<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
SCHEDULE 13D
(RULE 13D-101)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __) *
Sheldahl, Inc.
----------------------------------------
(NAME OF ISSUER)
Common Stock, $0.25 par value
-------------------------------------------
(TITLE OF CLASS OF SECURITIES)
822440 10 3
---------------------------------------------
(CUSIP Number)
Richard A. Charpie
Ampersand Ventures
55 William Street, Suite 240
Wellesley, MA 02481-4003
781-239-0700
----------------------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
12/28/00
----------------------------------------------
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
IF THE FILING PERSON HAS PREVIOUSLY FILED A STATEMENT ON SCHEDULE 13G TO REPORT
THE ACQUISITION WHICH IS THE SUBJECT OF THIS SCHEDULE 13D, AND IS FILING THIS
SCHEDULE BECAUSE OF RULE 13D-1(E), 13D-1(F) OR 13D-1 (G), CHECK THE FOLLOWING
BOX [ ].
NOTE: SCHEDULES FILED IN PAPER FORMAT SHALL INCLUDE A SIGNED ORIGINAL AND FIVE
COPIES OF THE SCHEDULE, INCLUDING ALL EXHIBITS. SEE RULE 13d-7(b) FOR OTHER
PARTIES TO WHOM COPIES ARE TO BE SENT.
* THE REMAINDER OF THIS COVER PAGE SHALL BE FILLED OUT FOR A REPORTING PERSON'S
INITIAL FILING ON THIS FORM WITH RESPECT TO THE SUBJECT CLASS OF SECURITIES, AND
FOR ANY SUBSEQUENT AMENDMENT CONTAINING INFORMATION WHICH WOULD ALTER
DISCLOSURES PROVIDED IN A PRIOR COVER PAGE.
THE INFORMATION REQUIRED ON THE REMAINDER OF THIS COVER PAGE SHALL NOT BE DEEMED
TO BE "FILED" FOR THE PURPOSE OF SECTION 18 OF THE SECURITIES EXCHANGE ACT OF
1934 (THE "ACT") OR OTHERWISE SUBJECT TO THE LIABILITIES OF THAT SECTION OF THE
ACT BUT SHALL BE SUBJECT TO ALL OTHER PROVISIONS OF THE ACT (HOWEVER, SEE THE
NOTES).
<PAGE> 2
CUSIP NO. 822440 10 3 13D PAGE 2 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ampersand IV Limited Partnership
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,422,519
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,422,519
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Includes 21,758,749 Common Shares owned in the aggregate by Morgenthaler
Venture Partners V, L.P., Sound Beach Technology Partners, LLC and Ampersand IV
Companion Fund Limited Partnership which Ampersand IV Limited Partnership may be
deemed to own by virtue of the existence of a Voting Agreement (see Item 5), and
as to which Ampersand IV Limited Partnership disclaims beneficial ownership.
<PAGE> 3
CUSIP NO. 822440 10 3 13D PAGE 3 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Ampersand IV Companion Fund Limited Partnership
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 110,795
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
110,795
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
0.4%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Includes 27,070,473 Common Shares owned in the aggregate by Morgenthaler
Venture Partners V, L.P., Sound Beach Technology Partners, LLC and Ampersand IV
Limited Partnership which Ampersand IV Companion Fund Limited Partnership may be
deemed to own by virtue of the existence of a Voting Agreement(see Item 5), and
as to which Ampersand IV Companion Fund Limited Partnership disclaims beneficial
ownership.
<PAGE> 4
CUSIP NO. 822440 10 3 13D PAGE 4 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
AMP-IV Management Company Limited Liability Company
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** Includes 21,647,954 Common Shares owned in the aggregate by Morgenthaler
Venture Partners V, L.P. and Sound Beach Technology Partners, LLC which
Ampersand IV Limited Partnership and Ampersand IV Companion Fund Limited
Partnership may be deemed to own by virtue of the existence of a Voting
Agreement (see Item 5), and as to which AMP-IV Management Company Limited
Liability Company disclaims beneficial ownership.
<PAGE> 5
CUSIP NO. 822440 10 3 13D PAGE 5 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Richard A. Charpie, Ph.D.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement (see Item 5), and as to which Richard A.
Charpie, Ph.D. disclaims beneficial ownership. Dr. Charpie expressly disclaims
beneficial ownership of all shares except to the extent of his proportionate
pecuniary interest in the Common Shares directly owned by Ampersand IV Limited
Partnership and Ampersand IV Companion Fund Limited Partnership.
<PAGE> 6
CUSIP NO. 822440 10 3 13D PAGE 6 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Peter D. Parker
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement (see Item 5), and as to which Peter D. Parker
disclaims beneficial ownership. Mr. Parker expressly disclaims beneficial
ownership of all shares except to the extent of his proportionate pecuniary
interest in the Common Shares directly owned by Ampersand IV Limited Partnership
and Ampersand IV Companion Fund Limited Partnership.
<PAGE> 7
CUSIP NO. 822440 10 3 13D PAGE 7 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Stuart A. Auerbach
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement (see Item 5), and as to which Stuart A. Auerbach
disclaims beneficial ownership. Mr. Auerbach expressly disclaims beneficial
ownership of all shares except to the extent of his proportionate pecuniary
interest in the Common Shares directly owned by Ampersand IV Limited Partnership
and Ampersand IV Companion Fund Limited Partnership.
<PAGE> 8
CUSIP NO. 822440 10 3 13D PAGE 8 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Charles D. Yie
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement(see Item 5), and as to which Charles D. Yie
disclaims beneficial ownership. Mr. Yie expressly disclaims beneficial ownership
of all shares except to the extent of his proportionate pecuniary interest in
the Common Shares directly owned by Ampersand IV Limited Partnership and
Ampersand IV Companion Fund Limited Partnership.
<PAGE> 9
CUSIP NO. 822440 10 3 13D PAGE 9 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
David J. Parker
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement(see Item 5), and as to which David J. Parker
disclaims beneficial ownership. Mr. Parker expressly disclaims beneficial
ownership of all shares except to the extent of his proportionate pecuniary
interest in the Common Shares directly owned by Ampersand IV Limited Partnership
and Ampersand IV Companion Fund Limited Partnership.
