FORM 10-K/A
U.S. 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
<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:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ------------------------------------- --------------------- ----------------------------------------------------------------
<S> <C> <C>
Robert Hersh 51 Chairman, Chief Executive Officer, President, Director
Dean S. Rappaport 46 Executive Vice President, Chief Operating Officer,
Director
William D. Stewart 49 Executive Vice President, Director
Nathan Katz 42 Executive Vice President
Ryan Burrow 37 Director
Henry Latimer 60 Director
Jeffrey Silverman 52 Director
Leonard Sokolow 41 Director
Robert Wachs 59 Director
David W. Sasnett 41 Senior Vice President, Chief Financial Officer
Janet P. Ailstock 49 Vice President, General Counsel
Thomas M. Bluth 40 Vice President, Secretary, Treasurer
Wai Check Lau 51 Former President of Go-Gro Industries Limited
</TABLE>
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. From 1984 until he joined the Company, Mr. Rappaport
was a partner with Wachsman & Rappaport, P.A., a public accounting firm located
in Margate, Florida.
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 of Crest
Industries, Inc., a distributor of home improvement products.
NATHAN KATZ has been an Executive Vice President of the Company since
October 1, 1993 and Chief Executive Officer of Catalina Industries, Inc. (d/b/a
Dana Lighting), a wholly-owned subsidiary of the Company, since August 1989.
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.
Page 2 of 13
<PAGE>
RYAN BURROW has been a Director of the Company since April 1994. Mr.
Burrow has been the President of BPI Global Asset Management LLP since March
1997. Mr. Burrow was Managing Director for STI Capital Management from August
1993 to March 1997. 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 the law firm of
Eckert, Seamans, Cherin & Mellott. He was formerly a partner with the law firm
of Fine, Jacobson, Schwartz, Nash & Block from 1983 to 1994. Mr. Latimer
presently serves as a director of Florida Panthers Holdings, Inc.
JEFFREY SILVERMAN joined Ply Gem Industries, Inc. as a Director in
1981. He became Executive Vice President in 1982, President in 1984 and was
Chairman of the Board and Chief Executive Officer from 1985 through December
1997, the date Ply Gem was acquired by Nortek Industries. Prior to joining Ply
Gem Industries he was managing general partner of an investment partnership. Mr.
Silverman was Man of the Year by the Building Materials Industry in 1987, and
Entrepreneur of the Year by Inc. Magazine, Ernst & Young, and Merrill Lynch in
1991. Mr. Silverman presently serves as a director of Realco, Inc. Mr. Silverman
was a member of the Board of Trustees of Long Island University, the Board of
Governors of the American Stock Exchange, the Howard Samuels Center at CCNY and
the American Business Conference.
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 Ezcony Interamerica, Inc. and as the Chairman and Chief Executive
Officer of The Americas Growth Fund, Inc. The shares of 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.
DAVID W. SASNETT has been Vice President of the Company since November
1994. In November 1997, Mr. Sasnett became a Senior Vice President of the
Company. 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.
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 Vice President 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.
WAI CHECK LAU was President of Go-Gro Industries Limited (a
wholly-owned subsidiary of the Company since July 1994) since 1985. On December
4, 1997, Mr. Lau submitted his resignation from Go-Gro and the Company,
effective January 23, 1998.
Page 3 of 13
<PAGE>
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 ended September 30, 1997, 1996
and 1995 for services in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------------- --------------------
SECURITIES
NAME AND FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(3) COMPENSATION(4)
- -------------------- ----------- ----------------- --------------- ---------------- -------------------- ------------------
<S> <C> <C> <C> <C> <C>
Robert Hersh 1997 $284,905 $ - - $ 1,500
Chairman, CEO 1996 271,338 43,787 - 1,500
and President 1995 258,418 14,917 62,500 794
Dean S. Rappaport
Executive Vice 1997 256,414 - - 6,059
President, Chief 1996 244,204 43,787 - 6,496
Operating Officer 1995 232,575 14,917 62,500 6,033
William D. Stewart 1997 256,414 - - 7,426
Executive Vice 1996 244,204 43,787 - 7,987
President 1995 232,575 14,917 62,500 7,802
Nathan Katz 1997 256,414 - - 1,500
Executive Vice 1996 244,204 43,787 - 1,500
President 1995 232,575 14,917 62,500 794
Wai Check Lau(5)
President - 1997 210,393 34,030 - -
Go-Gro Industries 1996 180,000 - - -
Limited 1995 180,000 - - -
</TABLE>
- -------------------------------
1 Amounts for Messrs. Hersh, Rappaport, Stewart and Katz 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 $4,559 in 1997, $4,996 in 1996
and $5,239 in 1995 for Mr. Rappaport and $5,926 in 1997,
$6,487 in 1996 and $7,008 in 1995 for Mr. Stewart.
