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EX-31.1 - Rennova Health, Inc. | v192015_ex31-1.htm |
EX-31.2 - Rennova Health, Inc. | v192015_ex31-2.htm |
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
|
Washington,
D.C.
20549
|
Amendment
No. 1 to
Form
10-K/A
(Mark
One)
þ
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended March 31, 2010
OR
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
file number: 0-26824
Tegal
Corporation
(Exact
name of Registrant as specified in its Charter)
Delaware
|
68-0370244
|
(State
or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S.
Employer Identification No.)
|
2201
South McDowell Boulevard
|
|
Petaluma,
California
|
94954
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (707) 763-5600
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
Registered Pursuant to Section 12(g) of the Act:
Common
Stock, $0.01 Par Value
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes ¨ No
þ
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.
Yes o No
þ
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes þ No
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405) is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. þ
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes
o
No o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company. See definitions of “large accelerated filer”, “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o
(Do not check if a smaller reporting company)
|
Smaller
reporting company þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act.
Yes o No
þ
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant, based on the closing sale price of the common
stock on March 31, 2010 as reported on the NASDAQ Capital Market, was
$8,016,209. As of June 14, 2010, 8,438,115 shares of the registrant’s common
stock were outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
See
“Explanatory Note.”
Explanatory
Note
This
Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report on
Form 10-K of Tegal Corporation for the fiscal year ended March 31, 2010,
originally filed with the Securities and Exchange Commission (“SEC”) on June 14,
2010 (the “Original Filing”). We are filing this Amendment to amend Part III of
the Original Filing to include the information required by and not included in
Part III of the Original Filing because we no longer intend to file our
definitive proxy statement within 120 days of the end of our fiscal year ended
March 31, 2010. We are also including as exhibits the current certifications
required under Section 302 of the Sarbanes-Oxley Act of 2002.
Except as
described above, no other changes have been made to the Original Filing. The
Original Filing continues to speak as of the date of the Original Filing, and we
have not updated the disclosures contained therein to reflect any events which
occurred at a date subsequent to the filing of the Original Filing other than as
expressly indicated in this Amendment. Accordingly, this Amendment should be
read in conjunction with the Original Filing and our other filings made with the
SEC on or subsequent to June 14, 2010. In this Amendment, unless the context
indicates otherwise, the terms “company,” “we,” “us,” and “our” refer to Tegal
Corporation. Other defined terms used in this Amendment but not defined herein
shall have the meaning specified for such terms in the Original
Filing.
2
TABLE
OF CONTENTS
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|
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Page No.
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PART
III
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|||
Item 10
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Direct Directors,
Executive Officers and Corporate Governance
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4
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Item 11
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Executive
Compensation
|
8
|
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Item 12
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
17
|
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Item 13
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Certain
Relationships and Related Transactions, and Director
Independence
|
18
|
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Item 14
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Principal
Accounting Fees and Services
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19
|
|
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|||
Part
IV
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|||
Item 15
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Exhibits,
Financial Statement Schedules
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21
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SIGNATURES
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21
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3
PART
III
Item
10. Directors and
Executive Officers of the Registrant
DIRECTORS
The
following table sets forth information regarding our directors as of July 13,
2010:
Name
|
Age
|
Director
Since
|
New Term Will Expire
|
|||
Gilbert
Bellini, Director
|
54
|
2008
|
2010
|
|||
Jeffrey
M. Krauss, Director
|
53
|
1992
|
2010
|
|||
Thomas
R. Mika, President, CEO and Chairman of the Board
|
59
|
2006
|
2010
|
|||
Carl
Muscari, Director
|
58
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2007
|
2010
|
|||
Ferdinand
Seemann, Director
|
48
|
2009
|
2010
|
Gilbert Bellini joined the
Board of Directors on September 23, 2008. Mr. Bellini has served as
President of Alcatel Micro Machining Systems (“AMMS”) since March
2006. The assets of AMMS were acquired by Tegal in September 2008.
From 1980 until 2006, Mr. Bellini held various management positions in software
development, equipment engineering, and industrial equipment product lines for
Alcatel-Lucent. Mr. Bellini was the contributor to the launch of the
deep etching of silicon at Alcatel and has been managing AMMS’s deep-etching
business since its creation in 1999. Mr. Bellini holds a Bachelor of
Science degree in Electronics from the University of Grenoble in France,
followed with several internal International Business Education Training courses
at Alcatel-Lucent. We believe that Mr. Bellini’s education and
experience as an engineer and his management experience at companies in the
semiconductor industry make Mr. Bellini a highly-valued member of the Board of
Directors.
Jeffrey M. Krauss has served
as a director of Tegal since June 1992. Since April 2000, Mr. Krauss has
been a Managing Member of Psilos Group Managers, LLC, a New York based venture
capital firm, and a Managing Member of the general partner of Psilos Group
Partners I, LP, Psilos Group Partners II, LP, Psilos Group Partners II-S, LP and
Psilos III, each a venture capital partnership. From 1990 until April 2000,
Mr. Krauss was a general partner of the general partner of Nazem &
Company III, L.P. and Nazem & Company IV, L.P., both venture capital
funds. He was also a general partner of the general partner of The Transatlantic
Fund, a joint venture capital fund between Nazem & Company and Banque
Nationale de Paris of France. Prior to joining Nazem & Company,
Mr. Krauss was a corporate attorney with the law firm of Simpson
Thacher & Bartlett, where he specialized in leveraged buyout
transactions. He currently serves as a director of several private
companies. We believe that Mr. Krauss’ public accounting experience,
CPA certification, business management experience and his
service as a director for several other companies make Mr. Krauss a
highly-valued member of the Board of Directors.
Thomas R. Mika has served as
a director of Tegal since 2006. Mr. Mika was appointed our President
and Chief Executive Officer in March 2005 and appointed Chairman of the Board in
October 2006. Mr. Mika also served on our Board of Directors of Tegal from 1992
to 2002, which included periods of service as the Chairman of the Compensation
Committee and a member of the Audit Committee, until he was appointed as
Executive Vice President and Chief Financial Officer in August
2002. Mr. Mika has more than 25 years of senior management,
finance and consulting experience. Mr. Mika has played and continues to
play a key role in company management, including managing the activities leading
to our initial public offering in 1995. Prior to becoming our Executive Vice
President and Chief Financial Officer, Mr. Mika founded IMTEC, a boutique
investment firm active in the management of several companies. In addition to
completing multiple private equity financings, joint ventures, acquisitions and
license agreements on behalf of his clients, he held senior positions with
Soupmasters International, Inc., where he served as President & CEO,
and Disc International, Ltd., a software firm, where he served as Chief
Executive. Mr. Mika was also a director of Metrologix, a semiconductor
metrology company, from the time of its initial start-up until its sale to
KLA-Tencor Corp. Prior to forming IMTEC, Mr. Mika was a managing consultant
with Cresap, McCormick & Paget and a policy analyst for the National
Science Foundation. He holds a Bachelor of Science degree in microbiology from
the University of Illinois at Urbana-Champaign and a Master of Business
Administration degree from the Harvard Graduate School of
Business. We believe that Mr. Mika’s earlier experience on the Board
of Directors for Tegal, his consulting experience in several different
industries, and his management experience as a CEO make Mr. Mika a highly-valued
member of the Board of Directors.
