<PAGE> 1
As filed with the Securities and Exchange Commission on May 8, 1998
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TEGAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE TEGAL CORPORATION 68-0370244
(State or Other Jurisdiction 2201 SOUTH MCDOWELL BOULEVARD (I.R.S. Employer
of Incorporation or Organization) P.O. BOX 6020 Identification Number)
</TABLE>
PETALUMA, CALIFORNIA 94955-6020
(707) 763-5600
(Address, including ZIP code, and
telephone number, including area code,
of registrant's principal executive offices)
MICHAEL L. PARODI
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
TEGAL CORPORATION
2201 SOUTH MCDOWELL BOULEVARD
P.O. BOX 6020
PETALUMA, CALIFORNIA 94955-6020
(707) 763-5600
(Name, address, including ZIP code, and telephone number, including area
code, of agent for service)
COPIES TO:
CHRISTOPHER L. KAUFMAN, ESQ.
H. JANE SUNG, ESQ.
LATHAM & WATKINS
75 Willow Road
Menlo Park, California 94025
(650) 328-4600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act of 1933 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 of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO REGISTERED PER SHARE(1) OFFERING REGISTRATION FEE
BE REGISTERED PRICE(1)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($0.01 par 1,745,813 $4.69 $8,187,863.00 $2,415.42
value)(2)
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of computing the amount of registration
fee, based on the average of the high and low prices for the Common Stock
as reported on the Nasdaq National Market on May 6, 1998, in accordance
with Rule 457(c) promulgated under the Securities Act of 1933.
(2) Rights to acquire shares of the Registrant's Series A Junior
Participating Preferred Stock are attached to and trade with the Common
Stock of the Registrant. Value attributable to such Rights, if any, is
reflected in the market price of the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED May 8, 1998
TEGAL CORPORATION
1,745,813 SHARES OF COMMON STOCK
($0.01 PAR VALUE PER SHARE)
This Prospectus relates to the offer and sale of up to 1,745,813 shares
(the "Shares") of common stock, par value $0.01 per share (the "Common Stock"),
of Tegal Corporation, a Delaware corporation (the "Company" or "Tegal"), by a
stockholder of the Company, Benefit Capital Management Corporation, as
Investment Manager for The Prudential Insurance Company of America, Separate
Account No. VCA-GA-5298, (the "Selling Stockholder"). The Shares may be offered
and sold from time to time by the Selling Stockholder. The Selling Stockholder
anticipates that, if and when offered and sold, such offers and sales may be
effected by the Selling Stockholder through one or more underwriters, licensed
brokers, dealers or agents, and directly to one or more purchasers, in one or
more transactions on the Nasdaq National Market pursuant to and in accordance
with the rules of the Nasdaq National Market or any other national securities
exchange on which the Common Stock may become listed, in negotiated transactions
or otherwise, at prices related to the prevailing market prices or at negotiated
prices. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company will bear substantially all registration expenses of the
offering of the Shares, except that the Selling Stockholder will pay any
applicable underwriting discounts and selling commissions and other fees, costs
and expenses of the Selling Stockholder relating to the sale or disposition of
the Shares.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "TGAL." On May 6, 1998 the last reported sale price for the Common
Stock of the Company as reported on the Nasdaq National Market was $4.875.
--------------
SEE "RISK FACTORS" COMMENCING ON PAGE 4 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK
OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
--------------
<PAGE> 3
The date of this Prospectus is _______, 1998.
--------------
2
<PAGE> 4
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 (including all amendments
thereto, the "Registration Statement") with respect to the securities offered
hereby. As permitted by the rules and regulations of the Commission, this
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information about
the Company and the securities offered hereby, reference is made to the
Registration Statement and the exhibits thereto, which may be examined without
charge at the public reference facilities maintained by the Commission at Room
1204, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of which may be obtained from the Commission upon payment of the
prescribed fees. Statements contained in this Prospectus concerning the
provisions of documents filed with the Registration Statement as exhibits are
necessarily summaries of such documents and each statement is qualified in its
entirety by reference to the applicable document filed with the Commission.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. The Registration Statement, the exhibits and schedules forming a
part thereof and the reports, proxy statements and other information filed by
the Company with the Commission in accordance with the Exchange Act can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1204, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7
World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a web site that contains reports, proxy and information
statements and other information regarding registrants who file with the
Commission and certain of the Company's filings are available at such web site:
http://www.sec.gov. In addition, the Common Stock is listed on the Nasdaq
National Market and reports and other information concerning the Company may be
inspected at the offices of the National Association of Securities Dealers, Inc.
at 1735 K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company under the Exchange Act with
the Commission are incorporated herein by reference.