<PAGE> 10
CUSIP NO. 822440 10 3 13D PAGE 10 OF 17 PAGES
--------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
K. Kachadurian
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e) [ ]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
--------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER: 27,181,268**
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER: 0
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER: 5,533,314**
WITH
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,533,314**
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES* [X]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.7%**
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT
** The shares listed under shared voting power includes 21,647,954 Common Shares
owned in the aggregate by Morgenthaler Venture Partners V, L.P. and Sound Beach
Technology Partners, LLC which Ampersand IV Limited Partnership and Ampersand IV
Companion Fund Limited Partnership may be deemed to own by virtue of the
existence of a Voting Agreement(see Item 5), and as to which K. Kachadurian
disclaims beneficial ownership. Mr. Kachadurian expressly disclaims beneficial
ownership of all shares except to the extent of his proportionate pecuniary
interest in the Common Shares directly owned by Ampersand IV Limited Partnership
and Ampersand IV Companion Fund Limited Partnership.
<PAGE> 11
CUSIP NO. 822440 10 3 13D PAGE 11 OF 17 PAGES
--------------------------------------------------------------------------------
ITEM 1. SECURITY AND ISSUER:
This statement on Schedule 13D (the "Schedule 13D") relates to the shares
of Common Stock, $0.25 par value (the "Common Shares"), of Sheldahl, Inc. (the
"Issuer"), a Minnesota Corporation. The principal executive offices of Sheldahl,
Inc. are located at 1150 Sheldahl Road, Northfield, Minnesota 55057-9444.
ITEM 2. IDENTITY AND BACKGROUND:
(a) REPORTING PERSONS
Ampersand IV Limited Partnership ("Ampersand IV")
Ampersand IV Companion Fund Limited Partnership ("Ampersand IV Companion
Fund")
AMP-IV Management Company Limited Liability Company ("AMP-IV")
Richard A. Charpie, Ph. D. ("Charpie")
See Schedule I for a list of the Managing Members of AMP-IV (the "Managing
Members")
Ampersand IV and Ampersand IV Companion Fund are hereinafter sometimes
collectively referred to as the "Ampersand Funds." The Ampersand Funds, AMP-IV,
Charpie and the Managing Members are hereinafter sometimes collectively referred
to as the "Reporting Persons."
(b) ADDRESS OF PRINCIPAL OFFICES OR RESIDENCE:
For All Reporting Persons:
c/o Ampersand Ventures
55 William Street, Suite 240
Wellesley, MA 02481-4003
(c). PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND NAME:
Ampersand IV and Ampersand IV Companion Fund are limited partnerships
organized in Delaware engaged in the business of private equity investment.
AMP-IV is the General Partner of Ampersand IV Limited Partnership and Ampersand
IV Companion Fund Limited Partnership, and is also organized in Delaware.
Richard A. Charpie, Ph. D. is the Principal Managing Member of AMP-IV, and
President of Ampersand Ventures. He resides in Wellesley, MA.
(d). CONVICTION IN A CRIMINAL PROCEEDING:
None.
(e). CONVICTION IN A CIVIL PROCEEDING:
None.
(f). CITIZENSHIP:
Ampersand IV, Ampersand IV Companion Fund and AMP-IV are all organized in
Delaware. Richard A. Charpie is a United States citizen, residing in Wellesley,
MA.
<PAGE> 12
CUSIP NO. 822440 10 3 13D PAGE 12 OF 17 PAGES
--------------------------------------------------------------------------------
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION:
Of the $8,250,000 invested in this transaction, $5,750,000 was obtained via
capital contributions from the limited partners of Ampersand IV and Ampersand IV
Companion Fund. The balance was borrowed from Silicon Valley Bank by Ampersand
IV Limited Partnership in the ordinary course of its business, to bridge the
next capital installment which is due in mid-February.
ITEM 4. PURPOSE OF TRANSACTION.
Ampersand IV and Ampersand IV Companion Fund acquired the Common Shares
owned by them for investment purposes. Following the closing of the transactions
in which the Reporting Persons acquired the Common Shares, the Reporting Persons
have no present plans or proposals for: (a) the acquisition of additional Common
Shares or other securities of the Issuer or for the disposition of Common Shares
or other securities of the Issuer, (b) an extraordinary corporate transaction,
such as a merger, reorganization or liquidation, involving the Issuer or any of
its subsidiaries, (c) a sale or transfer of a material amount of assets of the
Issuer or any of its subsidiaries, (d) any change in the present board of
directors or management of the Issuer other than those changes which have
already been made and other than changing the number of directors on the
Issuer's board of directors from nine to seven, (e) any material change in the
present capitalization or dividend policy of the Issuer, (f) any other material
change in the Issuer's or any of its subsidiaries' business or corporate
structure, (g) any other material change in the Issuer's charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of the Issuer by any person, other than increasing the
number of authorized shares of the Issuer's common stock and changing the number
of directors on the Issuer's board of directors, (h) causing any of the Issuer's
securities to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association, (i) causing any securities of the Issuer to
become eligible for termination of registration pursuant to Section 12(g)(4) of
the Act, or (j) any similar actions. The Reporting Persons intend to evaluate on
a continuing basis the Issuer's business operations and prospects, as well as
general economic and equity market conditions. Based on such evaluations, the
Reporting Persons' plans regarding the Issuer may change. Additionally, one of
the Managing Members of AMP-IV, Stuart A. Auerbach, is currently a director of
the Issuer and, accordingly, may be in a position to affect changes in the
Issuer's business if deemed necessary or desirable.
ITEM 5. INTEREST IN THE SECURITIES OF THE ISSUER.
(a) (i) Ampersand IV directly owns 5,422,519 Common Shares which shares
represent approximately 16.4% of the issued and outstanding shares of the
Issuer's common stock (based on the total number of issued and outstanding
shares of the Issuer's common stock being 30,590,011) (the "Total Outstanding
Shares"), based on disclosures made in the Issuer's Annual Report on Form 10-K
for the fiscal year ended September 1, 2000 and the number of shares of the
Issuer's common stock issued pursuant to that certain Agreement and Plan of
Merger, dated as of November 10, 2000, as amended (the "Merger Agreement"),
among the Issuer, IFT West Acquisition Company, International Flex Holdings,
Inc. ("IFH") and the stockholders of IFH and that certain Stock Purchase
Agreement, dated as of November 10, 2000, as amended (the "Purchase Agreement"),
among the Issuer, Ampersand IV, Ampersand IV Companion Fund and Morgenthaler
Venture Partners V, LP ("Morgenthaler"). These shares include 2,373,572 Common
Shares that Ampersand IV has the right to acquire upon conversion of 3,323
shares of the Issuer's Series G Convertible Preferred Stock directly owned by
Ampersand IV and 172,647 Common Shares issuable to Ampersand IV upon the
exercise of Warrants directly owned by Ampersand IV. The Series G Convertible
Preferred Stock is immediately convertible, and the Warrants are immediately
exercisable, by Ampersand IV. Additionally, Ampersand IV may be deemed to
beneficially own 18,968,549 Common Shares directly owned by Morgenthaler,
2,679,405 Common Shares directly owned by Sound Beach Technology Partners, LLC
("Sound Beach") and 110,795 Common Shares directly owned by Ampersand IV
Companion Fund by virtue of a Voting Agreement, dated as of November 10, 2000,
as amended (the "Voting Agreement") among Ampersand IV, Ampersand IV Companion
Fund, Morgenthaler and Sound Beach, whereby those parties have agreed to vote
all of their Common Shares in favor of certain designated nominees to the
Issuer's board of directors. The Voting Agreement, as amended is filed herewith
as Exhibit A. The 5,422,519 Common Shares owned directly by Ampersand IV plus
the 21,758,749 shares of which Ampersand IV may be deemed a beneficial owner by
virtue of the Voting Agreement, in the aggregate represent 69.3% of the Total
Outstanding Shares. Ampersand IV hereby expressly disclaims beneficial ownership
of any Common Shares not owned directly by it.
