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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended April 30, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from to .
COMMISSION FILE NUMBER 0-21488
CATALYST SEMICONDUCTOR, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0083129
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1250 Borregas Avenue, Sunnyvale, California 94089
(408) 542-1000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title and Class)
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 Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of the 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. [ ]
The aggregate market value of voting stock held by non-affiliates of the
Registrant, as of August 3, 1997, was approximately $16 million (based upon the
closing price for shares of the Registrant's Common Stock as reported by the
Nasdaq Market for the last trading date prior to that date). Shares of Common
Stock held by each officer, director and holder of 5% or more of the outstanding
Common Stock (including shares with respect to which a holder has the right to
acquire beneficial ownership within 60 days) have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
The number of shares outstanding of the Registrant's Common Stock as of
August 3, 1997 was 8,045,751.
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CATALYST SEMICONDUCTOR, INC.
PART III
Item 10 Directors and Executive Officers of the Registrant......................Page 1
Item 11 Executive Compensation Page.............................................Page 3
Item 12 Security Ownership of Certain Beneficial Owners and Management.........Page 11
Item 13 Certain Relationships and Related Transactions.........................Page 12
Signatures......................................................................Page 14
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Part III to Registrant's Form 10-K for the year ended April 30, 1997 is amended
and restated as follows:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the Company's executive officers required by
this item appears in "Item 1 -- Executive Officers and Key Personnel" of the
Form 10-K filed July 11, 1997.
DIRECTORS
Set forth below are the names of, and certain information as of August
3, 1997 about the current directors of the Company.
NAME AGE PRINCIPAL OCCUPATION
- ----------------------------------------- ------ ----------------------------------------
C. Michael Powell 46 Chairman, President and Chief
Executive Officer of Catalyst
Semiconductor, Inc.
Radu M. Vanco 47 Executive Vice President of
Engineering of Catalyst
Semiconductor, Inc.
Lionel M. Allan 54 President and Chief Executive Officer
of Allan Advisors, Inc.
Hideyuki Tanigami 47 President and Chief Executive Officer
of Marubun USA Corporation
Patrick Verderico 53 President and Chief Executive
Officer of Integrated Packaging
Assembly Corporation
Except as indicated below, each director has been engaged in the
principal occupation set forth above during the past five years. There are no
family relationships between any directors or executive officers of the Company.
C. MICHAEL POWELL joined the Company in August 1993. Mr. Powell has
served as Chairman since August 1995, as Chief Executive Officer and a director
of the Company since July 1994 and as President of the Company since August
1993. From August 1993 to July 1994, Mr. Powell served as Chief Operating
Officer of the Company and from October 1995 to February 1997, Mr. Powell served
as Chief Financial Officer of the Company. From April 1990 to July 1993, Mr.
Powell served as Vice President of Product Lines at Cypress Semiconductor
Corporation, a semiconductor company. From July 1988 to March 1990, Mr. Powell
served as the Vice President, General Manager of the Memory Division of SEEQ
Technology, Inc. Prior to joining SEEQ, Mr. Powell held various management
positions with Fairchild Semiconductor, Telmoss and Hewlett Packard. Mr. Powell
holds Bachelors and Masters degrees in Physics from Georgia Institute of
Technology as well as M.S.E.E. and MBA degrees from Stanford University.
RADU M. VANCO joined the Company in November 1992. Mr. Vanco has served
the Company as a director since November 1995, as Executive Vice President of
Engineering since October 1995 and as Vice President, Engineering, from November
1992 to October 1995. From 1991 to 1992, Mr. Vanco served as director of
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engineering of Cypress Semiconductor. From 1985 to 1991, Mr. Vanco held various
positions at SEEQ Technology, Inc. Mr. Vanco holds an M.S. in Electrical
Engineering from the Polytechnical Institute, Bucharest, Romania.
LIONEL M. ALLAN has served as a director of the Company since August
1995. Mr. Allan is President and Chief Executive Officer of Allan Advisors,
Inc., a legal consulting firm that he founded in 1992. Mr. Allan is also a
director and past Chairman of the Board of KTEH Public Television Channel 54, in
San Jose, California, a director of Accom, Inc., a digital video systems
company, and a director of Custom Chrome, Inc., a motorcycle parts company.
