-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LGMpQKb+gsYuiKT3CHQI+GsZxQYlbw7H82gYH2F1WsJPiyaVlfkdmkYHnOEoq7YU me2nR10Yt5iicDiD8yCeIw== 0000898430-96-001443.txt : 19960426 0000898430-96-001443.hdr.sgml : 19960426 ACCESSION NUMBER: 0000898430-96-001443 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960522 FILED AS OF DATE: 19960425 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: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12046 FILM NUMBER: 96550710 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 DEF 14A 1 DEFINITIVE PROXY MATERIAL SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] Check the appropriate box: [_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 STREAMLOGIC CORPORATION - -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) - -------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- Notes: StreamLogic Corporation (formerly Micropolis Corporation) 21329 Nordhoff Street Chatsworth, CA 91311 J. Larry Smart Chairman of the Board and President Dear Stockholder: It is my pleasure to invite you to attend your Company's Annual Meeting of Stockholders on May 22, 1996. The meeting will be held at the Company's headquarters in Chatsworth, California and will begin at 10:00 a.m. In the following pages you will find information about the meeting and a Proxy Statement. During the business session, I will briefly review 1995, the sale of the disk drive business, our name change to StreamLogic Corporation and discuss the future of the Company as a supplier of value-added data and video storage/server products. Our Stockholders will also have the opportunity to discuss their Company with the directors and officers of StreamLogic. If you cannot be with us in person, please be sure to vote your shares by proxy. Just mark, sign and date the enclosed proxy card and return it in the postage-paid envelope. Your prompt return of the card will help your Company avoid additional solicitation costs. In person or by proxy, your vote is important. I hope you can join us at the Annual Meeting. Sincerely, J. Larry Smart April 23, 1996 STREAMLOGIC CORPORATION 21329 NORDHOFF STREET CHATSWORTH, CALIFORNIA 91311 NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 22, 1996 To Our Stockholders: The Annual Meeting of the Stockholders of StreamLogic Corporation, a Delaware corporation (the "Company"), will be held at StreamLogic Corporation, 21329 Nordhoff Street, Chatsworth, California, on Wednesday, May 22, 1996 at 10:00 a.m., local time, for the following purposes: 1. To elect four directors to serve during the ensuing year and until their successors are elected and have qualified; 2. To transact such other business as may properly come before the meeting and any adjournments thereof. The Board of Directors intends to present for election as directors the nominees named in the accompanying proxy statement, whose names are incorporated herein by reference. In accordance with the By-Laws of the Company, the Board of Directors has fixed the close of business on April 3, 1996 as the record date for the determination of stockholders entitled to vote at the Annual Meeting and to receive notice thereof. All stockholders are cordially invited to attend the Annual Meeting. By Order of the Board of Directors Ericson M. Dunstan Secretary Chatsworth, California April 23, 1996 In order to ensure your representation at the Annual Meeting, if you cannot be present, you are requested to sign and date the enclosed proxy as promptly as possible and return it in the enclosed envelope (to which no postage need be affixed if mailed in the United States). If you attend the Annual Meeting and wish to vote in person, your proxy will not be used. STREAMLOGIC CORPORATION 21329 NORDHOFF STREET CHATSWORTH, CALIFORNIA 91311 PROXY STATEMENT This Proxy Statement is furnished to the stockholders by the Board of Directors of StreamLogic Corporation, a Delaware corporation (the "Company"), for solicitation of proxies for use at the Annual Meeting of Stockholders to be held at StreamLogic Corporation, 21329 Nordhoff Street, Chatsworth, California, on Wednesday, May 22, 1996 at 10:00 a.m., local time, and at any and all adjournments thereof. A stockholder giving a proxy pursuant to the present solicitation may revoke it at any time before it is exercised by giving a subsequent proxy or by delivering to the