Officer
Sheldahl, Inc.
1150 Sheldahl Road
Northfield, Minnesota 55057
(507) 663-8000
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
COPIES TO:
Charles P. Moorse, Esq.
Kristin L. Johnson, Esq.
Lindquist & Vennum P.L.L.P.
4200 IDS Center
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
Fax: (612) 371-3207
Approximate date of commencement of proposed sale to public: As soon
as practicable 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.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Maximum Maximum
Class of Amount Offering Aggregate Amount of
Securities to to be Price per Offering Registration
be Registered Registered Share(1) Price Fee(1)
Common Stock, 1,592,160 $5.50 $8,756,880 $2,435
$.25 par value
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and based on the average of the high and low sales
prices for the Registrant's Common Stock on April 8, 1999 as reported on the
Nasdaq National Market.
__________________________________
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 that 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>
SHELDAHL, INC.
1,592,160 Shares of
Common Stock
These shares of our common stock are being sold by the 51 selling
shareholders listed on page 12, or their transferees, pledgees, donees or
other successors in interest. We will not receive any part of the proceeds
from the sale.
Our common stock is listed on the Nasdaq National Market under the symbol
"SHEL". The reported last sale price of the common stock on April 8, 1999,
was $5.75 per share.
This investment involves a high degree of risk. See "Risk Factors"
beginning on page 3.
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved or disapproved these securities, or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary
is a criminal offense.
April 9, 1999
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus
and in documents incorporated herein by reference.
About Sheldahl
Sheldahl is a leading producer of high quality flexible printed
circuitry and laminate materials, principally for sale to the automotive
electronics and data communication markets. Flexible circuitry is used to
provide electrical connection between components and electronic systems and
also as a substrate to support electronic devices. Flexible circuits consist
of polyester or polyimide film to which copper is adhered to and processed
through various imaging, etching and plating processes. Flexible circuits
can be further processed by surface mount attachment of electronic components
to produce an interconnect assembly. Flexible circuits provide advantages
over rigid printed circuit boards by accommodating packaging contour and
motion and reducing size and weight.
In 1994, Sheldahl began to invest and extend its manufacturing process
capabilities towards the production of flexible circuits that offer greater
circuitry density. This product line utilized our patented Novaclad material
and we are marketing it to integrated circuit (IC) OEM and package
assemblers. We created the Micro Products business to market and sell this
Novaclad-based material under the trade names ViaThin and ViaArray targeted
for use in ball grid array (BGA) IC packages. Production for these products
originates in our Longmont, Colorado facility.
Sheldahl was incorporated in 1955 under the laws of the State of
Minnesota. Our principal executive offices are located at 1150 Sheldahl
Road, Northfield, Minnesota 55057 and our telephone number is (507) 883-6000.
The Offering
The selling shareholders are offering 1,592,160 shares of common stock.
These shares are issuable upon conversion of shares of Series E convertible
preferred stock and upon exercise of warrants issued by Sheldahl in a private
placement on February 26, 1999 and when issued will represent 12.49% of our
outstanding common stock.
Common stock offered by the selling shareholders 1,592,160
Common stock outstanding as of March 31, 1999 11,152,588
Nasdaq National Market Symbol SHEL
Use of Proceeds
Sheldahl will not receive any proceeds from the sale of the common
stock. See "Use of Proceeds."
Risk Factors
This offering involves certain investment risks. See "Risk Factors."
<PAGE>
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. The risks described below are not the only ones that we
face. Our business, operating results or financial condition could be
materially adversely affected by any of the following risks. The trading
price of our common stock could decline due to any of these risks, and you
may lose all or part of your investment. You should also refer to the other
information included or incorporated by reference in this prospectus,
including our financial statements and related notes.
Our Cash Flow is Minimal and We May Need Additional Financing
_______________
We anticipate, although there can be no assurance, that continued
improved performance of our existing Interconnect and Materials business in
our Northfield, Minnesota facilities, along with reduced capital spending, a
strengthened balance sheet from the proceeds of the Series E Preferred Stock
and our existing credit facility will provide adequate liquidity to fund
operations. If our Interconnect and Materials business in Northfield do not
continue to improve, or if anticipated sales revenue from Micro Products is
not achieved by the first quarter of fiscal 2000, our liquidity position
would significantly deteriorate so that existing debt capacity would be
reduced to minimal levels within twelve months. Therefore, if we do not
achieve our projected operating results, or if we do not have borrowings
available under our current credit and security agreement, we believe that we
would have to seek other options such as issuing additional new debt or
additional new equity financing. There can be no assurance, however, that we
will be able to issue any debt successfully or raise capital on terms
acceptable to us.
We have dedicated approximately $4.6 million of our expected cash flow
to fund restructuring charges taken over the last twelve months to pay for
employee separation costs, thereby negatively impacting our cash flow.
During the second half of fiscal 1999, we are projecting sales levels to
increase as our Longmont facility, the principal manufacturing site for our
Micro Products business, generates greater sales volume resulting in funds to
cover an increasing portion of fixed costs and improve cash flow thus
reducing the growth in our debt financing. We can not give assurance,
however, that we will achieve projected sales levels during the second half
of fiscal 1999 and into fiscal 2000.
Our Operations Depend on the Acceptance of Our New Micro Products By the Data
Communications Market IC Packaging Segment
_______________
Sheldahl's future operating results and growth in net sales depend
significantly upon the anticipated data communication market IC packaging
segment's acceptance of Novaclad-based ViaArray and ViaThin products which
our Micro Products business markets. Although we believe that these products
have attractive performance characteristics as well as utility in a
potentially broad range of products, their sales will depend on our ability
to:
- - convince potential customers that the advantages and applications
of the products justify the expense and production changes necessary to
incorporate them into the customer's manufacturing process;
- - work with designers of integrated circuit ("IC") packages and
electronics to incorporate the products;
- - qualify our products within the customer's design cycle time
requirements so that the customer can include them within their
products;
- - produce sufficient quantities of the product at industry quality
standards and deliver to customers in a timely manner.