4
Carl Muscari has served as a
director of Tegal since November 2007. Mr. Muscari is currently the Chief
Executive Officer of MSRC Co. (“MSRC”), a leading independent distributor of
computer and electronics components based in Brentwood, NH. During
his four-year tenure at MSRC, Mr. Muscari has been credited with the turn-around
and modernization of this privately-held company. From 1999 until
2003, Mr. Muscari served as Chairman and CEO of Video Network Communications,
Inc. (“VNCI”), based in Portsmouth, NH. Prior to VNCI, Mr. Muscari
was President of Acuity Imaging, Inc., a machine vision company, and President
& CEO of Exos, Inc. a private company with force-feedback controls
technology incorporated into home video, arcades and PCs, which was sold to
Microsoft in 1996. He was Executive Vice President and Chief
Operating Officer of Madison Cable Corp., a high volume manufacturer of
electronic cable for the computer industry, and the Vice President and General
Manager of the Seals Division of Ferrofluidics Corp., a major supplier to the
semiconductor, disk drive and aerospace industries. Mr. Muscari began
his career at Westinghouse Corporation, where he was a thermal-hydraulic
engineer and a production manager for Sun Chemical Corporation. Mr. Muscari
holds a BS Mechanical Engineering degree from Cornell University, an MS
Engineering degree from the Massachusetts Institute of Technology and an MBA
from the Harvard University Graduate School of Business. We believe
that Mr. Muscari’s experience and education as an engineer, his experience is
the electronics industry, and his management experience as a CEO make Mr.
Muscari a highly-valued member of the Board of Directors.
Ferdinand Seemann has served
as a director of Tegal since December 2009 and is currently the CEO of se2quel
Partners LLC, a technology consulting firm. Before founding se2quel Partners in
2003, Mr. Seemann held senior positions in several leading technology companies,
including Vice President of Lam Research Corporation, Executive Vice President
of Mattson Technology, President & CEO of Steag Microtech and President and
Owner of Seemann Engineering. Mr. Seemann started his career as a process
engineer at Wacker Siltronic in Germany. Mr. Seemann holds a BSEE from the
Fachhochschule Regensburg and mastered in “Novel, cost efficient photovoltaic
systems” in 1985. We believe that Mr. Seemann’s several years of
experience in the semiconductor industry as well as his management experience as
CEO, Vice President and Executive Vice President make Mr. Seeman a highly-valued
member of the Board of Directors.
All
directors hold office until our next annual meeting of the stockholders and
until their successors have been duly elected or qualified. There are no family
relationships between any of our directors or executive officers.
EXECUTIVE
OFFICERS
The
following table sets forth information regarding our executive officers as of
July 13, 2010:
Name
|
Age
|
Position
|
||
Thomas
R. Mika
|
59
|
President
and Chief Executive Officer
|
||
Christine
T. Hergenrother
|
45
|
Vice
President, Chief Financial Officer and Treasurer
|
||
Paul
Werbaneth
|
51
|
Vice
President, Marketing and
Applications
|
For
information on Mr. Mika’s background, see “Directors” above.
Christine Hergenrother was
appointed our Vice President, Chief Financial Officer, Secretary and Treasurer
in March 2005. Prior to that, Ms. Hergenrother served as our Director of
Corporate Development since June 2004, with principal responsibility for
Sarbanes-Oxley and general SEC compliance matters. Between September 2002 and
March 2004, Ms. Hergenrother was the Corporate Controller of Amarin
Pharmaceuticals, Inc. From February 1997 until September 2002,
Ms. Hergenrother held increasingly responsible positions within the finance
department of Tegal. Prior to Tegal, she was a senior accountant at Mindscape
Inc. and a staff auditor at the firm of Pisenti & Brinker, LLP.
Ms. Hergenrother holds a Bachelor of Science degree in Business Management
from Illinois State University. Ms. Hergenrother is a member of the
American Institute of Certified Public Accountants and the California Society of
CPA’s.
5
Paul Werbaneth was appointed
our Vice President of Marketing and Applications in October 2008. Mr.
Werbaneth first joined Tegal in 1983 as a process support
engineer. He held various engineering and marketing positions from
1983 - 2004 when he transferred to Tegal Japan as the Managing
Director. Following his assignment in Japan, he held senior
management positions in the Marketing department from 2004 through October 2008
for Tegal USA. He holds a Bachelor of Science degree in Chemical
Engineering from Cornell University, and has worked for more than 25 years in
semiconductor process engineering, technical marketing, and business management
positions at Intel, Hitachi America Ltd., and Tegal. Mr. Werbaneth is
a member of the Steering Committee of the Advanced Semiconductor Manufacturing
Conference (ASMC 2004 Conference Co-Chair), serves on the Technical Program
Committee for CS MANTECH, and is an active member of the MEMS Industry
Group. Mr. Werbaneth is also the author or co-author of more than 45
papers and articles on the topics of semiconductor processing, plasma etch
processes, and the semiconductor capital equipment business.
There are
no family relationships between any of our directors or executive
officers.
BOARD
OF DIRECTORS AND COMMITTEES OF THE BOARD
Audit
Committee
The Board
of Directors has established a standing Audit Committee. The Audit
Committee, consisting of Messrs. Muscari, Seemann and Krauss (Chairman) at the
fiscal year end March 31, 2010, reviews the adequacy of internal controls and
the results and scope of the audit and other services provided by our
independent auditors. The Audit Committee meets periodically with management and
the independent auditors.
Each
member of our Audit Committee meets the enhanced independence standards
established by the Sarbanes-Oxley Act of 2002 and related rulemaking of the
Securities and Exchange Commission, or SEC. The Board of Directors has further
determined that Mr. Krauss, Chairman of the Audit Committee, is an “audit
committee financial expert,” as such term is defined in Item 407(d)(5)(ii)
of Regulation S-K promulgated by the SEC, by virtue of his relevant experience
listed in his biographical summary provided above.
Compensation
Committee
The Compensation Committee consists of
Messrs. Muscari (Chairman), Krauss and Seemann. The Compensation
Committee held no meetings in fiscal 2010. The functions of the Compensation
Committee include establishing salaries, incentives and other forms of
compensation for our officers and other employees and administering our
incentive compensation and benefit plans. The Board of Directors has adopted a
compensation committee charter, a copy of which is posted on our website at
www.tegal.com.
