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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 Form 10-K/A Amendment No. 1 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the Fiscal Year ended December 31, 2004. OR o
    
    Transitional Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the transition period from: ______ to: ______. Commission file number 0-32809 Vialta, Inc. (Exact name of registrant as specified in its charter)
 Delaware
    
    94-3337236(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or Organization)
 48461 Fremont Boulevard Fremont, California 94538
 (Address, including zip code, of Registrants principal executive offices)
 (510) 870-3088 (Registrants telephone number, including area code)
 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 þ No o 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 the Form 10-K
or any amendments to this Form 10-K. þ Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange
Act Rule 126-2) Yes o No þ The aggregate market value of the voting and non-voting common equity held by non-affiliates
of the registrant on June 30, 2004 (based on the average bid and ask price on the OTC Bulletin
Board as of such date) was approximately $17,818,000. The number of outstanding shares of the registrants common stock, par value $0.001 per share, on
March 7, 2005 was 83,052,852 shares. DOCUMENTS INCORPORATED BY REFERENCE None




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EXPLANATORY NOTE Vialta, Inc. (the Company, Vialta, we, us or our) is filing this Amendment No. 1 on Form
10-K/A to our Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the Report)
for the purpose of including information that was to be incorporated by reference from our
definitive proxy statement pursuant to Regulation 14A of the Securities and Exchange Act of 1934.
We will not file our proxy statement within 120 days of our fiscal year ended December 31, 2004,
and are, therefore, amending and restating in their entirety Items 10, 11, 12, 13 and 14 of Part
III of the Report. In addition, in connection with the filing of this Amendment and pursuant to
Rules 12b-15 and 13a-14 under the Securities and Exchange Act of 1934, as amended, we are including
with this Amendment certain currently dated certifications. Except as described above, no other
amendments are being made to the Report. This Form 10-K/A does not reflect events occurring after
the March 31, 2005 filing of our Report, modify or update the disclosure contained in the Report in
any way other than as required to reflect the amendments discussed above and reflected below. 2




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VIALTA, INC. TABLE OF CONTENTS PagePART IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    4Item 11.
    
    Executive Compensation
    
    
    7Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
    
    
    12Item 13.
    
    Certain Relationships and Related Transactions
    
    
    14Item 14.
    
    Principal Accountant Fees and Services
    
    
    15PART IVItem 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    16Signature
    
    
    
    
    17EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
    3




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PART III 
 Item 10.Directors and Executive Officers of the Registrant DIRECTORS Our current directors were elected at the 2004 annual meeting of shareholders to serve as
directors until the 2005 annual meeting of shareholders, until their respective successors have
been elected and qualified or until such directors earlier resignation or removal. The
information of members of the Board of Directors as of March 31, 2005 is set forth below: DirectorName
    
