0000898430-95-001602.txt : 19950815
0000898430-95-001602.hdr.sgml : 19950815
ACCESSION NUMBER: 0000898430-95-001602
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950814
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MICROPOLIS CORP
CENTRAL INDEX KEY: 0000718865
STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572]
IRS NUMBER: 953093858
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-12046
FILM NUMBER: 95563693
BUSINESS ADDRESS:
STREET 1: 21211 NORDHOFF ST
CITY: CHATSWORTH
STATE: CA
ZIP: 91311
BUSINESS PHONE: 8187093300
MAIL ADDRESS:
STREET 1: 21211 NORDHOFF STREET
CITY: CHATSWORTH
STATE: CA
ZIP: 91311
10-Q
1
FORM 10-Q DATED 6-30-95
FORM 10-Q
---------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
________________________________________
(Mark One)
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1995
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: 0-12046
MICROPOLIS CORPORATION
--------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 95-3093858
--------------------------------------------- ----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21211 Nordhoff Street, Chatsworth, California 91311
--------------------------------------------- ----------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (818) 709-3300
Not Applicable
------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether 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 twelve months or for such shorter period that the
Registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
August 4, 1995: 15,546,879 shares of Common Stock, $1.00 Par Value
-------------------------------------------------------------------
MICROPOLIS CORPORATION
----------------------
TABLE OF CONTENTS
-----------------
Page Number
-----------
PART 1. FINANCIAL INFORMATION
Item 1 Financial Statements:
Condensed Consolidated Balance Sheets at 2
June 30, 1995 and December 30, 1994
Condensed Consolidated Statements of 3
Operations for the Three Months and
Six Months ended June 30, 1995 and
July 1, 1994
Condensed Consolidated Statements of 4
Cash Flows for the Six Months Ended
June 30, 1995 and July 1, 1994
Notes to Condensed Consolidated 5
Financial Statements
Item 2 Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 4 Submission of Matters to a Vote of 9
Security Holders
Item 6 Exhibit and Reports on Form 8-K 9
-1-
PART 1 - FINANCIAL INFORMATION
------------------------------
MICROPOLIS CORPORATION
----------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In thousands, except share amounts)
June 30, December 30,
1995 1994
-------- ------------
(Unaudited)
ASSETS
------
Current assets:
Cash, cash equivalents and
short-term investments $ 42,001 $ 63,216
Accounts receivable, net 42,204 61,724
Inventories 48,869 56,746
Other current assets 2,963 6,405
-------- --------
Total current assets 136,037 188,091
Property, plant and equipment, at cost, less
accumulated depreciation and amortization 46,784 44,252
Other assets 1,917 1,572
-------- --------
$184,738 $233,915
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 33,923 $ 46,388
Other accrued liabilities 20,951 20,681
-------- --------
Total current liabilities 54,874 67,069
Term Loan Facility 3,463 -
6% Convertible Subordinated Debentures 75,000 75,000
Deferred income taxes 1,621 2,216
Shareholders' equity:
Preferred stock, $1.00 par value, 2,000,000
shares authorized, none issued - -
Common stock, $1.00 par value, 50,000,000
shares authorized; 15,541,879 shares issued
and outstanding (15,266,440 in 1994) 15,542 15,266
Additional paid-in capital 110,168 108,863
Accumulated deficit (75,930) (34,499)
-------- --------
Total shareholders' equity 49,780 89,630
-------- --------
$184,738 $233,915
======== ========
See accompanying notes.