(a) Annual Report on Form 10-K for the fiscal year ended March 31, 1997;
(b) Quarterly Report on Form 10-Q for the quarter ended December 31,
1997;
(c) Quarterly Report on Form 10-Q for the quarter ended September 30,
1997;
(d) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997;
and
3
<PAGE> 5
(e) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (File No. 01-26824),
which was declared effective by the Commission on October 18,
1995, including any subsequently filed amendments and reports
updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
A copy of any or all of the documents incorporated or deemed to be
incorporated herein by reference (other than exhibits to such documents which
are not specifically incorporated by reference therein) will be provided without
charge to any person to whom a copy of this Prospectus is delivered, upon
written or oral request. Copies of this Prospectus, as amended or supplemented
from time to time, and any other documents (or parts of documents) that
constitute part of this Prospectus under Section 10(a) of the Securities Act of
1933, as amended (the "Securities Act"), will also be provided without charge to
each such person, upon written or oral request. Requests for such copies should
be addressed to David Curtis, Vice President, Finance and Administration, Chief
Financial Officer and Secretary, 2201 South McDowell Road, P. O. Box 6020,
Petaluma, California 94955-6020 (telephone number (707) 763-5600).
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference herein
contain projections and other forward-looking statements within the meanings of
Section 27A of the Securities Act and Section 21E of the Exchange Act, which
statements involve risks and uncertainties. For this purpose, any statements
contained or incorporated herein that are not statements of historical fact may
be deemed to be forward looking statements. Without limiting the foregoing, the
words "anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. Actual results could differ materially from
these forward-looking statements and projections as a result of certain factors,
including the factors set forth under "Risk Factors" herein.
THE COMPANY
The Company designs, manufactures, markets and services plasma etch
systems used in the fabrication of integrated circuits ("ICs") and related
devices in the thin film head, small flat panel and printer head applications.
Etching constitutes one of the principal IC production process steps and must be
performed numerous times in the production of an IC. The Company was formed in
December 1989 to acquire the operations of the former Tegal Corporation, a
division of Motorola, Inc. The predecessor company was founded in 1972 and
acquired by Motorola in 1978. The principal executive offices of the
4
<PAGE> 6
Company are at 2201 South McDowell Road, P.O. Box 6020, Petaluma, California
94955-6020 (telephone number (707) 763-5600).
Effective as of December 17, 1997, Robert V. Hery resigned as the President
and Chief Executive Officer of the Company, on which date the Board of Directors
of the Company elected Michael L. Parodi as the new President and Chief
Executive Officer of the Company. Mr. Hery has remained as the Chairman of the
Board of Directors of the Company. From 1991 to 1996, Mr. Parodi was Chairman of
the Board, President and Chief Executive Officer of Semiconductor Systems, Inc.
("SSI"), a manufacturer of track photolithography equipment sold to the
semiconductor and thin film head markets until SSI was merged with FSI
International ("FSI"). Mr. Parodi remained with FSI from the time of the merger
to December 1997 integrating SSI into FSI. In 1990, Mr. Parodi led the
acquisition of SSI from General Signal Corporation. Prior to 1990, Mr. Parodi
held various senior engineering and operations management positions with General
Signal Corporation, Signetics Corporation, Raytheon Company, Fairchild
Semiconductor Corporation and National Semiconductor Corporation.
For a more detailed discussion of the business and properties of the
Company, see the Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1997, which is incorporated by reference herein.
RISK FACTORS
In addition to the risk factors set forth below and the other
information in this Prospectus, prospective purchasers of the Shares offered
hereby should carefully consider the other risk factors set forth in "Business"
included in the Company's Annual Report on Form 10-K, which is incorporated
herein by reference.
