FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
COMMISSION FILE NO: 1-9917
CATALINA LIGHTING, INC.
(Exact name of Registrant as specified in its charter)
FLORIDA 59-1548266
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
18191 N.W. 68TH AVENUE, MIAMI, FLORIDA 33015
(Address of principal executive offices including zip code)
(305) 558-4777
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, par value New York Stock Exchange
$.01 per share
Securities registered pursuant to Section 12(g) of the Act: None
SECTIONS AMENDED
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
ITEM 11. EXECUTIVE COMPENSATION.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
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 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 registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [ ]
Page 1 of 13 Pages
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information with respect to the
Directors and Executive Officers of the Company:
NAME AGE POSITION WITH THE COMPANY
- ------------------------- ----------- ------------------------------------------
Robert Hersh 50 Chairman, Chief Executive Officer,
President, Director
Dean S. Rappaport 45 Executive Vice President, Chief Operating
Officer, Director
William D. Stewart 48 Executive Vice President, Director
Nathan Katz 41 Executive Vice President
Ryan Burrow 36 Director
Henry Latimer 59 Director
Leonard Sokolow 40 Director
Robert Wachs 58 Director
Wai Check Lau 49 President of Go Gro Industries Limited
Janet P. Ailstock 48 Vice President, General Counsel
Thomas M. Bluth 39 Vice President, Secretary, Treasurer
David W. Sasnett 40 Vice President, Chief Financial Officer
None of the Company's officers has any family relationship with any
director or other officer. "Family relationship" for this purpose means any
relationship by blood, marriage, or adoption, not more remote than first cousin.
ROBERT HERSH has been the President and Chief Executive Officer of the
Company since April 1991, Chairman of the Board since June 1991 and a Director
of the Company since April 1988. Mr. Hersh served as the Executive Vice
President of the Company from 1985 to April 1991 and as Secretary from June 1989
until June 1991.
DEAN S. RAPPAPORT has been an Executive Vice President of the Company
since January, 1988 and a Director of the Company since April 1988. From January
1988 to November 1996 Mr. Rappaport was Chief Financial Officer and Treasurer of
the Company. Mr. Rappaport was promoted to Chief Operating Officer of the
Company in November 1996.
WILLIAM D. STEWART has been an Executive Vice President of the Company
since 1989, and a Director of the Company since April 1994. From 1985 until he
joined the Company, Mr. Stewart was an Executive Vice President with Crest
Industries, Inc., a distributor of home improvement products.
Page 2 of 13 Pages
<PAGE>
NATHAN KATZ has been an Executive Vice President of the Company since
October 1, 1993 and President of Dana Lighting, Inc., a wholly-owned subsidiary
of the Company, between August 1989 and June 1995. From October 1983 to August
1989, Mr. Katz was the Chief Executive Officer of Dana Imports, Inc., an
importer of lamps located in Boston, Massachusetts.
RYAN BURROW has been a Director of the Company since April 1994. Mr.
Burrow has been Managing Director for STI Capital Management since August 1993.
Mr. Burrow served as a Senior Vice President of Sun Bank, N.A. from February
1990 to August 1993 and from September 1987 to February 1990 was a Senior Vice
President for the Bank of New York/Irving Trust Company.
HENRY LATIMER has been a Director of the Company since February 1996.
Mr. Latimer is the Managing Partner, Fort Lauderdale office, of Eckert, Seamans,
Cherin & Mellott. He was formerly a partner with Fine, Jacobson, Schwartz, Nash
& Block from 1983 to 1994.
LEONARD SOKOLOW has been a Director of the Company since March 1990.