-2-
MICROPOLIS CORPORATION
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
---------------------------- -------------------------
June 30, July 1, June 30, July 1,
1995 1994 1995 1994
------------ ------------- ------------ ----------
Net sales $70,076 $ 75,761 $110,975 $159,419
Cost of sales 54,707 68,516 104,475 139,878
------- -------- -------- --------
Gross profit 15,369 7,245 6,500 19,541
------- -------- -------- --------
Operating expenses:
Research and development 10,352 10,577 23,779 20,878
Selling, general and
administrative 10,270 10,691 23,441 21,675
------- -------- -------- --------
Total operating expenses 20,622 21,268 47,220 42,553
------- -------- -------- --------
Loss from operations (5,253) (14,023) (40,720) (23,012)
Interest expense (1,489) (1,256) (2,822) (2,539)
Interest income 419 486 966 998
------- -------- -------- --------
Loss before income taxes (6,323) (14,793) (42,576) (24,553)
Provision (credit) for
income taxes 21 - (1,145) -
------- -------- -------- --------
Net loss $(6,344) $(14,793) $(41,431) $(24,553)
======= ======== ======== ========
Loss per share $(.41) $(.99) $(2.70) $(1.64)
======= ======== ======== ========
Weighted average common and
common equivalent shares
outstanding 15,336 14,949 15,324 14,929
======= ======== ======== ========
See accompanying notes.
-3-
MICROPOLIS CORPORATION
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(In thousands)
Six Months Ended
-------------------------
June 30, July 1,
1995 1994
----------- -----------
(Unaudited)
Cash flows from operating activities:
Net loss $(41,431) $(24,553)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 10,679 11,911
(Gain) loss on disposal of fixed assets (23) 3
Deferred income taxes (595) -
Increase (decrease) from changes in:
Accounts receivable 19,520 (2,324)
Inventories 7,877 20,674
Other current assets 3,442 (69)
Other assets (382) 212
Accounts payable and other
accrued liabilities (12,193) (10,331)
-------- --------
Net cash used in operating activities (13,106) (4,477)
Cash flows from investing activities:
Net change in short-term investments 11,642 1,033
Proceeds from sale of equipment 23 83
Additions to property, plant and equipment (13,175) (9,005)
-------- --------
Net cash used in investing activities (1,510) (7,889)
Cash flows from financing activities:
Payment on capital lease obligation - (231)
Increase in Term Loan Facility 3,463 -
Proceeds from sale of common stock, net 1,580 1,489
-------- --------
Net cash provided by financing activities 5,043 1,258
Net decrease in cash and equivalents (9,573) (11,108)
Cash and equivalents at beginning of period 37,720 49,100
-------- --------
Cash and equivalents at end of period 28,147 37,992
Short-term investments 13,854 36,649
-------- --------
Total cash, cash equivalents and short-term investments $ 42,001 $ 74,641
======== ========
Supplemental cash flow information
Interest payments $ 2,785 $ 2,504
Tax payments (recoveries) $ (499) $ 2,966
See accompanying notes.
-4-
MICROPOLIS CORPORATION
----------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
JUNE 30, 1995
-------------
(Unaudited)
NOTE 1. General
-----------------
The accompanying condensed consolidated financial statements have not been
audited by independent auditors but, in the opinion of the Company, such
unaudited statements include all adjustments, consisting of normal recurring
accruals, necessary for a fair presentation of the consolidated financial
position as of June 30, 1995, and the consolidated results of operations for the
three and six month periods ended June 30, 1995 and July 1, 1994 and cash flows
for the six-month periods ended June 30, 1995 and July 1, 1994. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. Nevertheless, the Company believes that the disclosures in
these financial statements are adequate to make the information presented not
misleading. Interim results are not necessarily indicative of the results for
the full fiscal year.
These condensed consolidated financial statements should be read in
conjunction with the Company's consolidated financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 30, 1994 filed with the Securities and Exchange Commission.
NOTE 2. Inventories
--------------------
Inventories are stated at the lower of standard cost, which approximates
first-in, first-out, or market:
June 30, December 30,
1995 1994
-------- ------------
Raw materials and purchased parts $11,055 $ 18,634
Work in process 23,401 20,771
Finished goods 14,413 17,341
------- --------
$48,869 $ 56,746
======= ========
NOTE 3. Per Share Information
------------------------------
Loss per share is computed by dividing net loss by the weighted average
number of shares of common stock and applicable common stock equivalents
outstanding during the period. Primary and fully diluted loss per share are the
same.