As we have experienced in the past, any failure or significant delay in
qualifying, producing, marketing and selling these products could have a
material adverse effect on our business and financial performance until we
achieve efficient volume production and related sales revenue.
Delay in the Utilization of Our Longmont Facility Continues to Adversely
Impact our Financial Condition
_______________
During the first six months of fiscal 1999, the Micro Products business
resulted in a pretax loss prior to restructuring charges of $9.2 million. We
have experienced and will continue to experience a significant adverse
financial impact with respect to developing the Micro Products business. In
1998, the Micro Products business resulted in a pretax loss prior to
restructuring costs and impairment charges of $19.4 million as compared with
a $15.5 million and $6.0 million loss in 1997 and 1996, respectively. We
expect such significant losses to continue until Longmont achieves efficient
volume production and related sales revenue results. As of February 26,
1999, Longmont is operating at less than 10% of stated production capacity
with projected breakeven gross margin at 45% of factory utilization, or some
$24 million to $26 million of annual revenue of ViaThin and ViaArray
products. We do not expect breakeven volume at Longmont until the first
quarter of fiscal 2000 at the earliest, and the fourth quarter of fiscal 2000
at the latest. Investors should be aware that validation problems or other
difficulties may materialize once full volume production has commenced, and
we may not be able to achieve breakeven production in the time specified, or
at any time.
As of the date of this prospectus, Texas Instruments and Vitesse
Semiconductor have qualified ViaThin substrates for their operations. We
have begun shipping small volume production orders to these customers, and we
expect that their initial orders will lead to larger orders from these and
other customers as demonstrated by new designs and prototype orders currently
in process from these and other customers. We can give no assurance,
however, that such future orders will occur.
We Depend Significantly on the Automotive Market
_______________
Our sales to the automotive market as a percentage of our total sales
were approximately 67.5% in fiscal 1997, 68.7% in fiscal 1998 and 68.7% for
the first half of fiscal 1999. In addition, our customer base is
concentrated with our ten largest customers for fiscal 1998 accounting for
approximately 64.1% of our net sales. During fiscal 1998, 15.4% of our net
sales were to Motorola, Inc., 10.2% were to Ford Motor Company and 10.3% were
to Siemens, essentially all for automotive end-use applications. We expect
that for the foreseeable future, sales to a relatively small number of
customers will continue to account for a significant portion of our
automotive sales. Therefore, the loss of, or a significant decline in orders
from, one or more of our key customers could have a material adverse effect
on our business, results of operations and financial condition. As a result,
our business is directly dependent upon the conditions in the automotive
industry and fluctuates as automotive manufacturers begin production of new
models and end production of others. Accordingly, any decrease in the number
of the Company's electronic components included in new models could have a
material adverse effect on our results of operations. For example, during
the fourth quarter of fiscal 1998, our sales to the automotive market were
adversely impacted by the General Motors strike by approximately $2.0
million. In addition, as the automotive industry continues to reduce the
number of qualified suppliers and demand higher performance products at a
lower cost, we can not be certain that we will be able to maintain our
current sales volumes at existing profit margins to automotive manufacturers
and their suppliers.
Rapid Technological Change Could Render Our Products Obsolete
_______________
We supply the majority of component products to customers in the
automotive electronic and data communication markets which are characterized
by rapid technological change and new product introductions and enhancements.
Our future success in these markets will depend upon our ability to:
- - work closely with manufacturers to design end products or
applications which incorporate our products and achieve market
acceptance;
- - develop technologies to meet the evolving market requirements of
our customers;
- - continue to deliver high-performance, cost-effective products;
and expand our sales and marketing efforts domestically and internationally.
We can give no assurance, therefore, that we will continue to meet the
current qualification requirements of our major customers, meet the new
qualification requirements imposed by our customers or continue to be
selected as a supplier by new customers.
Our Business Requires Us to Make Significant Capital Expenditures Which We
May Not Recover
_______________
Our business is capital intensive. For example, in the past four and a
half years, we have invested approximately $116 million in total capital
expenditures, including $66 million in our Longmont facility. To remain
competitive, we must continue to make significant expenditures for capital
equipment, expansion of operations and research and development. Although we
have had some initial success introducing our Novaclad-based products,
further penetration is required. In order to accomplish such, we may need to
make additional capital investments to increase manufacturing capacity before
deriving sufficient positive cash flow from our initial investment in the
Longmont facility. Presently, capital expenditure plans in fiscal 1999 are
planned at $7 million, significantly lower than in the recent past. Reduced
capital spending, along with anticipated improving cash flow from operations,
funds available under our credit and security agreement, and proceeds from
the sale of the Series E preferred stock are expected to provide adequate
funds to meet our capital needs. There can be no assurance, however, that we
will have adequate funds to support our capital expenditure plans beyond
fiscal 1999.
We Rely on Patents, Trademarks and Proprietary Rights to Protect Our Products
_______________
We are aware of a patent which may cover certain plated through holes
of double-sided circuits made of our Novaclad material. Currently, the
holder has not made any claims against us under this patent. However, the
patent owner may attempt to construe the patent broadly enough to cover our
current or future manufacture of Novaclad-based products. We believe that
prior commercial art and conventional technology, including certain Company
patents exist which would allow us to prevail in the event any such claim is
made under this patent. Any action commenced by or against Sheldahl could be
time consuming and expensive and could result in requiring us to enter into a
license agreement or cease manufacture of any products ultimately determined
to infringe such patent.