DOMESTIC AND INTERNATIONAL ECONOMIC CONDITIONS
The Company's business is subject to general economic conditions, both
in the United States and abroad. A significant decline in economic conditions in
any significant geographic area could have a materiel adverse effect on the
Company. For example, there is currently an economic crisis in Asia, which has
led to weak demand for the Company's products in certain Asian economies --
notably Korea and Japan. The Company anticipates that the Asian economic crisis
may continue to adversely affect the Company's results of operations, and a
further decline of economic conditions in Asia could, in the future, affect
demand for the Company's products, which could have a material adverse effect on
the Company's sales and operating results.
YEAR 2000 COMPLIANCE
The Company utilizes a significant number of computer software programs
and operating systems across its entire organization. To the extent that the
Company's software applications contain source code that is unable to interpret
appropriately the upcoming calendar year "2000" and beyond, some level of
modification or replacement of such applications will be necessary. The Company
is working to identify its applications that are not "Year 2000" compliant and
plans to modify or replace such applications, as necessary. Given information
known at this time about the Company's systems that
5
<PAGE> 7
are non-compliant, coupled with the Company's ongoing, normal course-of-business
efforts to upgrade or replace critical systems, as necessary, management does
not expect Year 2000 compliance costs to have any material adverse impact on the
Company. Any costs related to the Company's Year 2000 compliance efforts will be
expensed as incurred. No assurance can be given, however, that all of the
Company's systems will be Year 2000 compliant or that compliance costs or the
impact of the Company's failure to achieve substantial Year 2000 compliance will
not have a material adverse effect on the Company.
The Company's 900 and 6500 series systems have already been reviewed and
verified that they handle calendar year "2000" and beyond appropriately.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Revenue ...................................... $ 57,423 $ 62,046 $ 44,645 $ 38,022 $ 42,777
Gross profit ................................. 25,901 28,577 20,583 16,508 19,458
Operating income (loss) ...................... 3,180 6,572 1,376 (1,072) 2,705
Income (loss) before income taxes ............ 4,180 6,186 949 (1,501) 1,792
Net income (loss) ............................ 3,140 5,566 828 (1,501) 1,526
Net income per share(1)
Basic ...................................... 0.31 1.14 (0.05) (5.67) 4.72
Diluted .................................... 0.29 0.64 (0.05) (5.67) 0.31
Shares used in per share calculation(1)
Basic ...................................... 10,124 4,506 502 357 218
Diluted .................................... 10,764 8,760 502 357 4,886
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents .................... $ 30,323 $ 23,283 $ 2,351 $ 3,462 $ 7,396
Working capital .............................. 45,392 41,726 11,432 11,297 11,690
Total assets ................................. 63,524 64,672 33,744 27,468 24,008
Short-term notes payable to banks
and others ................................ 252 243 8,164 3,947 0
Long-term obligations ........................ 301 356 4,338 3,749 3,295
Redeemable preferred stock ................... 0 0 21,695 22,382 22,207
Stockholders' equity (deficit) ............... 50,542 47,626 (11,633) (12,018) (10,196)
</TABLE>
(1) The Company adopted Statement of Accounting Standard No. 128
("FAS 128"), Earnings Per Share ("EPS"), which was issued in
February 1997. FAS 128 requires presentation of both basic and
diluted EPS on the income statement. For all periods presented,
Basic EPS is computed by dividing net income available to common
stockholders by the weighted average number of common shares
outstanding during the period. In computing diluted EPS, the
average stock price for the period is used in determining the
number of shares assumed to be purchased from the exercise of
stock options. Diluted EPS is computed using the weighted average
number of common and potential common stock equivalent shares
outstanding during the period.