Secretary of the Company a written notice of revocation prior to the voting of the proxy at the Annual Meeting. No proxy will be used if the stockholder is personally present at the Annual Meeting and informs the Secretary in writing that he or she wishes to vote his or her shares in person. Expenses incident to the preparation and mailing of the notice of meeting, proxy statement and form of proxy are to be paid by the Company. It is anticipated that the mailing to stockholders of this Proxy Statement and the enclosed proxy will commence on or about April 24, 1996. Following the initial mailing of the proxy statement and proxies, the Company and its agents may also solicit proxies by mail, telephone, facsimile or in person; employees of the Company who assist in such activities will not receive additional compensation in connection therewith. The purpose of the meeting and the matters to be acted upon are set forth in the foregoing attached Notice of Annual Meeting. As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be presented for consideration at the Annual Meeting. However, if any such other business shall properly come before the Annual Meeting, votes will be cast pursuant to said proxies in respect of any such other business in accordance with the judgment of the persons acting under said proxies. GENERAL INFORMATION BACKGROUND VOTING SHARES AND VOTING RIGHTS Stockholders of record at the close of business on April 3, 1996, are entitled to notice of, and to vote at, the Annual Meeting of Stockholders. There were 15,580,413 shares of Common Stock of the Company outstanding on that date. Each share of the Common Stock is entitled to one vote. In voting for the election of directors, each share has one vote for each position filled. There is no cumulative voting, which means a simple majority of the shares voting may elect all of the directors to be elected. Under the Company's By-Laws and Delaware law, shares represented by proxies that reflect abstentions or "broker non-votes" (i.e., shares held by a broker or nominee which are represented at the meeting, but with respect to which such broker or nominee is not empowered to vote on a particular proposal or proposals) will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum. However, under the Company's By-Laws and Delaware law, proxies that reflect abstentions as to a particular proposal will be treated as voted for purposes of determining the approval of that proposal and will have the same effect as a vote against that proposal, while proxies that reflect broker non-votes will be treated as unvoted for purposes of determining approval and will not be counted as votes for or against that proposal. The beneficial ownership of the Company's Common Stock by certain beneficial owners and by each of the Company's directors, each of its five most highly- compensated officers and all executive officers and directors as a group is set forth below under "Security Ownership of Certain Beneficial Owners" and "Security Ownership of Management." 1 ELECTION OF DIRECTORS The By-Laws of the Company presently provide for four directors. All four directors are to be elected at the 1996 Annual Meeting and will hold office until the 1997 Annual Meeting or until their successors are elected and have qualified. It is intended that the persons named in the enclosed proxy will, unless such authority is withheld, vote for the election of the four nominees proposed by the Board of Directors. In the event that any of them should become unavailable prior to the Annual Meeting, the proxy will be voted for a substitute nominee or nominees designated by the Board of Directors, or the number of directors may be reduced accordingly. The following table sets forth the names and ages of the nominees for election to the Board of Directors, the principal occupation or employment of each of such nominees during the past five years and at present, the name and principal business of the corporation or other organization, if any, in which such occupation or employment is or was carried on, directorships of other public companies held by such nominees, the present position of such nominees with the Company, and the period during which such nominees have served as directors of the Company. All of the nominees named below have consented to being named herein and to serve if elected.
