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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the fiscal year ended May 3, 1998, or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period
from __________ to __________ .
COMMISSION FILE NUMBER 0-21488
CATALYST SEMICONDUCTOR, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 77-0083129
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1250 Borregas Avenue, Sunnyvale, California 94089
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (408) 542-1000
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Act of 1934 during the
preceding 12 months (or for such shorter period that 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 amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non-affiliates of Registrant,
as of August 14, 1998, was approximately $1 million (based upon the average of
the closing bid and asked price for shares of Registrant's Common Stock as
reported by the OTC Bulletin Board for the last trading date prior to that
date). Shares of Common Stock held by each officer, director and holder of 5% or
more of the outstanding Common Stock (including shares with respect to which a
holder has the right to acquire beneficial ownership within 60 days) have been
excluded in that such persons may be deemed to be affiliates. This determination
of affiliate status is not necessarily a conclusive determination for other
purposes.
The number of shares of Registrant's Common Stock outstanding as of August 14,
1998 was 9,961,722.
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CATALYST SEMICONDUCTOR, INC.
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PART III
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Item 10. Directors and Executive Officers of Registrant....................... Page 3
Item 11. Executive Compensation............................................... Page 5
Item 12. Security Ownership of Certain Beneficial Owners and Management....... Page 13
Item 13. Certain Relationships and Related Transactions....................... Page 14
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PART IV
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K...... Page 16
Signatures ..................................................................... Page 18
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CATALYST SEMICONDUCTOR, INC.
ITEMS 10, 11 12 AND 13 OF PART III TO REGISTRANT'S FORM 10-K FOR FISCAL 1998 ARE
AMENDED IN THEIR ENTIRETY TO READ AS FOLLOWS:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Information relating to the Company's executive officers required by
this item appears in "Item 1 -- Executive Officers and Key Personnel" of this
Report on Form 10-K for fiscal 1998 as previously filed.
DIRECTORS
Set forth below are the names of, and certain information as of August
14, 1998 about the current directors of the Company.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION
<S> <C> <C>
Hideyuki Tanigami................ 48 President and Chief Executive Officer of Marubun
USA Corporation
Radu M. Vanco.................... 48 President, Chief Executive Officer and Director
of Catalyst Semiconductor, Inc.
Lionel M. Allan.................. 55 President and Chief Executive Officer Allan
Advisors, Inc.
C. Michael Powell................ 47 Independent Consultant
Patrick Verderico................ 54 President and Chief Executive Officer of
Integrated Packaging Assembly Corporation
</TABLE>
Except as indicated below, each director has been engaged in the
principal occupation set forth above during the past five years. There are no
family relationships between any directors or executive officers of the Company.
Mr. Tanigami became Chairman of the Company in March 1998 and has
served as a director of the Company since February 1996. From 1985 to April
1994, Mr. Tanigami served as Vice President, Corporate Development, of the
Company. From January 1996 to present, he has served as President and Chief
Executive Officer of Marubun USA Corporation, an electronics distribution
company. From June 1994 to present, he has also served as President of
Technology Matrix, Inc., and since 1985 has been President and Chief Executive
Officer of Tanigami Associates, an international consulting firm.
Radu M. Vanco has served the Company as President and Chief Executive
Officer since March 1998 and as a director since November 1995. From October
1996 to March 1998 he served as Executive Vice President of Engineering, from
October 1996 to December 1997 as Chief Operating Officer, and from November 1992
to October 1995 as Vice President, Engineering. From 1991 to 1992, Mr. Vanco
served as product line director at Cypress Semiconductor. From 1985 to 1991, Mr.
Vanco held various technical positions at SEEQ Technology, Inc. Mr. Vanco holds
an M.S. in Electrical Engineering from the Polytechnical Institute, Bucharest,
Romania.
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Mr. Allan has served as a director of the Company since August 1995.
Mr. Allan is President and Chief Executive Officer of Allan Advisors, Inc., a
legal consulting firm that he founded in 1992. Mr. Allan is also a director and
past Chairman of the Board of KTEH Public Television Channel 54, in San Jose,
California, a director of Accom, Inc., a digital video systems company, and
director of Global Motorsport Group, Inc., a motorcycle parts company.
Mr. Powell has served as an independent consultant since March 1998. He
served as Chairman of the Company from August 1995 to March 1998, as Chief
Executive Officer and a director of the Company July 1994 to August 1995 and as
President of the Company from August 1993 to March 1998. From August 1993 to
July 1994, Mr. Powell served as Chief Operating Officer of the Company and from
October 1995 to February 1997, Mr. Powell served as Chief Financial Officer of
the Company. From April 1990 to July 1993, Mr. Powell served as Vice President
of Product Lines at Cypress Semiconductor Corporation, a semiconductor company.
From July 1988 to March 1990, Mr. Powell served as the Vice President, General
Manager of the Memory Division of SEEQ Technology, Inc. Prior to joining SEEQ,
Mr. Powell held various management positions with Fairchild Semiconductor,
Telmos and Hewlett Packard. Mr. Powell holds Bachelors and Masters degrees in
Physics from Georgia Institute of Technology as well as M.S.E.E. and MBA degrees
from Stanford University.
Mr. Verderico has served as a director of the Company since April 1996.
From July 1997 to present, Mr. Verderico has served as President and Chief
Executive Officer of Integrated Packaging Assembly Corporation ("IPAC"). From
April 1997 to July 1997, Mr. Verderico served as Executive Vice President and
Chief Operating Officer of IPAC. From April 1996 to July 1996, Mr. Verderico
served as Executive Vice President and Chief Operating Officer of Maxtor
Corporation, a hard disk drive company. From 1994 to March 1996, he served as
Chief Financial Officer and Vice President, Finance and Administration, of
Creative Technology, a multimedia products manufacturer. From 1992 to 1994, he
served as Chief Financial Officer and Vice President, Finance and
Administration, of Cypress Semiconductor, and from 1989 to 1992, served as
Partner in Charge, West Region Manufacturing Consulting of Coopers & Lybrand, an
independent public accounting and consulting firm. Prior thereto he held various
positions with Philips Semiconductors, National Semiconductor and Fairchild
Semiconductor. Mr. Verderico has also been a director of Micro Component
Technology, Inc. since December 1992 and a director of Integrated Packaging
Assembly Corporation since July 1997.
Information relating to the Company's executive officers required by
this item appears in "Item 1 -- Executive Officers and Key Personnel" of this
Report on Form 10-K for fiscal 1998 as previously filed.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires the Company's executive officers and directors and
persons who own more than ten percent of a registered class of the Company's
equity securities to file an initial report of ownership on Form 3 and changes
in ownership on Form 4 or 5 with the Securities and Exchange Commission (the
"SEC") and the National Association of Securities Dealers, Inc. Executive
officers, directors and greater than ten percent stockholders are also required
by SEC rules to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on its review of copies of such forms received by it, the
Company believes that during fiscal 1998, all such reports were timely filed
except for late filings of a Form 3 by each of Messrs. Cremer, Georgescu,
Khoury, and Voicu. Again based solely on its review of copies of such forms
received by it, the Company believes that all filing requirements applicable to
its officers, directors and ten percent stockholders have been complied with.