    Age
    
    Position(s) with Vialta
    
    SinceFred S.L. Chan
    
    
    58
    
    
    Chairman of the Board
    
    
    1999Didier Pietri
    
    
    42
    
    
    Chief Executive Officer and Director
    
    
    2001George M. Cain
    
    
    60
    
    
    Director
    
    
    2003Herbert Chang
    
    
    42
    
    
    Director
    
    
    1999Michael S. Dubester
    
    
    57
    
    
    Director
    
    
    2003Matthew K. Fong
    
    
    51
    
    
    Director
    
    
    1999
 Except as set forth below, each of the directors has been engaged in the principal occupation
set forth next to his name above during the past five years. There are no family relationships
among any of the directors or executive officers of the Company. Fred S. L. Chanhas served as the Companys Chairman of the Board of Directors since the
Companys inception in 1999. He also served as the Companys President from its inception through
April 2001 and as Chief Executive Officer from its inception through August 2001. Prior to joining
the Company, Mr. Chan founded and held various executive positions at ESS Technology, Inc., a
designer, developer and marketer of highly integrated digital system processor chips, since 1986,
as well as being Chairman of the Board, in which capacity he still serves. Didier Pietrihas been a member of Vialtas board of directors since September 2001. Mr.
Pietri joined the Company in April 2001 as its President and in August 2001 also became its Chief
Executive Officer. Mr. Pietri relinquished the title of President in June 2004. Prior to joining
Vialta, Mr. Pietri served as President and Chief Executive Officer of TVA/Motion International, a
global entertainment production and distribution company from August 1999 to March 2001. From June
1995 to July 1999, Mr. Pietri was Senior Vice President of the ABC Television Network Group, as
well as President of ABC Pictures, a division of The Walt Disney Company. George M. Cainhas been a member of Vialtas board of directors since February 2003. Mr. Cain
is the founder and President of C3 Media & Marketing Group, LLC, a media marketing consulting
company. He has held that position since 1996. Mr. Cain is also the founder and CEO of Strategic
Media & Marketing Group, LLC, a marketing and sales company which has assisted a German enterprise
software company with the introduction of its products in North America. He has held that position
since 2001. Herbert Changhas been a member of Vialtas board of directors since November 1999. Mr. Chang
is the President of InveStar Capital, Inc., a venture capital firm. He has held that position since
August 1996. In addition, Mr. Chang is the managing member of Forefront Associates, LLC, which is
the general partner of Forefront Venture Partners, L.P., a position he has held since February
1998. Mr. Chang currently serves as a director of Marvell Technology Group Ltd. and Oplink
Communications, Inc. Michael S. Dubesterhas been a member of Vialtas board of directors since February 2003. Mr.
Dubester is the Senior Vice President of Business Development of Vulcan Sports Media, Inc., a U.S.
sports media company whose principal business is The Sporting News. He has held that position since
2000. Prior to that, Mr. Dubester served as the President of Times Mirror Interzines, the online
network of Internet sites affiliated with Times Mirror Magazine titles, the previous owner of The
Sporting News, from 1998 until 2000. He was the founder and President of The Sporting News Online,
from 1996 until 1998. Matthew K. Fonghas been a member of Vialtas board of directors since April 1999. Mr. Fong
was employed by the Company from September 2001 through January 31, 2003, as an Advisor to the
Chairman of the Board. In addition, since February 1999, Mr. Fong has been an attorney with the law firm of Sheppard, Mullin, Richter & Hampton,
LLP and the Chief Executive Officer of Strategic Advisory Group, a financial and high technology
consulting group that he founded. Prior to that, Mr. Fong served as California State Treasurer from
January 1995 to January 1999. 4




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Board of Directors Meetings and Committees The Board of Directors met four times during fiscal year 2004. The Board of Directors, during
2004, had an Audit Committee and a Compensation Committee, but did not have a Nominating Committee
or any other standing committees. Nominations to the Board of Directors are handled as discussed
below. With the exception of Herbert Chang, each incumbent director attended at least 75% of the
meetings of the Board and meetings of the Committees of the Board on which he served during the
fiscal year 2004. The Company invites Board members to attend annual meetings of the stockholders.
Didier Pietri attended the last annual meeting of stockholders. Audit Committee. The Audit Committee is currently comprised of three members: Matthew Fong
(Chairman), Michael Dubester and Herbert Chang. Mr. Dubester was elected to the Audit Committee on
May 1, 2003. Mr. Chang was elected to the Audit Committee on April 23, 2002. Currently, Mr. Chang
and Mr. Dubester are both independent as defined by the listing standard of NASDAQ as now in
effect. Prior to January 31, 2003, Mr. Fong was employed by the Company as the Advisor to the
Chairman so is not independent under such standard. During 2003, the Board did not designate any
member as a financial expert within the meaning of applicable regulatory standards, but believes
that each member has the appropriate experience and ability to perform their duties as Audit
Committee members. The Audit Committee pre-approves the performance of audit and non-audit services by the
Companys accountants and reviews the Companys internal control systems, financial reporting
procedures, the general scope of the Companys annual audit, the fees charged by the independent
accountants, and the fairness of any proposed transaction between any officer, director or other
affiliate of the Company and the Company. With respect to the foregoing, the Audit Committee makes
recommendations to the full Board and performs such further functions as may be required or
delegated to the Committee by the Board of Directors. The Board of Directors has adopted a written
charter for the Audit Committee, a copy of which is attached to the Proxy Statement filed by the
Company on April 30, 2002. During fiscal year 2004, the Audit Committee of the Board held four
meetings independent of the entire Board of Directors. Compensation Committee. The Compensation Committee is comprised of three members: Matthew
Fong (Chairman), George Cain and Michael Dubester. The Compensation Committee reviews and approves
compensation and benefits for the Companys key executive officers, administers the Companys stock
purchase and equity incentive plans and makes recommendations to the Board of Directors regarding
such matters. During fiscal year 2004, the Compensation Committee held two meetings independent of
the entire Board of Directors. Nominations. The Company does not have a nominating committee. In light of the relatively
small size of the Board of Directors, the Company does not believe that a separate nominating
committee is currently necessary. In the interim, all current directors will take part, as
necessary, in selecting any required nominees. The Board currently considers candidates for Board
membership suggested by its members. A stockholder who wishes to recommend a prospective nominee
for the Board should notify the Companys Corporate Secretary in writing with whatever supporting
material the stockholder considers appropriate. The Board will also consider whether to nominate
any person nominated by a stockholder pursuant to the provisions of the Companys bylaws relating
to stockholder nominations. EXECUTIVE OFFICERS Our current Executive Officers are Fred S.L. Chan, Didier Pietri, Yin-Wu Chen and William
Scharninghausen. Information about Mr. Chen and Mr. Scharninghausen is set forth below.
Information about Messrs. Chan and Pietri is set forth above in Directors. William M. Scharninghausen, 48, has been Chief Financial Officer of the Company since October
2002. Prior to joining Vialta, he was the Chief Financial Officer of Diva Systems, Inc., a video
on demand technology company, from January 1999 to September 2002. He also served as the Senior
Vice President of Finance and Administration of Diva Systems, Inc. from June 1997 to September
2002. As part of Gemstar-TV Guide International, Inc.s proposed purchase of Divas assets, Diva
filed a Chapter 11 bankruptcy petition and pre-negotiated plan of reorganization on May 29, 2002 in
the Northern District of California. 5




