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 52 Chairman, Chief Executive Officer, President, Director
Dean Rappaport 47 Executive Vice President, Chief Operating Officer, Director
William D. Stewart 50 Executive Vice President, Director
Ryan Burrow 38 Director
Henry Latimer 61 Director
Jeffrey Silverman 53 Director
Leonard Sokolow 42 Director
Nathan Katz 43 Executive Vice President
David W. Sasnett 42 Senior Vice President, Chief Financial Officer
Thomas M. Bluth 41 Vice President, Secretary, Treasurer
</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 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 of Crest
Industries, Inc., a distributor of home improvement products.
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.
Page 2 of 13
<PAGE>
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 has been a Director of the Company since April 1997.
Mr. Silverman is the Chairman and Co-Founder of LTS Capital Partners, LLC, an
Investment Firm. He joined Ply Gem Industries, Inc. as a Director in 1981. He
became Executive Vice President in 1982, President in 1983 and was Chairman of
the Board and Chief Executive Officer from 1985 through August 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., and also became President
of Union Atlantic LC in September 1996. Mr. Sokolow was Chairman and Chief
Executive Officer of the Americas Growth Fund, Inc. from August 1994 to December
1998. 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 is also a Certified Public Accountant. Mr. Sokolow presently serves as a
director of Ezcony Interamerica, Inc. The shares of Ezcony Interamerica are
traded over the counter.
NATHAN KATZ has been an Executive Vice President of the Company since
October 1, 1993 and Chief Executive Officer of Catalina Industries (formerly
known as 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.
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 was promoted to Chief Financial Officer
of the Company. Prior to that time, he was the Company's Controller. 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.
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.
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, 1998, 1997
and 1996 for services in all capacities.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
--------------------------------------------- -------------------
SECURITIES
NAME AND PRINCIPAL FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(3) COMPENSATION(4)
- -------------------- -------- ----------- ---------- ------------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert Hersh 1998 $ 299,151 $26,190 - $ 1,600
Chairman, CEO 1997 284,905 - - 1,500
and President 1996 271,338 43,787 - 1,500
Dean Rappaport
Executive Vice 1998 269,235 26,190 - 5,688
President, Chief 1997 256,414 - - 6,059
Operating Officer 1996 244,204 43,787 - 6,496
William D. Stewart 1998 269,235 26,190 - 6,907
Executive Vice 1997 256,414 - - 7,426
President 1996 244,204 43,787 - 7,987
Nathan Katz 1998 269,235 26,190 - 1,600
Executive Vice 1997 256,414 - - 1,500
President 1996 244,204 43,787 - 1,500
David W. Sasnett
Senior Vice 1998 151,068 15,000 - 1,549
President, Chief 1997 136,603 15,000 - 1,216
Financial Officer 1996 103,740 10,000 7,500 655
<FN>
- -------------------------------
(1) In accordance with their employment agreements, 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 $4,088, in 1998, $4,559 in 1997
and $4,996 in 1996 for Mr. Rappaport and $5,307 in 1998,
$5,926 in 1997 and $6,487 in 1996 for Mr. Stewart.
(b) The Company's matching contributions to the Company's 401(k)
plan of $1,600 in 1998, $1,500 in 1997 and $1,500 in 1996 for
each of Mr. Hersh, Mr. Rappaport, Mr. Stewart and Mr. Katz and
$1,549 in 1998, $1,216 in 1997 and $655 in 1996 for Mr.
Sasnett.
</FN>
</TABLE>
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, 1998.
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, 1998 and the value of options held by such officers at September
30, 1998 in terms of the closing price of the Company's stock on September 30,
1998.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1998
AND FISCAL YEAR END 1998 OPTION VALUES
SHARES VALUE OF
ACQUIRED ON VALUE NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS AT
NAME EXERCISE REALIZED(1) OPTIONS AT SEPTEMBER 30, 1998 SEPTEMBER 30, 1998(2)
- ------------------------------------------------------------------------------------ -------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert Hersh 4,600 $11,788 317,100 0 $ 52,300 0
Dean Rappaport 2,000 $ 4,375 317,100 0 $ 52,300 0
William D. Stewart 0 0 232,500 0 $ 10,000 0
Nathan Katz 0 0 217,500 0 $ 27,500 0
David W. Sasnett 0 0 17,500 2,500 $ 0 0
<FN>
- ---------------------------
(1) The value realized is computed by multiplying the difference between
the exercise price of the stock option and the market price of the
Common Stock on the date of exercise by the number of shares of Common
Stock with respect to which the option was exercised.