Compensation
Committee Interlocks and Insider Participation
There are and were no interlocking
relationships between the Board of Directors or the Compensation Committee and
the board of directors or compensation committee of any other company, nor has
any such interlocking relationship existed in the past.
Nominating/Corporate
Governance Committee
The
Nominating/Corporate Governance Committee is comprised of Messrs. Muscari
(Chairman), Seemann and Krauss. The Nominating/Corporate Governance Committee
held 1 meeting in fiscal 2010, but met informally on several occasions to
discuss particular candidates and matters related to corporate governance. The
functions of the Nominating/Corporate Governance Committee are to identify
qualified candidates for election to the Board of Directors and establish
procedures for the director candidate nomination and evaluation. The Board of
Directors has adopted a Nominating/Corporate Governance Committee charter, a
copy of which is posted on our website at www.tegal.com.
The
Nominating/Corporate Committee strives for a mix of skills and diverse
perspectives that are essential for the Board of Directors. In selecting the
nominees, the Nominating/Corporate Committee assesses the independence, business
judgment, management, accounting and finance, industry and technology knowledge,
understanding of manufacturing, leadership, strategic vision, knowledge of
international markets and marketing. Further criteria include a candidate’s
personal and professional ethics, integrity and values, as well as the
willingness to devote sufficient time to attend meetings and participate
effectively on the Board of Directors. The Nominating/Corporate
Governance Committee intends to evaluate candidates who are qualified to serve
on the Board of Directors and the Audit Committee of the Board of Directors so
as to comply with NASDAQ Listing Rules 5606(b)(1) and 5605(c)(2)(A) within the
cure period provided by NASDAQ Listing Rules 5605(b)(1) and
5605(c)(4).
6
CODE
OF BUSINESS CONDUCT AND ETHICS
Our Code
of Business Conduct and Ethics is available to stockholders, upon written
request, and is posted on our website at www.tegal.com. If you would like a copy
of our Code, please send your request to: Christine Hergenrother, Secretary,
Tegal Corporation, 2201 South. McDowell Boulevard, Petaluma, California
94954.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)
of the Exchange Act, requires our officers and directors, and persons who own
more than ten percent of a registered class of our equity securities, to file
reports of ownership and changes in ownership (Forms 3, 4 and 5) with the SEC.
Officers, directors and greater-than-ten-percent holders are required to furnish
us with copies of all such forms which they file.
To our
knowledge, based solely on our review of such reports or written representations
from certain reporting persons, we believe that all of the filing requirements
applicable to our officers, directors, greater than 10% beneficial owners and
other persons subject to Section 16 of the Exchange Act were complied with
during the year ended March 31, 2010.
7
Item
11.
Executive
Compensation
Compensation
Discussion and Analysis
Overview
of Compensation Programs and Philosophy
Our
philosophy is to provide a total compensation package that is competitive with
the prevailing practices for our industry and geographic locations. We believe
that there should be a strong link between pay and performance, both at the
company level and the individual level. Although we believe that exceptional
individual performance should be rewarded, we believe that such rewards should
not be made unless there has been strong company performance as
well.
Components
of Tegal’s Compensation Program
There are
four major elements that comprise Tegal’s executive officer compensation
program: (i) base salary; (ii) annual cash bonus, (iii) long-term incentives,
such as stock options and restricted stock unit awards; and (iv) retirement
benefits provided under a 401(k) plan and health benefits. Tegal has selected
these elements because each is considered useful and/or necessary to meet one or
more of the principal objectives of our compensation policy. For instance, base
salary and bonus target percentages are set with the goal of attracting and
retaining employees, adequately compensating them on a day-to-day basis for the
time spent and the services they perform and rewarding them for achievement at
specified levels of financial and individual performance. Our equity awards are
intended to provide an incentive and reward for the achievement of long-term
business objectives, including achievement of our financial goals and growth of
our company. Tegal believes that these elements of compensation, when combined,
are effective, and will continue to be effective, in achieving the objectives of
our compensation programs.
Tegal’s
compensation program is intended to assure that our compensation and benefits
policies attract, motivate and retain the key employees necessary to support our
growth and success, both operationally and strategically. We intend to design
and implement compensation and benefit programs for our officers and other
executives in order to meet these guiding principles. To meet these objectives,
Tegal has adopted the following overriding policies:
|
•
|
Use
total cash compensation (salary plus annual cash bonus) to recognize
appropriately each individual officer’s scope of responsibility, role in
the organization, experience and contributions;
and
|
|
•
|
Reward
performance by:
|
|
•
|
Providing
short-term bonus compensation by establishing a bonus plan to reward
corporate and individual achievement;
and
|
|
•
|
Providing
long-term incentives in the form of stock options and restricted stock
unit awards in order to retain those individuals with the leadership
abilities necessary for increasing long-term stockholder value while
aligning the interests of our officers with those of our
stockholders.
|
The above
policies were established by the Compensation Committee (the Committee) of the
Board of Directors in setting executive officer compensation, including the
assessment of the appropriate allocation among salaries, short- and long-term
incentives. Other considerations include Tegal’s business objectives,
competitive practices and trends and regulatory requirements.
Oversight
of Executive Compensation
Tegal’s
executive compensation program is overseen and administered by the Committee,
which is comprised entirely of independent directors as determined in accordance
with various Nasdaq Stock Market, Securities and Exchange Commission and
Internal Revenue Code rules.
The
Committee meets regularly with Tegal’s President and Chief Executive Officer,
Mr. Mika, to obtain recommendations with respect to our compensation
programs, practices and packages for executives, other employees and directors.
Mr. Mika makes recommendations to the Committee on the base salary, bonus
targets and equity compensation for the executive team and other employees. The
Committee considers, but is not bound to and does not always accept,
Mr. Mika’s recommendations with respect to executive compensation. The
Committee seriously considers proposals made by Mr. Mika, and executive
compensation levels established for fiscal 2010 were generally based upon
recommendations made by Mr. Mika.
8
Mr. Mika
attends some of the Committee’s meetings, but the Committee also regularly holds
executive sessions not attended by any members of management or non-independent
directors. The Committee discusses Mr. Mika’s compensation package with
him, but makes decisions with respect to Mr. Mika’s compensation without
him present. The Committee has the ultimate authority to make decisions with
respect to the compensation of our named executive officers. All grants of stock
options to newly-hired employees and to existing employees are made by the
Committee or the Board of Directors at regularly scheduled quarterly meetings.
The Committee also has authorized Mr. Mika to make salary adjustments and
bonus decisions for all employees other than executive officers.