<PAGE> 13
CUSIP NO. 822440 10 3 13D PAGE 13 OF 17 PAGES
--------------------------------------------------------------------------------
(ii) Ampersand IV Companion Fund directly owns 110,795 Common Shares which
shares represent approximately 0.4% of the Total Outstanding Shares. These
shares include 48,571 Common Shares that Ampersand IV Companion Fund has the
right to acquire upon conversion of 68 shares of the Issuer's Series G
Convertible Preferred Stock directly owned by Ampersand IV Companion Fund and
3,524 Common Shares issuable to Ampersand IV Companion Fund upon the exercise of
Warrants directly owned by Ampersand IV Companion Fund. The shares of Series G
Convertible Preferred Stock are immediately convertible, and the Warrants are
immediately exercisable, by Ampersand IV Companion Fund. Additionally, Ampersand
IV Companion Fund may be deemed to beneficially own 18,968,549 Common Shares
directly owned by Morgenthaler, 2,679,405 Common Shares directly owned by Sound
Beach and 5,422,519 Common Shares directly owned by Ampersand IV by virtue of
the Voting Agreement. The Voting Agreement, as amended, is filed herewith as
Exhibit A. The 110,795 Common Shares owned directly by Ampersand IV Companion
Fund plus the 27,070,473 shares of which Ampersand IV Companion Fund may be
deemed a beneficial owner by virtue of the Voting Agreement, in the aggregate
represent 69.3% of the Total Outstanding Shares. Ampersand IV Companion Fund
hereby expressly disclaims beneficial ownership of any Common Shares not owned
directly by it.
(iii) As the General Partner of Ampersand IV and Ampersand IV Companion
Fund, AMP-IV may be deemed to beneficially own the 5,533,314 Common Shares
directly owned in the aggregate by Ampersand IV and Ampersand IV Companion Fund,
which shares represent approximately 16.7% of the Total Outstanding Shares.
Additionally, as the General Partner of Ampersand IV and Ampersand IV Companion
Fund, AMP-IV may be deemed to beneficially own the 18,968,549 Common Shares
directly owned by Morgenthaler and the 2,679,405 Common Shares directly owned by
Sound Beach that the Ampersand Funds may be deemed to own by virtue of the
Voting Agreement. The Voting Agreement, as amended, is filed herewith as Exhibit
A. The 5,533,314 Common Shares owned directly by the Ampersand Funds plus the
21,647,954 shares of which the Ampersand Funds may be deemed to beneficially own
by virtue of the Voting Agreement, in the aggregate represent 69.3% of the Total
Outstanding Shares. AMP-IV hereby expressly disclaims beneficial ownership of
any Common Shares not owned directly by Ampersand IV or Ampersand IV Companion
Fund.
(iv) As the Principal Managing Member of AMP-IV, Charpie, along with the
other Managing Members, may be deemed to beneficially own the 5,533,314 Common
Shares directly owned in the aggregate by Ampersand IV and Ampersand IV
Companion Fund, which shares represent approximately 16.7% of the Total
Outstanding Shares. Additionally, Charpie and the other Managing Members may be
deemed to beneficially own the 18,968,549 Common Shares directly owned by
Morgenthaler and the 2,679,405 Common Shares directly owned by Sound Beach that
the Ampersand Funds may be deemed to own by virtue of the Voting Agreement. The
Voting Agreement, as amended, is filed herewith as Exhibit A. The 5,533,314
Common Shares owned directly by the Ampersand Funds plus the 21,647,954 shares
of which the Ampersand Funds may be deemed to beneficially own by virtue of the
Voting Agreement, in the aggregate represent 69.3% of the Total Outstanding
Shares. Charpie, and each of the other Managing Members, hereby expressly
disclaims beneficial ownership of all of these Common Shares except to the
extent of his proportionate pecuniary interest in the Common Shares directly
owned by Ampersand IV and Ampersand IV Companion Fund.
(b) (i) Sole Voting Power:
None
(ii) Shared Voting Power:
Ampersand IV has shared voting power over the 5,422,519 Common Shares that
it directly owns. It shares this voting power with AMP-IV and the Managing
Members of AMP-IV, including Charpie. Ampersand IV also shares voting power over
these shares with Morgenthaler, Sound Beach and Ampersand IV Companion Fund
pursuant to the terms of the Voting Agreement attached hereto as Exhibit A.
Ampersand IV also has shared voting power over 21,758,749 shares directly owned
by Morgenthaler, Sound Beach and Ampersand IV Companion Fund by virtue of the
Voting Agreement.
<PAGE> 14
CUSIP NO. 822440 10 3 13D PAGE 14 OF 17 PAGES
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Ampersand IV Companion Fund has shared voting power over the 110,795
Common Shares that it directly owns. It shares this voting power with AMP-IV and
the Managing Members of AMP-IV, including Charpie. Ampersand IV Companion Fund
also shares voting power over these shares with Morgenthaler, Sound Beach and
Ampersand IV Companion Fund pursuant to the terms of the Voting Agreement
attached hereto as Exhibit A. Ampersand IV also has shared voting power over
27,070,473 shares directly owned by Morgenthaler, Sound Beach and Ampersand IV
Companion Fund by virtue of the Voting Agreement.