HIDEYUKI TANIGAMI has served as a director of the Company since February
1996. From 1985 to April 1994, Mr. Tanigami served as Vice President, Corporate
Development, of the Company. From January 1996 to present, he has served as
President and Chief Executive Officer of Marubun USA Corporation, an electronics
distribution company. From June 1994 to present, he has also served as President
of Technology Matrix, Inc., and since 1985 has been President and Chief
Executive Officer of Tanigami Associates, an international consulting firm.
PATRICK VERDERICO has served as a director of the Company since April
1996. From July 1997 to present, Mr. Verderico has served as President and
Chief Executive Officer of Integrated Packaging Assembly Corporation ("IPAC").
From April 1997 to July 1997, Mr. Verderico served as Executive Vice President
and Chief Operating Officer of IPAC. From April 1996 to July 1996, Mr.
Verderico served as Executive Vice President and Chief Operating Officer of
Maxtor Corporation, a hard disk drive company. From 1994 to March 1996, he
served as Chief Financial Officer and Vice President, Finance and
Administration, of Creative Technology, a multimedia products manufacturer.
From 1992 to 1994, he served as Chief Financial Officer and Vice President,
Finance and Administration, of Cypress Semiconductor, and from 1989 to 1992,
served as Partner in Charge, West Region Manufacturing Consulting of Coopers &
Lybrand, an independent public accounting and consulting firm. Prior thereto he
held various positions with Phillips Semiconductors, National Semiconductor and
Fairchild Semiconductor. Mr. Verderico has also been a director of Micro
Component Technology, Inc. since December 1992 and a director of Integrated
Packaging Assembly Corporation since July 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities to file an initial report of ownership on Form 3 and changes
in ownership on Form 4 or 5 with the Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers, Inc. Executive
officers, directors and greater than ten percent stockholders are also required
by SEC rules to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on its review of copies of such forms received by it, the
Company believes that during Fiscal Year 1997 all such reports were filed. Again
based solely on its review of copies of such forms received by it, the Company
believes that all filing requirements applicable to its officers, directors and
ten percent stockholders were complied with.
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ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company in Fiscal
Years 1997, 1996 and 1995 to (i) the Company's Chief Executive Officer, (ii) the
four most highly compensated officers other than the Chief Executive Officer who
served as executive officers at April 30, 1997 and (iii) two highly compensated
individuals who would have qualified under (ii) above except they were not
serving as executive officers as of April 30, 1997 (collectively, the "Named
Officers").
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------- --------------------------------------------
AWARDS PAYOUTS
------------ ------------------------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING LTIP COMPENSA- FISCAL
POSITION SALARY($) BONUS($) SATION($) AWARDS($) OPTIONS(#)(1) PAYOUTS($) TION($)(2) YEAR
- ------------------------------ -------- -------- -------- -------- ------------- -------- ---------- -------
C. Michael Powell ........... $337,500 $ 77,459 -- -- 250,000 -- $ 14,028 1997
President and Chief ....... $331,501 $ 38,210 -- -- -- -- $ 13,577 1996
Executive Officer ........ $259,519 $ 30,000 -- -- 350,000 -- $ 16,344 1995
Radu M. Vanco ............... $231,879 $ 48,342 -- -- 215,000 -- $ 609 1997
Executive Vice President of $222,270 $ 9,334 -- -- -- -- $ 513 1996
Engineering .............. $188,808 $ 20,000 -- -- 169,166 -- -- 1995
Daryl E. Stemm .............. $108,654 -- -- -- 114,900 -- $ 66 1997
Vice President of Finance . $ 96,463 -- -- -- -- -- $ 42 1996
& Administration and Chief $ 67,907 -- -- -- 14,333 -- $ 16 1995
Financial Officer
Chris Carstens .............. $129,808 -- -- -- 75,000 -- $ 261 1997
Vice President, ........... $134,770 -- -- -- -- -- $ 261 1996
Quality and Reliability ..... $118,808 $ 10,000 -- -- 75,000 -- $ 232 1995
Scott L. Parker (3) ......... $236,369 -- -- -- 200,000 -- $ 238 1997
Vice President, ........... $ 49,277 -- -- -- -- -- -- 1996
Marketing and Sales ......... -- -- -- -- -- -- -- 1995
Alan L. Renninger(4) ........ $133,808 -- -- -- 30,000 -- $ 479 1997
Vice President, Technology $142,847 -- -- -- -- -- $ 478 1996
Development ................ $127,452 -- -- -- 40,000 -- $ 432 1995
- --------------
(1) Options listed for Fiscal Years 1995 and 1997 reflect options granted as a
result of repricing on May 14, 1994 and December 3, 1996. See Option
Repricing Table. The options listed with respect to Fiscal Year 1995 and
Fiscal Year 1997 long-term compensation awards include options granted upon
the repricing (and consequent cancellation) of previously granted options.