PRESENT POSITION PRINCIPAL OCCUPATION WITH THE COMPANY DURING PAST 5 YEARS; AND PERIOD SERVED NAME AND AGE OTHER DIRECTORSHIPS AS DIRECTOR ------------ -------------------- ----------------- J. Larry Smart, 48...... President, Chief Executive Officer President, Chief and Chairman of the Board of the Executive Officer Company. President and Chief and Chairman of the Executive Officer of Maxtor Board. Corporation, a company that manufactures Winchester disk drives and other mass-storage products, from March 1994 to February 1995; Chairman of the Board of Southwall Technologies Inc., a thin film technology company, since March 1994; President and Chief Executive Officer of Southwall Technologies Inc. from June 1991 to March 1994; and Senior Vice President at SCI Systems, a contract manufacturer, from November 1987 to June 1991. Ericson M. Dunstan, 63.. Senior Vice President, Chatsworth Director since Design Engineering of Micropolis 1976. (USA) Inc. since March 1996. Senior Vice President-Corporate Engineering from October 1985 to March 1996 and Secretary of the Company since 1976. Chriss W. Street, 46.... Principal of Chriss Street and Director since Company; a business involved in 1995. stock brokerage, venture capital, and restructuring, since January 1991. Chairman and CEO of Comprehensive Care, a publicly traded firm which develops, markets and manages programs for treatment of chemical dependency and psychiatric disorders, since November 1993. Secretary and Treasurer of Hacienda Village Modernization Corporation; a nonprofit organization to give vocational training and assistance to the under-privileged minority residents of a housing project, since June 1993. Greg L. Reyes, Jr., 33.. President and Chief Executive No present or prior Officer of Wireless Access, Inc., a positions with the leading designer and manufacturer of Company. state of the art two-way Narrowband PCS (N-PCS), 900 MHz, belt-top subscriber devices, sub-assemblies, and chip sets, since 1994. Vice President of Radio Frequency Division of Norand Corporation, which specialized in the design, development and manufacture of "In Premises" microcellular RF networks and applications specific terminals, from 1992 to 1994. Vice President of North American Field Operations of Banyan Systems Incorporated, a leader in network operating system and data communications products, prior to 1992.
2 During the 1995 fiscal year the Board of Directors of the Company held ten meetings inclusive of scheduled telephonic meetings. Each director attended 100% of the total number of meetings of the Board and of committees of the Board on which he served held during the year, except Mr. S. Kenneth Kannappan who was not present at one Board meeting. The Board of Directors of the Company has the following standing committees: the Audit Committee and the Compensation Committee. Mr. Street and Mr. Kannappan comprised the members of both committees. The functions of the Audit Committee are to aid the directors in fulfilling their responsibilities for financial reporting to the stockholders, to oversee the financial controls exercised by management, and to provide channels of communication between the Board of Directors, management and the Company's independent auditors. The functions of the Compensation Committee are to review and approve executive officer base salary and incentive compensation, stock plans, and other compensation matters and to administer the Company's stock option plan for executive officers and key employees. The Audit Committee and the Compensation Committee met two and six times, respectively, during 1995. The Company has no nominating committee. Each director who is not an officer of the Company was paid a retainer fee of $3,000 per quarter, an attendance fee of $2,000 per Board meeting attended, and a daily attendance fee of $1,000 for all committee meetings attended. In October 1987, the Board of Directors adopted the Stock Option Plan for Directors of Micropolis Corporation (the "Directors Plan") which was approved by the stockholders of the Company in April 1988. As of February 29, 1996, there were options outstanding to purchase an aggregate of 110,000 shares of Common Stock. At the close of business on the date of each annual meeting of the stockholders of the Company, each Director of the Company, who is not an employee of the Company or of any affiliate of the Company and who is reelected or continuing as a Director, is automatically granted an option to purchase 10,000 shares of the Company's Common Stock. In addition, when a person is initially elected to the Board, at an annual meeting of stockholders or at any other time, each such new Director who is not an employee of the Company or of any affiliate of the Company is automatically granted an option to purchase 30,000 shares of the Company's Common Stock at the close of business on the date of his or her election to the Board. Also in addition, when a Director who is not an employee of the Company or any affiliate of the Company initially is appointed to the position of Vice-Chairman of the Board, such Director is automatically granted an option to purchase 20,000 shares of the Company's Common Stock at the close of business on the date of his or her appointment. Stockholder action is not required with respect to such automatic option grants. Options under the Directors Plan have an exercise price equal to the fair market value of the shares covered by the option on the date of grant, have a term of five years and become exercisable in three equal annual installments commencing one year after the date of grant. At the close of business on May 22, 1996, options to purchase 10,000, 10,000 and 30,000 shares of the Company's Common Stock will automatically be granted to each of Mr. Dunstan, Mr. Street and Mr. Reyes, respectively, (if elected) at the market price of the Company's Common Stock on May 22, 1996. 3 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table sets forth certain information, as of December 31, 1995, with respect to those known by the Company, based solely on a review of filings on Schedules 13D or 13G, to be beneficial owners of more than five percent (5%) of the outstanding shares of the Company's Common Stock.