Morgenthaler is a Delaware Limited Partnership engaged in the business
of private capital investment, having an address at Terminal Tower, 50 Public
Square, Suite 2700, Cleveland, Ohio 44113. Sound Beach is a Delaware limited
liability company that is invested in the technology business. Sound Beach's
address is c/o International Flex Technologies, Inc., 2187 Atlantic Street, 4th
Floor, Stamford, CT 06902. To the best of the Reporting Persons' knowledge,
during the last five years, neither Morgenthaler nor Sound Beach has been
convicted in a criminal proceeding or has been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction which, as a result
of such proceeding, was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violations with respect to
such laws.
(iii) Sole dispositive power:
None
(iv) Shared dispositive power:
Ampersand IV has shared dispositive power over the 5,422,519 Common
Shares that it directly owns. It shares this dispositive power with AMP-IV and
the Managing Members of AMP-IV, including Charpie. Ampersand IV has no
dispositive power over the 21,758,749 Common Shares directly owned by
Morgenthaler, Sound Beach and Ampersand IV Companion Fund and hereby expressly
disclaims beneficial ownership of such shares.
Ampersand IV Companion Fund has shared dispositive power over the
110,795 Common Shares that it directly owns. It shares this dispositive power
with AMP-IV and the Managing Members of AMP-IV, including Charpie. Ampersand IV
Companion Fund has no dispositive power over the 27,070,473 Common Shares
directly owned by Morgenthaler, Sound Beach and Ampersand IV and hereby
expressly disclaims beneficial ownership of such shares.
(c) On December 28, 2000, Ampersand IV purchased 2,876,300 Common Shares
and 3323 shares of the Issuer's Series G Convertible Preferred Stock, which is
convertible into 2,373,572 Common Shares, pursuant to the Purchase Agreement.
Ampersand IV also acquired warrants to purchase 172,647 Common Shares for $.01
per share pursuant to that certain Subordinated Notes and Warrant Purchase
Agreement, dated as of November 10, 2000, as amended (the "Subordinated Debt
Agreement") among the Issuer, Ampersand IV, Ampersand IV Companion Fund,
Morgenthaler and Molex Incorporated.
On December 28, 2000, Ampersand IV Companion Fund purchased 58,700 Common
Shares and 68 shares of the Issuer's Series G Convertible Preferred Stock, which
is convertible into 48,571 Common Shares, pursuant to the Purchase Agreement.
Ampersand IV Companion Fund also acquired warrants to purchase 3,524 Common
Shares for $.01 per share on December 28, 2000 pursuant to the Subordinated Debt
Agreement.
(d) Other than as disclosed herein, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Common Shares acquired by the Reporting Persons, except
that the limited partners of Ampersand IV have rights in the Common Shares
directly owned by Ampersand IV in proportion to their respective pecuniary
interests in such shares and the limited partners of Ampersand IV Companion Fund
have rights in the Common Shares directly owned by Ampersand IV Companion Fund
in proportion to their respective pecuniary interests in such shares.
<PAGE> 15
CUSIP NO. 822440 10 3 13D PAGE 15 OF 17 PAGES
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(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Ampersand IV and Ampersand IV Companion Fund are each parties to a Voting
Agreement with Morgenthaler and Sound Beach, pursuant to which each of the
parties thereto have agreed to vote all of their shares of the Issuer's common
stock in favor of up to three directors nominated by Morgenthaler and/or the
Ampersand Funds to the Issuer's board of directors. The Ampersand Funds,
Morgenthaler and Sound Beach will no longer have an obligation to vote all of
their shares of the Issuer's common stock in favor of directors nominated by
Morgenthaler and/or the Ampersand Funds at any time when the Ampersand Funds,
Morgenthaler, Sound Beach and their affiliates fail to collectively own enough
shares of the Issuer's common stock to elect at least one director to the
Issuer's board of directors. Furthermore, pursuant to the terms of the Voting
Agreement, Sound Beach is prohibited from transferring 1,617,792 of its Common
Shares at any time while the Ampersand Funds, Morgenthaler and their affiliates
collectively hold at least 60% of the Common Shares acquired by them pursuant to
the Merger Agreement, the Purchase Agreement and the Subordinated Debt
Agreement. If the Ampersand Funds, Morgenthaler and their affiliates cease to
collectively hold at least 60% of the Common Shares acquired by them pursuant to
the Merger Agreement, the Purchase Agreement and the Subordinated Debt
Agreement, Sound Beach will be permitted to transfer a portion of the 1,617,792
restricted shares in an amount which would leave Sound Beach with a
proportionate amount of Common Shares as the Ampersand Funds' and Morgenthaler's
continued proportionate holdings of Common Shares. The Voting Agreement, as
amended, is filed herewith as Exhibit A.
ITEM 7. MATERIAL TO BE FILES AS EXHIBITS
Exhibit A Voting Agreement, dated as of November 10, 2000, as amended,
among Ampersand IV Limited Partnership, Ampersand IV Companion
Fund Limited Partnership, Morgenthaler Venture Partners V, L.P.
and Sound Beach Technology Partners, LLC.
Exhibit B Joint Filing Agreement
<PAGE> 16
CUSIP NO. 822440 10 3 13D PAGE 16 OF 17 PAGES
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
AMPERSAND IV LIMITED PARTNERSHIP
By: AMP-IV Management Company
Limited Liability Company,
its general partner
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
-------------------------------
Stuart A. Auerbach
Managing Member
AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
-------------------------------
Stuart A. Auerbach
Managing Member
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
-------------------------------
Stuart A. Auerbach
Dated: January 8, 2001 By: /s/ Richard A. Charpie
-------------------------------
Richard A. Charpie
Dated: January 8, 2001 By: /s/ Peter D. Parker
-------------------------------
Peter D. Parker
Dated: January 8, 2001 By: /s/ Charles D. Yie
-------------------------------
Charles D. Yie
Dated: January 8, 2001 By: /s/ David J. Parker
-------------------------------
David J. Parker
Dated: January 8, 2001 By: /s/ K. Kachadurian
-------------------------------
K. Kachadurian
<PAGE> 17
CUSIP NO. 822440 10 3 13D PAGE 17 OF 17 PAGES
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SCHEDULE I
CERTAIN INFORMATION REGARDING THE MANAGING MEMBERS OF
AMP-IV MANAGEMENT COMPANY LIMITED LIABILITY COMPANY
Principal Occupation and
Name (and Position) Business Address
------------------- ------------------------
Richard A. Charpie Principal Managing Member
AMP-IV Management Company Limited Liability Company
President
Ampersand Venture Management Corporation
55 William Street, suite 240
Wellesley, MA 02481-4003
Peter D. Parker Managing Member
AMP-IV Management Company Limited Liability Company
Vice President
Ampersand Venture Management Corporation
55 William Street, suite 240
Wellesley, MA 02481-4003
Stuart A. Auerbach Managing Member
AMP-IV Management Company Limited Liability Company
55 William Street, suite 240
Wellesley, MA 02481-4003
Charles D. Yie Managing Member
AMP-IV Management Company Limited Liability Company
55 William Street, suite 240
Wellesley, MA 02481-4003
David J. Parker Managing Member
AMP-IV Management Company Limited Liability Company
55 William Street, suite 240
Wellesley, MA 02481-4003
K. Kachadurian Managing Member
AMP-IV Management Company Limited Liability Company
55 William Street, suite 240
Wellesley, MA 02481-4003
<PAGE> 18
EXHIBIT A
VOTING AGREEMENT, dated as of November 10, 2000, among Morgenthaler Venture
Partners V, L.P., a Delaware limited partnership, Ampersand IV Limited
Partnership, a Delaware limited partnership, Ampersand IV Companion Fund Limited
Partnership, a Delaware limited partnership, and Sound Beach Technology
Partners, LLC, a Delaware limited liability company.