-5-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Results of Operations
---------------------
Three Months Ended June 30, 1995 Compared to Three Months Ended July 1, 1994
----------------------------------------------------------------------------
Net sales decreased 7.5% to $70.1 million in the second quarter of 1995 as
compared to $75.8 million in the second quarter of 1994. OEM revenues declined
by 14% in the 1995 quarter as compared to the 1994 quarter and sales made by the
Storage Systems Division decreased by approximately 5%. During the second
quarter of 1995, the Company achieved significantly increased shipments in both
the distribution and OEM channels for its SuperCapacity 2, 4 and 9 gigabyte (GB)
drives as compared to the first quarter of 1995. However, shipments of these
products in the second quarter of 1995 did not exceed shipments of the Company's
3.6 GB 5 1/4-inch and less than 2 GB 3 1/2-inch drives in the second quarter of
1994. Backlog as of June 30, 1995 was $24.3 million as compared to $32.6
million as of March 31, 1995 and $30.7 at July 1, 1994. The decline in backlog
from the previous quarter is the result of reduced order lead times,
particularly for the Company's 2 GB drives, which are now back in volume
production.
Cost of sales as a percent of sales decreased to 78.1% in the second
quarter of 1995 from 90.4% in the second quarter of 1994 resulting in a gross
margin of 21.9% in the 1995 quarter as compared to 9.6% in the 1994 quarter.
The increase in margin during the second quarter of 1995 was a result of a
greater mix of higher margin, higher capacity products.
Research and development expenses increased to 14.8% of sales in the second
quarter of 1995 as compared to 14.0% in the second quarter of 1994. The
percentage increase is the result of lower sales, offset by a decrease in
expense of $225,000. The decrease in expense was a result of lower costs
associated with Tulip Memory Systems, offset by slightly higher research and
development expenses on the Company's high capacity 3 1/2-inch and 5 1/4-inch
drives and subsystem products.
Selling, general and administrative expenses were 14.7% of sales in the
second quarter of 1995 as compared to 14.1% in the second quarter of 1994. The
percentage increase is the result of lower sales, offset by a decrease in
expense of $421,000. The decrease in expense was the result of the Company's
cost containment efforts initiated in March 1995.
Interest expense was $1.5 million in the second quarter of 1995 (2.1% of
sales) as compared to $1.3 million (1.7% of sales) in the second quarter of
1994, as a result of fees associated with the Company's Term Loan Facility.
Interest income was $419,000 as compared to $486,000 in the second quarter of
1994, as a result of lower cash equivalent and short-term investment balances.
As a result of the above, loss before income taxes was $6.3 million in 1995
as compared to $14.8 million in 1994. The Company's income tax provision
benefits from the tax holiday afforded the Company's Singapore operation, which
will remain in effect through August 2004. The effect on net income and
earnings per share of the income tax exemption in Singapore as compared to
income taxes at the maximum statutory rates was approximately $700,000 and $0.04
and $933,000 and $.06 for the second quarters of 1995 and 1994, respectively.
Net loss for 1995 was $6.3 million compared to $14.8 million in 1994.
-6-
Six Months Ended June 30, 1995 Compared to Six Months Ended July 1, 1994
------------------------------------------------------------------------
Net sales decreased 30.4% to $111.0 million in 1995 as compared to $159.4
million in 1994. OEM revenues declined by 26% in 1995 as compared to 1994 and
sales made by Storage Systems Division decreased by approximately 33%. The
decrease in revenues was primarily attributable to sharply lower orders than
anticipated in the distribution channel during the first quarter of 1995 for the
Company's 4 GB 3 1/2-inch and 9 GB 5 1/4-inch drives. In addition, a component
problem, and other technical issues, effectively shut down production of the
Company's 2 GB 3 1/2-inch drive for most of the first quarter of 1995. During
the second quarter of 1995, the Company resumed full production of its 2 GB 3
1/2-inch drives and met the increased demand for these drives and its
SuperCapacity 4 and 9 GB drives. Overall bookings for the first six months of
1995 decreased by 38% from those in 1994 principally due to lower orders during
the first quarter of 1995 for the SuperCapacity 4 and 9 GB drives.