Options to purchase the following number of shares granted to the following
persons in Fiscal Year 1995 were issued as a result of the repricing on May
14, 1994 of previously granted options: Mr. Powell - 250,000 (all of which
were originally granted in Fiscal Year 1994); Mr. Vanco - 121,666 (69,445
of which were originally granted in Fiscal Year 1994 and 52,221 of which
were originally granted in Fiscal Year 1993); Mr. Stemm - 4,333 (all of
which were originally granted in Fiscal Year 1993); Mr. Renninger - 30,000
(all of which were originally granted in Fiscal Year 1994); Mr. Carstens -
30,000 (all of which were originally granted in Fiscal Year 1994). Such
repriced options have not been reflected as grants in prior Fiscal Year
long-term compensation awards. The repriced options retain the same term
and vesting schedule as the options that were replaced.
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Options to purchase the following number of shares granted to the following
persons in Fiscal Year 1997 were issued as a result of the repricing on
December 3, 1996 of previously granted options: Mr. Powell - 150,000 (all
of which were originally granted in Fiscal Year 1996); Mr. Vanco - 155,000
(all of which were originally granted in Fiscal Year 1996); Mr. Stemm -
33,000 (all of which were originally granted in Fiscal Year 1996); Mr.
Carstens - 50,000 (all of which were originally granted in Fiscal Year
1996); Mr. Parker - 200,000 (all of which were originally granted in Fiscal
Year 1996); Mr. Renninger - 20,000 (all of which were originally granted in
Fiscal Year 1996). Such repriced options have not been reflected as grants
in prior Fiscal Year long-term compensation awards. The repriced options
retain the same term and vesting schedule as the options that were
replaced.
(2) The amount included under "All Other Compensation" represents the dollar
value of term life insurance premiums paid by the Company for the benefit
of such Named Officer.
(3) Mr. Parker terminated his employment with the Company on March 7, 1997.
(4) Mr. Renninger terminated his employment with the Company on March 28, 1997.
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EMPLOYEE BENEFIT PLANS
Each current Named Officer is entitled to participate in the Option
Plan. The Option Plan provides for the grant of options, stock purchase rights,
SARs and long-term performance awards.
The following table sets forth certain information with respect to stock
options granted during Fiscal Year 1997 to the Named Officers. No SARs were
granted in Fiscal Year 1997. In accordance with the rules of the Securities and
Exchange Commission, also shown below is the potential realizable value over the
term of the option (the period from the grant date to the expiration date) based
on assumed rates of stock appreciation from the option exercise price of 5% and
10%, compounded annually. These amounts are based on certain assumed rates of
appreciation and do not represent the Company's estimate of future stock price.
Actual gains, if any, on stock option exercises will be dependent on the future
performance of the Common Stock.