PRELIMINARY STATEMENT
Capitalized terms used herein have the meanings set forth in section 1
hereof. As a result of the transactions contemplated by the Merger Agreement,
Stock Purchase Agreement and Subordinated Notes and Warrant Purchase Agreement,
Morgenthaler, Ampersand, Ampersand Companion and Sound Beach will acquire or
have acquired shares of Common Stock, Preferred Stock and Warrants. In addition,
Morgenthaler, Ampersand, Ampersand Companion and Sound Beach have entered into
the Governance Agreement, pursuant to which, among other things, they are
entitled to designate individuals to be nominated for election as directors of
Sheldahl. The parties hereto wish to enter into an agreement with respect to the
disposition of Common Stock, how they will vote their shares of Common Stock for
the election of directors of the Company and how they will exercise their right
under the Governance Agreement to designate individuals to be nominated for
election as directors of Sheldahl. Accordingly, the parties hereto agree as
follows.
1. DEFINITIONS. The following terms have the indicated meanings when used
herein.
1.1 "AFFILIATE" or "ASSOCIATE" shall mean an affiliate or associate of a
person, as such terms are defined in Section 302A.011, subdivisions 43 and 45,
respectively, of the Minnesota Business Corporation Act.
1.2 "AMPERSAND" shall mean Ampersand IV Limited Partnership, a Delaware
limited partnership.
1.3 "AMPERSAND COMPANION" shall mean Ampersand IV Companion Fund Limited
Partnership, a Delaware limited partnership.
1.4 "APPLICABLE NUMBER" shall mean the following:
(a) three, so long as Morgenthaler, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member thereof
-1-
<PAGE> 19
own at least 69% of the Common Stock Equivalents acquired by them on the Closing
Date pursuant to the Merger Agreement, Stock Purchase Agreement and Subordinated
Notes and Warrant Purchase Agreement.
(b) two, so long as Morgenthaler, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member thereof own at least
50% but less than 69% of the Common Stock Equivalents acquired by them on the
Closing Date pursuant to the Merger Agreement, Stock Purchase Agreement and
Subordinated Notes and Warrant Purchase Agreement.
(c) one, so long as Morgenthaler, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member thereof own at least
15% but less than 50% of the Common Stock Equivalents acquired by them on the
Closing Date pursuant to the Merger Agreement, Stock Purchase Agreement and
Subordinated Notes and Warrant Purchase Agreement.
(d) zero, so long as Morgenthaler, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member thereof own less
than 15% of the Common Stock Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase Agreement and Subordinated
Notes and Warrant Purchase Agreement.
1.5 "BUSINESS DAY" means any day except a day on which the Nasdaq National
Market, the NYSE or the AMEX, as applicable, if the Common Stock is listed for
trading or quoted thereon at such time, is closed, and if the Common Stock is
not listed for trading or quoted on any of the Nasdaq National Market, the NYSE
or the AMEX at such time, then "Business Day" shall mean any day except
Saturday, Sunday and any day which shall be a legal holiday or a day on which
banking institutions in the State of Minnesota generally are authorized or
required by law or other government actions to close.
1.6 "CLOSING DATE" shall mean the Closing Date as defined in the Merger
Agreement.
1.7 "COMMON STOCK" shall mean the Common Stock, par value $0.25 per share,
of Sheldahl.
1.8 "COMMON STOCK EQUIVALENT" shall mean the following:
(a) with respect to shares of Common Stock, each share of Common Stock
shall be one Common Stock Equivalent.
-2-
<PAGE> 20
(b) with respect to Preferred Stock, each share of Preferred Stock
shall be a number of Common Stock Equivalents equal to the number of shares of
Common Stock issuable on conversion of such share of Preferred Stock as of the
date of determination.
(c) with respect to Warrants, each Warrant shall be a number of Common
Stock Equivalents equal to the number of shares of Common Stock issuable on
exercise of such Warrant as of the date of determination.
1.9 "GOVERNANCE AGREEMENT" shall mean the governance agreement, among
Sheldahl, Morgenthaler, Ampersand, Ampersand Companion and Sound Beach, referred
to in the Merger Agreement.
1.10 "IFH" shall mean International Flex Holdings, Inc., a Delaware
corporation.
1.11 "MERGER AGREEMENT" shall mean the agreement and plan of merger, dated
as of November 10, 2000 among Sheldahl, IFT West Acquisition Company, a wholly
owned subsidiary of Sheldahl, IFH and all of the stockholders of IFH.
1.12 "MOLEX" shall mean Molex Incorporated, a Delaware corporation.
1.13 "MORGENTHALER" shall mean Morgenthaler Venture Partners V, L.P., a
Delaware limited partnership.
1.14 "PER SHARE MARKET VALUE" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on the Nasdaq National
Market or other stock exchange or quotation system on which the Common Stock is
then listed or quoted or, if there is no such closing bid price on such date,
then the closing bid price on such exchange or quotation system on the date
nearest preceding such date for which there is such a closing bid price; or (b)
if the Common Stock is not listed or quoted then on the Nasdaq National Market
or any stock exchange or quotation system, the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the Nasdaq National
Market, Bloomberg, L.P. or in the National Quotation Bureau Incorporated or
similar organization or agency succeeding to its functions of reporting prices)
at the close of business on such date; or (c) if closing bid prices for the
Common Stock are not then reported by the Nasdaq National Market, Bloomberg,
L.P. or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices), then the average of
the "Pink Sheet" quotes for the relevant conversion period, as determined in
good faith by the holder; or (d) if the Common Stock is not then publicly traded
the fair market value of a share of Common
-3-
<PAGE> 21
Stock as determined by an Appraiser mutually acceptable to the holders and the
Company.