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ITEM 11. EXECUTIVE COMPENSATION
The following table shows the compensation paid by the Company in
fiscal 1998, 1997 and 1996 to (i) the Company's Chief Executive Officer and his
predecessor who left the Company in March 1998, (ii) the four most highly
compensated officers other than the Chief Executive Officer who served as
executive officers at April 30, 1998 and (iii) one highly compensated individual
who would have qualified under (ii) above except he was not serving as an
executive officer as of April 30, 1998 (collectively, the "Named Officers").
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SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
-------------------- -----------------------
Awards Payouts
------ --------------------
Other
Annual Restricted Securities All Other
Name and Principal Compen- Stock Underlying LTIP Compensa- Fiscal
Position Salary($) Bonus ($) sation($) Awards ($) Options (#) Payouts($) tion ($)(4) Year
- ------------------------------ --------- --------- --------- ----------- ----------- ---------- ----------- ------
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C. Michael Powell(1) ......... $292,500 $80,658 -- 549,000(2) -- $702,957(5) 1998
Former Chairman,President $337,500 $77,459 -- -- 250,000(3) -- $ 14,028 1997
and Chief Executive Officer $331,501 $38,210 -- -- 150,000 -- $ 13,577 1996
Radu M. Vanco ................ $225,000 $69,391 -- -- 313,166(2) -- $ 609 1998
President and Chief $231,879 $95,441 -- -- 227,500(3) -- $ 609 1997
Executive Officer $222,270 $ 9,334 -- -- 142,500 -- $ 513 1996
Marc H. Cremer ............... $203,418 -- -- -- 75,000(2) -- $ 288 1998
Vice President of Sales $ 24,000 15,540 -- -- 25,000 -- -- 1997
-- -- -- -- -- -- -- 1996
Bassam Khoury ................ $140,732 -- -- -- 74,746(2) -- $ 106 1998
Vice President of Marketing $147,574 -- -- -- 41,430(3) -- $ 87 1997
$141,886 $20,000 -- -- 25,000 -- $ 73 1996
Gelu Voicu ................... $126,523 -- -- -- 83,000(2) -- $ 183 1998
Vice President of Product $131,323 -- -- -- 64,500(3) -- $ 174 1997
Engineering and $ 98,288 -- -- -- 34,500 -- $ 153 1996
Manufacturing
Daryl E. Stemm(1) ............ $125,000 -- -- -- 125,000(2) -- $ 91 1998
Former Vice President, $108,654 -- -- -- 114,900(3) -- $ 66 1997
Finance and Administration, $ 96,463 -- -- -- 33,000 -- $ 42 1996
and Chief Financial Officer
Chris P. Carstens(1) ......... $168,596 -- -- -- 150,000(2) -- $ 47,427 1998
Former Vice President, $129,808 -- -- -- 75,000(3) -- $ 261 1997
Quality and Reliability $134,770 -- -- -- 50,000 -- $ 261 1996
- ---------------------
</TABLE>
(1) Mr. Powell's employment with the Company terminated March 19, 1998. Mr.
Vanco became President and Chief Executive Officer on March 19, 1998.
Mr. Stemm's employment with the Company terminated May 29, 1998. Mr.
Carstens employment with the Company terminated April 13, 1998.
(2) Options listed for fiscal 1998 long-term compensation awards reflect
options granted as a result of repricings (and consequent cancellation
of previously granted options) on January 15, 1998. See "Ten-Year
Option Repricings." Options to purchase the following number of shares
granted to the following persons in fiscal 1998 were issued as a result
of the repricing on January 15, 1998 of previously granted options: Mr.
Powell - 549,000; Mr. Vanco - 313,166; Mr. Cremer - 75,000; Mr. Khoury
- 74,746; Mr. Voicu - 83,000; Mr. Stemm - 125,000; Mr. Carstens -
150,000. Such repriced options have been reflected as grants in prior
fiscal year long-term compensation awards to the extent applicable,
however, the 75,000 shares granted to Mr. Cremer do not include 50,000
share previously granted in fiscal 1998 to Mr. Cremer, and the 83,000
shares granted to Mr. Voicu do not include 15,000 shares previously
granted in fiscal 1998 to Mr. Voicu. The repriced options retain the
same vesting schedule as the options that were replaced but may be
exercised for a period of ten years following the date of the
repricing.
Does not include options granted to the following individuals in April
1998 which options remain subject to stockholder approval of an
increase in the number of shares available under the Company's stock
option plan: Mr. Vanco - 100,000; Mr. Cremer - 25,000; Mr. Khoury -
20,000; Mr. Voicu - 20,000; Mr. Stemm - 25,000.
(3) Options listed for fiscal 1997 long-term compensation awards reflect
options granted as a result of repricings (and consequent cancellation
of previously granted options) on December 3, 1996. See Option
Repricing Table. Options to purchase the following
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number of shares granted to the following persons in fiscal 1997 were
issued as a result of the repricing on December 3, 1996 of previously
granted options: Mr. Powell - 150,000; Mr. Vanco - 167,500; Mr. Khoury
- 31,430; Mr. Voicu - 44,500; Mr. Stemm - 33,000; Mr. Carstens -
50,000. Such repriced options have been reflected as grants in prior
fiscal year long-term compensation awards to the extent applicable. The
repriced options retain the same vesting schedule as the options that
were replaced but may be exercised for a period of ten years following
the date of the repricing.
(4) The amount included under "All Other Compensation" for each Named
Officer other than Messrs. Powell and Carstens represents the assigned
dollar value of group term life insurance premiums paid by the Company
for the benefit of such Named Officer.
(5) $422,500 represents Mr. Powell's severance and benefits accrued upon
his termination of employment and $263,429 represents the forgiveness
of a loan owed to the Company upon termination of his employment
with the Company, plus a tax gross-up for such payment pursuant to a
loan forgiveness agreement with the Company. The remainder represents
life insurance premiums and the assigned value of group term life
insurance premiums paid by the Company for the benefit of such Named
Officer. See "Certain Relationships and Related Transactions."
(6) $47,125 represents Mr. Carstens' severance and benefits accrued upon
his termination of employment. The remainder represents the assigned
value of group term life insurance premiums paid by the Company for the
benefit of such Named Officer. See "Certain Relationships and Related
Transactions."
EMPLOYEE BENEFIT PLANS
Each current Named Officer is entitled to participate in the Option
Plan. The Option Plan provides for the grant of options, stock purchase rights,
SARs and long-term performance awards.
The following table sets forth certain information with respect to
stock options granted during fiscal 1998 to the Named Officers. No SARs were
granted in fiscal 1998. In accordance with the rules of the Securities and
Exchange Commission, also shown below is the potential realizable value over the
term of the option (the period from the grant date to the expiration date) based
on assumed rates of stock appreciation from the option exercise price of 5% and
10%, compounded annually. These amounts are based on certain assumed rates of
appreciation and do not represent the Company's estimate of future stock price.
Actual gains, if any, on stock option exercises will be dependent on the future
performance of the Common Stock.