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Yin-Wu Chen, 46, has been President of the Company since June 2004. He joined Vialta, Inc. in
2001 as Vice President of Engineering. Prior to Vialta, Inc., he was cofounder, president, and
chief executive officer of PROTON Communications, a Taiwan-based company, developing videophones,
network computers, CCD cameras, CCTV monitors, and digital recorders. He also served as executive
vice president of the parent company, PROTON Electronic Industrial, a brand-name manufacturer of
consumer electronics, and was responsible for the overall operations of the 650-person company with
production and sales channels in Taiwan and overseas. Earlier in his career, Chen was with AT&T
Bell Laboratories in New Jersey and worked on various networking projects. Chen received a Ph.D. in
Electrical Engineering from the University of Pennsylvania with a dissertation on radar signal
processing using a non-linear spectral estimation algorithm. He also has an M.S.E.E. from the
University of Pittsburgh and a B.S.E.E. from National Taiwan University. Section 16(a) Beneficial Ownership Reporting Compliance Section 16 of the Securities Exchange Act of 1934, as amended, requires the Companys
directors and officers, and persons who own more than 10% of the Companys Common Stock to file
initial reports of ownership and reports of changes in ownership. Such persons are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms that they file. Based
solely on its review of the copies of such forms furnished to the Company and written
representations from the executive officers and directors, the Company believes that all
transactions required to be reported pursuant to Section 16(a) for the year ended December 31, 2004
were reported on a timely basis. Code of Ethics Vialta has not adopted a Code of Ethics that applies to its principal executive officer,
principal financial officer and principal accounting officer. In view of Vialtas small size and
the limited number of personnel who are responsible for its operations, the Company has determined
that a formal code of ethics is not currently necessary. Our Board of Directors will, however,
revisit this issue in the future to determine if adoption of a code of ethics is appropriate. In
the meantime, our management has adopted an insider trading policy and is committed to promoting
honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with
applicable governmental laws and regulations. 6




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Item 11.Executive Compensation EXECUTIVE COMPENSATION The following table sets forth the compensation earned by the Named Executive Officers: (1)
the Companys Chief Executive Officer and (2) the Companys four other most highly compensated
executive officers for the fiscal year 2004. Summary Compensation Table Long-TermCompensationAnnual Compensation
    
    
    AwardsOther Annual
    
    
    Securities
    
    
    All OtherFiscal
    
    
    
    
    
    
    
    
    
    
    Compen-
    
    
    Underlying
    
    
    Compen-Name and Principal Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    sation (1)
    
    
    Options
    
    
    sation (2)Fred S.L. Chan (3)
    
    
    2004
    
    
    $
    248,000
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    200Chairman of the Board
    
    
    2003
    
    
    