Cost of sales as a percent of sales increased to 94.1% in 1995 from 87.7%
in 1994 resulting in a gross margin of 5.9% as compared to 12.3% in 1994. The
decrease in margin was the result of price erosion in the Company's 3 1/2-inch
and 5 1/4-inch products, operating inefficiencies due to low volume production
of the 2 GB drives, and a provision for materials which were to have been used
in production of the 2 GB drives during the first quarter of 1995.
Research and development expenses increased to 21.4% of sales in 1995 as
compared to 13.1% in 1994. The percentage increase is the result of lower sales
and an increase in spending of $2.9 million. The increase in spending was a
result of costs associated with Tulip Memory Systems and research and
development on the Company's high capacity 3 1/2-inch and 5 1/4-inch drives and
subsystem products.
Selling, general and administrative expenses were 21.1% of sales in 1995 as
compared to 13.6% in 1994. The percentage increase is the result of lower sales
and an increase in expense of $1.8 million. The increase in expense was the
result of increased expenditures for advertising and sales promotion activities
for new products, costs associated with a work force reduction in the U.S. and
Europe completed in March 1995, and the retention of outside assistance to help
the Company in formulating and implementing its recovery plan.
Interest expense was $2.8 million in 1995 (2.5% of sales) as compared to
$2.5 million (1.6% of sales) in the same period a year ago, primarily as a
result of fees associated with the Company's Term Loan Facility. Interest
income was $966,000 as compared to $998,000 in 1994.
As a result of the above, loss before income taxes was $42.6 million in
1995 as compared to $24.6 million in 1994. The Company enjoyed an income tax
benefit of $1.1 million in 1995, primarily representing a refund of certain
foreign income taxes paid in a prior year. The Company's income tax provision
benefits from the tax holiday afforded the Company's Singapore operation, which
will remain in effect through August 2004. The effect on net income and
earnings per share of the income tax exemption in Singapore as compared to
income taxes at the maximum statutory rates was approximately ($800,000) and
($0.05) and $2.0 million and $.13 for the first six months of 1995,
respectively. Net loss for 1995 was $41.4 million compared to a net loss of
$24.6 million in 1994.
-7-
Liquidity and Capital Resources
-------------------------------
Cash, cash equivalents and short-term investments decreased to $42.0
million as of June 30, 1995 from $63.2 million as of December 30, 1994. Net
cash used in operations of $13.1 million is primarily due to the Company's net
loss of $41.4 million and decrease in accounts payable of $12.2 million, offset
by a reduction in accounts receivable of $19.5 million, due principally to
decreased sales in the second quarter of 1995 compared to the fourth quarter of
1994. Accounts payable and other accrued liabilities decreased by $12.2 million
from the fourth quarter of 1994 due to decreased inventory receipts.
The Company's capital expenditures in the first half of 1995 were $13.2
million as compared to $9.0 million in 1994. Capital expenditures related
primarily to the construction of a new manufacturing facility in Singapore to
replace the current leased facility and for equipment and tooling to support new
products. The new facility is expected to be completed in 1996. The Company
has obtained a term loan facility to fund the expenditures associated with the
construction of the building. The Company currently anticipates that its 1995
capital spending will be substantially higher than in 1994 and will be
principally for construction of the new manufacturing facility and for equipment
and tooling required for the Company's new products.
The Company obtained a 2-year extension of its credit facility and reset
the size of the facility to $25 million, down from $33 million. The reduction in
size of the facility is not expected to have an impact on actual availability
under the line over the next twelve months. The availability under the facility
is a function of the level of eligible accounts receivable, warranty reserves
and other factors. Borrowings are secured by substantially all of the Company's
assets. The amount available under the facility as of June 30, 1995 was $8.7
million (of which $1.9 million is reserved for an outstanding standby letter of
credit).