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OPTION GRANTS IN FISCAL 1998
Potential Realizable Value at
Assumed Annual Rates of Stock
Individual Grants Price Appreciation for Option Term
----------------------------------------------- -------------------------------------------------
Number of Percent of Total
Securities Options
Underlying Granted to Exercise
Options Granted Employees in or Base Expiration
Name (#)(1) Fiscal Year (5) Price ($/SH) Date 5% ($) 10% ($)
- ------------------------- --------------- ----------------- ------------ ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Powell........ 230,770(2) N/A $1.0625 01/14/08 $154,200 $390,775
68,230(2) N/A $1.0625 01/14/08 $ 45,591 $115,537
50,000(2) N/A $1.0625 01/14/08 $ 33,410 $ 84,668
100,000(2) N/A $1.0625 01/14/08 $ 66,820 $169,355
100,000(2) N/A $1.0625 01/14/08 $ 66,820 $169,335
Radu M. Vanco............ 22,315(2) N/A $1.0625 01/14/08 $ 14,910 $ 37,787
10,185(2) N/A $1.0625 01/14/08 $ 6,806 $ 17,247
30,000(2) N/A $1.0625 01/14/08 $ 20,046 $ 50,801
35,666(2) N/A $1.0625 01/14/08 $ 23,832 $ 60,395
50,000(2) N/A $1.0625 01/14/08 $ 33,410 $ 84,668
50,000(2) N/A $1.0625 01/14/08 $ 33,410 $ 84,668
55,000(2) N/A $1.0625 01/14/08 $ 36,751 $ 93,134
60,000(2) N/A $1.0625 01/14/08 $ 40,092 $101,601
Marc H. Cremer........... 50,000(3) 8.5% $1.6250 06/17/07 N/A N/A
50,000(4) N/A $1.0625 01/14/08 $ 33,410 $ 84,668
25,000(2) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
Bassam Khoury............ 25,000(3) 4.2% $1.6250 06/17/07 N/A N/A
25,000(4) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
2,482(2) N/A $1.0625 01/14/08 $ 1,658 $ 2,447
3,834(2) N/A $1.0625 01/14/08 $ 2,562 $ 6,492
2,000(2) N/A $1.0625 01/14/08 $ 1,336 $ 1,756
11,430(2) N/A $1.0625 01/14/08 $ 7,638 $ 19,355
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
Gelu Voicu............... 15,000(3) 2.5% $2.28125 10/16/07 N/A N/A
15,000(4) N/A $1.0625 01/14/08 $ 10,023 $ 25,400
6,000(2) N/A $1.0625 01/14/08 $ 4,009 $ 10,160
</TABLE>
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<TABLE>
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7,500(2) N/A $1.0625 01/14/08 $ 5,012 $ 12,700
24,500(2) N/A $1.0625 01/14/08 $ 16,371 $ 41,487
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
Daryl E. Stemm........... 1,373(2) N/A $1.0625 01/14/08 $ 917 $ 2,325
8,727(2) N/A $1.0625 01/14/08 $ 5,831 $ 14,778
33,000(2) N/A $1.0625 01/14/08 $ 22,051 $ 55,881
56,900(2) N/A $1.0625 01/14/08 $ 38,021 $ 96,352
25,000(2) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
Chris P. Carstens........ 30,000(2) N/A $1.0625 01/14/08 $ 20,046 $ 50,801
10,000(2) N/A $1.0625 01/14/08 $ 6,682 $ 16,934
35,000(2) N/A $1.0625 01/14/08 $ 23,387 $ 59,267
25,000(2) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
25,000(2) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
25,000(2) N/A $1.0625 01/14/08 $ 16,705 $ 42,334
</TABLE>
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(1) Does not include options granted by the Board of Directors to the
following individuals in April 1998 which options remain subject to
stockholder approval of the Boards increase in the number of shares
available under the Company's stock option plan: Mr. Vanco - 100,000;
Mr. Cremer - 25,000; Mr. Khoury - 20,000; Mr. Voicu - 20,000; Mr. Stemm
- 25,000.
(2) Represents an option granted in December 1998 in replacement of a
previously outstanding option with an exercise price above 1.0625 in
connection with the repricing of such option.
(3) The referenced options were originally granted in fiscal 1998 and were
subsequently repriced in the same fiscal year on January 15, 1998. The
grant constituting the repricing is reflected in the next entry in the
table. See Note 3 below and "Ten-Year Option Repricings" below. The 5%
and 10% "Potential Realizable Value at Assumed Annual Rates of Stock
Price Appreciation for Option Term" have not been included since such
options were replaced by such repricing in the same fiscal year.
(4) This option constitutes the repricing of the option originally granted
during fiscal 1998 in as reported in the preceding entry in this table.
See Note 2 above and "Ten-Year Option Repricings" below.
(5) The "Percent of Total Options Granted to Employees in Fiscal Year" has
been provided only as to options originally granted during fiscal 1998
and not as to repricings.
The following table sets forth information with respect to options
exercised in fiscal 1998 by the Named Officers and the value of unexercised
options at April 30, 1998.
AGGREGATE OPTION EXERCISES IN FISCAL 1998 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares Acquired Value April 30, 1998 (#) April 30, 1998 ($) (1)
------------------------------ -----------------------------
Name on Exercise (#) Received ($) Exercisable Unexercisable Exercisable Unexercisable
- -------------------- ---------------- ------------ ------------ ------------- ------------- -------------
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C. Michael Powell... 0 0 549,000 -- 0 0
Radu M. Vanco ...... 0 0 101,298 211,864 0 0
Marc H. Cremer ..... 0 0 22,395 52,604 0 0
Bassam Khoury ...... 0 0 30,231 44,511 0 0
Gelu Voicu ......... 0 0 43,959 39,037 0 0
Daryl E. Stemm ..... 0 0 50,403 74,597 0 0
Chris P. Carstens... 0 0 96,415 -- 0 0
</TABLE>
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(1) Represents the market price at fiscal year end ($0.8125) less the
exercise price. For purposes of this calculation, the fiscal year end
market price of the shares is deemed to be the closing sale price of
the Company's Common Stock as reported on the NASDAQ Stock Market on
April 30, 1998.
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DIRECTOR COMPENSATION
In addition to options granted pursuant to the Company's stock option
plans, nonemployee directors (including directors who are consultants) receive
quarterly fees in an amount equal to $3,600 for each quarter in which such
director attends a Board meeting. See "Certain Relationships and Related
Transactions" for other payments and arrangements with directors.
REPORT ON COMPENSATION OF EXECUTIVE OFFICERS
The following is a report of the Compensation Committee of the Board of
Directors of the Company (the "Committee") describing the compensation
philosophy and parameters applicable to the Company's executive officers with
respect to the compensation paid to such officers during fiscal 1998. The actual
compensation paid to the Named Officers during fiscal 1998 is shown in the
"Summary Compensation Table."
The Committee is responsible for reviewing the Company's compensation
policies and the actual compensation paid to the Company's executive officers.
At the end of fiscal 1998, the Committee was comprised of two (2) of the
non-employee directors, Hideyuki Tanigami and Patrick Verderico. All policies
and actual compensation were submitted to the full Board for final approval.
Compensation Philosophy. The general philosophy of the Company's
compensation program is to offer the Company's Chief Executive Officer and other
executive officers competitive compensation packages based upon both the
Company's performance as well as the individual's performance and contributions.
The Company's compensation policies are intended to motivate and reward highly
qualified executives for long-term strategic management and the enhancement of
stockholder value, to support a performance-oriented environment that rewards
achievement of specific internal Company goals and to attract and retain
executives whose abilities are critical to the long-term success and
competitiveness of the Company. This is further subject to the Company's
financial condition and results of operations. The Company's compensation
program is comprised of three main components, Base Salary, Bonus Plan and Stock
Options.
Base Salary. Base salary for executive officers is set annually by
reviewing the competitive pay practices of comparable companies, the skills and
performance level of the individual executives and the needs of the Company.