Certain Anti-Takeover Provisions May Discourage Transactions In Our Stock
_______________
The Company's Articles of Incorporation and the Minnesota Business
Corporation Act include certain "anti-takeover" provisions. These
provisions, including the power to issue additional stock and to establish
separate classes or series of stock, may, in certain circumstances, deter or
discourage takeover attempts and other changes in control of the Company not
approved by the Board.
In June of 1996, the Sheldahl Board of Directors adopted a Rights
Agreement commonly called a poison pill. According to the terms of the
Rights Agreement, we issued one right in respect of each share of our common
stock outstanding. Such rights also attach to each share of common stock
issued subsequent to the adoption of the Rights Agreement, including the
shares offered. Each right entitles the holder to purchase a fraction of a
share of our Series A Preferred Stock or, in certain instances, our common
stock or the stock of a third party or group (an "acquiring person") in the
event that (i) an acquiring person acquires beneficial ownership of 15% or
more of the common stock or (ii) a tender offer or exchange offer that would
result in a person or group becoming an acquiring person is commenced.
On July 30, 1998, we amended Section 1(a) of the Rights Agreement to
provide that when applied to Molex Incorporated and any of its affiliated
parties the 15% threshold for beneficial ownership shall be 22%. We
increased this threshold with respect to Molex in connection with Molex's
investment in our Series D Preferred Stock private placement of July 1998
which otherwise would have resulted in Molex triggering provisions of the
Rights Agreement. The Rights Agreement remains in effect through June 2006
and could discourage tender offers or other transactions which could result
in our shareholders receiving a premium over the market price of common
stock.
This Prospectus contains and incorporates by reference certain
forward-looking statements based on current expectations which involve risks
and uncertainties. Actual results and the timing of certain events may
differ materially from those projected in such forward-looking statements due
to a number of risk factors, including those set forth below. The Company
has tried, wherever possible, to identify these forward-looking statements by
using words such as "believe," "anticipate," "estimate," "expect" and
similar expressions. The Company undertakes no obligation to release
publicly the results of any revisions to any such forward-looking statements
that may be made to reflect events or circumstances after the date of this
Prospectus or to reflect the occurrence of unanticipated events.
<PAGE>
THE COMPANY
See "Risk Factors" for information prospective investors should
consider. Novaclad(R), Novaflex(R), ViaThin(TM), ViaArray(R), and
Novaflex(R) VHD are registered trademarks of the Company.
Sheldahl is a leading producer of high quality flexible printed
circuitry and laminate materials, principally for sale to the automotive
electronics and data communication markets. Flexible circuitry is used to
provide electrical connection between components and electronic systems and
also as a substrate to support electronic devices. Flexible circuits consist
of polyester or polyimide film to which copper foil is laminated and
processed through various imaging, etching and plating processes. Flexible
circuits can be further processed by surface mount attachment of electronic
components to produce an interconnect assembly. Flexible circuits provide
advantages over rigid printed circuit boards by accommodating packaging
contour and motion and reducing size and weight.
Over the past four and a half years, we have introduced high
performance products based on proprietary thin film laminate technology:
ViaArray and ViaThin (high-density substrates). ViaArray, a higher-value
form of Novaclad, has predrilled small holes (vias) that allow printed
circuit manufacturers to produce interconnects to meet the changing need of
the market. We use ViaArray to manufacture chip-carrier substrates (ViaThin)
primarily for IC packages. These Novaclad-based products provide substantial
benefits compared to traditional flexible circuits and IC substrates,
including the capability for very fine circuit traces (down to 1 mil, or .001
inch) as well as greater heat tolerance and dissipation. We designed these
products to enable IC manufacturers to package future generations of ICs
economically by attaching the silicon die to ViaThin or high-density
substrates manufactured by other circuitry manufacturers using our Novaclad
or ViaArray products. As ICs are becoming increasingly powerful, they
produce more heat and require a greater number of connections to attach the
silicon die, placing substantially greater demands on IC packaging materials.
These products support the industry's drive for increasing functional
performance at a decreasing cost per function. Additionally, Novaclad is
used to manufacture our Novaflex VHD and Novaclad HD product lines. Novaclad
and Novaclad-based products accounted for $25.2 million or 21.5% of our net
sales in fiscal 1998.
Through February 26, 1999, we have invested approximately $66 million
in an advanced new production facility in Longmont, Colorado to produce
ViaArray and ViaThin products in commercial volumes. As of November 1995, we
anticipated investing approximately $38 million in the Longmont Facility.
Changes in the product characteristics of high density substrates relating to
precious metal plating, solder mask overcoat and testing, plus the
installation of assembly equipment not originally anticipated, significantly
increased the original investment to bring the Longmont Facility on line.
Recent purchases of land and equipment needed to increase originally
anticipated capacity also contributed to the total investment in the Longmont
Facility.