(b) The Company's matching contributions to the Company's 401(k)
plan of $1,500 in 1997, $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. On December 4, 1997, Mr. Lau
submitted his resignation from Go-Gro and the Company, effective
January 23, 1998.
Page 4 of 13
<PAGE>
OPTIONS GRANTED
No stock options were granted to the named executive officers of the
Company during the fiscal year ended September 30, 1997.
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, 1997 and the value of options held by such officers at September
30, 1997 in terms of the closing price of the Company's stock on September 30,
1997.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1997
AND FISCAL YEAR END 1997 OPTION VALUES
SHARES VALUE OF
ACQUIRED ON VALUE NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
NAME EXERCISE REALIZED OPTIONS AT SEPTEMBER 30, 1997 SEPTEMBER 30, 1997(1)
- ----------------------------------------------------------------------------------------- -----------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------------- ------------------- ----------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Robert Hersh 0 0 300,866 20,834 $ 696,000 0
Dean S.
Rappaport 0 0 298,266 20,834 $ 685,438 0
William D.
Stewart 0 0 211,666 20,834 $ 360,025 0
Nathan Katz 0 0 196,666 20,834 $ 298,188 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, 1997
of $5.8125.
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, 1996 and 1997. The aforementioned were issued under the Company's
1987 Stock Option and Stock Appreciation Rights Plan.
Page 5 of 13
<PAGE>
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 and 1997 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 served as President of Go-Gro. On
April 1, 1997, Mr. Lau and the Company entered into a new employment
agreement extending the term to March 31, 2002. In December 1997, this
employment agreement was terminated as Mr. Lau submitted his
resignation from Go-Gro and the Company, effective January 23, 1998.
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 noncompetitive 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. On February 3, 1997, the plaintiff voluntarily
dismissed the claim against the directors. The Company agreed to
indemnify each of the individual directors and the Company for expenses
paid for the legal costs for the defense of such proceeding.
Page 6 of 13
<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 ("Director Plan") as
compensation for services rendered. Mr. Wachs, Mr. Silverman and Mr.
Burrow are reimbursed for their travel expenses to the meetings.
Options are granted to purchase 10,000 shares of the Company's
Common Stock on a one time basis upon election and 2,000 shares for
each year served. Options are granted at the annual meeting 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.
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 1997.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists
of Leonard Sokolow, Henry Latimer 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
<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 8, 1998 by those who were the beneficial owner of more than 5%
of the Company's stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF COMMON STOCK
BENEFICIAL OWNER BENEFICIALLY OWNED(1) PERCENTAGE
- ----------------------------------------- --------------------------------------- -----------------------------------------
<S> <C> <C>
Nathan Katz............................ 630,742(2) 8.6%
55 Norfolk Avenue
Easton, MA
Wai Check Lau.......................... 588,200(3) 8.3%
6/F, Kenning Industrial Bldg.
19 Wang Hoi Road
Kowloon Bay, Hong Kong
Robert Hersh........................... 433,300(4,7) 5.8%
18191 N.W. 68th Avenue
Miami, Florida 33015
Dean S. Rappaport...................... 367,100(5,7) 4.9%
18191 N.W. 68th Avenue
Miami, Florida 33015
William D. Stewart..................... 265,500(6,7) 3.6%
18191 N.W. 68th Avenue
Miami, Florida 33015
Dimensional Fund Advisors, Inc. 450,000(8) 6.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 9040
</TABLE>
- ---------------------------------
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 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 62,500 shares purchasable at $6.75 per
share.
3 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 acquisition of Go-Gro
Industries Limited ("Go-Gro"), Wai Check Lau and Amy Yuen Ying Lau Cheung
each delivered an irrevocable proxy to Catalina Asia, an entity controlled
by the Company. Catalina Asia has a proxy to vote 558,200 shares
beneficially owned by Mr. Lau and an additional 80,400 shares of the
Company also issued to previous shareholders of Go-Gro upon the
acquisition. The 638,600 shares are voted at the direction of Messrs.
Hersh, Rappaport, and Stewart, members of the Board of Directors of
Catalina Asia.
Page 8 of 13
<PAGE>
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 shares at $4.125 per share and 62,500 shares at $6.75
per share.
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 shares at $4.875
per share, 50,000 shares at $4.125 per share and 62,500 shares 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 62,500 shares at $6.75 per share.
7 In addition, Messrs. Hersh, Rappaport and Stewart, jointly have a power
to vote 638,600 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.
8 Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 450,000
shares of Catalina Lighting, Inc. stock, all of which shares are held
in portfolios of DFA Investment Dimensions Group Inc., a registered
open-end investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors Inc. serves as
investment manager. Dimensional disclaims beneficial ownership of all
such shares.
FILINGS UNDER SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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.
Based solely upon a review of the copies of the forms
furnished to the Company, or written representations from certain
reporting persons that no Form 4's were required, the Company believes
that, all filing requirements applicable to its officers and directors
were complied with during the 1997 fiscal year, except Robert Wachs who
inadvertently filed a report late on December 17, 1996 related to 4,950
shares purchased in October 1996.
