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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 22, 1997
CATALYST SEMICONDUCTOR, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21488 77-0083129
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation Identification No.)
1250 Borregas Avenue, Sunnyvale CA 94089
(Address of principal executive offices) (Zip Code)
(408) 542-1000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On December 3, 1996, the Board of Directors of Catalyst Semiconductor,
Inc. (the "Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of Common Stock, $0.001 par value (the
"Common Shares"), of the Company. The dividend was paid on December 19, 1996
(the "Record Date") to stockholders of record as of the close of business on
that date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Participating Preferred Stock,
$0.001 par value, of the Company (the "Preferred Shares"), subject to
adjustment, at a price of $18 per one-thousandth of a Preferred Share, subject
to adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Preferred Shares Rights Agreement (the "Rights Agreement")
dated as of December 3, 1996 between the Company and First National Bank of
Boston, as Rights Agent (the "Rights Agent").
The following is a general description only and is subject to the detailed
terms and conditions of the Rights Agreement. A copy of the Rights Agreement,
including the Certificate of Designation, the form of Rights Certificate and the
Summary of Rights to be provided to stockholders of the Company, is attached as
Exhibit 4.1 to this Report and is incorporated herein by reference.
Rights Evidenced by Common Share Certificates
The Rights will not be exercisable until the Distribution Date (defined
below). Accordingly, Common Share certificates outstanding on the Record Date
will evidence the Rights related thereto, and Common Share certificates issued
after the Record Date will contain a notation incorporating the Rights Agreement
by reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender or transfer of any certificates for
Common Shares, even without notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate.
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Distribution Date
The Rights will separate from the Common Shares, certificates for the
rights ("Rights Certificates") will be issued and the Rights will become
exercisable upon the earlier of: (i) the close of business on the tenth day (or
such later date as may be determined by a majority of the Board of Directors,
excluding directors affiliated with the Acquiring Person, as defined below (the
"Continuing Directors")) following a public announcement that a person or group
of affiliated or associated persons has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding Common Shares
(an "Acquiring Person") or (ii) the close of business on the tenth day (or such
later date as may be determined by a majority of the Continuing Directors)
following the commencement of a tender offer or exchange offer, the consummation
of which would result in the beneficial ownership by a person or group of 15% or
more of the outstanding Common Shares. The earlier of such dates is referred to
as the "Distribution Date."
Issuance of Rights Certificates, Expiration of Rights
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date. Unless
otherwise determined by the Board of Directors, all Common Shares issued prior
to the Distribution Date will be issued with Rights. Common Shares issued after
the Distribution Date may be issued with Rights if such shares are issued (i)
upon the exercise, conversion or exchange of securities issued after adoption of
the Rights Agreement or (ii) pursuant to the exercise of stock options or under
any employee benefit plan or arrangement. Except as otherwise determined by the
Board of Directors, no other Common Shares issued after the Distribution Date
will be issued with Rights. In addition, no Common Shares issued after the
Distribution Date will be issued with Rights if such issuance would result in
(or create a significant risk) (i) of material adverse tax consequences to the
Company or the person to whom such Rights Certificate would be issued or (ii)
that such options or plans would not qualify for otherwise available special tax
treatment. The Rights will expire on December 3, 2006 (the "Final
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Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company or expire upon
consummation of certain mergers, consolidations or sales of assets, as described
below.
Initial Exercise of the Rights
Following the Distribution Date, and until the occurrence of one of the
subsequent events described below, holders of the Rights will be entitled to
receive, upon exercise and the payment of $18 (the "Purchase Price") per Right,
one one-thousandth of a Preferred Share.
Exchange Provision
At any time after an Acquiring Person has become such and prior to the
Acquiring Person beneficially owning 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by the Acquiring Person or its affiliates), in whole or in
part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
Right to Buy Common Shares at Half Price
Unless the Rights are earlier redeemed or exchanged, in the event that an
Acquiring Person becomes such, other than pursuant to a tender offer which is
made for all of the outstanding Common Shares and approved by a majority of the
Continuing Directors after determining that the offer is both adequate and
otherwise in the best interests of the Company and its stockholders (a
"Permitted Offer"), then proper provision will be made so that each holder of a
Right which has not theretofore been exercised (other than Rights beneficially
owned by the Acquiring Person, which will thereafter be void) will thereafter
have the right to receive, upon exercise of a Right, a number of Common Shares
having a then current value equal to two times the Purchase Price. In the event
that the Company does not have a sufficient number of Common Shares available,
or the Board decides that such action is necessary or appropriate and not
contrary to the interests of Rights holders, the Company may, among other
things, instead substitute cash, assets or other securities for the Common
Shares into which the Rights would have otherwise been exercisable.
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Right to Buy Acquiring Company Stock at Half Price
Similarly, unless the Rights are earlier redeemed or exchanged, in the
event that, after the Shares Acquisition Date (as defined below), (i) the
Company consolidates with or merges into another entity, (ii) another entity
consolidates with or merges into the Company or (iii) the Company sells or
otherwise transfers 50% or more of its consolidated assets or earning power,
proper provision must be made so that each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by the
Acquiring Person, which will thereafter be void) will thereafter have the right
to receive, upon exercise, a number of shares of common stock of the acquiring
company having a then current value equal to two times the Purchase Price
(unless the transaction satisfies certain conditions and is consummated with a
person who acquired shares pursuant to a Permitted Offer, in which case the
Rights will expire).