OPTION GRANTS IN FISCAL YEAR 1997
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
INDIVIDUAL GRANTS PRICE APPRECIATION FOR OPTION TERM
---------------------------------------------------
PERCENT OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED EXERCISE ----------------------------------
NAME UNDERLYING TO EMPLOYEES IN OR BASE EXPIRATION
OPTIONS GRANTED(#) FISCAL YEAR PRICE($/SH) DATE 5% ($) 10% ($)
- -------------------- ----------------- ----------- ------------ -------- ---------- ---------
C. Michael Powell... 30,280 1.38% $2.6875 12/02/06 $51,178 $129,695
19,720 0.90% $2.6875 12/02/06 $33,330 $84,464
100,000 4.55% $2.6875 12/02/06 $169,015 $428,318
49,386 2.25% $1.5625 04/21/07 $48,532 $122,988
50,614 2.30% $1.5625 04/21/07 $49,736 $126,040
Radu M. Vanco....... 21,488 0.98% $2.6875 12/02/06 $36,318 $92,037
28,512 1.30% $2.6875 12/02/06 $48,190 $122,122
50,000 2.27% $2.6875 12/02/06 $84,508 $214,159
55,000 2.50% $2.6875 12/02/06 $92,958 $235,575
33,487 1.52% $1.5625 04/21/07 $32,906 $83,394
26,513 1.21% $1.5625 04/21/07 $26,054 $66,027
Daryl E. Stemm....... 33,000 1.50% $2.6875 12/02/06 $55,775 $141,345
56,900 2.58% $2.7500 2/17/07 $98,406 $249,382
17,160 0.78% $1.5625 04/21/07 $16,862 $42,732
7,840 0.36% $1.5625 04/21/07 $7,704 $19,523
Chris Carstens....... 25,000 1.14% $2.6875 12/02/06 $42,254 $107,080
25,000 1.14% $2.6875 12/02/06 $42,254 $107,080
25,000 1.14% $1.5625 04/21/07 $24,567 $62,259
Scott L. Parker...... 38,162 1.73% $2.6875 12/02/06 $64,539 $163,553
161,815 7.34% $2.6875 12/02/06 $273,492 $693,083
Alan L. Renninger.... 10,000 0.45% $2.6875 12/02/06 $16,902 $42,832
10,000 0.45% $2.6875 12/02/06 $16,902 $42,832
10,000 0.45% $2.6875 12/02/06 $16,902 $42,832
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The following table sets forth information with respect to options
exercised in Fiscal Year 1997 by the Named Officers and the value of unexercised
options at April 30, 1997.
AGGREGATE OPTION EXERCISES IN FISCAL YEAR 1997 AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
APRIL 30, 1997 (#) APRIL 30, 1997 ($)(1)
SHARES ACQUIRED VALUE ------------------------- --------------------------
NAME ON EXERCISE(#) RECEIVED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------- ------------- ---------- ----------- ------------- ------------ -------------
C. Michael Powell.... 26,000 $138,544 256,289 292,711 $0 $12,500
Radu M. Vanco........ 22,500 $119,844 114,321 198,845 $0 $7,500
Daryl E. Stemm....... 2,500 $18,750 16,439 108,561 $0 $3,125
Chris Carstens....... 0 $0 68,123 81,877 $0 $3,125
Scott L. Parker...... 0 $0 49,999 0 $0 $0
Alan L. Renninger.... 6,000 $33,000 0 0 $0 $0
- ------------------
(1) The fair market value of the Company's Common Stock at the close of
business on April 30, 1997 was $1.6875.
COMPENSATION COMMITTEE REPORT
The following is a report of the Compensation Committee of the Board of
Directors of the Company (the "Committee") describing the compensation
philosophy and parameters applicable to the Company's executive officers with
respect to the compensation paid to such officers during Fiscal Year 1997. The
actual compensation paid to the Named Officers during fiscal year 1997 is shown
in the "Summary Compensation Table."
The Committee is responsible for reviewing and approving the Company's
compensation policies and the actual compensation paid to the Company's
executive officers. At the end of Fiscal Year 1997, the Committee was comprised
of two (2) of the non-employee directors, Hideyuki Tanigami and Patrick
Verderico.
Compensation Philosophy. The general philosophy of the Company's
compensation program is to offer the Company's Chief Executive Officer and other
executive officers competitive compensation packages based upon both the
Company's performance as well as the individual's performance and contributions.