We originally expected to commence production in our Longmont facility
in April 1996. However, due to its own financial difficulties, one of our
suppliers, Micro Plating Systems, Inc., delivered certain production
equipment much later than initially scheduled and subsequently exceeded our
anticipated installation period. In order to improve the design and
delivery of future key production equipment, we have identified additional
equipment suppliers. In addition to equipment problems, a more rigorous and
lengthy process qualification and product acceptance by our customers as well
as our customer's customers further delayed the facility's realization of
full volume production. As of the date hereof, however, Texas Instruments
and Vitesse Semiconductor have qualified ViaThin substrates for their
operations. We have begun shipping small volume production orders to these
customers, and we expect that their initial orders will lead to larger orders
from these and other customers as demonstrated by new designs and prototype
orders currently in process from these and other customers. As of February
26, 1999, the Longmont Facility is operating at less than 10% of stated
production capacity with projected breakeven at 45% of factory utilization or
some $24 million to $26 million of annual revenue of ViaThin and ViaArray
products. Breakeven volume at Longmont is not expected until the first
quarter of fiscal 2000 at the earliest, and the fourth quarter of fiscal 2000
at the latest.
YEAR 2000 ISSUES
Year 2000 Disclosure. The Year 2000 issue is the result of computer
programs being written using two digits rather than four to define the
applicable year. Our computer equipment, software, devices and products with
imbedded technology that are time-sensitive may recognize a date using "00"
as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including,
among other things, a shut down in our manufacturing operations, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities.
State of Readiness. We have undertaken various initiatives to evaluate
the Year 2000 readiness of our the products, the information technology
systems we use in operations ("IT Systems"), our non-IT systems, such as
power to its facilities, HVAC systems, building security, voicemail and other
systems, as well as the readiness of our customers and suppliers. We have
identified eleven Year 2000 target areas that cover the entire scope of our
business and have internally established teams committed to completing an 8-
step Compliance Validation Process ("CVP") for each target area. Each team
is expected to fully complete this process on or before September 1, 1999.
The table below identifies our target areas as well as the 8-step CVP with
our expected timeline. Sheldahl's Y2K teams are either complete or near
complete with Phase 1 of this process and progressing with Phase 2
remediation activities.
Year 2000 Target Areas
_______________
1. Business Computer Systems
2. Technical Infrastructure
3. End-User Computing
4. Manufacturing Equipment
5. Test Lab
6. Telecommunications
7. Research and Development
8. Logistics
9. Facilities
10. Customers
11. Suppliers/Key Service Providers
Compliance Validation Process:
Phase 1 - Expected Completion April 30, 1999
_______________
1. Team Formation
2. Inventory Assessment
3. Compliance Assessment
4. Risk Assessment
Phase 2 - Expected Completion September 1, 1999
_______________
1. Resolution/Remediation
2. Validation
3. Contingency Plan
4. Sign-Off Acceptance
With respect to our relationships with third parties, we rely both
domestically and internationally upon various vendors, governmental agencies,
utility companies, telecommunications service companies, delivery service
companies and other service providers. Although these service providers are
outside our control, we have has mailed letters to those with whom we believe
our relationships are material and have verbally communicated with some of
our strategic customers to determine the extent to which interfaces with such
entities are vulnerable to Year 2000 issues and whether products and services
purchased from or by such entities are Year 2000 ready. In February 1999 we
initiated a Business Partner Assessment Program focused on evaluating
customers and suppliers Year 2000 readiness to identify third parties that
imposed significant risk on Sheldahl. We intend to complete follow-up
activities, including but not limited to site surveys, phone surveys,
mailings and remediation assistance, with identified third parties as part of
the Phase 2 validation.
Costs to Address Year 2000 Issues. To date, the we have not incurred
any material expenditures in connection with identifying or evaluating Year
2000 compliance issues. We have incurred the majority of our costs from the
recent installation of a business computer system consisting primarily of the
Enterprise Requirements Planning (ERP) System as well as the opportunity cost
of time spent by our employees evaluating Year 2000 compliance matters
generally. Because we did not accelerate the installation of the ERP System,
we do not consider the costs related thereto to be charges for Year 2000
compliance. Presently, we estimate the cost of Year 2000 upgrades and
enhancements to our IT Systems and non-IT Systems to be less than $100,000.
We anticipate that these costs will be contained within our fiscal 1999
budget. At this time, we do not possess information necessary to estimate
the potential financial impact of Year 2000 compliance issues relating to our
vendors, customers and other third parties. Such impact, including the
effect of a Year 2000 business disruption, could have a material adverse
impact on our financial condition and results of operations.
Risks of Year 2000 Issues. Because we are still in the discovery and
evaluation phase of assessing our overall Year 2000 exposure, we cannot at
this time state with certainty that the Year 2000 issues will not have a
material adverse impact on our financial condition, results of operations and
liquidity. Although we consider them unlikely, we believe that the following
several situations, not in any particular order, make up our "most
reasonably likely worst case Year 2000 scenarios":
1. Disruption of a Significant Customer's Ability to Accept Products
or Pay Invoices.
Our significant customers are large, well-informed customers, mostly in
the automotive field, who are disclosing information to their vendors
that indicates they are well along the path toward Year 2000
compliance. These customers have demonstrated their awareness of the
Year 2000 issue by issuing requirements of their suppliers and
indicating the stages of identification and remediation which they
consider adequate for progressive calendar quarters leading up to the
century mark. Our significant customers, moreover, are substantial
companies that we believe would be able to make adjustments in their
processes as required to cause timely payment of invoices. Because of
lengthy lead times in the industry, disruption of orders from Sheldahl
is not likely a problem. Any deliveries occurring in the first half of
2000 will be those resulting from orders placed in 1999, while any
disruptions of the order process early in 2000 will concern deliveries
made many months later, with adequate opportunity for correction (or
manual handling) of the order process before the timing becomes
critical.
2. Disruption of Supply Materials.
Recently, we began a process of surveying our vendors for public
disclosures in regards to their Year 2000 readiness and are now in the
process of assessing and cataloging these disclosures. We expect to
work with vendors that provide inadequate disclosures or show a need
for remediation assistance. Where ultimate survey results show that
the need arises, we will arrange for back-up vendors before the
changeover date.