1.15 "PREFERRED STOCK" shall mean the series G preferred stock of Sheldahl
issued pursuant to the Stock Purchase Agreement.
1.16 "SHELDAHL" shall mean Sheldahl, Inc., a Minnesota corporation.
1.17 "SOUND BEACH" shall mean Sound Beach Technology Partners, LLC, a
Delaware limited liability company.
1.18 "STOCK PURCHASE AGREEMENT" shall mean the stock purchase agreement,
dated as of November 10, 2000, among Sheldahl, Morgenthaler, Ampersand and
Ampersand Companion, pursuant to which Sheldahl has agreed to issue and sell,
and Morgenthaler, Ampersand and Ampersand Companion have agreed to purchase, in
the aggregate 11,303 shares of Preferred Stock and 4,944,132 shares of Common
Stock on the terms and subject to the conditions provided therein.
1.19 "SUBORDINATED NOTES AND WARRANT PURCHASE AGREEMENT" shall mean the
Subordinated Notes and Warrant Purchase Agreement, dated as of November 10, 2000
among the Company, certain Stockholders and Molex.
1.20 "WARRANTS" shall mean the warrants issued pursuant to the Subordinated
Notes and Warrant Purchase Agreement.
2. VOTING FOR DIRECTORS OF SHELDAHL.
2.1 So long as Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and any Affiliate, Associate, partner or member thereof hold sufficient shares
of Common Stock to elect three directors to the Sheldahl board of directors and
Ampersand, Ampersand Companion and any Affiliates, Associates, partners or
members thereof hold between them 15% or more of the Common Stock Equivalents
acquired by them on the Closing Date, the parties hereto will vote all of their
shares of Common Stock for the election of two individuals nominated by
Morgenthaler and one individual nominated by Ampersand.
2.2 So long as Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and any Affiliate, Associate, partner or member thereof hold sufficient shares
of Common Stock to elect three directors to the Sheldahl board of directors and
Ampersand, Ampersand Companion and any Affiliates, Associates, partners or
members thereof hold between them fewer than 15% of the Common Stock Equivalents
acquired by them on
-4-
<PAGE> 22
the Closing Date, the parties hereto will vote all of their shares of Common
Stock for the election of three individuals nominated by Morgenthaler.
2.3 So long as Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and any Affiliate, Associate, partner or member thereof hold sufficient shares
of Common Stock to elect two but not more than two directors to the Sheldahl
board of directors and Ampersand, Ampersand Companion and any Affiliates,
Associates, partners or members thereof hold between them 15% or more of the
Common Stock Equivalents acquired by them on the Closing Date, the parties
hereto will vote all of their shares of Common Stock for the election of one
individual nominated by Morgenthaler and one individual nominated by Ampersand.
2.4 So long as Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and any Affiliate, Associate, partner or member thereof hold sufficient shares
of Common Stock to elect two but not more than two directors to the Sheldahl
board of directors and Ampersand, Ampersand Companion and any Affiliates,
Associates, partners or members thereof hold between them fewer than 15% of the
Common Stock Equivalents acquired by them on the Closing Date, the parties
hereto will vote all of their shares of Common Stock for the election of two
individuals nominated by Morgenthaler.
2.5 So long as Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and any Affiliate, Associate, partner or member thereof hold sufficient shares
of Common Stock to elect one but not more than one director to the Sheldahl
board of directors, the parties hereto will vote all of their shares of Common
Stock for the election of an individual nominated by whichever of Morgenthaler
and any Affiliates, Associates, partners or members thereof, on the one hand,
and Ampersand, Ampersand Companion and any Affiliates, Associates, partners or
members thereof taken together, on the other hand, owns more Common Stock
Equivalents.
3. EXERCISING RIGHT TO DESIGNATE NOMINEES PURSUANT TO SECTION 2(b) OF THE
GOVERNANCE AGREEMENT.
3.1 So long as the Applicable Number is three and Ampersand, Ampersand
Companion and any Affiliates, Associates, partners or members thereof hold
between them 15% or more of the Common Stock Equivalents acquired by them on the
Closing Date, the parties hereto will designate as individuals to be nominated
for election as directors of Sheldahl pursuant to section 2(b) of the Governance
Agreement two individuals nominated by Morgenthaler and one individual nominated
by Ampersand.
3.2 So long as the Applicable Number is three and Ampersand, Ampersand
Companion and any Affiliates, Associates, partners or members thereof hold
between
-5-
<PAGE> 23
them fewer than 15% of the Common Stock Equivalents acquired by them on
the Closing Date, the parties hereto will designate as individuals to be
nominated for election as directors of Sheldahl pursuant to section 2(b) of the
Governance Agreement three individuals nominated by Morgenthaler.
3.3 So long as the Applicable Number is two and Ampersand, Ampersand
Companion and any Affiliates, Associates, partners or members thereof hold
between them 15% or more of the Common Stock Equivalents acquired by them on the
Closing Date, the parties hereto will designate as individuals to be nominated
for election as directors of Sheldahl pursuant to section 2(b) of the Governance
Agreement one individual nominated by Morgenthaler and one individual nominated
by Ampersand.
3.4 So long as the Applicable Number is two and Ampersand, Ampersand
Companion and any Affiliates, Associates, partners or members thereof hold
between them fewer than 15% of the Common Stock Equivalents acquired by them on
the Closing Date, the parties hereto will designate as individuals to be
nominated for election as directors of Sheldahl pursuant to section 2(b) of the
Governance Agreement two individuals nominated by Morgenthaler.
3.5 So long as the Applicable Number is one, the parties hereto will
designate as an individual to be nominated for election as a director of
Sheldahl pursuant to section 2(b) of the Governance Agreement one individual
nominated by whichever of Morgenthaler and any Affiliates, Associates, partners
or members thereof, on the one hand, and Ampersand, Ampersand Companion and any
Affiliates, Associates, partners or members thereof taken together, on the other
hand, owns more Common Stock Equivalents.
4. RESTRICTIONS ON THE DISPOSITION OF COMMON STOCK
4.1 Sound Beach agrees that, for so long as Morgenthaler, Ampersand,
Ampersand Companion and any Affiliate, Associate, partner or member thereof
hold, in aggregate, at least 60% of the Common Stock Equivalents acquired by
them on the Closing Date pursuant to the Merger Agreement, Stock Purchase
Agreement and Subordinated Notes and Warrant Purchase Agreement, Sound Beach
agrees that it will not Transfer at least 1,265,668 shares of Common Stock
acquired by it pursuant to the Merger Agreement.