Mr. Sokolow is the President of Union Atlantic LC. In August 1993 Mr. Sokolow
was appointed as President of Genesis Partners, Inc., which merged into Union
Atlantic LC in September 1996. Mr. Sokolow was Executive Vice
President-Operations, Administration and Finance of Windmere Corporation from
March 1990 to July 1993, and Senior Vice President of Windmere from February
1989 to March 1990 and General Counsel of Windmere from December 1988 to July
1993. Prior to joining Windmere, Mr. Sokolow was a partner with the law firm of
Hornsby and Whisenand, P.A., practicing in the area of international and
domestic corporate, securities and tax law. Mr. Sokolow presently serves as a
director of The Box Worldwide, Inc. (formerly Video Jukebox Network, Inc.), as a
director of Ezcony Interamerica, Inc. and as the Chairman and Chief Executive
Officer of The Americas Growth Fund, Inc. The shares of The Box Worldwide, The
America's Growth Fund and Ezcony Interamerica are traded on NASDAQ.
ROBERT WACHS has been a Director of the Company since April 1988. Since
1980 Mr. Wachs has served as President and Chairman of Robert Wachs Associates,
Inc., a manufacturer sales representative firm located in Los Angeles,
California. Robert Wachs Associates, Inc. acts as a sales representative for the
Company.
WAI CHECK LAU has been President of Go-Gro Industries Limited (a
wholly-owned subsidiary of the Company since July 1994) since 1985.
JANET P. AILSTOCK has been Vice President and General Counsel for the
Company since April 1992. Prior to joining the Company, from 1986 to 1992 Ms.
Ailstock was associated with the law firm of Fine, Jacobson, Schwartz, Nash and
Block practicing in the area of securities and corporate law.
THOMAS M. BLUTH has been a Vice President of the Company since August
1994 and Secretary of the Company since November 1994. Mr. Bluth became
Treasurer of the Company in November 1996. From 1989 until he joined the
Company, Mr. Bluth was Vice President and General Counsel for Ellis Diversified,
Inc. From 1987 to 1989, Mr. Bluth was the Assistant Tax Director for
Southwestern Bell Corporation.
DAVID W. SASNETT has been a Vice President of the Company since
November 1994. In November 1996, Mr. Sasnett became the Chief Financial Officer
of the Company. Prior to that time, he was the Company's Controller and Chief
Accounting Officer. From 1993 until he joined the Company, Mr. Sasnett was the
Vice President - Finance and Controller of Hamilton Bank, N.A. and from 1980 to
1993 was employed by the international accounting firm of Deloitte & Touche.
Page 3 of 13 Pages
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ITEM 11. EXECUTIVE COMPENSATION.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information about the compensation of
the Company's CEO and each of the other four most highly compensated executive
officers of the Company during the fiscal years ending September 30, 1996, 1995
and 1994 for services in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------------------- ------------------------
ALL OTHER
NAME AND PRINCIPAL FISCAL OTHER ANNUAL SECURITIES COMPENSA-
POSITION YEAR SALARY BONUS 1 COMPENSATION 2 UNDERLYING OPTIONS 3 TION 4
- ----------------------- -------- ------------ ---------- ---------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C>
Robert Hersh 1996 $ 271,338 $ 43,787 - $ 1,500
Chairman, CEO and 1995 258,418 14,917 62,500 794
President 1994 246,112 153,449 - -
Dean S. Rappaport
Executive Vice 1996 244,204 43,787 - 6,496
President, Chief 1995 232,575 14,917 62,500 6,033
Operating Officer 1994 221,500 153,449 - 5,894
William D. Stewart 1996 244,204 43,787 - 7,987
Executive Vice 1995 232,575 14,917 62,500 7,802
President 1994 221,500 153,449 - 7,479
Nathan Katz 1996 244,204 43,787 - 1,500
Executive Vice 1995 232,575 14,917 62,500 794
President 1994 221,500 153,449 - -
Wai Check Lau5 1996 180,000 - - -
President - Go-Gro 1995 180,000 - - -
Industries Limited 1994 30,000 - - -
</TABLE>
- -------------
1 Amounts represent 1.67% of consolidated pre-tax income for the respective
fiscal years ended September 30.
2 Perquisites and personal benefits furnished to the named executive
officers do not meet the disclosure thresholds established under SEC
regulations.