3. Disruption of the Company's IT Systems.
We are proceeding with a scheduled upgrade of our current hardware and
software IT systems to state-of-the-art systems and such process has
required Year 2000 compliance in the various invitations for proposals.
Year 2000 testing is occurring as upgrades proceed and, in addition,
will occur after all upgrades are complete, sometime during fiscal
1999. For this reason, we consider that disruption of our IT Systems
is unlikely.
4. Disruption of the Company's Non-IT Systems.
We are completing a comprehensive assessment of all non-IT systems,
including among other things our manufacturing systems and operations,
with respect to both embedded processors and obvious computer control.
For some systems, upgrades are already completed or scheduled, and the
remaining non-compliant systems remediation needs are being planned.
Considering the nature of the equipment and systems involved, we expect
to complete any remediation efforts on a reasonably short schedule, and
in any case before arrival of the Year 2000. We also believe that,
after such assessment and remediation, if any disruptions do occur,
such will be dealt with promptly and will be no more severe with
respect to correction or impact than would be an unexpected breakdown
of well-maintained equipment.
5. De-Listing of Company as a Vendor to Certain Customers.
Several of our principal customers, through the intermediary of an
automotive industry information agency, have required updated reports
in the form of answers to an extensive multiple-choice survey on our
Year 2000 compliance efforts. According to these customers, failure to
reply to the readiness survey would have led to de-listing as a
supplier at the present time, resulting in possible current inability
to bid on procurements requiring deliveries two years or more in the
future. Although we did respond to these reports on a timely basis,
the substance of our answers to the readiness surveys have placed
Sheldahl in a "red" or "danger" zone with respect to those
customers' guidelines. One of our two largest customers involved in
the efforts of the independent audit agency had also already presented
a survey directly to Sheldahl, and as a result had arranged at its own
expense for an independent audit of our Year 2000 readiness. The
independent audit agency had reported, in the third quarter of fiscal
1998, that although Sheldahl's level of readiness placed us in the
"red" or "danger" category, we (i) were proceeding rapidly with its
evaluation and remediation efforts, (ii) were expected to reach the
ultimate compliance goals of the survey in adequate time, and (iii)
should not be considered a risk to the customer's sources of supply. In
December 1998, Sheldahl was re-audited by a Remediation Assistance
Program consultant on behalf of this customer. At the conclusion of
this audit the consultant recommended that Sheldahl's Year 2000
Readiness be upgraded to a "medium level of risk" from the previous
high level of risk ("red zone"). Furthermore, the consultant noted
that in reviewing Sheldahl's "Y2K plan against the goals of the
remediation assistance process, the assessor could not find any gaps or
areas of recovery that were not covered or considered." We expect but
cannot guarantee that responses from other customers will be similar.
In addition, we do not know whether other customers' expectations will
or will not be as stringent as those referred to above and whether our
current schedule will meet or exceed such expectations.
Contingency Plans. While we recognize the need for contingency
planning, we have not yet developed any specific contingency plans for
potential Year 2000 disruptions. The aforementioned 8-step Compliance
Validation Process, however, does include contingency planning by each team
and we will review such plans as developed. We do anticipate developing
contingency plans for our most critical areas, but details of such plans will
depend on our final assessment of the problem as well as the evaluation and
success of our remediation efforts. Future disclosures will include
contingency plans as they become available.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered in
this prospectus by the selling shareholders. With respect to the proceeds
from the private placement of the Series E shares, see "Recent Developments
- -- Series E Preferred Stock; Use of Proceeds." If the warrants are
exercised in full, we will receive $668,750. We intend to use such amount
for working capital purposes. We can give no assurance, however, that
investors will exercise any of the warrants.
SELLING SHAREHOLDERS
The shares of common stock offered in this prospectus by the selling
shareholders are issuable (i) upon conversion of the Series E preferred stock
held by the selling shareholders, (ii) as accrued dividends on the Series E
preferred stock and (iii) upon the exercise of outstanding warrants held by
the selling shareholders. A total of 8,560 shares of Series E preferred
stock and warrants to purchase up to 85,600 shares of our common stock at an
exercise price of $7.8125 per share were issued to the selling shareholders
in connection with a private placement in February 1999. Through April 8,
1999, no shares of the Series E preferred stock have been converted.
The amount of common stock shown in the following table represents the
amount into which the 8,560 shares of Series E preferred stock might have
been converted on April 8, 1999 based on the conversion price of $6.25. The
amount of common stock shown in the table also includes 136,960 shares of
common stock representing accrued dividends for two years on the shares of
Series E preferred stock based on the $6.25 conversion price, as well as
85,600 shares of common stock issuable to the selling shareholders upon
exercise of the warrants:
Number
Common Stock of Shares Owned
Beneficially of Common After Offering
Owned Prior to Stock (1)(2)(3)
Selling Shareholder Offering Offered(1) Number Percent
Jerry D. Armstrong 42,561 9,300 33,261 *
Rex W. Bates Custodian for
Gabrielle A. T. Bates or
UGTMA 10,500 9,300 1,200 *
Rex W. Bates Custodian for
Amber L. Bates or UGTMA 10,300 9,300 1,000 *
Rex W. Bates Custodian for
Patricia A. Mattingley ACF
Jennifer Mattingley 17,300 9,300 8,000 *
Ray O. Brownlie 33,061 9,300 23,761 *
CPL Investments Partnership 9,300 9,300 0 *
John A. Fischer 21,911 4,650 17,261 *
Jessica Catherine Fish 3,720 3,720 0 *
McKenna Marie Fish 3,720 3,720 0 *
Edward M. Giles 99,521 18,600 80,921 *
Edward M. Giles IRA #1 111,481 18,600 92,881 *
Walter Giles 3,720 3,720 0 *
Richard A. Hassel 40,911 4,650 36,261 *
Isles Capital L.P. 31,600 18,600 13,000 *
Edward Kassakian 19,800 9,300 10,500 *
John G. and Wilma R.