Bonus Plan. The Company's officers are eligible for bonuses under the
terms of individual bonus arrangements. When bonuses are given, they are based
upon the individual's achievement of specific corporate goals as well as the
individual's experience and contributions to the success of the Company.
During fiscal 1998, Messrs. Powell and Vanco received bonuses. See
"Compensation of Chief Executive Officer" in this Report on Compensation and
"Certain Relationships and Related Transactions." No other executive officer
received a bonus during fiscal 1998.
Stock Options. The Committee believes that stock options provide
additional incentives to officers to work toward maximizing stockholder value.
The Committee views stock options as one of the more important components of the
Company's long-term, performance-based compensation philosophy. These options
are provided through initial grants at or near the date of hire and through
subsequent periodic grants based upon performance and promotions, as well as
additional grants to provide continuing motivation as earlier grants vest in
full. Options granted by the Company to its executive officers and other
employees have exercise prices equal to fair market value at the time of grant
and, generally, vest over a four-year period. In addition, on January 15, 1998
the Company repriced its outstanding options to $1.0625 per share, the then
current fair market value of the Company's Common Stock.
Severance Arrangements. See "Certain Relationships and Related
Transactions" for a description of severance arrangements for the executive
officers.
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Compensation for the Chief Executive Officer. Mr. Vanco's base salary
was established at a level which the Committee determined to be similar to the
amounts paid by comparably sized companies similarly situated. He also received
a bonus of $69,391 in fiscal 1998 which equaled the principal and accrued
interest due and payable on a loan owed to the Company, plus a tax gross-up for
such payment pursuant to a loan forgiveness agreement with the Company. While
Mr. Powell was Chief Executive Officer his base salary was established at a
level which the Committee determined to be similar to the amounts paid by
comparably sized companies. He also received a bonus of $80,658 in fiscal
1998 which equaled the principal and accrued interest due and payable on a loan
owed to the Company, plus a tax gross-up for such payment pursuant to a loan
forgiveness agreement with the Company. See "Certain Relationships and Related
Transactions."
The Committee considers equity based compensation, in the form of stock
options, to be an important component of a Chief Executive Officer's
compensation. These grants are intended to motivate leadership for long-term
Company growth and profitability. During fiscal 1998, Mr. Vanco was granted
options to purchase 100,000 shares of the Company's Common Stock at the exercise
price of $0.6875, however, such options are not effective unless and until an
increase in the number of shares available under the Company's option plan is
approved by the Company's stockholders.
Tax Deductibility of Executive Compensation. The Committee has
considered the potential impact of Section 162(m) of the Internal Revenue Code
adopted under the federal Revenue Reconciliation Act of 1993. This Section
disallows a tax deduction for any publicly-held corporation for individual
compensation exceeding $1,000,000 in any taxable year for any of the executive
officers named in the Proxy Statement, unless compensation is performance-based.
The Committee has studied the impact of Section 162(m) on the Company's Option
Plan.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
Hideyuki Tanigami
Patrick Verderico
REPORT ON REPRICING OF OPTIONS
On January 15, 1998, the Board of Directors of the Company unanimously
approved resolutions authorizing the repricing of certain outstanding stock
options held by all then employees, including officers, and certain consultants
of the Company on the terms described below. The overall purpose of the
Company's stock option plan had been to attract and retain the services of the
Company's employees and to provide incentives to such persons to exert
exceptional efforts for the Company's success. The Committee concluded that the
decline in the market value of the Company's Common Stock had diminished the
value of the Company's stock option program as an element of the Company's
compensation arrangements. Accordingly, the Board approved the repricing program
described below.
All outstanding and unexercised options granted prior to December 2,
1998 with an exercise price above $1.0625 per share, the closing price on
January 15, 2008, held by employees of the Company, including officers, and
certain consultants were repriced to the new price of $1.0625. The expiration
date of the new repriced options is January 15, 2008.
THE BOARD OF DIRECTORS
Lionel M. Allan
C. Michael Powell
Hideyuki Tanigami
Radu M. Vanco
Patrick Verderico
-9-
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors.
During fiscal 1998, Messrs. Tanigami and Verderico served as the members of the
Compensation Committee of the Board of Directors. Mr. Tanigami, Chairman of the
Board of Directors was employed by the Company in various capacities from
October 1985 to April 1994 including the most recent position as Vice President
of Corporate Development. Messers. Powell and Vanco participated in the Board's
final approval of executive compensation matters.
TEN-YEAR OPTION REPRICINGS
The Named Officers of the Company received repriced stock options on
May 14, 1994, December 3, 1996 and January 15, 1998 as follows:
<TABLE>
<CAPTION>
Length of
Original
Number of Market Option Term
Securities Price Exercise Remaining
Underlying of Stock Price at New at Date of
Option at Time of Time of Exercise Repricing
Name and Position Date Repriced (#) Repricing ($) Repricing ($) Price ($) (Months)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C. Michael Powell........... January 15, 1998 230,770 $1.0625 $1.9375 $1.0625 76
Former Chairman, President January 15, 1998 68,230 $1.0625 $1.9375 $1.0625 76
and Chief Executive Officer January 15, 1998 50,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 100,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 100,000 $1.0625 $1.5625 $1.0625 111
December 3, 1996 50,000 $2.6875 $5.2500 $2.6875 104
December 3, 1996 100,000 $2.6875 $6.0000 $2.6875 111
May 14, 1994 250,000 $1.9375 $5.7500 $1.9375 117
Radu M. Vanco............... January 15, 1998 22,315 $1.0625 $1.9375 $1.0625 76
President and Chief January 15, 1998 10,185 $1.0625 $1.9375 $1.0625 76
Executive Officer January 15, 1998 30,000 $1.0625 $1.9375 $1.0625 76
January 15, 1998 35,666 $1.0625 $1.9370 $1.0625 76
January 15, 1998 50,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 50,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 55,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 60,000 $1.0625 $1.5625 $1.0625 111
December 3, 1996 50,000 $2.6875 $5.2500 $2.6875 104
December 3, 1996 62,500 $2.6875 $7.2500 $2.6875 107
December 3, 1996 55,000 $2.6875 $6.0000 $2.6875 111
May 14, 1994 52,221 $1.9375 $6.3000 $1.9375 116
May 14, 1994 19,445 $1.9375 $5.7500 $1.9375 116
May 14, 1994 50,000 $1.9375 $5.7500 $1.9375 117
Marc H. Cremer.............. January 15, 1998 25,000 $1.0625 $2.3125 $1.0625 110