The
Committee reviews the compensation program on an as-needed basis. In setting
compensation levels for a particular executive, the Committee takes into
consideration the proposed compensation package as a whole and each element
individually, as well as the executive’s past and expected future contributions
to our business.
In
determining the particular elements of compensation that will be used to
implement Tegal’s overall compensation policies, the Committee reviews our
financial performance, and the continued improvement expected in the coming
fiscal year operating budgets, difficulties still facing us in achieving its
operating budget, achievement of targeted revenue, gross profit and operating
expense levels, as well as the competitive environment in which we
operate.
Reliance
on Compensation Consultants
The Committee has the authority to
engage its own independent advisors to assist in carrying out its
responsibility. In fiscal 2010, the Committee did not retain a compensation
consultant.
Base
Salary
The base
salary for each named executive officer is generally established through
negotiation at the time the executive is hired, taking into account the
executive’s qualifications, experience, prior salary and competitive salary
information. Each year, the Compensation Committee determines whether
to approve merit increases to our named executive officers’ base salaries based
upon their individual performance and the recommendations of Mr.
Mika. As a result of such a review, salaries for our named executive
officers during fiscal 2010 were decreased 5% from fiscal 2009.
Bonus
Plan
In order
to motivate executives and managers in the attainment of our annual goals and to
enhance our ability to attract and retain key managerial employees through a
competitive compensation package, in past years we have adopted an annual
discretionary performance bonus plan for certain executives and managers. Under
this plan, each named executive officer or manager typically has an annual
bonus incentive target expressed as a percentage of that executive’s or
manager’s base salary. For fiscal 2010, no bonuses were paid.
Long-Term
Incentive Compensation
Tegal
provides long-term incentive compensation through awards of stock options and
restricted stock units that generally vest over multiple years. Tegal’s equity
compensation program is intended to align the interests of our officers with
those of our stockholders by creating an incentive for our officers to maximize
stockholder value. The equity compensation program also is designed to encourage
our officers to remain employed with Tegal in a very competitive labor
market.
Equity-based
incentives are granted to our officers under Tegal’s stockholder-approved equity
incentive plan. The Committee has in the past several years only granted equity
awards to executive officers at its scheduled meetings. Grants approved during
scheduled meetings become effective and are priced as of the date of approval,
or a predetermined future date (for example, new hire grants are effective as of
the later of the date of approval or the newly hired employee’s start date),
provided that if public announcement of material information other than
quarterly earnings is anticipated, the grant date may be deferred at the
discretion of the Board of Directors or Committee until after release of such
information. All grants of stock options or other equity awards to newly-hired
employees are made by the Committee or the Board of Directors at regularly
scheduled quarterly meetings. The exercise price of all options is at the
closing price of our common stock on the grant date, as reported by the Nasdaq
Stock Market.
The
Committee believes that stock options and restricted stock unit awards can be
effective tools for meeting Tegal’s compensation goal of increasing long-term
stockholder value by tying the value of the stock options and restricted stock
awards to Tegal’s performance in the future. The number of options and
restricted stock units the Committee grants to each officer and the vesting
schedule for each grant is determined based on a variety of factors, including
the Committee’s goal of increasing the proportion of long-term incentive
compensation awarded to executive officers. No stock options or
restricted stock units were awarded in fiscal 2010 to the named executive
officers.
9
Other
Benefits and Perquisites
Our named
executive officers are eligible to participate in the Tegal Corporation Employee
Savings and Retirement Plan (the “401(k) Plan”). Under the 401(k) Plan, all
Tegal employees are eligible to participate and to receive matching
contributions from Tegal that are subject to vesting over time.
Tegal
also offers a number of other benefits to the named executive officers pursuant
to benefit programs that it maintains for broad-based employee participation.
These benefits programs include medical, dental and vision insurance, long-term
and short-term disability insurance, life and accidental death and dismemberment
insurance, health and dependent care flexible spending accounts, business travel
insurance, educational assistance, employee assistance and certain other
benefits.
In
addition, Tegal provided an automobile allowance of $9,000 per year to Scott
Brown, Tegal’s Former Vice President, Sales North America.
Accounting
and Tax Considerations
In
designing its compensation programs, Tegal takes into consideration the
accounting and tax effect that each element will or may have on Tegal and the
executive officers and other employees as a group. Tegal recognizes a charge to
earnings for accounting purposes when either stock options or restricted stock
unit awards are granted. In addition, since restricted stock unit awards provide
immediate value to employees once vested, while the value of stock options is
dependent on future increases in the value of Tegal stock, Tegal may be able to
realize the same retention value from a smaller number of shares of restricted
stock units as compared to stock options.
In
addition, Tegal has not provided any executive officer or director with a
gross-up or other reimbursement for tax amounts the executive might pay pursuant
to Section 280G or Section 409A of the Internal Revenue
Code.
In
determining which elements of compensation are to be paid, and how they are
weighted, Tegal also takes into account whether a particular form of
compensation will be considered “performance-based” compensation for purposes of
Section 162(m) of the Internal Revenue Code. Under Section 162(m),
Tegal generally receives a federal income tax deduction for compensation paid to
certain executive officers only if the compensation is less than $1 million
during any fiscal year or is “performance-based” under Section 162(m). Our
Committee currently intends to continue seeking a tax deduction for all of
Tegal’s executive compensation, to the extent we determine it is in the best
interests of Tegal. All of the stock options granted to our executive officers
qualify under Section 162(m) as performance-based
compensation.
Compensation
Committee Report
The
information contained in this report shall not be deemed to be “soliciting
material” or “filed” with the SEC or subject to the liabilities of
Section 18 of the Exchange Act, except to the extent that Tegal
specifically incorporates it by reference into a document filed under the
Securities Act or the Exchange Act.
We, the
Compensation Committee of the Board of Directors of Tegal Corporation, have
reviewed and discussed the Compensation Discussion and Analysis contained in
this proxy statement with management. Based on such review and discussion, we
have recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in Tegal’s Annual Report on Form 10-K/A for the fiscal year
ended March 31, 2010.
Submitted
on July 30, 2010 by the members of the Compensation Committee of the Board of
Directors.
THE
COMPENSATION COMMITTEE
|
|
Carl
Muscari, Chair
|
|
Jeffrey
M. Krauss
|
|
Ferdinand
Seemann
|
10
EXECUTIVE
COMPENSATION
The
following table shows, for the fiscal year ended March 31, 2010, the cash
compensation paid by us and our subsidiaries as well as certain other
compensation paid or accrued for those years for services in all capacities to
the persons serving as the Chief Executive Officer during fiscal 2010 and the
other two most highly compensated executive officers whose total annual salary
and bonus exceeded $100,000 in fiscal 2010, which executives are referred to as
the “named executive officers”.