Kassakian 55,408 4,650 50,758 *
W. Donald Larson 158,001 37,200 120,801 *
Dennis M. Mathisen (4) 605,433 69,750 535,683 4.1
Mark J. Mathisen 61,500 46,500 15,000 *
Peter M. Mathisen 61,500 46,500 15,000 *
Davis Merwin 142,641 18,600 124,041 *
Nicholson Boys LLP 18,600 18,600 0 *
Nicholson Family Foundation 9,300 9,300 0 *
Richard H. Nicholson 18,600 18,600 0 *
Todd S. Nicholson 18,600 18,600 0 *
Trust FBO Children of Todd
S. Nicholson 9,300 9,300 0 *
Mark Pyms & Christina Pyms 3,720 3,720 0 *
Benjamin Raker 26,561 9,300 17,261 *
Katherine Raker 13,281 4,650 8,631 *
Samuel Raker 26,561 9,300 17,261 *
RBSTB Nominees Limited 93,000 93,000 0 *
Kenneth J. Roering 68,321 9,300 59,021 *
Richard L. Shepley (5) 42,411 4,650 37,761 *
Carley Patricia Wilcox 1,860 1,860 0 *
Catherine Fish Wilcox 1,860 1,860 0 *
Charles William Wilcox 144,781 93,000 51,781 *
Charlotte Teresa Wilcox 283,742 93,000 190,742 1.48
Julia O'Brien Wilcox 55,800 55,800 0 *
Julia O'Brien Wilcox
Skip Trust 18,600 18,600 0 *
Julia Wilcox Skip Trust-B2 18,600 18,600 0 *
Kevin Garner Wilcox 35,861 18,600 17,261 *
Richard S. Wilcox, Jr. (6) 493,208 325,500 167,708 1.31
Richard S. Wilcox III 232,500 232,500 0 *
Richard S. Wilcox IV 1,860 1,860 0 *
Thomas Patrick Wilcox 127,521 93,000 34,521 *
6/17/42 Trust b/o
Beekman Winthrop 249,011 18,600 230,411 1.80
Beekman Winthrop
Birthday Trust 90,121 18,600 71,521 *
Dudley Winthrop WMI Trust 101,011 18,600 82,411 *
George Wood 52,451 9,300 43,151 *
Total Shares Offered 1,592,160
___________________________
* Less than 1%.
(1) Represents the maximum number of shares that may be sold by each
selling shareholder pursuant to this Prospectus; provided, however,
that pursuant to Rule 416 under the Securities Act of 1933, as amended,
the Registration Statement of which this Prospectus is a part shall
also cover any additional shares of common stock which become issuable
in connection with the shares registered for sale hereby by reason of
(i) any stock dividend, stock split, recapitalization or other
transaction effected without the receipt of consideration which results
in an increase in the Company's number of outstanding shares of common
stock. In the event Rule 416 is not available, the Company is
obligated to register such additional shares of common stock.
(2) Assumes the sale of all shares offered hereby to unaffiliated third
parties. The selling shareholders may sell all or part of their
respective shares.
(3) Assumes conversion of shares of Sheldahl's Series D convertible
preferred stock and exercise of warrants issued in connection with our
Series D preferred stock held by some of the selling shareholders.
(4) Includes 65,000 shares held by Marshall Financial Group, Inc. of which
Mr. Mathisen is President and sole shareholders and 30,000 shares held
by Mr. Mathisen's two minor sons. Mr. Mathisen disclaims beneficial
ownership of such shares.
(5) Includes 20,500 shares held by Mr. Shepley in his IRA.
(6) Includes 26,455 shares held by Mr. Wilcox in his IRA.
PLAN OF DISTRIBUTION
The selling shareholders may offer their shares at various times in one
or more of the following transactions:
- - on the Nasdaq National Market, where our common stock is listed;
- - in the over-the-counter market;
- - in transactions other than on such exchanges or in the over-the-counter
market;
- - in connection with short sales of the shares;
- - by pledge to secure debts and other obligations;
- - in connection with the writing of non-traded and call options, in hedge
transactions and in settlement of other transactions in standardized or
over-the-counter options; or
- - in a combination of any of the above transactions.
- - The selling shareholders may sell their shares at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices.
- - The selling shareholders may use broker-dealers to sell their shares.
If this happens, broker-dealers will either receive discounts or commissions
from the selling shareholders, or they will receive commissions from
purchasers of shares for whom they acted as agents.
LEGAL MATTERS
Our outside general counsel, Lindquist & Vennum P.L.L.P. of
Minneapolis, Minnesota, will issue an opinion about the legality of the
shares for us and the selling shareholders.
EXPERTS
The audited financial statements and schedule incorporated by reference
in this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
INDEMNIFICATION
Sheldahl's Articles of Incorporation eliminate or limit certain
liabilities of its directors and our Bylaws provide for indemnification of
directors, officers and employees of Sheldahl in certain instances. Insofar
as exculpation of, or indemnification for, liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling Sheldahl pursuant to the foregoing provisions, Sheldahl has been
informed that in the opinion of the Securities and Exchange Commission such
exculpation or indemnification is against public policy as expressed in the
Act and is therefore unenforceable.