The Company's compensation policies are intended to motivate and reward highly
qualified executives for long-term strategic management and the enhancement of
stockholder value, to support a performance-oriented environment that rewards
achievement of specific internal Company goals and to attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company. The Company's compensation program is comprised
of three main components, Base Salary, Bonus Plan and Stock Options.
Base Salary. Base salary for executive officers is set annually by
reviewing the competitive pay practices of comparable companies, the skills and
performance level of the individual executives and the needs of the Company.
Bonus Plan. The Company's officers are eligible for bonuses under the
terms of individual bonus arrangements. When bonuses are given, they are based
upon the individual's achievement of specific corporate goals as well as the
individual's experience and contributions to the success of the Company.
During Fiscal Year 1997, the following executive officers received
bonuses: C. Michael Powell and Radu M. Vanco. No other executive officer
received a bonus during Fiscal Year 1997. See "Certain Relationships and Related
Transactions."
Stock Options. The Committee believes that stock options provide
additional incentives to officers to work toward maximizing stockholder value.
The Committee views stock options as one of the more important components of the
Company's long-term, performance-based compensation philosophy. These options
are provided through initial grants at or near the date of hire and through
subsequent periodic grants based upon performance and promotions, as well as
additional grants to provide continuing motivation as earlier grants vest in
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full. Options granted by the Company to its executive officers and other
employees have exercise prices equal to fair market value at the time of grant
and, generally, vest over a four-year period.
Severance Arrangements. See Item 13 for a description of severance
arrangements for certain executive officers.
Compensation for the Chief Executive Officer. Mr. Powell's base salary
was established at a level which the Committee determined to be similar to the
amounts paid by comparably sized companies. Mr. Powell received a bonus of
$77,459 in Fiscal Year 1997 which equaled the principal and accrued interest due
and payable on a loan owed to the Company, and a tax gross-up for such payment
pursuant to the agreement entered into between Mr. Powell and the Company. See
"Certain Relationships and Related Transactions."
The Committee considers equity based compensation, in the form of stock
options, to be an important component of a Chief Executive Officer's
compensation. These grants are intended to motivate leadership for long-term
Company growth and profitability. During Fiscal Year 1997, Mr. Powell was
granted options to purchase (a) 150,000 shares of the Company's Common Stock at
the exercise price of $2.6875 and (b) 100,000 shares of the Company's Common
Stock at the exercise price of $1.5625 per share.
Tax Deductibility of Executive Compensation. The Committee has
considered the potential impact of Section 162(m) of the Internal Revenue Code
adopted under the federal Revenue Reconciliation Act of 1993. This Section
disallows a tax deduction for any publicly-held corporation for individual
compensation exceeding $1,000,000 in any taxable year for any of the executive
officers named in the Proxy Statement, unless compensation is performance-based.
The Committee has studied the impact of Section 162(m) on the Company's Option
Plan.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Hideyuki Tanigami
Patrick Verderico
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REPORT ON REPRICING OF OPTIONS
On December 3, 1996, the Board of Directors of the Company unanimously
approved resolutions authorizing the exchange of certain outstanding stock
options held by all then employees, including officers, and certain consultants
of the Company on the terms described below. The overall purpose of the
Company's stock option plan had been to attract and retain the services of the
Company's employees and to provide incentives to such persons to exert
exceptional efforts for the Company's success. The Committee concluded that the
decline in the market value of the Company's Common Stock had diminished the
value of the Company's stock option program as an element of the Company's
compensation arrangements. Accordingly, the Committee approved the exchange
program described below.
All employees of the Company, including officers, and certain
consultants were given the opportunity to exchange those unexercised options
granted prior to December 2, 1996, with an exercise price above $2.6875 per
share, the closing price on December 3, 1996 (the "Old Options"), for new
options ("New Options") on a one-for-one basis. The exercise price of the New
Options is $2.6875 per share. The expiration date of the New Options is December
2, 2006.