Vice President of Sales January 15, 1998 50,000 $1.0625 $1.6250 $1.0625 113
Bassam Khoury............... January 15, 1998 2,482 $1.0625 $1.9375 $1.0625 76
Vice President of Marketing January 15, 1998 3,834 $1.0625 $1.9375 $1.0625 76
January 15, 1998 2,000 $1.0625 $1.9375 $1.0625 76
January 15, 1998 11,430 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 25,000 $1.0625 $1.6250 $1.0625 115
December 3, 1996 11,430 $2.6875 $4.1250 $2.6875 114
December 3, 1996 10,000 $2.6875 $7.2500 $2.6875 107
December 3, 1996 10,000 $2.6875 $5.0000 $2.6875 112
May 14, 1994 10,000 $1.9375 $5.7500 $1.9375 103
May 14, 1994 11,110 $1.9375 $5.7500 $1.9375 116
</TABLE>
-10-
<PAGE> 11
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Gelu Voicu................... January 15, 1998 15,000 $1.0625 $2.28125 $1.0625 117
Vice President of Product January 15, 1998 6,000 $1.0625 $1.9375 $1.0625 76
Engineering and January 15, 1998 7,500 $1.0625 $1.9370 $1.0625 76
Manufacturing January 15, 1998 24,500 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 10,000 $1.0625 $2.6875 $1.0625 107
December 3, 1996 24,500 $2.6875 $5.2500 $2.6875 104
December 3, 1996 10,000 $2.6875 $7.2500 $2.6875 107
December 3, 1996 10,000 $2.6875 $5.0000 $2.6875 112
May 14, 1994 8,000 $1.9375 $5.7500 $1.9375 115
Daryl E. Stemm................ January 15, 1998 1,373 $1.0625 $1.9375 $1.0625 76
Former Vice President, Finance January 15, 1998 8,727 $1.0625 $1.9375 $1.0625 76
and Administration, and January 15, 1998 33,000 $1.0625 $2.6875 $1.0625 107
Financial Officer Chief January 15, 1998 56,900 $1.0625 $2.7500 $1.0625 109
January 15, 1998 25,000 $1.0625 $1.5625 $1.0625 111
December 3, 1996 33,000 $2.6875 $6.0000 $2.6875 111
May 14, 1994 4,333 $1.9375 $5.7500 $1.9375 117
Chris P. Carstens............. January 15, 1998 30,000 $1.0625 $1.9375 $1.0625 76
Former Vice President, Quality January 15, 1998 10,000 $1.0625 $1.9375 $1.0625 76
and Reliability January 15, 1998 35,000 $1.0625 $2.5000 $1.0625 70
January 15, 1998 25,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 25,000 $1.0625 $2.6875 $1.0625 107
January 15, 1998 25,000 $1.0625 $1.5625 $1.0625 111
December 3, 1996 25,000 $2.6875 $5.2500 $2.6875 104
December 3, 1996 25,000 $2.6875 $6.0000 $2.6875 111
May 14, 1994 30,000 $1.9375 $5.7500 $1.9375 115
</TABLE>
-11-
<PAGE> 12
PERFORMANCE GRAPH
The following line graph compares the annual percentage change in the
cumulative total stockholder return for the Company's Common Stock with the S&P
500 Index and the S&P Electronics (Semi/Components) Index for the period
commencing May 11, 1993 (the date the Company's Common Stock first traded on The
Nasdaq National Market) and ending on April 30, 1998. The graph assumes that
$100 was invested on May 11, 1993, the date of the Company's initial public
offering, and that all dividends are reinvested. Historic stock price
performance should not necessarily be considered indicative of future stock
price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG CATALYST SEMICONDUCTOR, INC., THE S & P 500 INDEX
AND THE S & P ELECTRONICS (SEMICONDUCTORS) INDEX
<TABLE>
<CAPTION>
Cumulative Total Return
-----------------------------------------------------------------------
5/11/93 3/31/94 3/31/95 4/30/96 4/30/97 4/30/98
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Catalyst Semiconductor, Inc. $100 $ 40.74 $ 37.04 $ 50.00 $ 12.50 $ 6.02
S & P 500 $100 $103.99 $120.18 $161.10 $201.59 $284.37
S & P Electronics (Semiconductors) $100 $139.63 $167.68 $216.52 $427.04 $451.84
</TABLE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, which might incorporate future
filings made by the Company under those statutes, the preceding Report of the
Compensation Committee of the Board of Directors on Executive Compensation, the
Report of the Board of Directors on Option Repricing and the Performance Graph
are not to be incorporated by reference into any of those previous filings; nor
is such report or graph to be incorporated by reference into any future filings
which the Company may make under those statutes.
-12-
<PAGE> 13
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company's Common Stock as of August
14, 1998 by (i) each beneficial owner of more than 5% of the Company's Common
Stock, (ii) each director, (iii) each Named Officer and (iv) all current
directors and executive officers as a group. Except as otherwise indicated, each
person has sole voting and investment power with respect to all shares shown as
beneficially owned, subject to community property laws where applicable.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
-------------------------
NUMBER PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OF SHARES OF TOTAL
--------- -------
<S> <C> <C>
Elex N.V....................................... 1,500,000 15.1%
Transportstraat 1
B 3980
Tessenderlo, Belgium
United Microelectronics Corp................... 650,000 6.5%
No. 13, Innovation Road I
Science-Based Industrial Park
Hsin-Chei City, Taiwan R.O.C.
C. Michael Powell (1)......................... 549,000 5.2%
Radu M. Vanco (1)............................. 235,033 2.3%
Lionel M. Allan (1)........................... 70,519 *
Hideyuki Tanigami (1)......................... 82,082 *
Patrick Verderico (1)......................... 15,832 *
Bassam Khoury (1)............................. 45,524 *
Gelu Voicu (1)................................ 54,756 *
Marc H. Cremer (1)............................ 25,520 *
Thomas E. Gay III.............................. 0 *
Sorin Georgescu................................ 0 *
Chris P. Carstens (1)........................ 96,415 *
Daryl E. Stemm................................ 125,000 1.2%
All current directors and executive officers
as a group (10 persons) (2)............... 1,078,266 9.8%
</TABLE>
* Percentage of shares beneficially owned is less than one percent
of total.
-13-
<PAGE> 14
(1) Includes shares issuable upon exercise of stock options as of
August 14, 1998 or within 60 days thereafter as follows:
<TABLE>
<S> <C>
C. Michael Powell........... 549,000 shares at $1.0625
Radu M. Vanco............... 235,033 shares at $1.0625
Lionel M Allan.............. 20,000 shares at $5.1250
5,000 shares at $5.0000
2,500 shares at $1.6875
43,019 shares at $1.0625
Hideyuki Tanigami........... 66,250 shares at $1.6875
2,500 shares at $1.6875
13,332 shares at $6.0000
Patrick Verderico........... 13,332 shares at $5.0000
2,500 shares at $1.6875
Bassam Khoury............... 43,376 shares at $1.0625
Marc H. Cremer.............. 25,520 shares at $1.0625
Gelu Voicu.................. 50,710 shares at $1.0625
Daryl E. Stemm.............. 125,000 shares at $1.0625
Chris P. Carstens........... 96,415 shares at $1.0625
</TABLE>
(2) Includes 1,072,072 shares issuable upon exercise of stock options as
of August 14, 1998 or within 60 days thereafter, held by Messrs.
Powell, Vanco, Allan, Tanigami, Verderico, Khoury, Voicu and Cremer as
described in Note 1 above.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal 1998, the Company recorded approximately $413,000 of
consulting fees to Essex S.A., a Romanian corporation ("Essex"), and to certain
parties affiliated with Essex, for engineering services. Radu M. Vanco, the
Company's President and Chief Executive Officer indirectly owns 91% of the
capital stock of Essex. Negotiations with Essex to determine the fee for such
services were conducted as an arms length commercial negotiation and did not
include any participation by Mr. Vanco.