3 Stock options vest annually in increments of one-third of the options
granted.
4 The amounts disclosed in this column represent:
(a) The portion of premiums paid by the Company for reverse split-dollar
life insurance of $4,996 in 1996, $5,239 in 1995 and $5,894 in 1994
for Mr. Rappaport and $6,487 in 1996, $7,008 in 1995 and $7,479 in
1994 for Mr. Stewart.
(b) The Company's matching contributions to the Company's 401(k) plan of
$1,500 in 1996 and $794 in 1995 for each of Mr. Hersh,
Mr. Rappaport, Mr. Stewart and Mr. Katz.
5 Mr. Lau joined the company on July 30, 1994, upon the Company's acquisition
of Go-Gro Industries Limited.
Page 4 of 13 Pages
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STOCK OPTIONS
No stock options were granted to the named executive officers of the
Company during the fiscal year ended September 30, 1996.
OPTION EXERCISES AND HOLDINGS
The following table provides information as to options exercised by each
of the named executive officers of the Company during the fiscal year ended
September 30, 1996 and the value of options held by such officers at September
30, 1996 in terms of the closing price of the Company's stock on September 30,
1996.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1996 AND FISCAL YEAR END 1996 OPTION VALUES
SHARES VALUE OF
ACQUIRED ON VALUE NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
NAME EXERCISE REALIZED OPTIONS AT SEPTEMBER 30, 1996 SEPTEMBER 30, 1996 1
- -------------- --------------- ---------- --------------------------------- --------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert Hersh 0 0 280,033 41,667 $ 237,150 0
Dean S.
Rappaport 0 0 277,433 41,667 $ 231,950 0
William D.
Stewart 0 0 190,833 41,667 $ 85,000 0
Nathan Katz 0 0 175,833 41,667 $ 110,000 0
Wai Check Lau 0 0 0 0 0 0
</TABLE>
- ---------------------------
1 Based on the closing price of the Company's stock on September 30, 1996
of $3.75.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company has entered into employment agreements with Robert
Hersh, Dean S. Rappaport, William D. Stewart and Nathan Katz for three year
terms, renewed each year on the Anniversary Date of each employment
agreement. Commencing October 1, 1993, Messrs. Hersh, Rappaport, Stewart
and Katz's base annual salaries were $246,112, $221,500, $221,500, and
$221,500, respectively, with annual increases of the greater of 5% or the
percentage increases in the consumer price index published by the U.S.
Department of Labor ("U.S. Consumer Price Index"). Messrs. Hersh, Rappaport
and Stewart each received options to purchase 50,000 shares of Common Stock
during each of the fiscal years 1990 through 1993 under the terms of their
respective contracts. Mr. Katz received options to purchase 50,000 shares
of common stock in both 1992 and 1993. Messrs. Hersh, Rappaport, Stewart
and Katz each received options to purchase 62,500 shares of Common Stock
during fiscal year 1995. No options were given during fiscals 1994 and
1996. The aforementioned were issued under the Company's 1987 Stock Option
and Stock Appreciation Rights Plan.
Page 5 of 13 Pages
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In connection with the employment agreements of Messrs. Hersh,
Rappaport, Stewart and Katz, the Company agreed to fund a management bonus
pool (the "Pool") with 6.67 % of the Company's consolidated pre-tax
profits, at the end of each of the Company's fiscal years beginning with
the year ending September 30, 1990 (Mr. Katz was entitled to participate in
the bonus pool beginning October 1, 1993). Under the employment agreements
described above, Messrs. Hersh, Rappaport, Stewart and Katz were each
entitled to not less than one-fourth of the Pool. Bonuses were waived in
1990, no amounts were distributed in 1991 due to pre-tax losses and amounts
earned under the Pool in fiscal 1993, 1994, 1995 and 1996 totaled
approximately $356,000, $614,000, $60,000 and $175,000, respectively.