The Company anticipates a further decrease in cash in the third quarter of
1995. Historically the third quarter has been weaker than other quarters of the
fiscal year. This pattern appears to be repeating in 1995. Third quarter
results will depend in significant measure on the level of orders received in
the latter half of the quarter which cannot be predicted with assurance. While
the Company believes it has sufficient liquidity to meet its short term
financial needs, should third quarter revenues prove to be significantly lower
than currently anticipated, the Company may require additional financing. While
the Company currently believes such financing could be obtained from its present
lenders or other sources if needed, there can be no assurance as to the terms on
which it would be available, if at all.
-8-
PART II - OTHER INFORMATION
---------------------------
MICROPOLIS CORPORATION
----------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
a) The Annual Meeting of Stockholders of Micropolis Corporation was
held on April 26, 1995.
b) Matters voted on at the meeting and votes cast on each matter were
as follows:
. The stockholders voted to elect five directors as follows:
Nominee For Withhold
------- --- --------
Stuart P. Mabon 12,748,239 82,614
Ericson M. Dunstan 12,748,239 82,614
Chriss W. Street 12,748,339 82,514
J. Larry Smart 12,747,263 83,590
S. Kenneth Kannappan 12,747,493 83,360
There were no broker non-votes in the election of directors.
. The shareholders approved an amendment to the Stock Option Plan
for Directors of Micropolis Corporation to increase the number of
options automatically granted under this plan.
Broker
For Against Abstain Non-Votes
--- ------- ------- ---------
10,836,324 1,764,044 217,285 13,200
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
--------
10.47* Agreement for Services between Micropolis Corporation and J.
Larry Smart.
* Management contract or compensatory plan or arrangement required
to be filed as an Exhibit to the Form 10-Q Report pursuant to Item
6 (a).
b) Reports on Form 8-K
-------------------
No report on Form 8-K has been filed during the quarter for which
this report is filed.
-9-
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on August 11, 1995.
MICROPOLIS CORPORATION
By s/ J. Larry Smart
--------------------------------------
J. Larry Smart
President and Chief Executive Officer
By s/ Barbara V. Scherer
--------------------------------------
Barbara V. Scherer
Vice President - Finance,
Chief Financial Officer and Treasurer
-10-
EX-10.47
2
SMART AGREEMENT
Exhibit 10.47
Micropolis Corporation
21211 Nordhoff Street
Chatsworth, California 91311
(818) 709-3300 Telex 651486
AGREEMENT FOR SERVICES
This Agreement is made and entered into by and between Micropolis
Corporation (Micropolis), a California corporation, with executive offices at
21211 Nordhoff Street, Chatsworth, California 91311 and J. LARRY SMART
------------------------
(Contractor) of 21245 COMER DRIVE, SARATOGA, CA 95070 (address).
-------------------------------------
1. Micropolis requires and Contractor agrees to render certain services
more particularly described in attachments hereto and incorporated herein by
reference, as well as such other services to which the parties may agree, as
designated in additional exhibits or by reference to this Agreement in purchase
orders or other documents utilized by the parties.
2. All terms and provisions of the Agreement of Confidentiality dated
MAY 31, 1995, between the parties, attached hereto are incorporated herein by
------------
reference and are made a part of the Agreement.
3. All service rendered by Contractor pursuant to this Agreement, any
extension or modification thereof, shall be as an Independent Contractor and not
as an employee of Micropolis. Contractor shall provide Micropolis with a correct
social security number and address to enable proper filing by Micropolis of U.S.
Form 1099 and California Form 599, and agrees to properly report fees received
from Micropolis to all appropriate taxing authorities and to hold Micropolis
harmless from any and all liability for Contractor's failure to do so.
4. Contractor is engaged on a project basis and shall be paid pursuant to
terms agreed upon and reflected in the purchase order for such services. The
Contractor's engagement may be terminated by either party at any time. In such
event, fees payable to the contractor shall be pro-rated and measured by the
portion of the project completed, or pursuant to terms set forth in the purchase
order, whichever method is more specific.