SUMMARY
COMPENSATION TABLE
Name and Principal Position
|
Year
|
Salary
($)(3)
|
Bonus
($)
|
Option
Awards
($) (1)
|
All Other
Compensation
($) (2)
|
Total
($)
|
||||||||||||||||
Thomas
Mika
|
2010
|
271,393 | — | — | 1,081 | 272,474 | ||||||||||||||||
Chairman,
President & CEO
|
2009
|
285,208 | — | 320,222 | 1,191 | 606,621 | ||||||||||||||||
Christine
Hergenrother
|
2010
|
162,947 | — | — | 401 | 163,348 | ||||||||||||||||
Vice
President, CFO
|
2009
|
175,150 | — | 59,196 | 402 | 234,748 | ||||||||||||||||
Scott
Brown
|
2010
|
202,518 | — | — | 51,034 | 253,552 | ||||||||||||||||
Former
Vice President, Sales, North America
|
2009
|
230,416 | — | 14,658 | 9,707 | 254,781 |
(1)
|
The
amounts included in the “Option Awards” column represent the grant date
fair value of such awards as computed in accordance with FASB ASC Topic
718. The valuation assumptions used in determining such
amounts are described in Note 1 to our consolidated financial statements
included in our annual report on Form 10-K for the fiscal year ended
March 31, 2010. For the purpose of this table, we
have recomputed amounts included in the Summary Compensation Table for
prior years based on the new
standard.
|
(2)
|
All
other compensation in fiscal 2010 includes for all individuals the value
of the company match under the 401(k) Plan. Mr. Brown’s other
compensation for 2010 includes a $9,000 car allowance and a $41,250
severance payment.
|
(3)
|
Mr.
Brown’s salary includes commission amounts of $39,807 for fiscal year 2010
and $64,521 for fiscal year 2009. Mr. Brown resigned effective
March 31, 2010.
|
11
OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR END
The
following table sets forth the outstanding stock options held by the named
executive officers at March 31, 2010. No plan-based awards were granted
during the fiscal year ended March 31, 2010.
Options
Awards
|
|||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
(1)
Unexercisable
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
(2)
|
|||||||||
Thomas
Mika
|
15,318 | 1,021 | 4.60 |
11/15/2016
|
|||||||||
69,100 | 34,550 | 4.20 |
12/18/2017
|
||||||||||
54,616 | 163,847 | 2.34 |
11/5/2018
|
||||||||||
Christine
Hergenrother
|
16,587 | 1,106 | 4.60 |
11/15/2016
|
|||||||||
12,773 | 6,387 | 4.20 |
12/18/2017
|
||||||||||
10,096 | 30,289 | 2.34 |
11/5/2018
|
||||||||||
Scott
Brown
|
25,000 | 7.08 |
2/28/2016
|
||||||||||
6,250 | 1,250 | 4.60 |
11/15/2016
|
||||||||||
6,774 | 5,270 | 4.20 |
12/18/2017
|
||||||||||
2,500 | 7,500 | 2.34 |
11/5/2018
|
(1)
|
Options
vest at a rate of 25% of the shares on the first anniversary of the date
the option is granted, 25% of the shares on the second anniversary of the
date the option is granted, and 2.083% of the shares on the last day of
each month commencing with the 25th month, with full vesting on the last
day of the 48th month following the date the option is
granted.
|
(2)
|
The
expiration date of each option occurs ten year after the date of grant of
each option.
|
Employment
and Change in Control Agreements
Tegal provides for certain severance
benefits in the event that an executive’s employment is involuntarily or
constructively terminated. Such severance benefits are designed to
alleviate the financial impact of an involuntary termination through salary
(and, with respect to Mr. Mika and Ms. Hergenrother, bonus) with the intent of
providing for a stable work environment. We believe that reasonable severance
benefits for our executive officers are important because it may be difficult
for our executive officers to find comparable employment within a short period
of time following certain qualifying terminations. Tegal also believes these
benefits are a means reinforcing and encouraging the continued attention and
dedication of key executives of Tegal to their duties of employment without
personal distraction or conflict of interest in circumstances which could arise
from the occurrence of a change in control. We believe that the interests of
stockholders will be best served if the interests of our senior management are
aligned with them, and providing severance and change in control benefits should
eliminate, or at least reduce, the reluctance of senior management to pursue
potential change in control transactions that may be in the best interests of
stockholders.
Tegal extends severance benefits
because they are essential to help Tegal fulfill its objectives of attracting
and retaining key managerial talent. These agreements are intended to be
competitive within our industry and company size and to attract highly qualified
individuals and encourage them to be retained by Tegal. While these arrangements
form an integral part of the total compensation provided to these individuals
and are considered by the Committee when determining executive officer
compensation, the decision to offer these benefits did not influence the
Committee’s determinations concerning other direct compensation or benefit
levels. The Committee has determined that such arrangements offer protection
that is competitive within our industry and company size and to attract highly
qualified individuals and encourage them to be retained by
Tegal.
12
Employment Agreements with
Thomas R. Mika and Christine
T. Hergenrother. Tegal has entered into an at-will employment agreement
with each of Mr. Mika and Ms. Hergenrother. The employment agreements had
an initial term of two years and are subject to annual automatic one year
extensions unless either party provides prior notice of its intention not to
renew. The employment agreements provide for an annual target bonus equal to a
specified percentage of annual base salary (50% for Mr. Mika and 30% for Ms.
Hergenrother) payable upon achievement of targets and other objectives set by
the Board of Directors and for annual long-term incentive awards with a fair
market value on the date of grant equal to a specified percentage of annual base
salary (100% for Mr. Mika and 30% for Ms. Hergenrother).
The
employment agreement with Mr. Mika provides that in the event that
Mr. Mika’s employment is terminated by us other than for “cause,” if he
resigns for “good reason,” dies or becomes disabled, or if we give notice of
nonrenewal of the term, he will receive continued payments of base salary for a
period of twenty-four months following the date of termination, plus an amount
equal to two times the average annual incentive bonus paid to Mr. Mika for
the three most recently completed fiscal years in which a cash bonus program
covering Mr. Mika was in effect or a cash bonus was actually paid, payable
in equal installments over a period of twenty-four months following the date of
termination. In the event that within twelve months following a “change of
control,” he is terminated by us other than for “cause” or if he resigns for
“good reason”, the severance benefits will be payable in a lump sum and any
long-term incentive awards outstanding shall become fully vested, and if
applicable, exercisable.