6
<PAGE> 8
THE SELLING STOCKHOLDER
The Company was formed in December 1989 to acquire substantially all of
the assets of the former Tegal Corporation in a leveraged acquisition (the
"Acquisition"). In December 1989, in connection with the Acquisition, the
Selling Stockholder, as Investment Manager for The Prudential Insurance Company
of America, Separate Account No. VCA-GA-5298, provided the Company a term loan
in the aggregate principal amount of $8.0 million, and in partial consideration
for such loan, the Company granted the Selling Stockholder, on behalf of such
account, a warrant to purchase 228,571 shares of Series A Preferred Stock at an
exercise price of $2.43 per share (the "Series A Warrant"). In November 1991,
the Company issued the Selling Stockholder, on behalf of such account, 822,838
shares of Series A Preferred Stock for $2.0 million, or $2.43 per share. In
March 1993, the Company and the Selling Stockholder, on behalf of such account,
converted the $8.0 million term loan and approximately $1.2 million of accrued
and unpaid interest thereon into 876,190 shares of Series C Preferred Stock and
876,190 shares of Series D Preferred Stock. In December 1994, the Company issued
to the Selling Stockholder, on behalf of such account, 154,285 shares of Common
Stock in exchange for the cancellation of Series A Warrant. The Selling
Stockholder converted all shares of Series A, Series C and Series D Preferred
Stock held by it on behalf of such account into shares of Common Stock on a
1-for-1 basis upon the closing of the Company's initial public offering on
October 1995 and immediately thereafter, on behalf of such account, sold 983,690
shares of Common Stock.
The Selling Stockholder also beneficially owns approximately 31% limited
partnership interest in Nazem & Company III, L.P. ("Nazem"). As of the date
hereof, Nazem beneficially owns 3,291,399 shares of Common Stock representing
approximately 31.2% of the outstanding shares of Common Stock and has two
representatives on the Board of Directors of the Company. In addition, the
Selling Stockholder has representation on the Valuation Committee of Nazem
(which values securities held by Nazem but does not affect voting or investment)
and owns limited partnership interests in two other funds affiliated with Nazem,
neither of which owns any capital stock of the Company.
As of the date of this Prospectus, the Selling Stockholder beneficially
owns the Shares, or approximately 16.5% of the Company's issued and outstanding
shares of Common Stock. If all of the Shares are sold and the Selling
Stockholder does not acquire additional securities of the Company, the Selling
Stockholder will not hold any outstanding shares of Common Stock upon the
termination of this offering.
Except as otherwise noted above, the Company is unaware of any material
relationship between the Selling Stockholder and the Company in the past three
years other than as a result of the ownership of the Shares.
USE OF PROCEEDS
The Shares are being sold by the Selling Stockholder for its own
account, and the Company will not receive any of the proceeds from the sale of
the Shares.
7
<PAGE> 9
PLAN OF DISTRIBUTION
The Selling Stockholder or its pledges, donees, transferees or other
successors in interest may offer Shares from time to time, but may not offer
Shares after _______, 1998 (120 days after the date of this Prospectus) pursuant
to this Registration Statement, depending on market conditions and other
factors, in one or more transactions on the Nasdaq National Market or other
national securities exchanges on which the Common Stock is traded, in the over
the counter market or otherwise, at market prices prevailing at the time of
sale, at negotiated prices or at fixed prices. The Shares may be offered in any
manner permitted by law, including through underwriters, licensed brokers,
dealers or agents, and directly to one or more purchasers. Sales of Shares may
involve (i) sales to underwriters who will acquire Shares for their own account
and resell them in one or more transactions at fixed prices or at varying prices
determined at time of sale, (ii) block transactions in which the broker or
dealer so engaged will attempt to sell the Shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction, (iii)
purchases by a broker or dealer as principal and resale by such broker or dealer
for its account, (iv) an exchange distribution in accordance with the rules of
any such exchange and (v) ordinary brokerage transactions and transactions in
which a broker solicits purchasers. Brokers and dealers may receive compensation
in the form of underwriting discounts, concessions or commissions from the
Selling Stockholder and/or purchasers of Shares for whom they may act as agent
(which compensation may be in excess of customary commissions). The Selling
Stockholder and any broker or dealer that participates in the distribution of
Shares may be deemed to be underwriters and any commissions received by them and
any profit on the resale of Shares positioned by a broker or dealer may be
deemed to be underwriting discounts and commissions under the Securities Act. In
the event the Selling Stockholder engages an underwriter in connection with the
sale of the Shares, to the extent required, a Prospectus Supplement will be
distributed, which will set forth the number of Shares being offered and the
terms of the offering, including the names of the underwriters, any discounts,
commissions and other items constituting compensation to underwriters, dealers
or agents, the public offering price and any discounts, commissions or
concessions allowed or reallowed or paid by underwriters to dealers.