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS ------------------- ------------------------------ -------- Ryback Management Corporation(1). 5,373,748 34.3% 7711 Carondelet Avenue Box 16900 St. Louis, Missouri 63105 State of Wisconsin Investment Board........................... 1,466,000 9.5% P.O. Box 7842 Madison, Wisconsin 53707 Loomis, Sayles & Company(2)...... 1,195,876 7.67% One Financial Center Boston, Massachusetts 02111 Richard C. Perry................. 1,150,000 7.3% 2635 Century Parkway, N.E. Suite 1000 Atlanta, Georgia 30345
SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth information regarding ownership of the Company's Common Stock as of February 29, 1996 by nominees for Directors, by each of the named Executive Officers and by all Executive Officers and Directors as a group:
AMOUNT AND NATURE OF PERCENT NAME BENEFICIAL OWNERSHIP(3)(4))(5) OF CLASS ---- ------------------------------ -------- DIRECTORS J. Larry Smart (CEO)............. 40,000 * Ericson M. Dunstan............... 67,500 * Chriss W. Street................. 36,700 * S. Kenneth Kannappan............. 10,000 * EXECUTIVE OFFICERS Taroon C. Kamdar................. 66,000 * Barbara V. Scherer............... 24,893 * Donald L. McDonell............... 12,400 * All Executive Officers and Direc- tors as a Group (8 persons, including those named)........... 267,243 1.7%
- -------- *Less than 1%. (1) Shares held in a fiduciary capacity by Ryback Management Corporation and/or Lindner Dividend ("Lindner") Fund, Inc. as of December 31, 1995. Of the shares owned as of that date, 1,919,800 are directly owned and 3,453,948 shares are indirectly owned through the ownership of the Company's 10% Convertible Subordinated Notes due 1998 (the "Notes") and the Company's 6% Convertible Subordinated Debentures due 2012 (the "Debentures"). On April 5, 1996, the Company repurchased $10,000,000 aggregate principal amount of the Notes at par, plus accrued interest to the date of purchase, from Linder. Pursuant to an agreement with Lindner, whose consent was required for consummation of the sale of the disk drive business, the remaining $10,000,000 of the Notes will be repaid by the Company on June 28, 1996 at par. As consideration for the consent, the Company on March 29, 1996 issued two year warrants priced at $4 per share. As set forth in the Schedule 13D filed with the Securities and Exchange Commission by Ryback Management Corporation, Eric E. Ryback is the President of Ryback Management Corporation. (2) Of the shares beneficially owned as of that date, approximately 1,195,876 are indirectly owned through the ownership of the Debentures. The Debentures are convertible into common stock at a price of $48.50 at any time prior to redemption or maturity. (3) Information with respect to beneficial ownership is based on information furnished to the Company by each person included in this table. Except as indicated in the notes to the table, each stockholder included in the table has sole voting and dispositive power with respect to the shares shown to be beneficially owned by the stockholder. (4) All of the stockholders included in this table reside in California. California has community property laws under which the spouse of a stockholder in whose name securities are registered may be entitled to share in the management of their community property which may include the right to vote or dispose of the shares. (5) Includes installments of options to purchase 10,000, 12,000, 10,000, 10,000, 66,000, 13,000, 10,000 and 137,000 shares of Common Stock held by Mr. Smart, Dr. Dunstan, Mr. Street, Mr. Kannappan, Mr. Kamdar, Ms. Scherer, Mr. McDonell and all executive officers and directors as a group, respectively, that were exercisable on, or within 60 days after, February 29, 1996. 4 EXECUTIVE COMPENSATION CASH AND OTHER COMPENSATION The following table and accompanying notes show, for the Chief Executive Officer and the other four most highly-compensated executive officers of the Company for 1995, the compensation paid by the Company and its subsidiaries to such persons for services in all capacities during 1995 and the preceding two fiscal years. SUMMARY COMPENSATION TABLE