WHERE YOU CAN FIND INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, DC, New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also
available to the public from our website at www.sheldahl.com or at the SEC's
website at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later information
that we file with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 until the selling shareholders sell all
the shares. This prospectus is part of a registration statement we filed
with the SEC (Registration No. 333-______).
- - Annual Report on Form 10-K for the fiscal year ended August 28, 1998;
- - Quarterly Reports on Form 10-Q for the fiscal quarters ended November
27, 1998 (as amended by Report on Form 10-Q/A on January 8, 1999) and
February 26, 1999;
- - Current Report on Form 8-K filed January 15, 1999;
- - Current Report on Form 8-K filed March 9, 1999;
- - Proxy Statement dated December 9, 1998 for the 1999 Annual Meeting of
shareholders on January 13, 1999.
- - The description of the Company's common stock contained in the
Company's Registration
- - Statement on Form S-3 filed with the Commission under the Exchange Act
on October 12, 1995, declared effective on November 15, 1995 (No. 33-63373),
and as such description is supplemented by Form 8-A, filed with the
Commission on June 21, 1996, and amended on July 30, 1998.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
John V. McManus
Vice President - Finance
Sheldahl, Inc.
1150 Sheldahl Road
Northfield, MN 55057
(507) 663-8000
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. The selling shareholders
will not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
any supplement is accurate as of any date other than the date on the front of
those documents.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14: Other Expenses of Issuance and Distribution*
SEC registration fee $ 2,435
Nasdaq listing fee 16,000
Accounting fees and expenses 2,000
Legal fees and expenses 2,500
Printing expenses 0
Blue Sky fees and expenses 0
Transfer agent and registrar fees 500
Miscellaneous 565
_______
Total $ 24,000
=======
__________________
*Except for the SEC registration fee and Nasdaq listing fee, all of the
foregoing expenses have been estimated.
ITEM 15: Indemnification of Directors and Officers
Section 302A.521 of Minnesota Statutes requires the Registrant to
indemnify a person made or threatened to be made a party to a proceeding by
reason of the former or present official capacity of the person with respect
to the Registrant, against judgments, penalties, fines, including reasonable
expenses, if such person (1) has not been indemnified by another organization
or employee benefit plan for the same judgments, penalties, fines, including,
without limitation, excise taxes assessed against the person with respect to
an employee benefit plan, settlements, and reasonable expenses, including
attorneys' fees and disbursements, incurred by the person in connection with
the proceeding with respect to the same acts or omissions; (2) acted in good
faith; (3) received no improper personal benefit, and statutory procedure has
been followed in the case of any conflict of interest by a director; (4) in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (5) in the case of acts or omissions occurring in
the person's performance in the official capacity of director or, for a
person not a director, in the official capacity of officer, committee member
or employee, reasonably believed that the conduct was in the best interests
of the Registrant, or, in the case of performance by a director, officer or
employee of the Registrant as a director, officer, partner, trustee, employee
or agent of another organization or employee benefit plan, reasonably
believed that the conduct was not opposed to the best interests of the
Registrant. In addition, Section 302A.521, subd. 3, requires payment by the
Registrant, upon written request, of reasonable expenses in advance of final
disposition in certain instances. A decision as to required indemnification
is made by a disinterested majority of the Board of Directors present at a
meeting at which a disinterested quorum is present, or by a designated
committee of the Board, by special legal counsel, by the shareholders or by a
court. The Registrant's Bylaws provide for indemnification of officers,
directors and employees to the fullest extent provided by Section 302A.521.
As permitted by Section 302A.251 of the Minnesota Business Corporation
Act, the Amended and Restated Articles of Incorporation of the Registrant
eliminate the liability of the directors of the Registrant for monetary
damages arising from any breach of fiduciary duties as a member of the
Registrant's Board of Directors (except as expressly prohibited by Minnesota
Statutes, Section 302A.251, subd. 4).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
provisions referenced in Item 15 of this Registration Statement 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 Securities 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
hereunder, 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 Securities Act and will be governed
by the final adjudication of such issue.
In addition, the Registration Rights Agreement, filed as an Exhibit
hereto, contains provisions for indemnification by the selling shareholders
of the Registrant and its officers, directors, and controlling persons
against certain liabilities under the Securities Act.
Item 16. Exhibits
Exhibit
Number Description
3.1 Amended and Restated Articles of Incorporation, incorporated
by reference from Exhibit 3.1 of the Registrant's Form 10-Q
for the quarter ended February 26, 1999.
3.2 Bylaws, as amended, incorporated by reference from Exhibit 3.2
of the Registrant's Form 10-K for the fiscal year ended August
28, 1998.
4.3 Rights Agreement dated as of June 16, 1996 and amended July
25, 1998 between the Company and Norwest Bank Minnesota, N.A.,
is incorporated by reference to Exhibit 1 to the Company's
Form 8-A dated June 20, 1996 and Amendment No. 1 thereto dated
July 30, 1998.
4.4 Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock, incorporated by
reference from Exhibit 1 of Registrant's Form 8-A dated June
20, 1996.
4.5 Convertible Preferred Stock Purchase Agreement dated August
27, 1997, among the Registrant and Southbrook International
investments, Ltd., HBK Cayman LP, HBK Offshore Fund Ltd., and
Brown Simpson Strategic Growth Fund LP, incorporated by
reference from Exhibit 4.1 of the Registrant's Form 8-K filed
September 10, 1997.
4.6 Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock dated August 27, 1997,
incorporated by reference from Exhibit 4.2 of the Registrant's
Form 8-K filed September 10, 1997.