STOCK OPTION AND COMPENSATION COMMITTEE
Hideyuki Tanigami
Patrick Verderico
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TEN-YEAR OPTION REPRICINGS
The officers of the company received repriced stock options on December 3, 1996
as follows:
LENGTH OF
NUMBER OF MARKET ORIGINAL
SECURITIES PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK PRICE AT NEW REMAINING
NAME AND OPTION AT TIME OF TIME OF EXERCISE AT DATE OF
POSITION DATE REPRICED(#) REPRICING($) REPRICING($) PRICE($) REPRICING (MONTHS)
-------- ---- ----------- ------------ ------------ -------- ------------------
C. Michael Powell ................. December 3, 1996 30,280 $2.6875 $5.25 $2.6875 104
President and .................. December 3, 1996 19,720 $2.6875 $5.25 $2.6875 104
Chief Executive Officer ........ December 3, 1996 100,000 $2.6875 $6.00 $2.6875 111
Radu M. Vanco ..................... December 3, 1996 21,488 $2.6875 $5.25 $2.6875 104
Executive Vice December 3, 1996 28,512 $2.6875 $5.25 $2.6875 104
President, Engineering December 3, 1996 50,000 $2.6875 $7.25 $2.6875 108
December 3, 1996 55,000 $2.6875 $6.00 $2.6875 111
Daryl E. Stemm .................... December 3, 1996 33,000 $2.6875 $6.00 $2.6875 111
Vice President of
Finance &
Administration
and Chief
Financial Officer
Chris Carstens .................... December 3, 1996 25,000 $2.6875 $5.25 $2.6875 104
Vice President, Quality December 3, 1996 25,000 $2.6875 $6.00 $2.6875 111
and Reliability
Scott L. Parker ................... December 3, 1996 38,185 $2.6875 $5.00 $2.6875 111
Vice President, December 3, 1996 161,815 $2.6875 $5.00 $2.6875 111
Marketing and Sales
Alan Renninger .................... December 3, 1996 10,000 $2.6875 $7.25 $2.6875 108
Vice President, December 3, 1996 10,000 $2.6875 $6.00 $2.6875 111
Technology Development
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PERFORMANCE GRAPH
The following line graph compares the annual percentage change in the
cumulative total stockholder return for the Company's Common Stock with the S&P
500 Index and the S&P Electronics (Semi/Components) Index for the period
commencing May 11, 1993 (the date the Company's Common Stock first traded on the
Nasdaq National Market) and ending on April 30, 1997. The graph assumes that
$100 was invested on May 11, 1993, the date of the Company's initial public
offering, and that all dividends are reinvested. Historic stock price
performance should not necessarily be considered indicative of future stock
price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CATALYST SEMICONDUCTOR, INC., THE S & P 500 INDEX
AND THE S & P ELECTRONICS (SEMICONDUCTORS) INDEX
[GRAPH]
Catalyst Semiconductor, Inc.
S & P 500
S & P Electronics (Semiconductors)
5/11/93 3/31/94 3/31/95 4/30/96 4/30/97
- ---------------------------------------------------------------------------------------------------
Catalyst Semiconductor, Inc. [ ] $100.00 $41.00 $37.00 $50.00 $13.00
S & P 500 (DELTA) $100.00 $104.00 $120.00 $161.00 $202.00
S & P Electronics (Semiconductors) - $100.00 $140.00 $168.00 $217.00 $427.00
- ---------------------------------------------------------------------------------------------------
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of August
3, 1997 by (i) each beneficial owner of more than 5% of the Company's Common
Stock, (ii) each director, (iii) each Named Officer and (iv) all directors and
executive officers as a group. Except as otherwise indicated, each person has
sole voting and investment power with respect to all shares shown as
beneficially owned, subject to community property laws where applicable.
SHARES BENEFICIALLY OWNED
-----------------------------
NUMBER PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES TOTAL
- ------------------------------------------------------------ ------------------------------
United Microelectronics Corp................................ 650,000 7.2%
No. 13, Innovation Road I
Science-Based Industrial Park
Hsin-Chei City, Taiwan R.O.C.