In March 1994, the Company loaned Radu M. Vanco, then Vice President
Engineering and, from October 1995 to March 1998, Executive Vice President of
Engineering and since then President and Chief Executive Officer, $100,000
payable in two years with interest at 6% per annum. The loan proceeds were used
by Mr. Vanco for his home. On March 12, 1996, the Company and Mr. Vanco agreed
to a bonus arrangement which has the effect of (a) forgiving the principal and
accrued interest on the note on a monthly basis over two years commencing March
16, 1996 as long as he remains employed by the Company and (b) forgiving the
principal and accrued interest immediately upon his termination without cause or
upon a change in control. All principal and accrued interest on the note is
immediately due and payable upon his voluntarily resignation or termination for
cause. Pursuant to this arrangement, payment of the principal and accrued
interest was satisfied in full in March 1998.
In September 1995, the Company loaned C. Michael Powell, Chairman,
Chief Executive Officer, President and Chief Financial Officer of the Company,
$200,000 payable in five years with interest at 7% per annum. The loan proceeds
were used by Mr. Powell for his home. The agreement between the parties contains
a bonus arrangement which has the effect of (a) forgiving the principal and
accrued interest on the note over five years on a monthly basis commencing
October 7, 1995 for so long as he remains employed by the Company, (b) forgiving
the
-14-
<PAGE> 15
principal and accrued interest immediately upon his termination without cause or
upon a change of control, (c) an additional amount equal to any federal or state
taxes payable with respect to such bonuses. All principal and accrued interest
on the note is immediately due and payable upon his voluntarily resignation or
termination for cause. Upon his termination in March 1998, the Company accrued
an aggregate of $263,429 in satisfaction of such loan, all accrued interest
thereon and the tax payment. In addition, the vesting of all options was
accelerated.
The Company entered into agreements with Messrs. Vanco, Cremer, Gay,
Georgescu, Khoury, Voicu, Powell, Carstens and Stemm dated May 1998, April 1998,
June 1998, April 1998, April 1998, April 1998, August 1995, April 1995 and
September 1995, respectively, which entitle such officers to certain severance
payments in the event of an involuntary termination as a result of a merger,
sale or change in ownership of the Company (a "Change of Control") and certain
other benefits upon any involuntary termination by the Company without cause (an
"Involuntary Termination"). Pursuant to the terms and conditions of said
agreements, such individuals will receive the following benefits: (a) Mr. Vanco
- - for Involuntary Termination as a result of a Change of Control he shall
receive severance payments equal to 2, 1-1/2, 1 and 1 times his annual salary if
terminated within one, two, three, or four (or more) years, respectively,
following his agreement payable over one year plus benefits for six months and
all stock options shall be immediately vested and be exercisable for a period of
three years; for any other Involuntary Termination he shall receive a severance
payment equal to his annual salary payable over one year and all stock options
shall be immediately vested and be exercisable for a period of three years; (b)
each of Messrs. Cremer, Gay, Georgescu, Khoury and Voicu - for Involuntary
Termination as a result of a Change of Control he shall receive a severance
payment equal to one-half his annual salary payable over six months and all
unvested options shall immediately vest and be exercisable for one year; for any
other Involuntary Termination he shall receive a severance payment equal to
one-quarter of his annual salary payable over six months and all vested options
shall be exercisable for a period of one year; (c) Mr. Powell - for Involuntary
Termination as a result of a Change of Control he would receive severance
payments equal to 2, 1-1/2, 1 and -1/2 times his annual salary if terminated
within one, two, three, or four (or more) years, respectively, following his
agreement plus benefits for six months ; for an Involuntary Termination he would
receive a severance payment equal to his annual salary; upon a Change of Control
or his death or Involuntary Termination, all stock options would be immediately
vested and be exercisable for a period of three years following any such death
or Involuntary Termination; Mr. Powell's employment terminated in March 1998 and
the Company accrued expenses aggregating $422,520 for such severance and
benefits; and (d) Mr. Carstens - for Involuntary Termination as a result of a
Change of Control he would receive a severance payment equal to one-half his
annual salary and benefits; for any other Involuntary Termination he would
receive a severance payment equal to one-quarter of his annual salary payable
over one year; Mr. Catsrens' employment terminated in April 1998 and the Company
accrued expenses aggregating $47,125 for such severence and benefits; and (e)
Mr. Stemm - for an Involuntary Termination he would receive a severence payment
equal to one-half of his annual salary and benefits payable over six months plus
vesting of all outstanding options over such six-month period which options
shall be exercisable for a period of one year; Mr. Stemm's employment terminated
in May 1998 and the foregoing benefits are currently being provided to Mr.
Stemm.
Messrs. Allan and Tanigami serve as consultants to the Company. During
fiscal 1998 Mr. Allan's company, Allan Advisors, Inc., received consulting fees
of $5,000 per month plus a fixed allowance for reimbursement of office expenses
of $1,000 per month. Mr. Allan's agreement has been extended through August
2001. Mr. Tanigami receives $6,000 per month for consulting services pursuant to
an at-will arrangement.
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by the Delaware General Corporation
Law. The Company's Bylaws also provide that the Company shall indemnify its
directors, officers, employees and agents in such circumstances. In addition,
the Company has entered into separate indemnification agreements with its
officers and directors that may require the Company, among other things, to
indemnify them against certain liabilities that may arise by reason of their
status or service as directors or officers and to advance their expenses
incurred as a result of any proceeding against them as to which they could be
indemnified.
Hideyuki Tanigami, a director of the Company, is President of Marubun
USA Corporation, a wholly owned subsidiary of Marubun Japan. During fiscal 1998,
Marubun Japan was a distributor of the Company's products in Japan and accounted
for approximately 21% of the Company's net revenues in fiscal 1998. In December
1997, Marubun resigned as a distributor effective in or about March 1998.
In connection with the sale by the Company and the purchase by United
Microelectronics Corporation, a corporation organized and existing under the
laws of the Republic of China ("UMC"), of 650,000 shares of
-15-
<PAGE> 16
Common Stock in February 1996, UMC agreed to provide the Company with specified
levels of wafer supplies and UMC and the Company entered into certain mutual
licensing arrangements. UMC also obtained certain registration rights relating
to the Common Stock purchased.
The terms of the transactions described above were negotiated at arms
length such that the terms were as favorable to the Company as could have been
obtained from an unaffiliated third party.
ITEM 14(a)(3) TO REGISTRANT'S FORM 10-K FOR FISCAL 1998 AS PREVIOUSLY FILED IS
AMENDED TO ADD EXHIBIT 10.63:
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS
See Index to Financial Statements on page F-2 of this Annual Report on
Form 10-K for fiscal 1998 as previously filed.
(a)(2) FINANCIAL STATEMENT SCHEDULES
See Item 14(a)(1) above. Schedules other than those included in
referenced Index have been omitted because they are not required or are not
applicable.
(a)(3) EXHIBITS
<TABLE>
<S> <C> <C>
3.2 (1) Restated Certificate of Incorporation of Registrant.
3.4 (1) Bylaws of Registrant.
4.1 (5) 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.
10.3 (1) Stock Purchase Agreement dated March 31, 1992 between Kamlesh Kumari and Registrant, together
with Promissory Note and Guarantee by B.K. Marya.
10.7 (1) Stock Option Plan, as amended, including forms of Stock Option Agreement.
10.8 (1) 1993 Employee Stock Purchase Plan.
10.9 (1) 1993 Director Stock Option Plan.
10.12 (1) Distributor Agreement dated February 1990 between Arrow Electronics, Inc. and Registrant.
10.14 (1) Distributor Agreement dated June 30, 1986 between Registrant and Marubun Corporation.