In addition, the Selling Stockholder may, from time to time, sell shares
in transactions under Rule 144 promulgated under the Securities Act.
Pursuant to the Amended and Restated Information and Registration Rights
Agreement dated as of March 31, 1990, as amended (the "Registration Rights
Agreement"), with Tegal Corporation Limited, a predecessor to the Company and
the other persons listed thereto, the Company will pay substantially all
registration expenses of the offering of the Shares, and the Selling Stockholder
will pay all underwriting discounts and selling commissions and other fees,
costs and expenses of the Selling Stockholder relating to the sale or
disposition of the Shares. The Company has agreed to indemnify the Selling
Stockholder and any other person who sells Shares pursuant to this Prospectus,
and any officer, director or agent of such person, against certain liabilities
under federal securities laws.
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<PAGE> 10
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Latham & Watkins, Menlo Park, California.
EXPERTS
The consolidated financial statements and consolidated financial
statement schedule of Tegal Corporation and subsidiaries as of March 31, 1997
and for the year then ended incorporated by reference in this Prospectus have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements and consolidated financial
statement schedule of Tegal Corporation and subsidiaries, as of March 31, 1996,
and for each of the years in the two-year period ended March 31, 1996, have been
incorporated by reference herein and in the Registration Statement in reliance
upon the reports of KPMG Peat Marwick LLP, independent auditors, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
9
<PAGE> 11
================================================================================
NO DEALER, SALES PERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREAFTER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information .................................................... 2
Incorporation of Certain
Information by Reference ............................................... 2
Forward-Looking Statements ............................................... 3
The Company .............................................................. 3
Risk Factors ............................................................. 4
The Selling Stockholder .................................................. 4
Use of Proceeds .......................................................... 6
Plan of Distribution ..................................................... 6
Legal Matters ............................................................ 7
Experts .................................................................. 7
</TABLE>
1,745,813 SHARES
TEGAL CORPORATION
COMMON STOCK
------------------
PROSPECTUS
------------------
________, 1998
================================================================================
10
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses relating to the registration of the Shares will be borne by
the Company. Such expenses are set forth in the table below. All amounts are
estimates except the Securities Act registration fee.
<TABLE>
<S> <C>
Securities Act Registration Fee ................... $ 2,415
Legal Fees and Expenses (other than Blue Sky) ..... 20,000
Accounting Fees and Expenses ...................... 5,000
Blue Sky Fees and Expenses ........................ 5,000
Miscellaneous ..................................... _______
Total ............................................. $32,415
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Certificate of Incorporation provides that to the fullest
extent permitted by the Delaware General Corporation Law ("DGCL"), a director of
the Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director. Subsection (b)(7) of Section
102 of the DGCL enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director to the corporation or its stockholders for monetary
damages for violations of the director's fiduciary duty, except (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the
DGCL (providing for liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions) or (iv) for any transaction from which
a director derived an improper personal benefit. The effect of the provision of
the Company's Certificate of Incorporation is to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of the
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek nonmonetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any present or former director, officer, employee or agent of the
corporation, or any individual serving at the Company's request as a director,
officer or employee of another organization, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding provided that such director, officer, employee or agent acted in good
faith and in a manner reasonably believed to
II-1
<PAGE> 13
be in, or not opposed to, the best interests of the corporation, and, with
respect to any criminal action or proceeding, provided further that such
director, officer, employee or agent had no reasonable cause to believe his
conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
present or former director, officer, employee or agent who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit
provided that such director, officer, employee or agent acted in good faith and
in a manner reasonably believed to be in, or not opposed to, the best interests
of the corporation, except that no indemnification may be made in respect to any
claim, issue or matter as to which such director, officer, employee or agent
shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all of the circumstances of the case, such director,
officer, employer or agent is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 further provides that to the extent a director, officer,
employee or agent has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys fees) actually and reasonably incurred by him in connection
therewith; that indemnification and advancement of expenses provided for, by, or
granted pursuant to Section 145 shall not be deemed exclusive of any other
rights to which the indemnified party may be entitled; and empowers the
corporation to purchase and maintain insurance on behalf of a present or former
director, officer, employee or agent of the corporation, or any individual
serving at the Company's request as a director, officer or employee of another
organization, against any liability asserted against him or incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.