    252,762
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    175of Directors
    
    
    2002
    
    
    
    248,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9502001
    
    
    
    248,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    966Didier Pietri (4)
    
    
    2004
    
    
    $
    300,000
    
    
    $
    56,250
    (7)
    
    
    
    
    
    
    
    
    
    $
    200Chief Executive Officer
    
    
    2003
    
    
    
    310,663
    
    
    
    150,000
    
    
    
    
    
    
    
    2,000,000
    
    
    
    1752002
    
    
    
    300,000
    
    
    
    175,000
    (5)
    
    
    
    
    
    
    
    
    
    
    9502001
    
    
    
    188,636
    
    
    
    
    
    
    
    
    
    
    
    2,000,000
    
    
    
    252William M. Scharninghausen (6)
    
    
    2004
    
    
    $
    185,436
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    200Chief Financial Officer
    
    
    2003
    
    
    
    183,729
    
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    1752002
    
    
    
    28,038
    
    
    
    
    
    
    
    
    
    
    
    250,000
    
    
    
    862001
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Yin-Wu Chen (8)
    
    
    2004
    
    
    $
    174,500
    
    
    $
    
    
    
    
    
    
    
    
    200,000
    
    
    $
    200President
    
    
    2003
    
    
    
    170,667
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    1752002
    
    
    
    160,000
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    9502001
    
    
    
    36,410
    
    
    
    
    
    
    
    
    
    
    
    200,000
    
    
    
    252
   (1)
    In accordance with SEC rules, perquisites and personal benefits have been omitted because
such benefits, if any, did not exceed the reporting thresholds under SEC rules.  (2)
    Includes dollar value of premiums paid by the Company under the Companys long term
disability policy on behalf of the Named Executive Officers.  (3)
    Mr. Chan was President of the Company from its inception through April 2001 and was its Chief
Executive Officer from its inception through August 28, 2001.  (4)
    Mr. Pietri joined the Company as President on April 30, 2001 and became Chief Executive
Officer on August 29, 2001. (5) Includes $75,000 earned in 2002 that was deferred, at Mr. Pietris election, to 2003. (6) Mr. Scharninghausen joined the Company as Chief Financial Officer on October 16, 2002. (7) A discretionary bonus of $56,250 was paid in May 2004. (8) Mr. Chen joined the Company as Vice President of Engineering in 2001 and was promoted to
President in June 2004. 7




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OPTION GRANTS IN LAST FISCAL YEAR Individual Grants
    
    
    
    
    
    
    
    
    
    
    Potential RealizableNumber of
    
    
    Percent of
    
    
    
    
    
    
    
    
    
    
    Value at AssumedSecurities
    
    
    Total Options
    
    
    
    
    
    
    
    
    
    
    Annual Rates of StockUnderlying
    
    
    Granted to
    
    
    
    
    
    
    
    
    
    
    Price Appreciation forOptions
    
    
    Employees in
    
    
    Exercise
    
    
    Expiration
    
    
    Option TermName
    
    Granted
    
    
    Fiscal Year
    
    
    Price
    
    
    Date
    
    
    5%
    
    
    10%Fred S. L. Chan
    
    
    
    
    
    
    0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Didier Pietri
    
    
    
    
    
    
    0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    William M.
Scharninghausen
    
    
    
    
    
    
    0
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Yin-Wu Chen(1)
    
    
    200,000
    
    
    
    96
    %
    
    
    0.37
    
    
    
    6/16/14
    
    
    $
    133,940
    
    
    $
    170,200
   (1)
    Options vest at a rate of 25% on each of the one and two year anniversary of grant and 1/48
on each one-month anniversary thereafter. AGGREGATE OPTIONS EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END VALUES
 The following table sets forth certain information concerning the exercise of options by each
of the Named Executive Officers during fiscal year 2004, including the aggregate amount of gains on
the date of exercise. In addition, the table includes the number of shares covered by both
exercisable and unexercisable stock options as of December 31, 2004. Number of Securities
    
    
    Value of UnexercisedUnderlying Unexercised
    
    
    In-The-MoneyShares
    
    
    
    
    
    
    Options at Fiscal
    
    
    Options atAcquired on
    
    
    Value
    
    
    Year End
    
    
    Fiscal Year-End (1)Name
    
    Exercise
    
    
    Realized
    
    
    Exercisable
    
    
    Unexercisable
    
    
    Exercisable
    
    
    UnexercisableFred S. L. Chan
    
    
    0
    
    
    $
    0
    
    
    