10.15 (1) Irrevocable License Agreement dated May 8, 1988 between Seiko Instruments, Inc. and Registrant.
10.16 (1) 64 KBIT CMOS EEPROM, 1M BIT CMOS EEPROM and 256 KBIT CMOS EEPROM Consulting and Design Work
Agreement dated March 26, 1986 between OKI Electric Industry Co., Ltd. and the Registrant.
10.17 (1) FLASH EEPROM Development and License Agreement dated July 18, 1988 between OKI Electric Co.,
Ltd. and Registrant.
10.18 (1) 4M FLASH Development and License Agreement dated May 27, 1992 between OKI Electric Co., Ltd.
and Registrant.
10.27 (1) Form of Indemnification Agreement entered into by Registrant with each of its directors and
executive officers.
10.34 (2) Wafer Supply Agreement dated February 24, 1995 between OKI Electric Industry Co., Ltd. and the
Registrant.
10.36 (3)+ License Agreement dated August 18, 1995 between Intel Corporation and Registrant
10.38 (4) Standard Industrial Lease dated March 22, 1996 between Marin County Employees Retirement
Association and Registrant.
</TABLE>
-16-
<PAGE> 17
<TABLE>
<S> <C> <C>
10.39 (4)+ Master Agreement dated February 7, 1996 between United Microelectronics Corporation and the
Registrant.
10.41 (4)+ Amendment dated May 20, 1996 to the Wafer Supply Agreement dated February 24, 1994 between OKI
Electric Industry Co., Ltd. and Registrant.
10.42 (4) Separation and Consulting Agreements dated August 14, 1995 between B.K. Marya and Registrant.
10.43 (4) Separation and Consulting Agreements dated August 30, 1995 between Donald B. Witmer and the
Registrant.
10.44 (4) Employment Agreement dated April 25, 1995 between Christopher Carstens and Registrant.
10.45 (4) Employment Agreement dated August 14, 1995 between C. Michael Powell and Registrant.
10.46 (4) Employment Agreement dated October 14, 1995 between Radu Vanco and Registrant.
10.47 (4) Loan Agreement and Loan Forgiveness Agreement dated September 7, 1995 between C. Michael Powell
and Registrant.
10.48 (4) Loan Forgiveness Agreement dated March 12, 1996 between Radu Vanco and Registrant.
10.49 (6) Loan and Security Agreement dated June 19, 1997 between Coast Business Credit, a division of
Southern Pacific Thrift & Loan Association ("Coast"), and Registrant.
10.50 (6) Loan and Security Agreement (CEFO Facility) dated June 19, 1997 between Coast Business Credit,
a division of Southern Pacific Thrift & Loan Association ("Coast"), and Registrant.
10.51 (6) Commercial Security Agreement dated April 1, 1998 between Registrant and Oki Electric Industry
Co., Ltd.
10.52 (6) Wafer Purchase Agreement dated March 23, 1998 between Registrant and Trio-Tech International
PTE LTD with Variation Agreement dated April 16, 1998 between Registrant and Trio-Tech.
10.53 (6) Addendum dated May 29, 1998 to Employment Agreement dated October 14, 1995 between Radu Vanco
and Registrant.
10.54 (6) Severance Agreement dated April 28, 1998 between Sorin Georgescu and Registrant.
10.55 (6) Severance Agreement dated April 28, 1998 between Gelu Voicu and Registrant.
10.57 (6) Severance Agreement dated April 28, 1998 between Marc H. Cremer and Registrant.
10.58 (6) Severance Agreement dated April 28, 1998 between Bassam Khoury and Registrant.
10.59 (6) Severance Agreement dated June 1, 1998 between Thomas E. Gay III and Registrant.
10.60 (6) Amendment No. 1 to Preferred Shares Rights Agreement dated as of May 22, 1998 between
Registrant and BankBoston, N.A., as rights agent.
10.61 (6) Common Stock Purchase Agreement dated as of May 26, 1998 between Registrant and Elex N.V.
("Elex") with Standstill Agreement dated as of May 26, 1998 between Registrant and Elex.
10.62 (6) Letter Agreement dated August 6, 1998 between Coast and Registrant concerning default and
forbearance under the Company's bank agreements.
10.63 Agreement dated August 14, 1995 between Registrant and Lionel M. Allan.
21.1 (1) List of Subsidiaries of Registrant.
23.1 (6) Consent of Independent Accountants.
24.1 (6) Power of Attorney.
27.1 (6) Financial Data Schedule.
</TABLE>
(1) Incorporated by reference to Registrant's Registration Statement
on Form S-1 filed with the Commission on May 11, 1993 (File No.
33-60132), as amended.
(2) Incorporated by reference to Registrant's Form 10-K filed for
the fiscal year ended March 31, 1995.
(3) Incorporated by reference to Registrant's Form 10-Q filed for
the fiscal quarter ended September 30, 1995.
(4) Incorporated by reference to Registrant's Form 10-K filed for
the fiscal year ended April 30, 1996.
(5) Incorporated by reference to Exhibit 1 to Registrant's Form 8-A
filed on January 22, 1997.
(6) Previously filed in connection with the Company's Annual Report
on Form 10-K for the fiscal year ended May 3, 1998.
+ Confidential treatment has been granted as to a portion of this
Exhibit. Such portion has been redacted and filed separately
with the Securities and Exchange Commission.
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter ended May 3,
1998.
-17-
<PAGE> 18
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, in the City of Sunnyvale
and State of California, on August 27, 1998.
CATALYST SEMICONDUCTOR, INC.
By: /s/ Radu M. Vanco
----------------------------------
Radu M. Vanco
President, Chief Executive
Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of
Registrant and in the capacities and on the dates indicated.
Date: August 27, 1998 By: *
--------------- ----------------------------------
Radu M. Vanco
President, Chief Executive Officer
and Director
(Principal Executive Officer)
Date: August 27, 1998 By: *
--------------- ----------------------------------
Thomas E. Gay III
Vice President of Finance
and Administration
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: August 27, 1998 By: *
--------------- ----------------------------------
Lionel M. Allan
Director
Date: August 27, 1998 By: *
--------------- ----------------------------------
C. Michael Powell
Director
Date: August 27, 1998 By: *
--------------- ----------------------------------
Hideyuki Tanigami
Director
Date: August 27, 1998 By: *
--------------- ----------------------------------
Patrick Verderico
Director
* /s/ Radu M. Vanco
----------------------
By: Radu M. Vanco
Attorney-in Fact
-18-
<PAGE> 19
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<TABLE>
<CAPTION>
<S> <C> <C>
3.2 (1) Restated Certificate of Incorporation of Registrant.
3.4 (1) Bylaws of Registrant.
4.1 (5) 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.
10.3 (1) Stock Purchase Agreement dated March 31, 1992 between Kamlesh Kumari and Registrant, together
with Promissory Note and Guarantee by B.K. Marya.
10.7 (1) Stock Option Plan, as amended, including forms of Stock Option Agreement.
10.8 (1) 1993 Employee Stock Purchase Plan.
10.9 (1) 1993 Director Stock Option Plan.
10.12 (1) Distributor Agreement dated February 1990 between Arrow Electronics, Inc. and Registrant.
10.14 (1) Distributor Agreement dated June 30, 1986 between Registrant and Marubun Corporation.