(2) Based on the closing price of the Company's stock on September 30, 1998
of $2.25.
</FN>
</TABLE>
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 which expire on September
30, 2001. 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 fiscal years 1994, 1996, 1997 and 1998. 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, 1996 and 1998 totaled approximately $356,000, $614,000,
$60,000, $175,000 and $105,000, respectively.
The employment agreements with Messrs. Hersh, Rappaport, Stewart and
Katz 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.
On May 7, 1998, the Company entered into Change in Control Agreements
with David Sasnett and Thomas M. Bluth. The Agreements expire in May 1999.
The Company pays its proportional share of a reverse split-dollar life
insurance policy for Mr. Rappaport, Mr. Stewart and Mr. Katz. In the event of
the death of Mr. Rappaport, Mr. Stewart or Mr. Katz 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>
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 from 1989 to 1997 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. Burrow
is reimbursed for his 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 from 1989 to 1997 2,000 shares for
each year served. Options were granted at the annual meeting which coincided
with their election or appointment or, if the date of appointment or election
was 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 were 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 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of
Leonard Sokolow, Henry Latimer, Jeffrey Silverman and Ryan Burrow. Messrs.
Sokolow, Latimer, Silverman and Burrow are independent directors of the Company
and are not officers 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, 1999 by those who were the beneficial owners 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) 8.5%
55 Norfolk Avenue
Easton, MA
Wai Check Lau....................... 558,200(3) 7.8%
6/F, Kenning Industrial Bldg.
19 Wang Hoi Road
Kowloon, Hong Kong
Robert Hersh........................ 435,300(3),(4) 5.8%
18191 N.W. 68th Avenue
Miami, Florida 33015
Dean Rappaport...................... 367,100(3),(5) 4.9%
18191 N.W. 68th Avenue
Miami, Florida 33015
William D. Stewart.................. 265,500(3),(6) 3.6%
18191 N.W. 68th Avenue
Miami, Florida 33015
Heartland Advisors, Inc............. 1,442,700(7) 20.1%
790 North Milwaukee Street
Milwaukee, WI 53202
Dimensional Fund Advisors, Inc. 450,900(8) 6.3%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 9040
<FN>
- ---------------------------------
(1) Includes shares which may be acquired pursuant to vested stock options
and options which become exercisable through March 9, 1999 or shares
for which the stockholder has the power to direct the vote.
(2) Includes shares purchasable through the exercise of options as follows:
55,000 shares at $1.75 per share and 162,500 shares at $2.4375 per
share.
(3) Of this total 477,500 shares are owned by Go-Gro Holdings Limited,
which is owned by Wai Check Lau and 7,500 shares are owned by 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 127,300 shares of the Company also issued to previous
shareholders of Go-Gro upon the acquisition. The 685,500 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 purchasable through the exercise of options as follows:
100,000 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 purchasable through the exercise of options as follows:
100,000 shares at $1.75 per share and 212,500 shares at $2.4375 per
share.
(6) Includes shares purchasable through the exercise of options as follows:
20,000 shares at $1.75 per share and 212,500 shares at $2.4375 per
share.
(7) Heartland Advisors, Inc., a registered investment advisor, is deemed to
have beneficial ownership of 1,442,700 shares of Catalina Lighting,
Inc. stock, all of which shares are held in investment advisory
accounts. As a result, various persons have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, the securities. The interest of one such account, Heartland
Value Fund, a series of Heartland Group, Inc., a registered investment
company, relates to more than 5% of the stock.
(8) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 450,900
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 The DFA
Participating 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.
</FN>
</TABLE>
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 except for Heartland Advisors, Inc.
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 1998 fiscal year.