    2,148,510
    
    
    
    246,250
    
    
    $
    252,673
    
    
    $
    54,175Didier Pietri
    
    
    0
    
    
    $
    0
    
    
    
    3,041,667
    
    
    
    958,333
    
    
    
    
    
    
    
    William M.
Scharninghausen
    
    
    0
    
    
    $
    0
    
    
    
    139,167
    
    
    
    125,833
    
    
    
    
    
    
    
    Yin-Wu Chen
    
    
    0
    
    
    $
    0
    
    
    
    179,583
    
    
    
    260,417
    
    
    
    
    
    
    
    
    COMPENSATION OF DIRECTORS During 2004, non-employee directors of the Company received cash compensation for their
services, along with reimbursement for their reasonable expenses in attending meetings of the Board
of Directors or any meetings of a Committee of the Board of Directors. Commencing with the first
quarter of 2004, each non-employee director received the following fees:  o
    $2,000 for each Board meeting attended in person; 8




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o
    $1,000 for each Board meeting attended by telephone;o
    $8,000 per year for service on the Audit Committee or $12,000 per year for
service as the Chairman of the Audit Committee, in each case payable in four quarterly
installments; ando
    an annual stock grant of 20,000 shares under our 2000 Directors Stock Option
Plan, as amended on April 30, 2003. Prior to its amendment, the 2000 Directors Stock
Option Plan provided for an initial grant of 32,000 shares and subsequent grants of
8,000 shares each year for services as a director. All options are granted at an
exercise price equal to the fair market value of a share of Common Stock on the date of
grant and vest in four equal annual installments, starting on the first anniversary of
the date of grant. For a more detailed description of the Directors Plan, including the
amendment, see Exhibit 10.2 of the Companys 2003 Form 10-K for the 2003 fiscal year
filed with the SEC. Mr. Fong, as a non-employee director, received $22,000 for Board and committee meetings
attended in 2004. Mr. Cain received $14,000; Mr. Chang received $2,000, and Mr. Dubester received
$18,000 for Board and committee meetings attended in 2004. Directors who are employees of the Company do not receive additional compensation for their
services as directors. During fiscal 2004, Mr. Chan and Mr. Pietri were the only employees who
served as directors. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 Fred Chan, who is the Chairman of the Company, participated in deliberations of the Companys
Board of Directors concerning executive officer compensation. Vialta employs Fred S.L. Chans brother as its Senior Director of IT. The salary and benefits
provided to this individual for fiscal 2004 was $107,759. No Compensation committee interlocks existed during 2004. REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION General The Committee acts on behalf of the Board to examine and implement the general compensation
policy of the Company for all executive officers and such other employees of the Company as the
Board of Directors may deem appropriate. The Committee reviews the general compensation policy
applicable to the Chief Executive Officer (CEO) and other executive officers on an annual basis.
The Committee administers the Companys incentive and equity plans, including the 1999 Stock
Incentive Plan, the 2000 Directors Stock Option Plan and the 2001 Nonstatutory Stock Option Plan. The Companys policy in compensating its executive officers is intended to attract, motivate
and retain these executives. Consistent with this policy, key executives are eligible to receive,
in addition to their base salaries, stock option grants under the 1999 Stock Incentive Plan in
amounts determined by the Board of Directors based on recommendations by the Compensation
Committee. Stock options have value for these executives only if the price of the Companys stock
increases above the fair market value on the grant date and the executive remains in the Companys
employ for the period required for the shares to vest. Additional incentive compensation is also
considered by the Committee based on individual performance and the achievement of short term
goals. The base salary, incentive compensation and stock option grants of the executive officers are
determined in part by the Committee reviewing data on prevailing compensation practices in
technology companies with whom the Company competes for executive talent and by their evaluating
such information in connection with the Companys corporate goals. To this end, the Committee
attempts to compare the compensation of the Companys CEO and other executive officers with the
compensation practices of comparable companies to determine base salary, target bonuses and target
total cash compensation. 9