In connection with the Company's acquisition of Go-Gro Industries,
Limited ("Go-Gro") the Company entered into an employment agreement with
the previous majority stockholder of Go-Gro, Wai Check Lau, under which
such individual serves as President of Go-Gro. The term of the employment
agreement is from July 30, 1994 to July 30, 1999, renewable for a
successive five-year period under terms mutually acceptable to the Company
and the employee. The agreement provides for annual compensation of
$180,000.
On April 1, 1992, the Company entered into an employment agreement
with Ms. Janet Ailstock for a two year term. The officer received a base
annual salary of $100,000 and an annual award of 5,000 shares of Company
common stock, with annual increases of the base salary of the greater of 5%
or the percentage increase in the U.S. Consumer Price Index. On April 1,
1994 and 1996, the term of the employment agreement was extended for
additional two year terms ending March 31, 1998.
The employment agreements with Messrs. Hersh, Rappaport, Stewart,
Katz and Ms. Ailstock each provide that, if the employee terminates his
employment without good reason or is terminated for cause, such employee is
subject to a non-competition provision for a three year period. In the
event of a change of control of the Company preceded, accompanied or
followed (within specified time limits) by a reduction of the employee's
compensation or a diminution of his status or responsibilities, the
employee is entitled to terminate his employment and receive a lump sum
distribution of compensation in an amount equal to three times his then
current effective yearly compensation, including, but not limited to,
salary and bonuses. If the employee elects to so terminate, he will have
the right to sell any shares of the Company's capital stock then owned to
the Company at their fair market value and the non-competitive provisions
contained in the employment agreements shall terminate. Payments under the
agreements by the Company after a change of control are, however, limited
to the amount which would be deductible by the Company under the Internal
Revenue Code of 1986, as amended. A "change of control" is deemed to occur
upon (i) the acquisition of 21% of the Company's voting power, (ii) the
election of three or more directors without approval of the Incumbent
Directors, as defined, within a twelve-month period, or (iii) the Incumbent
Directors becoming less than a majority of the Board of Directors of the
Company or its successor. The agreements also provide for payments of three
times annual compensation if the employment is terminated without cause by
the Company or for good reason by the employee.
The Company pays its proportional share of a reverse split-dollar
life insurance policy on Mr. Rappaport and Mr. Stewart's life. In the event
of either of Mr. Rappaport's or Mr. Stewart's death during the term of
their employment agreements, the Company would receive $1,000,000.
LEGAL PROCEEDINGS
On June 4, 1991, the Company was served with a copy of the Complaint
in a matter captioned JOHN H. BROWDER VS. CATALINA LIGHTING, INC., ROBERT
HERSH, DEAN S. RAPPAPORT AND HENRY GAYER, Case No. 91-23683, in the Circuit
Court of the 11th Judicial Circuit in and for Dade County, Florida. The
Company and the directors believe that the Complaint is totally without
merit and are vigorously defending the same. The Company has agreed to
indemnify each of the individual directors against liabilities incurred in
connection with such proceeding to the extent permitted by Florida law and
the Company may advance expenses to the individual directors arising out of
such proceeding.
Page 6 of 13 Pages
<PAGE>
On February 23, 1993, Dana Lighting (now Catalina Industries), a
subsidiary of the Company, was served with a copy of the Complaint in a
matter captioned HOLMES PRODUCTS CORPORATION VS. DANA LIGHTING, INC. AND
NATHAN KATZ, Case No. 93-0249 in the Superior Court of the Commonwealth of
Massachusetts. The Company and the directors believe that the Complaint is
totally without merit and are vigorously defending the same. The Company
has agreed to indemnify each of the individual directors and Mr. Katz
against liabilities incurred in connection with such proceeding to the
extent permitted by Florida law and the Company may advance expenses to the
individual officers arising out of such proceeding.
COMPENSATION OF DIRECTORS
Salaried employees of the Company do not receive any additional
compensation for serving as a director or committee member. Non-employee
Directors receive an annual retainer of $14,000, plus $1,000 per Board
meeting and Committee meeting attended, and an option to purchase 2,000
shares of Common Stock under the Company's Non-Employee Directors Stock
Option Plan ("Directors Plan") as compensation for services rendered. Mr.