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, 1999 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......................... 435,300 (2),(12) 5.8%
Dean Rappaport....................... 367,100 (3),(12) 4.9%
William D. Stewart................... 265,500 (4),(12) 3.6%
Leonard Sokolow...................... 41,000 (5) *
Ryan Burrow.......................... 20,700 (6) *
Henry Latimer........................ 14,495 (7) *
Jeffrey Silverman..................... 27,000 (8) *
Nathan Katz.......................... 630,742 (9) 8.5%
David W. Sasnett..................... 21,300 (10) *
Thomas M. Bluth...................... 24,500 (11) *
All executive officers and directors
of the Company and its subsidiaries as
a group (10 persons)................. 2,533,137 (13) 30.2%
<FN>
* less than 1%
- ---------------------------
(1) Includes shares which may be acquired pursuant to vested stock options
and options which become exercisable through March 9, 1999.
(2) Includes shares purchasable through the exercise of options as follows:
100,000 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 purchasable through the exercise of options as follows:
100,000 shares at $1.75 per share and 212,500 shares at $2.4375 per
share.
(4) Includes shares purchasable through the exercise of options as follows:
20,000 shares at $1.75 per share and 212,500 shares at $2.4375 per
share.
(5) Includes shares purchasable through the exercise of options as follows:
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,
2,000 shares at $6.25 per share and 2,000 shares at $3.75 per share.
(6) Includes 500 shares owned by Mr. Burrow's wife and shares purchasable
through the exercise of options as follows: 2,000 shares at $6.625 per
share, 2,000 shares at $10.75 per share, 2,000 shares at $6.25 per
share and 12,000 shares at $3.75 per share.
(7) Includes shares purchasable through the exercise of options as follows:
2,000 shares at $6.25 per share and 12,000 shares at $3.75 per share.
(8) Includes 2,000 shares purchasable through the exercise of options at
$3.75 per share.
(9) Includes shares purchasable upon the exercise of options as follows:
55,000 shares at $1.75 per share and 162,500 shares at $2.4375 per
share.
(10) Includes 20,000 shares purchasable through the exercise of options at
$2.4375 per share.
(11) Includes 22,500 shares purchasable through the exercise of options at
$2.4375 per share.
(12) Messrs. Hersh, Rappaport and Stewart, jointly as members of the Board
of Directors of Catalina Asia have a power to vote 685,500 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.
(13) Includes 685,500 shares owned by previous shareholders of Go-Gro
Industries Limited which Messrs. Hersh, Rappaport and Stewart jointly
have a power to vote pursuant to irrevocable proxies.
</FN>
</TABLE>
Page 11 of 13
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company leased 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 expires in June 1999. Rent
expense related to these leases was approximately $159,000, $164,000 and
$540,000 for the years ended September 30, 1998, 1997 and 1996, respectively.
The Company leases its Hong Kong office from a company owned by Wai
Check Lau, a shareholder of the Company. The lease expires in 2001 but may be
extended for an additional year. Rent expense related to this lease was
$257,000, $270,000 and $258,000, for the years ended September 30, 1998, 1997
and 1996, respectively.
During the years ended September 30, 1998, 1997 and 1996, Go-Gro
purchased $1.0 million, $2.1 million and $1.8 million, respectively, in raw
materials from an affiliate which is fifty percent owned by the Company and
which includes an officer of the Company as one of its directors.
Notes and advances receivable from Dean Rappaport totaled approximately
$119,000 at December 31, 1998 and included a $100,000 note bearing interest at
LIBOR plus 250 basis points, collateralized by stock option agreements to
purchase 100,000 shares of the Company and maturing in December 1999.
Notes and advances receivable from William D. Stewart totaled
approximately $65,000 at December 31, 1998 and included a $50,000 note bearing
interest at LIBOR plus 250 basis points, collaterized by stock option agreements
to purchase 50,000 shares of the Company and maturing in January 2000.
Notes and advances receivable from Nathan Katz totaled approximately
$78,000 at December 31, 1998 and included a $70,000 note bearing interest at
LIBOR plus 250 basis points, collaterized by stock option agreements to purchase
45,000 shares of the Company and maturing in January 2000.
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/ Robert Hersh
---------------------------
Robert Hersh
Chairman, President and
Chief Executive Officer
January 28, 1999
Page 13 of 13