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Compensation of Executive Officers During the fiscal year that ended on December 31, 2004, the Companys executive compensation
program was comprised of the following key components: base salary, annual bonus, and equity-based
incentives. Base Salary. The Company sets the base salaries of its executives at levels believed to be
consistent with comparably sized companies engaged in similar industries. Equity-Based Incentive Compensation. Stock options are an important component of the total
compensation of executives. The Company believes that stock options align the interests of each
executive with those of the stockholders. They also provide executives a significant, long-term
interest in the Companys success and help retain key executives in a competitive market for
executive talent. The Companys 1999 Equity Incentive Plan authorizes the Committee to grant stock
options to executives. The number of shares owned by, or subject to options held by, each executive
officer is periodically reviewed and additional awards are considered based upon past performance
of the executive and the relative holdings of other executives in the Company. The option grants
generally utilize four-year vesting periods to encourage executives to continue contributing to the
Company, and they expire not later than ten years from the date of grant. Compensation of the Chief Executive Officer The Companys CEOs compensation plans include the same elements and performance measures as
the plans of the Companys other executive officers. The Compensation Committee evaluates the
performance of the Companys CEO, sets his base compensation and determines bonuses and awards
stock or option grants, if any. In May 2003 the Compensation Committee approved continuing Mr.
Pietris basic compensation at the rate he has been paid since joining the Company in April of
2001. In addition, the Compensation Committee voted to provide a guaranteed bonus of $75,000,
which was paid in November 2003. A discretionary bonus of $75,000 was paid at 75% amounting to
$56,250 in May 2004. A discretionary bonus of $50,000 was paid in January 2005. The Compensation
Committee also approved a stock option grant to Mr. Pietri of 2,000,000 shares of common stock to
vest 25% immediately, 25% on the first anniversary of the grant and 21/2% each month thereafter. In
determining the terms of his agreement, the Compensation Committee considered a number of factors
and criteria including, Mr. Pietris depth of experience, his past accomplishments with other
companies, his vision and leadership abilities, and the future needs of the Company. In making
its compensation decisions with Mr. Pietri, the Compensation Committee also considered the need to
provide continuity of leadership. The Compensation Committee exercised its discretion and judgment
based on the above factors, and no specific formula was applied to determine the weight of any
factor. Deductibility of Executive Compensation The Compensation Committee has considered the impact of Section 162(m) of the Code, which
disallows a deduction for any publicly held corporation for individual compensation exceeding $1
million in any taxable year for the CEO and four other most highly compensated executive officers,
unless such compensation meets the requirements for the performance-based exception to the
general rule. Since the cash compensation paid by the Company to each of its executive officers is
expected to be below $1 million, the Compensation Committee believes that this section will not
affect the tax deductions available to the Company. It will be the Compensation Committees policy
to qualify, to the extent reasonable, the executive officers compensation for deductibility under
applicable tax law. COMPENSATION COMMITTEE Matt Fong (Chairman)
George Cain
Michael Dubester EMPLOYMENT AGREEMENTS Didier Pietri originally entered into an employment letter agreement on April 2001, with the
Company pursuant to which he was entitled to receive an annual salary of $300,000. In addition to
basic compensation, Mr. Pietri was entitled to participation in employee benefit plans, stock
option grants and a guaranteed bonus of $100,000 after one year of service. Mr. Pietri was also
awarded 10




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an additional $150,000 bonus, which was paid in 2003. In April 2002, the Compensation
Committee approved continuing Mr. Pietris basic compensation at the previous rate, but the
guaranteed bonus for his second year of service was reduced to $75,000, and a discretionary bonus
of $75,000 was added. Any discretionary bonus must be paid before the expiration of the agreement.
In May, 2003, the Compensation Committee again approved continuing Mr. Pietris base salary and
retaining his guaranteed and discretionary bonuses. In addition, the compensation committee
approved a stock option grant to Mr. Pietri of 2,000,000 shares of common stock to vest 25%
immediately, 25% on the first anniversary of the grant and 21/2% each month thereafter. 11




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##### Table of Contents



The following description data are supplied in accordance with Rule 304(d) of Regulation S-T: Dow JonesNASDAQ
    
    ConsumerVialta, Inc.
    