LONG TERM ANNUAL COMPENSATION COMPENSATION ----------------------------------------- ------------ OTHER OPTIONS NAME AND ANNUAL GRANTED ALL OTHER PRINCIPAL POSITION YEAR SALARY(1) BONUS COMPENSATION(2) (SHARES) COMPENSATION(3) ------------------ ---- --------- ------- --------------- ------------ --------------- J. Larry Smart, Presi- 1995 $161,544 $50,000(5) $ -- 380,000 $ -- dent, Chief Executive Officer and Chairman of the Board (4) Taroon C. Kamdar, Presi- 1995 237,003 60,000 -- 40,000 15,492 dent, Asia Pacific 1994 200,044 25,000 2,060 25,000 48,075 Division 1993 203,410 91,170 2,612 -- -- Barbara V. Scherer, 1995 162,708 35,000 -- 40,000 -- Vice President--Finance 1994 128,292 -- -- 5,000 -- and Chief Financial 1993 143,152 13,810 -- 5,000 -- Officer Ericson M. Dunstan, 1995 156,520 -- -- 40,000 -- Senior Vice President-- 1994 162,136 -- -- 10,000 6,548 Engineering 1993 165,254 9,525 -- 20,000 14,966 Donald L. McDonell, 1995 144,668 -- -- 19,000 -- Vice President--Sales 1994 134,825 50,000 -- -- 1,375 1993 109,265 18,965 -- 20,000 7,911 Stuart P. Mabon, Presi- 1995 148,874 -- -- -- 35,898 dent and Chairman of 1994 292,136 -- -- 20,000 11,798 the Board (6) 1993 296,871 22,860 -- 50,000 3,933
- -------- (1) Includes amounts contributed by each person named through salary reduction under the Micropolis Corporation Employee Savings and Retirement Plan (the "Section 401(k) Plan"). The 1993 salary year included 53 weeks. (2) Amounts represent reimbursement during the fiscal year for the payment of taxes. (3) Amounts for Mr. Kamdar include cash payments of $25,492 and $48,075 in 1995 and 1994, respectively, relating to his overseas assignment. Amounts for Dr. Dunstan, Mr. McDonell and Mr. Mabon represent payoff of accrued vacation. (4) Mr. Smart joined the Company as president and chief executive officer in July 1995. (5) Excludes a bonus of $137,500 declared and paid in the second quarter of 1996 pursuant to Mr. Smart's employment agreement and as compensation for the completion of the sale of the hard disk drive business in 1996. (6) Mr. Mabon resigned as president in July 1995. The Company has a severance pay agreement with Mr. Kamdar which provides for payments in the event his employment is terminated by the Company for reasons other than cause. At December 29, 1995, the aggregate commitments pursuant to the agreement were approximately $100,000 for Mr. Kamdar. The commitment to Mr. Kamdar is for six months base salary and performance bonus. 5 STOCK OPTIONS In October 1987, the Board of Directors adopted the Stock Option Plan for Executive and Key Employees of Micropolis Corporation (the "Option Plan"). The Option Plan was approved by stockholders in April 1988. The Option Plan is administered by the Compensation Committee of the Board of Directors of the Company. Under the Option Plan, full-time employees of the Company and of any subsidiary of the Company are eligible to receive grants of non-qualified stock options and incentive stock options (as defined in Section 422 of the Internal Revenue Code (the "Code")). The following table sets forth information regarding stock options granted in 1995 to each of the named executive officers. OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS - ----------------------------------------------------------- % OF TOTAL GRANT DATE OPTIONS PRESENT VALUE(2) OPTIONS GRANTED GRANTED TO EXERCISE EXPIRATION ------------------- NAME (SHARES)(1) EMPLOYEES PRICE DATE 5% 10% ---- --------------- ---------- -------- ---------- -------- ---------- J. Larry Smart...... 350,000 31.7% $5.438 4/25/00 $525,847 $1,161,984 30,000 2.7 5.375 7/05/00 44,550 98,445 Taroon C. Kamdar..... 40,000 3.6 5.375 7/05/00 50,401 131,260 Barbara V. Scherer.... 20,000 1.8 5.750 4/26/00 31,772 70,209 20,000 1.8 5.375 7/05/00 29,700 65,630 Ericson M. Dunstan.... 40,000 3.6 5.375 7/05/00 59,401 131,260 Donald L. McDonell... 19,000 1.7 5.375 7/05/00 28,215 62,348
- -------- (1) The per share exercise price of all options granted is the fair market value of the Company's Common Stock on the date of grant. Options have a term of five years and become exercisable in three to five equal installments, each of which accrues at the end of each year after the grant date except for the fifth installment, which accrues 60 days before the expiration date. (2) The potential realizable value is calculated from the exercise price per share, assuming the market price of the Company's Common Stock appreciates in value at the stated percentage rate from the date of grant to the expiration date. Actual gains, if any, are dependent on the future market price of the Common Stock. The following table sets forth information regarding stock option exercises and year-end stock option values for each of the named executive officers for 1995. OPTION EXERCISES IN LAST FISCAL YEAR AND OPTION VALUES AT DECEMBER 29, 1995