4.7 Form of Warrant dated August 25, 1997, incorporated by
reference from Exhibit 4.3 of the Registrant's Form 8-K filed
September 10, 1997.
4.8 Registration Rights Agreement dated August 27, 1997, among the
Registrant and Southbrook International investments, Ltd., HBK
Cayman LP, HBK Offshore Fund Ltd., and Brown Simpson Strategic
Growth Fund LP, incorporated by reference from Exhibit 4.4 of
the Registrant's Form 8-K filed September 10, 1997.
4.9 Convertible Preferred Stock Purchase Agreement among the
Company and the Purchasers listed in Exhibit A thereto,
incorporated by reference from Exhibit 4.1 of the Registrant's
Form 8-K filed August 18, 1998.
4.10 Certificate of Designation, Preferences and Rights of Series D
Convertible Preferred Stock, incorporated by reference from
Exhibit 4.2 of the Registrant's Form 8-K filed August 18,
1998.
4.11 Form of Warrant issued to the Purchasers, incorporated by
reference from Exhibit 4.3 of Registrant's Form 8-K filed
August 18, 1998.
4.12 Registration Rights Agreement among the Company and the
Purchasers listed in Exhibit A thereto, incorporated by
reference from Exhibit 4.4 of Registrant's Form 8-K filed
August 18, 1998.
4.13 Agreement Relating to Sheldahl between Molex Incorporated and
the Registrant dated November 18, 1998, incorporated from
Exhibit 4.13 of the Registrant's Form 10-K for the fiscal year
ended August 28, 1998.
4.14 Convertible Preferred Stock Purchase Agreement among the
Company and the Purchasers listed in Exhibit A thereto,
incorporated by reference from Exhibit 4.1 of the Registrant's
Form 8-K filed March 9, 1999.
4.15 Certificate of Designation, Preferences and Rights of Series E
Convertible Preferred Stock, incorporated by reference from
Exhibit 4.2 of the Registrant's Form 8-K filed March 9, 1999.
4.16 Form of Warrant issued to the Purchasers, incorporated by
reference from Exhibit 4.3 of Registrant's Form 8-K filed
March 9, 1999.
4.17 Registration Rights Agreement among the Company and the
Purchasers listed in Exhibit A thereto, incorporated by
reference from Exhibit 4.4 of Registrant's Form 8-K filed
March 9, 1999.
5.1 Opinion and Consent of Lindquist & Vennum, counsel to the
Company.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit
5.1 to the Registration Statement).
24 Power of Attorney (included in the signature page of the
Registration Statement).
27 Financial Data Schedule
Item 17. Undertakings
The undersigned Registrant hereby undertakes, in accordance with Item
512 of Regulation S-K:
(a) (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) 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
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; and
(e) To deliver or cause to be delivered with the Prospectus, to
each person to whom the Prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 and Rule
14c-3 under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X is not
set forth in the Prospectus, to deliver, or cause to be delivered to each
person to whom the Prospectus is sent or given, the latest quarterly report
that is specifically incorporated by reference in the Prospectus to provide
such interim financial information.
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, 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.
(i) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained
in a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
Prospectus 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe 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 Northfield, State of Minnesota, on
the 8th day of April, 1999.
SHELDAHL, INC.
By /s/ Edward L. Lundstrom
Edward L. Lundstrom, Chief
Executive Officer, President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Edward L. Lundstrom and Jill D. Burchill, and each of them (with full power
to act alone), such person's true and lawful attorneys-in-fact and agents
with full power of substitution and resubstitution for such person and in
such person's 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 full power and
authority to do and perform each and every act and thing necessary or
desirable to be done in and about the premises, as fully to all intents and
purposes as such person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes, 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 by the following persons on April 8,
1999 in the capacities indicated.
Signature Title
/s/ James E. Donaghy Chairman of the Board and Director
James E. Donaghy
/s/ Kenneth J. Roering Vice Chairman of the Board and Director
Kenneth J. Roering
/s/ Edward L. Lundstrom Chief Executive Officer, President and
Edward L. Lundstrom Director (principal executive officer)
/s/ Jill D. Burchill Vice President & Chief Financial Officer
Jill D. Burchill (principal financial and accounting officer)
/s/ John G. Kassakian Director
John G. Kassakian
/s/ Gerald E. Magnuson Director
Gerald E. Magnuson
/s/ Dennis M. Mathisen Director
Dennis M. Mathisen
/s/ William B. Miller Director
William B. Miller
/s/ Raymond C. Wieser Director
Raymond C. Wieser
/s/ Beekman Winthrop Director
Beekman Winthrop
<PAGE>
[LINDQUIST & VENNUM P.L.L.P. LETTERHEAD]
Exhibit 5.1
April 8, 1999
Sheldahl,Inc.
1150 Sheldahl Road
Northfield, MN 55057
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 filed by
Sheldahl, Inc. with the Securities and Exchange Commission, relating to a
public offering of up to 1,592,160 shares of common stock, $.25 par value, to
be offered and sold by certain selling shareholders (as defined therein),
please be advised that as counsel to the Company, upon examination of such
corporate documents and records as we have deemed necessary or advisable for
the purposes of this opinion, it is our opinion that:
1. The Company is a validly existing corporation in good standing
under the laws of the State of Minnesota.
2. The shares of common stock being offered by the selling
shareholders are duly authorized and, when issued to the selling shareholders
and paid for as contemplated by the Purchase Agreement and the warrants, as
applicable, included in the Registration Statement as Exhibits 4.14 and 4.16,
respectively, will be legally and validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
/s/ Lindquist & Vennum
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report and to all references to our firm included in or made a part of
this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
April 5, 1999
<PAGE>