The
employment agreement with Ms. Hergenrother provides that in the event that her
employment is terminated by us other than for “cause,” if she resigns for “good
reason,” dies or becomes disabled, or if we give notice of nonrenewal of the
term, she will receive continued payments of base salary for a period of twelve
months following the date of termination, plus an amount equal to the average
annual incentive bonus paid to Ms. Hergenrother for the three most recently
completed fiscal years in which a cash bonus program covering Ms. Hergenrother
was in effect or a cash bonus was actually paid, payable in equal installments
over a period of twelve months following the date of termination. In the event
that within twelve months following a “change of control,” she is terminated by
us other than for “cause” or if he resigns for “good reason”, the severance
benefits will be payable in a lump sum and any long-term incentive awards
outstanding shall become fully vested, and if applicable,
exercisable.
For
purposes of the employment agreements, “cause” generally means an executive’s
willful engagement in an act or omission which is in bad faith and to the
detriment of Tegal, his or her engagement in misconduct, gross negligence, or
willful malfeasance, in each case that causes material harm to Tegal, his or her
breach of the employment agreement, his or her habitual neglect of or material
failure to perform his or her duties (other than any failure resulting solely
from physical or mental disability or incapacity) after a written demand for
performance is delivered to him or her by Tegal, his or her conviction of a
felony or any crime involving moral turpitude, his or her use of drugs or
alcohol in a way that either interferes with the performance of his or her
duties or compromises the integrity or reputation of Tegal, his or her
engagement in any act of dishonestly involving Tegal, his or her disclosure of
confidential information of Tegal not required by his job duties, his or her
engagement of commercial bribery or the perpetration of fraud. An
executive will have 45 days to cure any event which could lead to termination
for cause, if such events are curable.
For
purposes of the employment agreements, “good reason” generally means the
assignment to an executive of principal duties or responsibilities, or the
substantial reduction of his duties and responsibilities, either of which is
inconsistent with his or her position, a material reduction in his or her annual
base salary, except to the extent the salaries of other executives of Tegal are
similarly reduced, a relocation of his or her principal place of business by
more than 50 miles from either Petaluma or San Jose, California, or any material
breach by Tegal of the employment agreement that is not cured within 45 calendar
days following written notice of the breach to Tegal.
For
purposes of the employment agreements, “change of control” generally means a
sale of substantially all of the assets of Tegal, a merger of Tegal with or into
another corporation in which the holders of at least 50% of Tegal’s outstanding
voting power hold less than 50% of the outstanding voting power immediately
after such merger, or during any period of two consecutive years, individuals
who, at the beginning of such period, constitute the Board of Directors together
with any new directors whose election by the Board or nomination for election by
Tegal’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were either directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority
thereof.
13
Executive Severance
Plan. In addition, the Board of Directors has approved a
severance program for executive officers which generally provides for severance
in an amount equal to six month’s base salary in the event an executive
officer’s employment is terminated by Tegal without cause, however, in the event
that an executive officer is terminated by Tegal without cause within 12 months
following a change of control, we will continue to pay such executive officer’s
base salary for a period of 12 months.
For purposes of the executive
severance program, the terms “cause” and “change of control” generally have the
same meanings given to such terms in Mr. Mika’s employment
agreement.
POTENTIAL
PAYMENTS UPON TERMINATION
The
following table summarizes potential change in control and severance payments to
each named executive officer. The three right-hand columns describe the payments
that would apply in three different potential scenarios — a termination of
employment as a result of death, disability or our non-renewal of a written
employment agreement; a termination of employment as a result of the named
executive officer’s termination of employment by us other than for cause (or,
with respect to Mr. Mika and Ms. Hergenrother, his or her resignation for good
reason); or a termination of employment as a result of the named executive
officer’s termination of employment by us other than for cause (or, with respect
to Mr. Mika and Ms. Hergenrother, his or her resignation for good reason), in
each case within 12 months following a change in control. The table
assumes that the termination or change in control occurred on March 31,
2010.
As of March 31, 2010
|
||||||||||||
Name
|
Death, Termination as a Result
of Disability or Non-Renewal
of Employment Agreement
|
Termination
without Cause (or, for Mr. Mika
and Ms. Hergenrother,
Resignation for Good Reason)
Prior to a Change in Control or
More than 12 Months Following a
Change of Control
|
Termination without Cause (or,
for Mr. Mika and Ms.
Hergenrother, Resignation for
Good Reason) Within 12 Months
Following a Change of Control
|
|||||||||
Tom
Mika
|
||||||||||||
Cash
Severance
|
$ | 923,000 | (1) | $ | 923,000 | (1) | $ | 923,000 | (2) | |||
Option
Award Acceleration (7)
|
— | — | — | |||||||||
Total
|
$ | 923,000 | $ | 923,000 | $ | 923,000 | ||||||
Christine
Hergenrother
|
||||||||||||
Cash
Severance
|
$ | 214,375 | (3) | $ | 214,375 | (3) | $ | 214,375 | (4) | |||
Option
Award Acceleration (7)
|
— | — | — | |||||||||
Total
|
$ | 214,375 | $ | 214,375 | $ | 214,375 | ||||||
Scott
Brown (8)
|
||||||||||||
Cash
Severance
|
— | $ | 82,500 | (5) | $ | 165,000 | (6) | |||||
Option
Award Acceleration (7)
|
— | — | — | |||||||||
Total
|
— | $ | 82,500 | $ | 165,000 |
(1)
|
Amount
represents 24 months of base salary plus two times the average annual
incentive bonus paid to Mr. Mika for the previous three fiscal years
in which a bonus plan was in place, payable in 24 equal monthly
installments.
|
(2)
|
Amount
represents 24 months of base salary plus two times the average annual
incentive bonus paid to Mr. Mika for the previous three fiscal years
in which a bonus plan was in place, payable in a lump
sum.
|
(3)
|
Amount
represents 12 months of base salary, plus one times the average annual
incentive bonus paid to Ms. Hergenrother for the previous three fiscal
years in which a bonus plan was in place, payable in 12 equal monthly
installments.
|
(4)
|
Amount
represents 12 months of base salary, plus one times the average annual
incentive bonus paid to Ms. Hergenrother for the previous three fiscal
years in which a bonus plan was in place, payable in a lump
sum.
|
(5)
|
Amount
represents 6 months of base salary, payable in 6 equal monthly
installments.
|
14
(6)
|
Amount
represents 12 months of base salary, payable in 12 equal monthly
installments.
|
(7)
|
Amount
represents the fair market value of our common stock on March 31,
2010 less the exercise price of the accelerated stock options, multiplied
by the number of shares underlying the options subject to accelerated
vesting.
|
(8)
|
Mr.
Brown resigned from Tegal on March 31, 2010. In connection with
his resignation, we paid him cash severance in the amount of
$41,250.
|
Director
Compensation
Our
outside directors currently receive an annual $15,000 retainer for service on
the Board of Directors, meeting fees of $1,500 per Board meeting and $1,000 for
the first 6 audit committee meetings and $750 for the first 6 nominating and
compensation committee meetings not held in conjunction with a full Board of
Directors meeting. Furthermore, directors may be reimbursed for certain expenses
in connection with attendance at Board of Directors and committee meetings.