Wachs and Mr. Burrow are reimbursed for their travel expenses to the
meetings.
Under the Directors Plan, options are granted to purchase 2,000
shares of the Company's Common Stock for each year served. Options are
granted at the annual meeting date which coincides with their election or
appointment or, if the date of appointment or election is between annual
meetings, at the next subsequent annual meeting. The exercise price is the
fair market value of the Common Stock on the date granted, and options are
granted for a term of ten years. An option may not be exercised before the
next subsequent annual meeting of stockholders following the date of the
grant. Options are exercisable during the term only by the non-employee
Directors and are transferable only by will or the laws of descent and
distribution.
Robert Wachs and Associates, of which Robert Wachs is the President,
received commissions as a sales representative of approximately $11,000
during fiscal 1996.
NONQUALIFIED STOCK OPTIONS
The Company from time to time issues non-qualified stock options to
purchase shares of Common Stock to its officers. All such options are
issued pursuant to individual stock option agreements and bear an exercise
price equal to or in excess of the market value of the Common Stock on the
date of grant. The period during which such options may be exercised
varies, depending on the optionee and the circumstances under which the
options have been granted. The exercise price of such options may be paid
in cash or, under certain circumstances, by delivery of shares of Common
Stock or by a combination of the foregoing. No non-qualified stock options
were granted to directors or named executive officers during fiscal 1996.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of
Leonard Sokolow and Ryan Burrow. Messrs. Burrow and Sokolow are independent
directors of the Company, and neither is an officer of the Company.
Page 7 of 13 Pages
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, to the best knowledge of the Company,
information with respect to the Company's Common Stock beneficially owned
on January 7, 1997 by those who were the beneficial owner of more than 5%
of the Company's stock.
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENTAGE
- ---------------------------------- ---------------------- ------------
Wai Check Lau..................... 615,000(2) 8.7%
6/F, Kenning Industrial Bldg.
19 Wang Hoi Road
Kowloon Bay, Hong Kong
Nathan Katz....................... 609,909(3) 8.4%
55 Norfolk Avenue
Easton, MA
Robert Hersh...................... 407,467(4)(7) 5.5%
18191 N.W. 68th Avenue
Miami, Florida 33015
Dean S. Rappaport................. 347,267(5)(7) 4.7%
18191 N.W. 68th Avenue
Miami, Florida 33015
William D. Stewart................ 229,667(6)(7) 3.2%
18191 N.W. 68th Avenue
Miami, Florida 33015
- ---------------------------------
(1) Includes shares which may be acquired pursuant to vested stock options and
options which become exercisable 60 days thereafter or shares for which the
stockholder has the power to direct the vote.
(2) Includes 477,500 shares issued to Go-Gro Holdings Limited, which is owned
by Wai Check Lau and 7,500 shares issued to Amy Yuen Ying Lau Cheung, the
wife of Wai Check Lau. In July 1994, as part of the Company's acquisition
of Go-Gro Industries Limited, Wai Check Lau and Amy Yuen Ying Lau Cheung
each delivered an irrevocable proxy to Catalina Asia, an entity controlled
by the Company. As a part of the same transaction, Catalina Asia received a
proxy to vote an additional 165,000 shares of the Company. The shares are
voted at the direction of Messrs. Hersh, Rappaport, and Stewart, members of
the Board of Directors of Catalina Asia.
(3) Includes 55,000 shares purchasable upon the exercise of options at $1.75
per share, 50,000 shares purchasable at $4.875 per share, 50,000 shares
purchasable at $5.25 per share and 41,667 shares purchasable at $6.75 per
share.
(4) Includes shares subject to options to purchase 109,200 shares at $1.75 per
share, 50,000 shares at $3.375 per share, 50,000 shares at $4.875 per
share, 50,000 at $4.125 per share and 41,667 at $6.75 per share.