Adjustments to Prevent Dilution
The Purchase Price payable, the number of Rights and the number of
Preferred Shares, Common Shares or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution as set forth in the Rights Agreement. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
Rights and Preferences of the Preferred Shares
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to an aggregate dividend of
1,000 times the dividend declared per Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a preferential
liquidation payment equal to accrued but unpaid dividends plus the greater of
$1,000 per share and 1,000 times the aggregate per share amount to be
distributed to the holders of Common Shares. Each Preferred Share will have
1,000 votes, voting together with the holders of Common Shares, except as
required by law or the Certificate of Designation of Rights, Preferences and
Privileges of Series A Participating Preferred Stock. In the event of any
merger,
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consolidation or other transaction in which Common Shares are changed or
exchanged, each Preferred Share will be entitled to receive 1,000 times the
amount received per Common Share. These rights are protected by customary
anti-dilution provisions. Because of the nature of the dividend, liquidation and
voting rights of the Preferred Shares, the value of the one one-thousandth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
Redemption
At any time prior to the close of business on the earlier of (i) the tenth
day following the date (the "Shares Acquisition Date") of public announcement
that an Acquiring Person has become such or such later date as may be determined
by a majority of the Continuing Directors and publicly announced by the Company
or (ii) the Final Expiration Date of the Rights, the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right ("Redemption
Price").
No Stockholders' Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
Amendment of Rights Agreement
The provisions of the Rights Agreement may be supplemented or amended by
the Board of Directors in any manner prior to the Distribution Date without the
approval of Rights holders. After the Distribution Date, the provisions of the
Rights Agreement may be supplemented or amended by the Board in order to (i)
cure any ambiguity, defect or inconsistency, (ii) to make changes which are
deemed necessary or advisable and do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to lengthen (A) the time period governing redemption
shall be made at such time as the Rights are not
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redeemable, or (B) any other period unless for the purpose of protecting,
enhancing or clarifying the rights of, and/or benefits to, the holders of
Rights.
Certain Anti-takeover Effects
The Rights approved by the Board are designed to protect and maximize the
value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board of Directors. Takeover attempts frequently
include coercive tactics to deprive a corporation's Board of Directors and its
stockholders of any real opportunity to determine the destiny of the
corporation. The Rights have been declared by the Board in order to deter such
tactics, including a gradual accumulation of shares in the open market of a 15%
or greater position to be followed by a merger or a partial or two-tier tender
offer that does not treat all stockholders equally. These tactics unfairly
pressure stockholders, squeeze them out of their investment without giving them
any real choice and deprive them of the full value of their shares.
The Rights are not intended to prevent a takeover of the Company and will
not do so. The Rights are not exercisable in the event of a Permitted Offer, as
described above. The Rights may be redeemed by the Company at $.01 per Right
within ten days (or such later date as may be determined by a majority of the
Continuing Directors) after the accumulation of 15% or more of the Company's
outstanding Common Shares by a single acquiror or group. Accordingly, the Rights
should not preclude any merger or business combination approved by the Board of
Directors. Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights has no immediate dilutive effect, will not affect reported earnings
per share, should not be taxable to the Company or to its stockholders and will
not change the way in which the Company's shares are presently traded. The
Company's Board of Directors believes that the Rights represent a sound and
reasonable means of addressing the complex issues of corporate policy created by
the current takeover environment. However, the Rights may have the effect of
rendering more difficult or discouraging an acquisition of the Company deemed
undesirable by the Board of Directors. The
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Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the Company's Board
of Directors, except pursuant to an offer conditioned upon the negation,
purchase or redemption of the Rights.
Item 7. Financial Statements and Exhibits.
4.1. Preferred Shares Rights Agreement, dated as of December 3,
1996, between Catalyst Semiconductor, Inc. and First National
Bank of Boston, including the Certificate of Designation of
Rights, Preferences and Privileges of Series A Participating
Preferred Stock, the Form of Rights Certificate and the
Summary of Rights attached thereto as Exhibits A, B and C,
respectively. (Incorporated by reference to Exhibit 1 to Form
8-A filed by the Company on January 24, 1997)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CATALYST SEMICONDUCTOR, INC.
Date: January 17, 1997 By: /s/ C. Michael Powell
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C. Michael Powell
Chairman and Chief Executive Officer
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CATALYST SEMICONDUCTOR, INC.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
Exhibit
No. Exhibit
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4.1 Preferred Shares Rights Agreement, dated as of December 3, 1996,
between Catalyst Semiconductor, Inc.and First National Bank of
Boston, including the Certificate of Designation of Rights,
Preferences and Privileges of Series A Participating Preferred
Stock, the Form of Rights Certificate and the Summary of Rights
attached thereto as Exhibits A, B and C, respectively.
(Incorporated by reference to Exhibit 1 to Form 8-A filed by the
Company on January 22, 1997)
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