VALUE OF UNEXERCISED NUMBER OF UNEXERCISED "IN-THE-MONEY' STOCK OPTIONS STOCK OPTIONS(1) ------------------------- ------------------------- SHARES ACQUIRED VALUE NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- ----------- ----------- ------------- ----------- ------------- J. Larry Smart.......... -- -- -- 380,000 -- -- Taroon C. Kamdar........ -- -- 66,000 59,000 -- -- Barbara V. Scherer...... -- -- 9,000 46,000 -- -- Ericson M. Dunstan...... -- -- 12,000 58,000 -- -- Donald L. McDonell...... -- -- 10,000 29,000 -- --
- -------- (1) Market value of underlying Common Stock on date of exercise or fiscal year-end, minus the option exercise price. The share price as of December 29, 1995 was $3.75. 6 REPORT OF THE COMPENSATION COMMITTEE The Compensation Committee of the Board of Directors (the "Committee") has furnished the following report on executive compensation. The members of the Committee during 1995 were Mr. Street, the commitee's chairman, and Mr. Kannappan. In this capacity, they were involved in decision-making responsibilities for the 1995 fiscal year. OVERALL POLICY The Committee consists entirely of independent, outside directors and is responsible for formulating and implementing corporate policy with respect to executive compensation. Each year the Committee reassesses the Company's executive compensation program. The Committee's annual review process involves determining the base salaries of the Chief Executive Officer ("CEO") and the other executive officers, reviewing and approving performance bonus plans and bonus criteria and reviewing the Company's stock option plan and analyzing grants thereunder. In determining the executive compensation package for 1995, the Committee sought to retain the Company's talented and entrepreneurial management by setting base salaries at competitive levels and to motivate executive officers to perform to the full extent of their abilities by creating significant incentive compensation opportunities intended to correlate executive compensation with the Company's achievement of certain performance goals. The Company's executive compensation program is comprised of base salary, performance bonuses, stock options and a stock purchase plan. The policies underlying each component of the compensation program are described more fully below. Although the components of executive officer compensation are determined separately, the Committee considers the entire compensation (earned or potentially earned) of each executive officer in setting each component. The CEO is employed pursuant to the terms of an employment agreement with specified levels of compensation including base salary, cash bonus and stock options. The Company has evaluated current compensation levels and concluded it is unlikely that Section 162(m) of the Code would lead to the loss of deductibility of compensation in future periods. BASE SALARY The Committee determines the base salary of the CEO based on competitive compensation data, overall Company financial and operating performance and the Committee's assessment of the CEO's past performance and its expectation as to his future contributions in leading the Company. The Committee has adopted a similar policy with respect to the other executive officers of the Company. Utilizing salary survey data supplied by outside industry associations and independent survey organizations, the Committee fixes base salaries that are within a range of salaries for positions of similar responsibilities at selected other companies. In addition, the Committee considers factors such as overall Company performance and the individual's past performance and future potential in establishing the base salaries of the other executive officers, as well as the recommendations of the CEO. BONUS PLANS The Committee believes that the CEO and other executive officers' incentive compensation should be influenced by Company financial and operating performance and develops and approves incentive compensation plans which are based upon the achievement of performance goals such as earnings per share (EPS), sales, gross margins and the market capitalization value of the Company's Common Stock. Incentive compensation plans are also based on the achievement by executive officers and other key employees of individual performance goals, which are typically related to the performance of his or her business group or the area of the Company's business in which he or she is involved. 