The Company's Certificate of Incorporation provides that the Company
shall indemnify its directors, officers, employees and agents against losses
incurred by any such person by reason of the fact that such person was acting in
such capacity. In addition, pursuant to an agreement with holders of securities
providing for registration rights, such holders are entitled to be indemnified
by the Company for certain liabilities under federal securities laws.
The Company has in effect directors' and officers' liability policies in
the aggregate amount of $10 million covering all of its directors and officers.
II-2
<PAGE> 14
ITEM 16. EXHIBITS.
The following documents are filed as part of this Registration
Statement.
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
<S> <C>
3.1 Certificate of Incorporation of Tegal Corporation, as
amended (incorporated herein by reference to Exhibits
3(i).1 and 3(i).2 included in Registrant's Registration
Statement on Form S-1 (No. 33-84702)).
3.2 By-Laws of Tegal Corporation (incorporated by reference
to Exhibit 3(ii) included in Registrant's Registration
Statement on Form S-1 (File No. 33-84702)).
4.1 Information and Registration Rights Agreement between
Tegal Corporation and the other persons listed thereto
dated as of December 19, 1989, as amended to date
(incorporated herein by reference to Exhibit 4.2 included
in Registrant's Registration Statement on Form S-1 (No.
33-84702)).
4.2 Specimen form of certificate of the Registrant's Common
Stock (incorporated herein by reference to Exhibit 4.1
included in Registrant's Registration Statement on Form
S-1 (No. 33-84702)).
5.1 Opinion of Latham & Watkins.
23.1 Consent of Latham & Watkins (included in its opinion
filed as Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney (included on the signature page to
this Registration Statement).
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or most recent
post-effective amendment thereof) which, individually
II-3
<PAGE> 15
or in the aggregate, represent a fundamental change in the information
set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously discussed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration, by means of a post-effective amendment,
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered 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 Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Petaluma, State of California, on the 8th day of
May, 1998.
TEGAL CORPORATION,
a Delaware corporation
By: /s/ Michael L. Parodi
-------------------------------------
Michael L. Parodi
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Michael L. Parodi and David
Curtis, and each of them, with full power of substitution and full power to act
without the other, his true and lawful attorney-in-fact and agent to act for him
in his name, place and stead, in any and all capacities, to sign any or all
amendments (including post-effective amendments) to this Registration Statement
on Form S-3, or any Registration Statement for the same offering that is to be
effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933,
and to file the same, with all exhibits thereto, and other documents in
connection therewith or in connection with the registration of the Common Stock
under the Securities Exchange Act of 1934, as amended, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully, to all intents and purposes, as they or he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, 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 in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Michael L. Parodi President, May 8, 1998
--------------------------- Chief Executive Officer
Michael L. Parodi and Director
(Principal Executive Officer)
</TABLE>
II-5
<PAGE> 17
<TABLE>
<S> <C> <C>
/s/ David Curtis Vice President, Finance and May 8, 1998
--------------------------- Administration and
David Curtis Chief Financial Officer
(Principal Financial Officer)
/s/ William O'Shea Corporate Controller May 8, 1998
--------------------------- (Principal Accounting Officer)
William O'Shea
/s/ Robert V. Hery Chairman of the Board May 8, 1998
Robert V. Hery
/s/ Jeffrey M. Krauss Director May 8, 1998
---------------------------
Jeffrey M. Krauss
/s/ Thomas R. Mika Director May 8, 1998
---------------------------
Thomas R. Mika
/s/ Fred Nazem Director May 8, 1998
---------------------------
Fred Nazem
/s/ Edward A. Dohring Director May 8, 1998
---------------------------
Edward A. Dohring
</TABLE>
II-6
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Certificate of Incorporation of Tegal Corporation, as
amended (incorporated herein by reference to Exhibits
3(i).1 and 3(i).2 included in Registrant's Registration
Statement on Form S-1 (No. 33-84702)).