Page 8 of 13 Pages
<PAGE>
(5) Includes shares subject to options to purchase 106,600 shares at $1.75 per
share, 50,000 shares at $3.375 per share, 50,000 at $4.875 per share,
50,000 at $4.125 per share and 41,667 at $6.75 per share.
(6) Includes shares subject to options to purchase 20,000 shares at $1.75 per
share, 30,000 shares at $2.50 per share, 20,000 shares at $3.375 per share,
50,000 shares at $4.875 per share, 50,000 shares at $4.125 per share and
41,667 at $6.75 per share.
(7) In addition, Messrs. Hersh, Rappaport and Stewart, jointly have a power to
vote 750,000 shares owned by previous shareholders of Go-Gro Industries
Limited pursuant to irrevocable proxies. These shares are not included in
their amounts of shares beneficially owned.
FILINGS UNDER SECTION 16(A)
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent
of a registered class of the Company's equity securities, to file reports
of ownership and changes in ownership of such securities with the
Securities and Exchange Commission and the New York Stock Exchange.
Officers, directors and greater than ten-percent beneficial owners are
required by applicable regulations to furnish the Company with copies of
all Section 16(a) forms they file. The Company is not aware of any
beneficial owner of more than ten percent of its Common Stock.
During August 1996, the daughter of Robert Wachs, a Director of the
Company, purchased 1,000 shares. Mr. Wachs notified the Company that he
failed to timely file one report on Form 4 concerning the purchase of such
shares. Such report was filed on December 17, 1996 which was due September
10, 1996. Based solely upon review of the copies of the forms furnished to
the Company, or written representations from certain reporting persons that
no Form 5's were required, the Company believes that, except for Mr. Wachs'
Form 4, all filing requirements applicable to its officers and directors
were complied with during the 1996 fiscal year.
Page 9 of 13 Pages
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SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
The following table sets forth, to the best knowledge of the
Company, the shares of Common stock beneficially owned at January 7, 1997
by each Director and Executive Officer and by all Executive Officers and
Directors of the Company as a group.
COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1) PERCENTAGE
- --------------------------------------- ------------------- ----------
Robert Hersh .......................... 407,467 (2), (13) 5.5%
Dean S. Rappaport ..................... 347,267 (3), (13) 4.7%
William D. Stewart .................... 229,667 (4), (13) 3.2%
Leonard Sokolow ....................... 37,000 (5) *
Robert Wachs .......................... 101,450 (6) 1.4%
Ryan Burrow ........................... 4,700 (7) *
Henry Latimer ......................... 495 *
Nathan Katz ........................... 609,909 (8) 8.4%
Wai Check Lau ......................... 615,000 (9) 8.7%
Janet P. Ailstock ..................... 55,833 (10) *
Thomas Bluth .......................... 18,667 (11) *
David Sasnett ......................... 11,133 (12) *
All Executive Officers and
Directors of the Company and its
Subsidiaries as a Group
(12 persons) .......................... 2,545,843 (14) 30.8%
* less than 1%
- -------------
(1) Includes shares which may be acquired pursuant to vested stock options
and options which become exercisable 60 days thereafter.
(2) Includes shares subject to options to purchase 109,200 shares at $1.75
per share, 50,000 shares at $3.375 per share, 50,000 shares at $4.875 per share,
50,000 at $4.125 per share and 41,667 at $6.75 per share.
Page 10 of 13 Pages
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(3) Includes shares subject to options to purchase 106,600 shares at $1.75
per share, 50,000 shares at $3.375 per share, 50,000 at $4.875 per share,
50,000 at $4.125 per share and 41,667 at $6.75 per share.
(4) Includes shares subject to options to purchase 20,000 shares at $1.75
per share, 30,000 shares at $2.50 per share, 20,000 shares at $3.375 per share,
50,000 shares at $4.875 per share, 50,000 shares at $4.125 per share and 41,667
at $6.75 per share.