    Composite
    
    Electronics IndexDate
    
    Investment Value
    
    Investment Value
    
    Investment Value8/23/01
    
    $
    100.00
    
    
    $
    100.00
    
    
    $
    100.0012/31/01
    
    $
    263.83
    
    
    $
    81.94
    
    
    $
    112.0512/31/02
    
    $
    64.89
    
    
    $
    75.35
    
    
    $
    138.8912/31/03
    
    $
    114.89
    
    
    $
    106.18
    
    
    $
    345.8212/31/04
    
    $
    50.00
    
    
    $
    83.53
    
    
    $
    601.47
 
 Item 12.Security Ownership of Certain Beneficial Owners and Management Equity Compensation Plan Information The following table summarizes information with respect to options under our equity
compensation plans at December 31, 2004: Number of
    
    
    Weighted Average
    
    
    Number of SecuritiesSecurities to be
    
    
    Exercise Price of
    
    
    Remaining Available forIssued Upon Exercise
    
    
    Outstanding
    
    
    Future Issuance Underof Outstanding
    
    
    Options,
    
    
    Equity CompensationOptions, Warrants
    
    
    Warrants
    
    
    Plans (Excluding Securitiesand Rights
    
    
    and Rights
    
    
    Reflected in Column (a))(a)
    
    
    (b)
    
    
    (c)Equity
compensation plans
approved by
security holders
    
    
    11,609,938
    
    
    $
    0.31
    
    
    
    4,742,955Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    11,609,938
    
    
    $
    0.31
    
    
    
    4,742,955
 Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information, as of March 31, 2004, known to the Company
regarding the beneficial ownership of the Companys Common Stock by (i) each person known by the
Company to be the beneficial owner of more than 5% of the Companys Common Stock, (ii) each of the
Companys directors, (iii) each executive officer named in the Summary Compensation Table below
(the Named Executive Officers) and (iv) all directors and executive officers as a group. Unless
otherwise indicated in the footnotes hereto, each director and executive officer has (or could have
upon exercise of an option vested or vesting within 60 days of March 31, 2004) sole vesting and
investment power, subject to community property laws where applicable. 12




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##### Table of Contents



Common StockBeneficially OwnedName and Address of Beneficial Owners (1)
    
    Number
    
    
    PercentState of Wisconsin Investment Board (2)
    
    
    7,867,600
    
    
    
    9
    %P.O. Box 7842, Madison, WI 53707Victory Acquisition Corp. (3)
    
    
    32,039,840
    
    
    
    39
    %19770 Stevens Creek Blvd., Cupertino, CA 95014Fred S.L. Chan (4)
    
    
    33,658,420
    
    
    
    40
    %Didier Pietri (5)
    
    
    3,496,936
    
    
    
    4
    %George M. Cain (6)
    
    
    15,000
    
    
    
    *Herbert Chang (7)
    
    
    49,666
    
    
    
    *Matthew K. Fong (8)
    
    
    95,974
    
    
    
    *Michael S. Dubester (9)
    
    
    15,000
    
    
    
    *William Scharninghausen (10)
    
    
    165,208
    
    
    
    *Yin-Wu Chen (11)
    
    
    180,000
    
    
    
    *All executive officers and directors as a group (8 persons)
    
    
    37,676,204
    
    
    
    43
    %
   *
    
    Less than 1% of the outstanding shares of the Companys Common Stock.  (1)
    Unless otherwise indicated, the address for each beneficial owner is c/o Vialta, Inc., 48461
Fremont Boulevard, Fremont, CA 94538.  (2)
    Based on a filing with the Securities Exchange Commission on February 15, 2005 indicating
beneficial ownership as of December 31, 2004.  (3)
    Victory acquired its shares from certain participating stockholders pursuant to the terms of
a contribution agreement between Victory and certain participating stockholders in connection
with the proposed acquisition of the Company by Victory. As a result, each of the participating
stockholders is deemed to beneficially own the shares of Victory set forth above.  (4)
    Includes all shares held by Victory Acquisition Corp., an entity controlled by Mr. Chan, and
1,618,580 shares which Mr. Chan has the right to acquire on or within 60 days of March 31,
2005 through the exercise of options.  (5)
    Includes 3,437,500 shares which Mr. Pietri has the right to acquire on or within 60 days of
March 31, 2005 through the exercise of options.  (6)
    Includes 15,000 shares which Mr. Cain has the right to acquire on or within 60 days of March
31, 2005 through the exercise of options.  (7)
    Includes 49,666 shares which Mr. Chang has the right to acquire on or within 60 days of March
31, 2005 through the exercise of options.  (8)
    Includes 15,000 shares which Mr. Fong has the right to acquire on or within 60 days of March
31, 2005 through the exercise of options.  (9)
    Includes 15,000 shares which Mr. Dubester has the right to acquire on or within 60 days of
March 31, 2005 through the exercise of options.  (10)
    Includes 165,208 shares which Mr. Scharninghausen has the right to acquire on or within 60
days of March 31, 2005 through the exercise of options.  (11)
    Includes 180,000 shares which Mr.Chen has the right to acquire on or within 60 days of March
31, 2005 through the exercise of options 13