Page 9 of 13
<PAGE>
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 8, 1998
by each director and executive officer and by all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED(1) PERCENTAGE
- ------------------------------------------ -------------------------------- -------------------------------------
<S> <C> <C>
Robert Hersh............................ 433,300 (2), (14) 5.8%
Dean S. Rappaport....................... 367,100 (3), (14) 4.9%
William D. Stewart...................... 265,500 (4), (14) 3.6%
Leonard Sokolow......................... 39,000 (5) *
Robert Wachs............................ 107,250 (6) 1.5%
Ryan Burrow............................. 8,700 (7) *
Henry Latimer........................... 2,495 (8) *
Jeffrey Silverman 25,000 *
Nathan Katz............................. 630,742 (9) 8.6%
Wai Check Lau........................... 588,200 (10) 8.3%
Janet P. Ailstock....................... 66,833 (11) *
Thomas Bluth............................ 22,833 (12) *
David Sasnett........................... 18,100 (13) *
All executive officers and
directors of the Company and its
subsidiaries as a group
(13 persons)............................ 2,655,453 (15) 31.6%
</TABLE>
* 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 shares at $4.125 per share and 62,500 shares at $6.75 per
share.
Page 10 of 13
<PAGE>
(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 shares at $4.875
per share, 50,000 shares at $4.125 per share and 62,500 shares 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 62,500 shares 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 shares at $10.75 per share,
2,000 shares at $6.625 per share and 2,000 shares at $6.25 per share.
(6) Includes shares subject to options to purchase 50,000 shares at $1.75
per share, 25,000 shares options 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 shares at $10.75 per share, 2,000 shares at $6.625 per share
and 2,000 shares at $6.25. Also includes 2,450 shares owned by members of
Mr. Wach's 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, 2,000 shares at $10.75 and
2,000 shares at $6.25.
(8) Includes shares subject to options to purchase 2,000 shares at
$6.25 per share.
(9) 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 62,500 shares purchasable at
$6.75 per share.
(10) 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 acquisition of
Go-Gro Industries Limited ("Go-Gro"), Wai Check Lau and Amy Yuen Ying Lau
Cheung each delivered an irrevocable proxy to Catalina Asia, an entity
controlled by the Company. Catalina Asia has a proxy to vote 558,200 shares
beneficially owned by Mr. Lau and an additional 80,400 shares of the
Company also issued to previous shareholders of Go-Gro upon the
acquisition. The 638,600 shares are voted at the direction of Messrs.
Hersh, Rappaport, and Stewart, members of the Board of Directors of
Catalina Asia.
(11) Includes shares subject to options to purchase 35,833 shares at $4.125
per share.
(12) Includes 20,833 shares purchasable upon the exercise of options at
$4.125 per share.
(13) Includes 17,500 shares purchasable upon the exercise of options at
$4.125 per share.
(14) Messrs. Hersh, Rappaport and Stewart, jointly have a power to vote
638,600 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.
(15) Includes an additional 80,400 shares owned by previous shareholders of
Go-Gro Industries Limited. These shares are included in the 638,600 shares
which Messrs. Hersh, Rappaport and Stewart jointly have a power to vote
pursuant to irrevocable proxies.
Page 11 of 13
<PAGE>
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 $148,000, $530,000 and $521,000, for the years ended
September 30, 1997, 1996 and 1995, respectively.
The Company leases its Hong Kong office from a company owned by the
former President and former majority stockholder of Go-Gro. The lease
expires in 1999 but may be extended for an additional two years. Rent
expense related to this lease was $270,000, $258,000 and $237,000, for the
years ended September 30, 1997, 1996 and 1995, respectively.
During the years ended September 30, 1997, 1996 and 1995, Go-Gro
purchased $2.1 million, $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 former President of Go-Gro as one of its directors.
On December 22, 1997 the Company advanced $100,000 to Dean S.
Rappaport, increasing his indebtedness to the Company to approximately
$111,000. The $100,000 advance bears interest at LIBOR plus 2.5%, is
secured by stock option agreements to purchase 100,000 shares of the
Company, and matures December 19, 1998.
On January 6, 1998, the Company advanced $50,000 to William D.
Stewart, increasing his indebtedness to the Company to approximately
$61,000. The advance bears interest at LIBOR plus 2.5%, is secured by stock
option agreements to purchase 50,000 shares of the Company and matures
January 5, 1999.
On January 9, 1998, the Company advanced $13,207 to Nathan Katz
increasing his indebtedness to the Company to $70,000. Such indebtedness
bears interest at LIBOR plus 2.5% , is secured by stock option agreements
to purchase 45,000 shares of the Company and matures January 9, 1999.
Page 12 of 13
<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/ David W. Sasnett
----------------------------------
Chief Financial Officer and
Chief Accounting Officer
January 28, 1998
Page 13 of 13