Additionally, each committee chair receives an annual chair retainer as
follows: $7,500 for the Audit Committee chair, $5,000 for the
Compensation Committee chair and $4,000 for the Nominating Committee chair. In
addition, non-employee directors receive 8,333 stock options upon initial
election or appointment to the Board of Directors and each director
automatically receives 4,166 stock options annually thereafter.
The
following table shows director compensation during fiscal year
2010.
|
March 31, 2010
|
||||||||
Name
|
Fees Earned
or Paid in
Cash ($)
|
Options
($) (1)
(2)
|
Total ($)
|
||||||
Gilbert
Bellini
|
— | 9,204 | |||||||
Jeffrey
M. Krauss
|
36,250 | 37,726 | |||||||
Carl
Muscari
|
36,750 | 42,101 | |||||||
Ferdinand
Seemann
|
8,375 | 32,726 |
(1)
|
The
amounts included in “Options” column represent the grant date fair value
of such awards as computed in accordance with FASB ASC Topic 718. The
valuation assumptions used in determining such amounts are described in
Note 1 to our consolidated financial statements included in this annual
report on Form 10-K for the fiscal year ended March 31,
2010.
|
(2)
|
On
March 25, 2010, the Board of Directors issued stock options to purchase
4,166 shares of Tegal common stock to each of Messrs. Bellini, Krauss,
Muscari and Seemann, which stock options vest monthly over a one-year
period. In addition, on December 9, 2010, in connection with
his appointment to the Board of Directors, Mr. Seemann was issued
additional stock options to purchase 8,333 shares of Tegal common stock,
which stock options monthly over a one-year period. The
aggregate number of options outstanding at the end of fiscal 2010 for each
non-employee director was as follows: Mr. Bellini, 12,499
shares, Mr. Krauss, 62,166 shares; Mr. Muscari, 16,998 shares; and
Mr. Seemann 12,499
shares.
|
15
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets forth information as of March 31, 2010 for all of our
equity compensation plans, including our Eighth Amended and Restated 1998 Equity
Participation Plan, our 1990 Stock Option Plan, our Equity Incentive Plan, our
2007 Incentive Award Plan, and our Fifth Amended and Restated Stock Option Plan
for Outside Directors.
Plan Category
|
Number of Securities
to be Issued upon
Exercise of all
Outstanding
Options, Warrants
and Rights
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans
(Excluding Securities
Reflected in Column(a))
|
|||||||||
(a)
|
(b)
|
(c)
|
||||||||||
Equity
compensation plans approved by security holders
|
986,153 | $ | 4.56 | 590,247 | (1) | |||||||
Equity
compensation plans not approved by security holders
|
— | — | — | |||||||||
Total
|
986,153 | $ | 4.56 | 590,247 | (1) |
(1) Excludes
19,527 shares remaining available for future issuance under our Employee
Qualified Stock Purchase Plan.
16
Item
12. Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth information with respect to the beneficial ownership
of shares of our common stock by our directors, the individuals named in the
Summary Compensation Table, all directors and executive officers as a group and
beneficial owners of more than 5% of our common stock as of July 13, 2010.
For purposes of this proxy, beneficial ownership of securities is defined in
accordance with the rules of the SEC and means generally the power to vote or
dispose of securities, regardless of any economic interest therein. An asterisk
denotes beneficial ownership of less than 1%. The address of each director and
officer is c/o Tegal Corporation, 2201 South McDowell Boulevard, Petaluma,
California 94954.
Name of Beneficial Owner
|
Position
|
Shares
Beneficially
Owned
( # ) (1)
|
Percent Of
Class
(%) (1)
|
|||||||
Thomas
R. Mika (2)
|
President
& CEO
|
190,894 | 2.26 | |||||||
Christine
Hergenrother (2)
|
Vice
President & CFO
|
48,304 | ||||||||
Paul
Werbaneth (2)
|
Vice
President, Sales and Marketing
|
21,350 | * | |||||||
Jeffrey
M. Krauss (2)
|
Director
|
70,536 | * | |||||||
Gilbert
Bellini (2)
|
Director
|
10,069 | * | |||||||
Carl
Muscari(2)
|
Director
|
14,568 | * | |||||||
Ferdinand
Seemann(2)
|
Director
|
9,374 | * | |||||||
Directors
and Named Executive Officers as a group (7 individuals)
|
|
365,095 | 4.33 | |||||||
Name
and address of beneficial owner
|
||||||||||
Lloyd
I Miller, III (3)
|
Investor
|
689,032 | 8.16 | |||||||
Alcatel
Vacuum Technology France (4)
|
Investor
|
1,044,386 | 12.38 | |||||||
Verition
Fund Management (5)
|
Investor
|
961,555 | 11.39 |
(1)
|
Applicable
percentage of ownership is based on 8,439,095 shares of common stock
outstanding as of July 13, 2010. The number of shares of common stock
beneficially owned and calculation of percent ownership of each person or
group of persons named above, in each case, takes into account those
shares underlying warrants and stock options that are currently
exercisable within 60 days of July 13, 2010, but which may or may not
be subject to our repurchase rights, and shares of common stock that such
person or group of person has the right to acquire within 60 days of July
13, 2010 pursuant to the vesting or distribution of restricted stock
units.
|
(2)
|
Includes
options to purchase shares of common stock that are exercisable within 60
days of July 13, 2010 and shares underlying RSUs that may be acquired
within 60 days of July 13, 2010.
|
(3)
|
Based
on information set forth in a Schedule 13-G/A filed with the SEC on
December 31, 2009. Includes 506,687 shares of common stock with sole
voting power and 182,345 shares of common stock with shared voting power.
The address of the principal business is 4550 Gordon Drive, Naples, FL
34102.
|
(4)
|
Based
on the records of our transfer agent. Includes 1,044,386 of common stock
with sole voting power. The address of the principal business is 12 Rue De
La Baume 75008, Paris, France.
|
17
(5)
|
Based
on information set forth in a Form 4 filed with the SEC on July 1, 2010,
includes 961,555 of common stock with sole voting power. The address of
the principal business is One American Lane Greenwich, CT
06831.
|
Item
13. Certain
Relationships and Related Transactions
On September 2, 2008, we, AMMS and
Alcatel Lucent (“Alcatel” and together with AMMS, the “Sellers”), entered into
an Asset Purchase Agreement pursuant to which we agreed to purchase certain
equipment, intellectual property and other assets of the Sellers for an
aggregate consideration of $5,000,000. This transaction was closed on September
16, 2008. The Purchase Price was in the form of $1,000,000 in cash
and $4,000,000 in shares of our common stock, par value $0.01 per share (the
“Common Stock”), or 1,044,386 shares. Pursuant to the Purchase
Agreement, we agreed to appoint Gilbert Bellini to our board of directors. AMMS’
board designation right terminates upon the later of (a) the termination or
expiration of certain customer services related agreements set forth in the
Purchase Agreement, and (b) when AMMS beneficially owns less than 5% of the
number of shares of Common Stock issued and outstanding (including the shares to
be issued to the Sellers).