7 Under the Company's Key Person Bonus Plan (the "KPB"), the Committee, in consultation with the CEO, fixes a targeted dollar amount of incentive compensation for the CEO and each other executive officer based upon industry compensation surveys, past performance and estimated future performance. For 1995, the target incentive compensation of the CEO was based principally upon the achievement of specific objectives including product development, market development, completion of certain financing transactions and growing the subsystems and video product lines into a successful business. For the other executive officers, 50% of the target incentive compensation was based on the achievement of the targeted EPS for 1995. The remaining 50% of the other executive officer incentive compensation under the KPB Plan was linked to specific individual performance objectives. Each individual has several performance objectives. These performance objectives related to such matters as cost of material reduction, inventory management, product quality, accounts receivable, customer service, timeliness of product delivery and new product introduction. In the event that an executive officer did not achieve a specific individual performance objective, a proportionate amount of EPS incentive compensation was lost by that participant. The CEO consults with the Committee as to whether or not each executive officer has achieved his or her individual performance objective or objectives. Since the Company did not achieve its EPS target in 1995 only a small amount of project-specific bonuses were paid in 1995. STOCK OPTION PLAN Stock options under the Company's Option Plan (approved by stockholders in April 1988) are periodically granted by the Committee to executive officers and other key employees of the Company to further the growth, development and financial success of the Company. As an incentive to create value for shareholders, the Committee granted an option to purchase 350,000 shares of Common Stock to the CEO upon his joining the Company. In determining the grants of stock options the Committee reviews with the Chief Executive Officer his recommendations for individual awards, and takes into account the respective scope of responsibility and the anticipated performance requirements and contributions to the Company of each proposed optionee. Stock option awards are also based, among other things, on a review of compensation data from selected other companies as well as the Committee's perception of past and expected future contributions to the Company. All options are granted at the current market price. Since the value of an option bears a direct relationship to the Company's stock price it is an effective incentive for Company management to create value for stockholders. The Committee views stock options, therefore, as an important component of its long-term, performance based compensation philosophy. STOCK PURCHASE PLAN The Company's Employee Stock Purchase Plan (the "Stock Purchase Plan") was adopted by the Board of Directors and approved by stockholders in April 1984. The Stock Purchase Plan is administered by the Board and qualifies as an "employee stock purchase plan" under Section 423 of the Code. All employees and executive officers, including the CEO, are eligible to participate in the Stock Purchase Plan. The Stock Purchase Plan is intended to provide Company executives and employees with a favorable means of acquiring Common Stock of the Company through payroll deductions and to provide an incentive for continued employment. In general, the purchase price is 85% of the market price of the stock at either the beginning or the end (whichever is lower) of each plan period. COMPENSATION COMMITTEE Chriss W. Street S. Kenneth Kannappan 8 SHAREHOLDER RETURN PERFORMANCE The following graph compares the Company's cumulative stockholder return on its Common Stock (no dividends have been paid thereon) with the return on the common stocks included in The Nasdaq Stock Market (US) and the Nasdaq Computer Manufacturers indexes. The stocks in these groups are weighted by market capitalization and returns thereon include the reinvestment of dividends. The presentation assumes $100 invested on December 28, 1990, the last trading day prior to the end of the Company's 1990 fiscal year. COMPARISON OF FIVE-YEAR CUMULATIVE RETURN AMONG MICROPOLIS CORP., NASDAQ STOCK MARKET U.S. INDEX AND NASDAQ COMPUTER MANUFACTURERS INDEX PERFORMANCE GRAPH APPEARS HERE