Bharat Kumar (B.K.) Marya(1)................................ 465,554 5.1%
P.O. Box 250
Los Altos, California 94023
C. Michael Powell(2)........................................ 307,326 3.4%
Radu M. Vanco(2)............................................ 142,320 1.6%
Lionel M. Allan(2).......................................... 38,745 *
Hideyuki Tanigami(2)........................................ 59,580 *
Patrick Verderico(2)........................................ 6,666 *
Daryl E. Stemm(2) .......................................... 21,275 *
Chris Carstens(2)........................................... 82,599 *
Scott L. Parker (2)(3) 49,999 *
Alan L. Renninger(4)........................................ 0 *
All current directors and executive
officers as a group (7 persons)............................. 658,511 7.3%
- -----------------
* Percentage of shares beneficially owned is less than one percent of total.
(1) Includes shares issuable upon exercise of stock options as of August 3,
1997 or within 60 days thereafter as follows: 87,441 shares at $1.8000;
183,333 shares at $1.9375; and 40,000 shares at $3.00. Includes shares
held by the B.K. Marya Revocable Living Trust and by Kamlesh Kumari, the
mother-in-law of Mr. Marya (including shares held by Ms. Kumari as
trustee of certain trusts for Mr. Marya's children). Mr. Marya disclaims
beneficial ownership of such shares.
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(2) Includes shares issuable upon exercise of stock options as of August 3,
1997 or within 60 days thereafter as follows:
C. Michael Powell................ 189,102 shares at $1.9375
51,562 shares at $1.9370
66,662 shares at $2.6875
Radu M. Vanco.................... 46,033 shares at $1.9375
27,748 shares at $1.9370
68 ,539 shares at $2.6875
Lionel M Allan................... 13,332 shares at $5.1250
2,500 shares at $5.0000
22,913 shares at $2.6875
Hideyuki Tanigami................ 9,165 shares at $1.9375
43,749 shares at $1.9370
6,666 shares at $6.0000
Patrick Verderico................ 6,666 shares at $5.0000
Daryl E. Stemm................... 1,155 shares at $1.9375
7,059 shares at $1.9370
12,375 shares at $2.6875
Chris Carstens................... 32,816 shares at $1.9375
26,249 shares at $2.5000
23,434 shares at $2.6875
Scott L. Parker ................ 49,999 shares at $2.6875
(3) Mr. Parker's employment with the Company terminated on March 7, 1997. As
of August 3, 1997, he held 49,999 shares issuable upon exercise of stock
options or within 60 days thereafter.
(4) Mr. Renninger's employment with the Company terminated on March 28,
1997. As of August 3, 1997, he held no shares issuable upon exercise of
stock options or within 60 days thereafter.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During Fiscal Year 1997, the Company paid approximately $135,000 to
Essex Com SRL, a Romanian corporation ("Essex"), for engineering services. Radu
M. Vanco, the Company's Executive Vice President of Engineering owns 100% of the
capital stock of Essex. Negotiations with Essex to determine the fee for such
services were conducted as an arms length commercial negotiation and did not
include any participation by Mr. Vanco.
In March 1994, the Company loaned Radu M. Vanco, then Vice President
Engineering and, since October 1995, Executive Vice President of Engineering,
$100,000 payable in two years with interest at 6% per annum. The loan proceeds
were used by Mr. Vanco for his home. On March 12, 1996, the Company and Mr.
Vanco agreed to a bonus arrangement which has the effect of (a) forgiving the
principal and accrued interest on the note on a monthly basis over two years
commencing March 16, 1996 as long as he remains employed by the Company and (b)
forgiving the principal and accrued interest immediately if he is terminated
without cause or in the event of a change in control. The principal and accrued
interest on the note becomes immediately due and payable if he voluntarily
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resigns or is terminated for cause. At the end of Fiscal Year 1997, $44,792 in
principal and accrued interest were outstanding on the note.