5. All inventions, processes, techniques, designs, computer programs,
improvements, discoveries, or innovations (referred to collectively as
"inventions") developed by the Contractor alone, or in conjunction with others
and whether developed during or after the termination of the Contractor's
engagement with Micropolis, (1) which are reasonably within the scope of any
project for which he was engaged by Micropolis or (2) which are derived directly
or indirectly from information obtained or developed during the engagement or
(3) which result from the use of Micropolis facilities, personnel or materials
shall be the exclusive property of Micropolis, and shall be held and maintained
by the Contractor in the same manner as all "Confidential and Proprietary"
Information in accordance with the requirements of the Agreement of
Confidentially.
6. All inventions described in Paragraph 5 above shall be disclosed to
Micropolis forthwith, and Contractor shall execute such documents and provide
such assistance as Micropolis may reasonably request to cause the assignment of
such invention to Micropolis, and if Micropolis elects, at its expense, to apply
for letters patent, and/or copyright registrations, and protect same against
infringement.
7. Contractor shall, upon completion of a project or termination of
business relations with Micropolis, return all Micropolis property including
notebooks, sketches, drawings, reports, written information or data, models,
prototypes, breadboards and all copies thereof, which relate directly or
indirectly to the projects on which engaged, including documents and writings
developed by the Contractor while working on the project. It is the intent of
the parties that the Contractor provide Micropolis with all records and
materials created at Micropolis' expense, and not retain any such items for
---
future reference, or any other purpose.
8. Contractor may, but is not required to use Micropolis' facilities when
rendering services on a project. Contractor shall determine the means and
manner in which the project shall be accomplished, but shall use best efforts to
meet target dates agreed upon at the commencement of the engagement.
9. Contractor represents and warrants that in the performance of services
for Micropolis will not be engaged in violation or conflict with any valid
agreement, law or regulation.
10. Contractor asserts that he is not now engaged and will not, during the
term of this Agreement, engage in consulting or in any other activity concerning
or respecting any aspect of work to be performed under this Agreement with any
entity who is a competitor of Micropolis or is affiliated with a competitor of
Micropolis.
11. This Agreement, exhibits and such other documents that may be
incorporated by reference herein, constitute the complete and entire agreement
between the parties and supersede any verbal or written terms or understandings
not expressly set forth herein. Any conflict between a provision of this
Agreement and other documents shall be resolved in favor of this Agreement.
12. Should any provision of this Agreement be invalid or unenforceable, the
remaining provisions shall remain in full force and effect.
13. This Agreement may be amended only by written instrument signed by the
----
contractor and an officer of Micropolis.
14. This Agreement is for personal services and is not assignable by the
Contractor.
15. Failure by Micropolis to exercise any right or to require compliance
with any obligation hereunder shall not constitute a waiver by Micropolis to
thereafter exercise such right or enforce such obligation.
16. All obligations of the Contractor hereunder shall survive the
termination of this Agreement and the termination or completion of a given
project.
17. This Agreement shall be governed by California law, and shall be
construed in accordance with the general meaning of the words used and not in
favor of or against either party.
18. IN WITNESS WHEREOF, the parties have set forth their signatures.
MICROPOLIS CORPORATION
BY: STUART MABON BY: NANCY TULLOS
------------------------ ---------------------------
(print name) (print name)
/s/ STUART MABON /s/ NANCY TULLOS 6-26-95
------------------------ ----------------------------
(signature) date (signature) date
PRESIDENT DIRECTOR, HUMAN RESOURCES
------------------------ ----------------------------
(title) (title)
--------------------------------------------------------------------------------
NOTE: The foregoing agreement does not have any attachments or exhibits. Mr.
Smart was engaged to perform a review of corporate strategy and a review of the
readiness of certain of the Company's high capacity drive projects. Mr. Smart
was compensated $1,000 per day, an aggregate of $17,000 during the period from
May 31, 1995 through July 10, 1995.
EX-27
3
ARTICLE 5 FINANCIAL DATA
5
1,000
3-MOS
DEC-29-1995
JUN-30-1995
42,001
0
48,283
6,079
48,869
136,037
120,678
73,894
184,738
54,874
78,463
15,542
0
0
34,238
184,738
70,076
70,076
54,707
54,707
20,622
0
1,489
(6,323)
21
(6,344)
0
0
0
(6,344)
(0.41)
(0.41)