3.2 By-Laws of Tegal Corporation (incorporated by reference
to Exhibit 3(ii) included in Registrant's Registration
Statement on Form S-1 (File No. 33-84702)).
4.1 Information and Registration Rights Agreement between
Tegal Corporation and the other persons listed thereto
dated as of December 19, 1989, as amended to date
(incorporated herein by reference to Exhibit 4.2 included
in Registrant's Registration Statement on Form S-1 (No.
33-84702)).
4.2 Specimen form of certificate of the Registrant's Common
Stock (incorporated herein by reference to Exhibit 4.1
included in Registrant's Registration Statement on Form
S-1 (No. 33-84702)).
5.1 Opinion of Latham & Watkins.
23.1 Consent of Latham & Watkins (included in its opinion
filed as Exhibit 5.1).
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of KPMG Peat Marwick LLP.
24.1 Powers of Attorney (included on the signature page to
this Registration Statement).
</TABLE>
II-7
<PAGE> 1
Exhibit 5.1
[LATHAM & WATKINS LETTERHEAD]
May 8, 1998
Tegal Corporation
2201 South McDowell Boulevard
P.O. Box 6020
Petaluma, California 94955-6020
Re: Tegal Corporation
1,745,813 shares of Common Stock, par value $.01 per share
Ladies/Gentlemen:
In connection with the registration of 1,745,813 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of Tegal
Corporation, a Delaware corporation (the "Company"), issued to a certain
stockholder (the "Selling Stockholder") of the Company, under the Securities Act
of 1933, as amended, on Form S-3 filed with the Securities and Exchange
Commission on May 8, 1998 (the "Registration Statement"), you have requested
our opinion with respect to the matters set forth below.
In our capacity as your special counsel in connection with such
registration, we have made such legal and factual examinations and inquiries as
we have deemed necessary or appropriate for purposes of this opinion, except
where a statement is qualified as to knowledge or awareness, in which case we
have made no or limited inquiry as specified below.
<PAGE> 2
LATHAM & WATKINS
Tegal Corporation
May 8, 1998
Page 2
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as copies.
We have been furnished with, and with your consent have relied
upon, certificates of officers of the Company with respect to certain factual
matters. In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary.
We are opining herein as to the effect on the subject transaction
only of the General Corporation Law of the State of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of any
other laws, or as to any matters of municipal law or the laws of any other local
agencies within the state. In rendering the opinion below, we have also relied
on the opinion of Richards, Layton & Finger dated as of October 24, 1995, the
Company's special counsel in connection with the domestication of the Company in
the State of Delaware and the opinion of Conyers, Dill and Pearman dated as of
October 24, 1995, the Company's Bermuda counsel.
Whenever a statement herein is qualified by "to our knowledge" or
a similar phrase, it is intended to indicate that those attorneys in this firm
who have rendered legal services in connection with the above transactions do
not have current actual knowledge of the inaccuracy of such statement. However,
except as otherwise expressly indicated, we have not undertaken any independent
investigation to determine the accuracy of any such statement, and no inference
that we have any knowledge of any matters pertaining to such statement should be
drawn from our representation of the Company.
Subject to the foregoing, it is our opinion that, as of the date
hereof, the Shares have been duly authorized, validly issued and, to our
knowledge, are fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Latham & Watkins
<PAGE> 1
Exhibit 23.2
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
April 23, 1997 appearing on page 44 of Tegal Corporation's Annual Report on Form
10-K for the year ended March 31, 1997. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule which appears on
page S-2 of such Annual Report on Form 10-K. We also consent to the reference to
us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
- ------------------------
Price Waterhouse LLP
San Jose, California
May 5, 1998
<PAGE> 1
Exhibit 23.3
The Board of Directors
Tegal Corporation:
We consent to incorporation herein by reference of our reports dated April 23,
1996, relating to the consolidated balance sheets of Tegal Corporation and
subsidiaries as of March 31, 1996, and 1995, and the related consolidated
statements of earnings, retained earnings, and cash flows for each of the years
in the two-year period ended March 31, 1996, and the related consolidated
financial statement schedule, which reports appear in the March 31, 1997, annual
report on Form 10-K of Tegal Corporation and to the reference to our firm under
the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Mountain View, California
May 4, 1998