Measurement Period MICROPOLIS NASDAQ STOCK NASDAQ COMPUTER (Fiscal Year Covered) CORP. MARKET INDEX MANUFACTURERS INDEX - --------------------- ---------- ------------ ------------------ Measurement Pt-12/28/90 $100 $100 $100 FYE 12/30/91 $ 99 $160 $140 FYE 12/30/92 $ 93 $187 $188 FYE 12/30/93 $ 80 $213 $178 FYE 12/30/94 $102 $208 $196 FYE 12/30/95 $ 43 $301 $308
9 COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act") requires the Company's directors and executive officers, and persons who own more than ten percent of a registered class of the Company's equity securities ("Insiders"), to file with the Securities and Exchange Commission (the "SEC") initial reports of ownership and reports of changes in ownership of Common Stock of the Company. Insiders are required by SEC regulations to furnish the Company with copies of all Section 16(a) reports they file. To the Company's knowledge, based solely on its review of the copies of such reports furnished to the Company and written representations from certain Insiders that no other reports were required, during the fiscal year ended December 29, 1995 all Section 16(a) filing requirements applicable to Insiders were complied with. GENERAL INDEPENDENT AUDITORS The Board of Directors has selected Ernst & Young LLP to serve as the Company's independent accountants for the 1996 fiscal year. One or more representatives of Ernst & Young LLP will be present at the Annual Meeting to respond to appropriate questions and will be given an opportunity to make a statement if they so desire. STOCKHOLDER PROPOSALS Stockholder proposals for presentation at the annual meeting to be held in 1997 must be received at the Company's principal executive offices on or before November 20, 1996. ANNUAL REPORT The Company's Annual Report to Stockholders containing audited financial statements for the year ended December 29, 1995 is being mailed to all stockholders of record with these proxy materials. ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN AND RETURN THE ACCOMPANYING PROXY CARDS IN THE ENCLOSED ENVELOPE. ERICSON M. DUNSTAN Secretary DATED: April 23, 1996 10 PROXY STREAMLOGIC CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF STREAMLOGIC CORPORATION (FORMERLY MICROPOLIS CORPORATION) PROXY FOR ANNUAL MEETING OF STOCKHOLDERS, MAY 22, 1996 The undersigned, a stockholder of StreamLogic Corporation, a Delaware corporation, hereby appoints J. Larry Smart and Barbara V. Scherer and each of them, each having full power of substitution to vote the shares of stock of StreamLogic Corporation which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of said Corporation to be held at StreamLogic Corporation, 21329 Nordhoff Street, Chatsworth, California, on Wednesday, May 22, 1996, at 10:00 A.M., and at any adjournment thereof. PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY ITEM. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS, PLEASE SIGN THE REVERSE SIDE; NO BOXES NEED TO BE CHECKED. (CONTINUED AND TO BE SIGNED ON OTHER SIDE) FOLD AND DETACH HERE Please mark your votes as indicated in this example [X] ELECTION OF DIRECTORS The Board of Directors recommends a vote FOR authority to vote for the election of the nominees listed below. Failure to check either of the boxes with respect to the election will, if this card has been signed and dated, constitute a vote for authority to vote for the election of the director. WITHHELD FOR FOR ALL [ ] [ ] Authority to vote for the election of the nominee listed below. J. Larry Smart Ericson M. Dunstan Chriss W. Street Greg L. Reyes, Jr. ------------------- ------------------ Proxy Card Number Number of Shares WITHHELD FOR: (To withhold authority to vote for any individual nominee, write that nominee's name on this space provided below). - ------------------------------------------------------------------------------ In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Even if you are planning to attend the meeting in person, you are urged to sign and mail the Proxy in the return envelope so that your stock may be represented at the meeting. Signature(s) Date ----------------------------------- ---------------------- (NOTE: Please sign exactly as your name appears on the label. If more than one name appears, all persons so designated should sign. When signing in a representative capacity, please give full title.) Please return promptly in the enclosed envelope, which requires no postage if mailed in the U.S.A. FOLD AND DETACH HERE -----END PRIVACY-ENHANCED MESSAGE-----