10.15 (1) Irrevocable License Agreement dated May 8, 1988 between Seiko Instruments, Inc. and Registrant.
10.16 (1) 64 KBIT CMOS EEPROM, 1M BIT CMOS EEPROM and 256 KBIT CMOS EEPROM Consulting and Design Work
Agreement dated March 26, 1986 between OKI Electric Industry Co., Ltd. and the Registrant.
10.17 (1) FLASH EEPROM Development and License Agreement dated July 18, 1988 between OKI Electric Co.,
Ltd. and Registrant.
10.18 (1) 4M FLASH Development and License Agreement dated May 27, 1992 between OKI Electric Co., Ltd.
and Registrant.
10.27 (1) Form of Indemnification Agreement entered into by Registrant with each of its directors and
executive officers.
10.34 (2) Wafer Supply Agreement dated February 24, 1995 between OKI Electric Industry Co., Ltd. and the
Registrant.
10.36 (3)+ License Agreement dated August 18, 1995 between Intel Corporation and Registrant.
10.38 (4) Standard Industrial Lease dated March 22, 1996 between Marin County Employees Retirement
Association and Registrant.
</TABLE>
-19-
<PAGE> 20
<TABLE>
<S> <C> <C>
10.39 (4)+ Master Agreement dated February 7, 1996 between United Microelectronics Corporation and the
Registrant.
10.41 (4)+ Amendment dated May 20, 1996 to the Wafer Supply Agreement dated February 24, 1994 between OKI
Electric Industry Co., Ltd. and Registrant.
10.42 (4) Separation and Consulting Agreements dated August 14, 1995 between B.K. Marya and Registrant.
10.43 (4) Separation and Consulting Agreements dated August 30, 1995 between Donald B. Witmer and the
Registrant.
10.44 (4) Employment Agreement dated April 25, 1995 between Christopher Carstens and Registrant.
10.45 (4) Employment Agreement dated August 14, 1995 between C. Michael Powell and Registrant.
10.46 (4) Employment Agreement dated October 14, 1995 between Radu Vanco and Registrant.
10.47 (4) Loan Agreement and Loan Forgiveness Agreement dated September 7, 1995 between C. Michael Powell
and Registrant.
10.48 (4) Loan Forgiveness Agreement dated March 12, 1996 between Radu Vanco and Registrant.
10.49 (6) Loan and Security Agreement dated June 19, 1997 between Coast Business Credit, a division of
Southern Pacific Thrift & Loan Association ("Coast"), and Registrant.
10.50 (6) Loan and Security Agreement (CEFO Facility) dated June 19, 1997 between Coast Business Credit,
a division of Southern Pacific Thrift & Loan Association ("Coast"), and Registrant.
10.51 (6) Commercial Security Agreement dated April 1, 1998 between Registrant and Oki Electric Industry
Co., Ltd.
10.52 (6) Wafer Purchase Agreement dated March 23, 1998 between Registrant and Trio-Tech International
PTE LTD with Variation Agreement dated April 16, 1998 between Registrant and Trio-Tech.
10.53 (6) Addendum dated May 29, 1998 to Employment Agreement dated October 14, 1995 between Radu Vanco
and Registrant.
10.54 (6) Severance Agreement dated April 28, 1998 between Sorin Georgescu and Registrant.
10.55 (6) Severance Agreement dated April 28, 1998 between Gelu Voicu and Registrant.
10.57 (6) Severance Agreement dated April 28, 1998 between Marc H. Cremer and Registrant.
10.58 (6) Severance Agreement dated April 28, 1998 between Bassam Khoury and Registrant.
10.59 (6) Severance Agreement dated June 1, 1998 between Thomas E. Gay III and Registrant.
10.60 (6) Amendment No. 1 to Preferred Shares Rights Agreement dated as of May 22, 1998 between
Registrant and BankBoston, N.A., as rights agent.
10.61 (6) Common Stock Purchase Agreement dated as of May 26, 1998 between Registrant and Elex N.V.
("Elex") with Standstill Agreement dated as of May 26, 1998 between Registrant and Elex.
10.62 (6) Letter Agreement dated August 6, 1998 between Coast and Registrant concerning default and
forbearance under the Company's bank agreements.
10.63 Agreement dated August 14, 1995 between Registrant and Lionel M. Allan.
21.1 (1) List of Subsidiaries of Registrant.
23.1 (6) Consent of Independent Accountants.
24.1 (6) Power of Attorney.
27.1 (6) Financial Data Schedule.
</TABLE>
(1) Incorporated by reference to Registrant's Registration Statement
on Form S-1 filed with the Commission on May 11, 1993 (File No.
33-60132), as amended.
(2) Incorporated by reference to Registrant's Form 10-K filed for
the fiscal year ended March 31, 1995.
(3) Incorporated by reference to Registrant's Form 10-Q filed for
the fiscal quarter ended September 30, 1995.
(4) Incorporated by reference to Registrant's Form 10-K filed for
the fiscal year ended April 30, 1996.
(5) Incorporated by reference to Exhibit 1 to Registrant's Form 8-A
filed on January 22, 1997.
(6) Previously filed in connection with the Company's Annual Report
on Form 10-K for the fiscal year ended May 3, 1998.
+ Confidential treatment has been granted as to a portion of this
Exhibit. Such portion has been redacted and filed separately
with the Securities and Exchange Commission.
-20-
<PAGE> 1
EXHIBIT 10.63
ALLAN ADVISORS, INC.
CONSULTING AGREEMENT
This Consulting Agreement is entered into at Santa Clara, California,
on August 14, 1995, between Allan Advisors, Inc. ("Consultant" or "AAI") and
Catalyst Semiconductor, Inc. ("Company").
1. Consulting Relationship. AAI is a legal consulting firm which has
provided Contract Inside CounselSM services to Company since March 1992. Company
wishes to engage AAI to provide continuing consulting services to Company as set
forth herein.
2. Duties. Consultant agrees to advise Company as requested by its
Chief Executive Officer, including one day per week of on-site services.
3. Compensation. Company agrees to pay to AAI as compensation for all
duties performed by Consultant hereunder, a consulting fee of $5000 per month
and an office expense allowance of $1000 per month, both payable in advance on
the first day of each month.
4. Term of Consulting Agreement. This Consulting Agreement shall
commence on this date and shall terminate three years from this date; provided,
however, that Company may terminate this Agreement on 30 days written notice at
any time upon payment of a termination fee of six months of consulting fees and
office allowance.
5. Stock Options. A material part of this Agreement is the stock
options to be granted from time to time to Lionel M. Allan for services rendered
to Company as its Contract Inside CounselSM, management adviser, and/or outside
director. Company agrees that any and all stock options held by Lionel M. Allan
shall become immediately fully vested and not subject to forfeiture upon any
sale of substantially all of the Company's assets, or a sale of a majority of
its shares or any other change of control, or if Company elects to terminate
this Agreement prior to three years from this date or in the event of Lionel M.
Allan's death. In such event, all options shall remain fully exercisable for
three years from the occurrence of said event.
In witness whereof, the parties have entered into this Agreement at
Santa Clara, California on August 14, 1995.
Catalyst Semiconductor, Inc. Allan Advisors, Inc.
/s/ C. Michael Powell /s/ Lionel M. Allan
- ------------------------------------ ------------------------------------
C. Michael Powell Lionel M. Allan
Chairman and Chief Executive Officer Chairman and Chief Executive Officer