(5) Includes shares subject to options to purchase 25,000 shares at $4.875
per share, 2,000 shares at $7.875 per share, 2,000 shares at $5.375 per share,
2,000 shares at $6.875 per share, 2,000 at $10.75 per share and 2,000 shares at
$6.625.
(6) Includes shares subject to options to purchase 50,000 shares at $1.75
per share, 25,000 shares at $4.875 per share, 2,000 shares at $12.125 per share,
2,000 shares at $7.875 per share, 2,000 shares at $3.375 per share, 2,000 shares
at $5.375 per share, 2,000 shares at $6.875 per share, 2,000 at $10.75 per share
and 2,000 shares at $6.625 per share. Also includes 1,650 shares owned by
members of Mr. Wachs' immediate family.
(7) Includes 500 shares owned by Mr. Burrow's wife and shares subject to
options to purchase 2,000 shares at $6.625.
(8) Includes 55,000 shares purchasable upon the exercise of options at
$1.75 per share, 50,000 shares purchasable at $4.875 per share, 50,000 shares
purchasable at $5.25 per share and 41,667 shares purchasable at $6.75 per share.
(9) Includes 477,500 shares issued to Go-Gro Holdings Limited, which is
owned by Wai Check Lau and 7,500 shares issued to Amy Yuen Ying Lau Cheung, the
wife of Wai Check Lau. As part of the acquisition of Go-Gro Industries Limited,
Catalina Asia was issued an irrevocable proxy to vote such shares. The shares
are voted at the direction of Messrs. Hersh, Rappaport and Stewart, the Board of
Directors of Catalina Asia.
(10) Includes shares subject to options to purchase 30,833 shares at $4.125
per share.
(11) Includes 16,667 shares purchasable upon the exercise of options at
$4.125 per share.
(12) Includes 10,833 shares purchasable upon the exercise of options at
$4.125 per share.
(13) Messrs. Hersh, Rappaport and Stewart, jointly have a power to vote
750,000 shares owned by previous shareholders of Go-Gro Industries Limited
pursuant to irrevocable proxies. These shares are not included in the amount of
shares beneficially owned by these executive officers.
(14) Includes an additional 165,000 shares owned by previous shareholders
of Go-Gro Industries Limited. These shares are included in the 750,000 shares
which Messrs. Hersh, Rappaport and Stewart jointly have a power to vote pursuant
to irrevocable proxies.
Page 11 of 13 Pages
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leased its two facilities located in Massachusetts from
entities in which an officer and a former officer had an ownership
interest. One of the leases expired in 1996 and the other one is on a
month-to-month basis. Rent expense related to these leases was
approximately $530,000, $521,000 and $512,000 for the years ended September
30, 1996, 1995 and 1994, respectively.
The Company leases its Hong Kong office from a company owned by the
President and former majority stockholder of Go Gro. The lease expires in
August 1997 but may be extended for an additional two years. Rent expense
related to this lease was $258,000, $237,000 and $39,000 for the years
ended September 30, 1996, 1995 and 1994, respectively.
During the years ended September 30, 1996 and 1995, Go-Gro
purchased $1.8 million and $1.1 million, respectively, in raw materials
from an affiliate which is fifty percent owned by the Company and which
includes the President of Go-Gro as one of its directors.
In January 1994, the Company delivered 32,644 restricted common
shares as consideration for the one-year extension, from May 1993 to May
1994, of its non-compete contract with a former Chairman and Chief
Executive Officer of the Company. In January 1994, the Company elected to
extend the term of this non-compete agreement for the third year of its
three-year option, from May 1994 to May 1995. The consideration for the
one-year extension was satisfied in May 1994 by the issuance of 23,112
restricted shares of the Company's common stock.
Page 12 of 13 Pages
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 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.
CATALINA LIGHTING, INC.
By: /s/Robert Hersh
------------------------------
Chairman, President and
Chief Executive Officer
January 28, 1997
Page 13 of 13 Pages