4.2 If, at anytime, Morgenthaler, Ampersand, Ampersand Companion and any
Affiliate, Associate, partner or member thereof hold, in aggregate, less than
60% of the Common Stock Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase Agreement and Subordinated
Notes and Warrant Purchase
-6-
<PAGE> 24
Agreement, the parties hereto agree that Sound Beach may Transfer, out of the
1,265,668 shares of Common Stock that are restricted pursuant to Section 4.1
above, additional shares of Common Stock in such amount as will allow Sound
Beach to hold, after such Transfer, a percentage of its Common Stock acquired
pursuant to the Merger Agreement equal to or greater than the percentage of the
Common Stock Equivalents held at such time, in aggregate, by Morgenthaler,
Ampersand, Ampersand Companion and any Affiliate, Associate, partner or member
which were acquired by them on the Closing Date pursuant to the Merger
Agreement, Stock Purchase Agreement and Subordinated Notes and Warrant Purchase
Agreement,
5. MISCELLANEOUS.
5.1 AMENDMENTS; NO WAIVERS.
(a) Any provision of this agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Morganthaler, Ampersand and Ampersand Companion, or in the case of
a waiver, by the party or parties against whom the waiver is to be effective;
provided, however, that no such amendment or waiver will be effective against
Sound Beach if the effect of such amendment or waiver is to increase the
restrictions of Sound Beach.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
5.2 SUCCESSORS AND ASSIGNS. The provisions of this agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns; PROVIDED, HOWEVER, that no party may assign
this agreement without the other party's prior written consent.
5.3 GOVERNING LAW. This Agreement shall he construed in accordance with and
governed by the internal laws of the State of Minnesota.
5.4 COUNTERPARTS; EFFECTIVENESS. This agreement may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This agreement
shall become effective when each party hereto shall have received counterparts
thereof signed by the other party hereto.
-7-
<PAGE> 25
5.5 SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges and
agrees that the parties' respective remedies at law for a breach or threatened
breach of any of the provisions of this agreement would be inadequate and, in
recognition of that fact, agrees that, in the event of a breach or threatened
breach by any party hereto of the provisions of this agreement, in addition to
any remedies at law, the parties hereto, respectively, without posting any bond
shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available.
5.6 TERMINATION.
(a) This entire agreement shall terminate on the first date on which
both of the following statements are true:
(i) Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and all of their Affiliates, Associates, partners or members hold, in aggregate,
fewer than 15% of the Common Stock Equivalents acquired by Morgenthaler,
Ampersand, Ampersand Companion and Sound Beach on the Closing Date pursuant to
the Merger Agreement, Stock Purchase Agreement and Subordinated Notes and
Warrant Purchase Agreement.
(ii) Morgenthaler, Ampersand, Ampersand Companion and Sound Beach
and all of their Affiliates, Associates, partners or members do not hold, in
aggregate, sufficient share of Common Stock to elect at least one director to
the Sheldahl board of directors.
(b) In addition, the terms of Section 4 shall terminate on the first
date on which:
(i) At least eighteen months have elapsed from the Closing Date;
(ii) The Per Share Market Value of the Common Stock is greater
than $10.50 (as adjusted for stock splits, reverse stock splits and stock
dividends) for at least 30 consecutive Business Days; and
(iii) The average daily trading volume of the Common Stock on the
Nasdaq National Market for such 30 consecutive Business Days exceeds 50,000
shares (as adjusted for stock splits, reverse stock splits and stock dividends);
and
-8-
<PAGE> 26
5.7 SEVERABILITY. If any term, provision, covenant or restriction of this
agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, provided that the parties hereto
shall negotiate in good faith to attempt to place the parties in the same
position as they would have been in had such provision not been held to be
invalid, void or unenforceable.
-9-
<PAGE> 27
IN WITNESS WHEREOF, each of the parties hereto have caused this agreement
to be executed on its behalf as of the date first referred to above.
MORGENTHALER VENTURE PARTNERS V, L.P.
By: /s/ JOHN D. LUTSI
---------------------------------
Name: John D. Lutsi
Title: General Partner
AMPERSAND IV LIMITED PARTNERSHIP
BY: AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY,
Its general partner
By: /s/ STUART A. AUERBACH
----------------------------------
Name: Stuart A. Auerbach
Title: Managing Member
AMPERSAND IV COMPANION FUND LIMITED
PARTNERSHIP
BY: AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY,
Its general partner
By: /s/ STUART A. AUERBACH
----------------------------------
Name: Stuart A. Auerbach
Title: Managing Member
-10-
<PAGE> 28
SOUND BEACH TECHNOLOGY PARTNERS, LLC
By: /s/ DONALD R. FRIEDMAN
----------------------------------
Name: Donald R. Friedman
Title: President and Chief Executive
Officer
-11-
<PAGE> 29
FIRST AMENDMENT TO VOTING AGREEMENT
-----------------------------------
This First Amendment to the Voting Agreement (the "First Amendment"), dated
as of December 28, 2000, among Morgenthaler Venture Partners V, L.P., a Delaware
limited partnership, Ampersand IV Limited Partnership, a Delaware limited
partnership, Ampersand IV Companion Fund Limited Partnership, a Delaware limited
partnership, and Sound Beach Technology Partners, LLC, a Delaware limited
liability company amends the Voting Agreement, dated as of November 10, 2000
(the "Voting Agreement"), among Morgenthaler Venture Partners V, L.P., Ampersand
IV Limited Partnership, Ampersand IV Companion Fund Limited Partnership, and
Sound Beach Technology Partners, LLC. Capitalized terms not defined herein shall
have the meanings set forth in the Voting Agreement.
WHEREAS, the parties thereto entered into the Voting Agreement on November
10, 2000; and
WHEREAS, the Stock Purchase Agreement, the Merger Agreement and the
Subordinated Noted and Warrant Purchase Agreement been amended by the parties
thereto; and
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. AMENDMENT OF THE VOTING AGREEMENT. The Voting Agreement is hereby amended
as follows:
(a) Section 1.11 shall be deleted in its entirety, and the following shall
be substituted therefor:
"1.11 `MERGER AGREEMENT' shall mean the agreement and plan of merger,
dated as of November 10, 2000, as amended, modified or supplemented
from time to time, among Sheldahl, IFT West Acquisition Company, a
wholly owned subsidiary of Sheldahl, IFH and all of the stockholders
of IFH."