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##### Table of Contents



Item 13:Certain Relationships and Related Transactions Vialta employs Fred S.L. Chans brother as its Senior Director of IT. The salary and benefits
provided to this individual for fiscal 2004 was $107,759. Mr. Chan is Chairman of the Board of ESS Technology, Inc., and owns approximately 14.1% of the
outstanding common stock of ESS. Prior to its spin-off in August 2001, Vialta was a subsidiary of
ESS. Vialta leases its corporate headquarters and purchases component parts from ESS. The
companies are also parties to an Administrative and Management Services Agreement. During 2004,
Vialta made payments to ESS of $377,000 under the lease, $782,000 for component parts and $12,000
for administrative and management services. 14




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##### Table of Contents



Item 14.Principal Accountant Fees and Services Fees Paid to PricewaterhouseCoopers LLP The following table lists the aggregate fees paid for professional services by
PricewaterhouseCoopers LLP for all Audit Fees, Audit-Related Fees, Tax Fees, and All Other
Fees for the last two fiscal years. Fiscal 2004
    
    
    Fiscal 2003Audit Fees
    
    $
    229,540
    
    
    $
    208,000Audit Related Fees
    
    
    0
    
    
    
    0Tax Fees
    
    
    62,800
    
    
    
    40,900All Other Fees
    
    
    0
    
    
    
    0$
    292,340
    
    
    $
    248,900
 The Audit fees for the years ended December 31, 2004 and 2003, respectively, were for services
rendered for the audit of the Companys annual financial statements for the fiscal years 2004 and
2003, and for reviews of the financial statements included in the Companys quarterly reports on
Form 10-Q for the first three quarters of the fiscal years 2004 and 2003. Tax fees for the years
ended December 31, 2004 and 2003, respectively, were for tax compliance, tax advice and tax
preparation. Policy of Audit Committee with respect to Independent Auditors The Audit Committee of the Board pre-approved all non-audit services provided by
PricewaterhouseCoopers LLP and concluded, based on information provided by PricewaterhouseCoopers
LLP, that providing such services is compatible with maintaining PricewaterhouseCoopers LLPs
independence. The Companys management has the primary responsibility for the integrity of the Companys
financial information. The Companys independent accountants are responsible for conducting
independent audits of the Companys financial statements in accordance with generally accepted
auditing standards and expressing an opinion on the financial statements based on those audits.
The Audit Committee nominates the independent accountants for approval by the Board and is
responsible for overseeing the conduct of the above activities by management and such accountants. As part of its responsibility, the Audit Committee has met with the Companys independent
accountants to review and discuss the adequacy of the Companys internal control system, financial
reporting procedures and other matters required to be discussed by the Statement of Auditor
Standards 61 such as the independent accountants judgments as to the quality of the financial
statements, changes in the accounting policies and sensitive accounting estimates. The Audit
Committee has reviewed and discussed the audited financial statements with management and the
Companys independent accountants. The Audit Committee preapproved the general scope of the
Companys annual audit and performance of non-audit services by the Companys accountants and
reviewed the fees charged by the independent accountants. The Audit Committee has received the
written disclosures and the letter from the independent accountants required by Independent
Standards Board Standard No. 1 and has discussed with the independent accountants that firms
independence. 15




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PART IV 
 Item 15.Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a)(3) Exhibits The exhibit index below lists the exhibits that are filed as a part of this amendment ExhibitNumber
    
    Exhibit Title31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 16




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##### Table of Contents



SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized VIALTA, INC.
(Registrant)By: /s/ Didier PietriDidier Pietri
Chief Executive Officer
 Dated:
May 2, 2005 17




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INDEX TO EXHIBITS ExhibitNumber
    
    Exhibit Title31.1
    
    Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Chief Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.