During
fiscal year ended March 31, 2010, we paid Alcatel Vacuum Technology France
$2,938,992 for the purchase of inventory.
18
Item 14. Principal
Accountant Fees and Services
Audit
Fees
The
aggregate fees billed for professional services rendered by Burr, Pilger &
Mayer LLP for the audit of our annual financial statements for the fiscal year
ended March 31, 2010, the reviews of the financial statements included in our
quarterly reports on Form 10-Q for the fiscal year ending March 31, 2010, and
services that are normally provided by the Burr, Pilger & Mayer LLP in
connection with statutory and regulatory filings and engagements for that fiscal
year were approximately $327,000.
The
aggregate fees billed for professional services rendered by Burr, Pilger &
Mayer LLP for the audit of our annual financial statements for the fiscal year
ended March 31, 2009, the reviews of the financial statements included in our
quarterly reports on Form 10-Q for the fiscal year ending March 31, 2008, and
services that are normally provided by the Burr, Pilger & Mayer LLP in
connection with statutory and regulatory filings and engagements for that fiscal
year were approximately $388,000.
Audit-Related
Fees
The
aggregate fees billed by Moss Adams LLP for assurance and related services that
were reasonably related to the performance of the audit or review of our
financial statements and are not reported above under “Audit Fees” were $0 for
the fiscal year ended March 31, 2010.and $4,000 for the fiscal year ended March
31, 2009. The services for the fees disclosed under this category
were for work done in relation to the review of prior year numbers in our form
10-K, Form S-8, and Form S-3.
The
aggregate fees billed by Dal Pogetto & Co, LLP for assurance and related
services that were reasonably related to the performance of the audit or review
of our 401(k) plan and are not reported above under “Audit Fees” were $0 for the
fiscal year ended March 31, 2010 and $11,300 for the fiscal year ended March 31,
2009.
The
aggregate fees billed by Burr, Pilger & Mayer LLP for assurance and related
services that were reasonably related to the performance of the audit or review
of our 401(k) plan and are not reported above under “Audit Fees” were $12,000
for fiscal year ended March 2010.
Tax
Fees
The
aggregate fees billed by Burr, Pilger & Mayer, LLP for professional services
rendered for tax compliance, tax advice, and tax planning were approximately
$45,000 for the fiscal year ended March 31, 2010 and approximately $55,000
during the fiscal year ended March 31, 2009.
The
aggregate fees billed by David L Wittrock CPA for professional services rendered
for tax compliance, tax advice, and tax planning were approximately $25,000 for
fiscal year ended March 31, 2009.
The
aggregate fees billed by Dal Pogetto for professional services rendered for tax
compliance were approximately $7,500 for the fiscal year ended March 31,
2010.
Audit
Committee Pre-Approval Policies
The Audit
Committee has adopted a policy that requires the Audit Committee to approve all
audit and permissible non-audit services to be provided by the independent
auditors. The Audit Committee has established a general pre-approval policy for
certain audit and non-audit services, up to a specified amount for each
identified service that may be provided by the independent auditors. The
Chairman of the Audit Committee may specifically approve any service within the
pre-approved audit and non-audit service category if the fees for such service
exceed the maximum set forth in the policy, as long as the excess fees are not
reasonably expected to exceed $50,000. Any such approval by the Chairman must be
reported to the Audit Committee at its next scheduled meeting. The general
pre-approval fee levels for all services to be provided by the independent
auditors are reviewed annually by the Audit Committee. The annual tax return
services provided by Burr, Pilger & Mayer were 16% of the total audit fees
for the fiscal year ended March 31, 2010 and 22% of the total audit fees for the
fiscal year ended March 31, 2009. 100% of the “audit related fees”
were approved by the Audit Committee.
19
AUDIT
COMMITTEE REPORT
Notwithstanding anything to the
contrary set forth in any of our filings under the Securities Act of 1933 or the
Securities Exchange Act of 1934, the following Audit Committee Report shall not
be incorporated by reference into any such filings and shall not otherwise be
deemed to be filed under such Acts.
The Audit
Committee of our Board of Directors is comprised of independent directors as
required by the listing standards of the Nasdaq National Market. The Audit
Committee operates pursuant to a written charter adopted by our Board of
Directors, a copy of which has been filed with the SEC.
The role
of the Audit Committee is to oversee our financial reporting process on behalf
of the Board of Directors. Our management has the primary responsibility for our
financial statements as well as our financial reporting process, principles and
internal controls. The Independent Registered Public Accounting Firm is
responsible for performing an audit of our financial statements and expressing
an opinion as to the conformity of such financial statements with generally
accepted accounting principles.
In this
context, the Audit Committee has reviewed and discussed our audited financial
statements as of and for the year ended March 31, 2010 with management and
the Independent Registered Public Accounting Firm. The Audit Committee has
discussed with the Independent Registered Public Accounting Firm the matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees), as currently in effect. In addition, the
Audit Committee has received the written disclosures and the letter from the
Independent Registered Public Accounting Firm required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), as
currently in effect, and it has discussed with the Independent Registered Public
Accounting Firm their independence from us. The Audit Committee has also
considered whether the Independent Registered Public Accounting Firm’s provision
of information technology services and other non-audit services to us is
compatible with maintaining the Independent Registered Public Accounting Firm’s
independence.
Based on
the reports and discussions described above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in our
Annual Report on Form 10-K for the year ended March 31, 2010, for filing
with the Securities and Exchange Commission.
Submitted
on June 14, 2010 by the members of the Audit Committee of the Board of
Directors.
Jeffrey
M. Krauss
|
|
Carl
Muscari
|
|
Ferdinand
Seemann
|
20
Item 15. Exhibits,
Financial Statement Schedules
Documents
filed as part of this Amendment:
Exhibit
Number
|
|
Description of Exhibit
|
31.1
|
Certification
pursuant to Rule 13a-14(a) of the Securities and Exchange Act of
1934 for principal executive officer
|
|
31.2
|
Certification
pursuant to Rule 13a-14(a) of the Securities and Exchange Act of
1934 for principal financial
officer
|
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Tegal
Corporation
|
|||
By:
|
/s/ thomas r.
mika
|
||
Thomas
R. Mika
|
|||
President,
Chief Executive Officer
|
|||
and
Chairman of the Board
|
21