(b) Section 1.18 shall be deleted in its entirety, and the following shall
be substituted therefor:
"1.18 `STOCK PURCHASE AGREEMENT' shall mean the stock purchase
agreement, dated as of November 10, 2000, as amended, modified or
supplemented from time to time, among Sheldahl, Morgenthaler,
<PAGE> 30
Ampersand and Ampersand Companion, pursuant to which Sheldahl has
agreed to issue and sell, and Morgenthaler, Ampersand and Ampersand
Companion have agreed to purchase, in the aggregate 11,303 shares of
Preferred Stock and 9,783,571 shares of Common Stock on the terms and
subject to the conditions provided therein."
(c) Section 1.19 shall be deleted in its entirety, and the following shall
be substituted therefor:
"1.19 `SUBORDINATED NOTES AND WARRANT PURCHASE AGREEMENT' shall mean
the Subordinated Notes and Warrant Purchase Agreement, dated as of
November 10, 2000, as amended, modified or supplemented from time to
time, among the Company, certain Stockholders and Molex."
(d) Section 4 of the Voting Agreement shall be deleted in its entirety, and
the following shall be substituted therefor:
"4. Restrictions on the Disposition of Common Stock
4.1 Sound Beach agrees that, for so long as Morgenthaler,
Ampersand, Ampersand Companion and any Affiliate, Associate, partner
or member thereof hold, in aggregate, at least 60% of the Common Stock
Equivalents acquired by them on the Closing Date pursuant to the
Merger Agreement, Stock Purchase Agreement and Subordinated Notes and
Warrant Purchase Agreement, Sound Beach agrees that it will not
Transfer at least 1,617,792 shares of Common Stock acquired by it
pursuant to the Merger Agreement.
4.2 If, at anytime, Morgenthaler, Ampersand, Ampersand Companion
and any Affiliate, Associate, partner or member thereof hold, in
aggregate, less than 60% of the Common Stock Equivalents acquired by
them on the Closing Date pursuant to the Merger Agreement, Stock
Purchase Agreement and Subordinated Notes and Warrant Purchase
Agreement, the parties hereto agree that Sound Beach may Transfer, out
of the 1,617,792 shares of Common Stock that are restricted pursuant
to Section 4.1 above, additional shares of Common Stock in such amount
as will allow Sound Beach to hold, after such Transfer, a percentage
of its Common Stock acquired pursuant to the Merger Agreement equal to
or greater than the percentage of the Common Stock Equivalents held at
such time, in aggregate, by Morgenthaler, Ampersand, Ampersand
Companion
<PAGE> 31
and any Affiliate, Associate, partner or member which were acquired by
them on the Closing Date pursuant to the Merger Agreement, Stock
Purchase Agreement and Subordinated Notes and Warrant Purchase
Agreement."
2. MISCELLANEOUS.
(a) EFFECT OF FIRST AMENDMENT. Except as otherwise expressly set forth in
this First Amendment, nothing herein shall be deemed to constitute an amendment,
modification or waiver of any of the terms and conditions of the Voting
Agreement or the Exhibits thereto, all of which terms and conditions shall
remain in full force and effect as originally constituted and the undersigned
shall remain obligated pursuant to the terms thereunder.
(b) GOVERNING LAW. This First Amendment shall be governed by and construed
and enforced in accordance with the internal laws of the State of Minnesota
without regard to the principles of conflicts of law thereof.
(c) EXECUTION. This First Amendment may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.
<PAGE> 32
IN WITNESS WHEREOF, each of the parties hereto have caused this First
Amendment to be executed on its behalf as of the date first referred to above.
MORGENTHALER VENTURE PARTNERS V, L.P.
By: /s/ JOHN D. LUTSI
----------------------------------
Name: John D. Lutsi
Title: General Partner
AMPERSAND IV LIMITED PARTNERSHIP
BY: AMP-IV MANAGEMENT COMPANY
LIMITED LIABILITY COMPANY,
ITS GENERAL PARTNER
By: /s/ RICHARD A. CHARPIE
----------------------------------
Name: Richard A. Charpie
Title: Principal Managing Member
AMPERSAND IV COMPANION FUND LIMITED
PARTNERSHIP
BY: AMP-IV MANAGEMENT COMPANY
LIMITED LIABILITY COMPANY,
ITS GENERAL PARTNER
By: /s/ RICHARD A. CHARPIE
----------------------------------
Name: Richard A. Charpie
Title: Principal Managing Member
<PAGE> 33
SOUND BEACH TECHNOLOGY PARTNERS, LLC
By: /s/ DONALD R. FRIEDMAN
-----------------------------------
Name: Donald R. Friedman
Title: President and Chief Executive
Officer
<PAGE> 34
EXHIBIT B
JOINT FILING AGREEMENT OF
AMPERSAND IV LIMITED PARTNERSHIP,
AMPERSAND IV COMPANION FUND LIMITED PARTNERSHIP,
AMP-IV MANAGEMENT COMPANY LIMITED LIABILITY COMPANY,
RICHARD A. CHARPIE, PETER D. PARKER,
STUART A. AUERBACH, CHARLES D. YIE,
DAVID J. PARKER, AND K. KACHADURIAN
The undersigned persons agree and consent pursuant to Rule 13d-1(k)(1)
under the Securities Exchange Act of 1934, as amended, as of the date set forth
below, to the joint filing on their behalf of the Schedule 13D to which this
Exhibit is attached, in connection with their beneficial ownership of the common
stock of Sheldahl, Inc. at December 28, 2000 and agree that such statement is
filed on behalf of each of them.
AMPERSAND IV LIMITED PARTNERSHIP
By: AMP-IV Management Company Limited
Liability Company, its general partner
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
------------------------------------------
Stuart A. Auerbach
Managing Member
AMP-IV MANAGEMENT COMPANY LIMITED
LIABILITY COMPANY
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
------------------------------------------
Stuart A. Auerbach
Managing Member
Dated: January 8, 2001 By: /s/ Stuart A. Auerbach
------------------------------------------
Stuart A. Auerbach
Dated: January 8, 2001 By: /s/ Richard A. Charpie
------------------------------------------
Richard A. Charpie
Dated: January 8, 2001 By: /s/ Peter D. Parker
------------------------------------------
Peter D. Parker
Dated: January 8, 2001 By: /s/ Charles D. Yie
-------------------------------------------
Charles D. Yie
Dated: January 8, 2001 By: /s/ David J. Parker
-------------------------------------------
David J. Parker
Dated: January 8, 2001 By: /s/ K. Kachadurian
-------------------------------------------
K. Kachadurian