In September 1995, the Company loaned C. Michael Powell, Chairman, Chief
Executive Officer, President and Chief Financial Officer of the Company,
$200,000 payable in five years with interest at 7% per annum. The loan proceeds
were used by Mr. Powell for his home. The agreement between the parties provides
for a bonus arrangement which has the effect of (a) forgiving the principal and
accrued interest on the note over five years on a monthly basis commencing
October 7, 1995 as long as he remains employed by the Company and (b) forgiving
the principal and accrued interest immediately if he is terminated without cause
or in the event of a change of control. In addition he receives an amount equal
to any federal or state taxes payable with respect to such bonuses. The
principal and accrued interest on the note becomes immediately due and payable
if he voluntarily resigns or is terminated for cause. At the end of Fiscal Year
1997, $147,143 in principal and accrued interest were outstanding on the note.
The Company entered into employment agreements with Messrs. Powell,
Vanco, Carstens and Stemm in August, October, April and September 1995,
respectively, which entitle such officers to a one-time severance payment upon
any involuntary termination by the Company without cause. Pursuant to the terms
and conditions of said agreements, for terminations resulting from a merger,
sale or change in ownership of the Company, severance payments shall be as
follows: Mr. Powell will receive to 2, 1-1/2, 1 and -1/2 times his salary if
terminated within one, two, three or more than three years, respectively, of his
agreement; Mr. Vanco will receive 1-1/2, 1 and -1/2 times his salary if
terminated within one, two or more than two years, respectively, of his
Agreement; and Messrs. Carstens and Stemm will receive one-half their respective
salary if so terminated. If involuntary termination without cause should occur
in the absence of a merger, sale or change in control of the Company, then the
severance payment for Messrs. Powell, Vanco, Carstens and Stemm shall equal 1,
1/2, 1/4 and 1/2 times their respective annual salaries. For the purposes of
determining the severance payments described above, salary is defined as the
salary payable to an officer for the fiscal year in which such officer's
termination occurs.
The Company has entered into separate indemnification agreements with
each of its directors and executive officers that may require the Company, among
other things, to indemnify them against certain liabilities that may arise by
reason of their status or service as directors or officers and to advance their
expenses incurred as a result of any proceeding against them as to which they
could be indemnified.
Hideyuki Tanigami, a director of the Company, is President of Marubun
USA Corporation, a wholly owned subsidiary of Marubun Japan. Marubun Japan is a
distributor of the Company's products in Japan and accounted for approximately
14% of the Company's net revenues in Fiscal Year 1997.
In connection with the sale by the Company and the purchase by United
Microelectronics Corporation, a corporation organized and existing under the
laws of the Republic of China ("UMC"), of 650,000 shares of Common Stock in
February 1996, UMC agreed to provide the Company with specified levels of wafer
supplies and UMC and the Company entered into certain mutual licensing
arrangements. UMC also obtained certain registration rights relating to the
Common Stock purchased.
The terms of the transactions described above were negotiated at arms
length such that the terms were as favorable to the Company as could have been
obtained from an unaffiliated third party.
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CATALYST SEMICONDUCTOR, INC.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to report to
be signed on its behalf by the undersigned thereunto duly authorized, in the
City of Santa Clara and State of California, on August 28, 1997.
CATALYST SEMICONDUCTOR, INC.
By: /S/ C. Michael Powell
-----------------------------------------------
C. Michael Powell
Chairman of the Board of Directors, President,
and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Exchange Act of 1934,
this amendment to report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
Date: August 28, 1997 By: /S/ C. Michael Powell
----------------------------------------------------
C. Michael Powell
Chairman of the Board of Directors, President,
and Chief Executive Officer
Date: August 28, 1997 By: *
----------------------------------------------------
Daryl E. Stemm
Vice President of Finance and Administration and
Chief Financial Officer
Date: August 28, 1997 By: *
----------------------------------------------------
Radu M. Vanco
Executive Vice President, Engineering and Director
Date: August 28, 1997 By: *
----------------------------------------------------
Lionel M. Allan
Director
Date: August 28, 1997 By: *
----------------------------------------------------
Hideyuki Tanigami
Director
Date: August 28, 1997 By: *
----------------------------------------------------
Patrick Verderico
Director
* /S/ C. Michael Powell
- --------------------------------
By: C. Michael Powell
Attorney-in-fact
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