<PAGE> 1
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
HMT Technology 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] No fee required.
[ ] 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:
_______________________________________________________________________
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_______________________________________________________________________
4. Date Filed:
_______________________________________________________________________
<PAGE> 2
HMT TECHNOLOGY CORPORATION
1055 PAGE AVENUE
FREMONT, CA 94538
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1997
To the Stockholders of HMT Technology Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of HMT
Technology Corporation, a Delaware corporation (the "Company"), will be held on
Thursday, August 14, 1997, at 9:00 a.m., local time, at Embassy Suites Hotel,
901 East Calaveras Boulevard, Milpitas, California 95035 for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of Coopers & Lybrand L.L.P. as independent
auditors of the Company for its fiscal year ending March 31, 1998.
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on June 25, 1997, as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
LOGO
Peter S. Norris
Vice President, Finance, Chief
Financial Officer,
Treasurer and Assistant Secretary
Fremont, California
July 9, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
HMT TECHNOLOGY CORPORATION
1055 PAGE AVENUE
FREMONT, CA 94538
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 14, 1997
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of HMT
Technology Corporation, a Delaware corporation (the "Company" or "HMT"), for use
at the Annual Meeting of Stockholders to be held on August 14, 1997, at 9:00
a.m., local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at Embassy Suites Hotel, 901
East Calaveras Boulevard, Milpitas, California 95035. The Company intends to
mail this proxy statement and accompanying proxy card on or about July 9, 1997,
to all stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company
or, at the Company's request, CIC Express Service, Inc. ("CIC"). No additional
compensation will be paid to directors, officers or other regular employees for
such services, but CIC will be paid its customary fee, estimated to be about
$4,000, if it renders solicitation services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on June 25,
1997 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on June 25, 1997, the Company had outstanding and entitled to
vote 41,535,789 shares of Common Stock. Each holder of record of Common Stock on
such date will be entitled to one vote for each share held on all matters to be
voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 1055 Page
Avenue, Fremont, California 94538, a written notice of revocation or a duly
executed proxy
<PAGE> 4
bearing a later date, or it may be revoked by attending the meeting and voting
in person. Attendance at the meeting will not, by itself, revoke a proxy.
STOCKHOLDERS PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1998 Annual Meeting of Stockholders must be received by the Company
not later than March 11, 1998 in order to be included in the proxy statement and
proxy relating to that Annual Meeting. Stockholders are also advised to review
the Company's Bylaws, which contain additional requirements with respect to
advance notice of stockholder proposals and director nominations.
PROPOSAL 1
ELECTION OF DIRECTORS
There are five nominees for the five Board positions presently authorized.
The number of directors constituting the whole Board of Directors is fixed by
resolution of the Board of Directors. Each director to be elected will hold
office until the next annual meeting of stockholders and until his successor is
elected and has qualified, or until such director's earlier death, resignation
or removal. Each nominee listed below is currently a director of the Company,
all having been elected by the stockholders.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election
of the five nominees named below. In the event that any nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unable to serve.
NOMINEES FOR ELECTION FOR A ONE-YEAR TERM EXPIRING AT THE 1998 ANNUAL MEETING
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD WITH THE COMPANY
- ------------------------- --- -------------------------------------------
<S> <C> <C>
Ronald L. Schauer 53 President, Chief Executive Officer and
Chairman of the Board
Bruce C. Edwards 43 Director
Neil M. Garfinkel 31 Director
Walter G. Kortschak 38 Director
Robert G. Teal 54 Director
</TABLE>
Ronald L. Schauer joined the Company as President and Chief Executive
Officer and a member of the Board of Directors in February 1994. From June 1993
to February 1994, he was the owner, President and Chief Executive Officer of
PAWS, Inc., a plastics manufacturing company. From June 1991 to June 1993, he
was President and Chief Operating Officer of Magnetic Data, Inc., a contract
manufacturer of disk drives and computers. From June 1983 to May 1991, he was
Corporate Vice President and General Manager of the Memory Products Division of
Stolle Corporation, a wholly owned subsidiary of Alcoa, a diversified aluminum
manufacturing company. From 1972 to May 1983, Mr. Schauer held various technical
and general management positions in the Data Recording Products Division at 3M
Company, a diversified manufacturing company. Mr. Schauer holds a B.S. in
Electrical Engineering from South Dakota State University.
Bruce C. Edwards joined the Company's Board of Directors in January 1996.
Since February 1996, he has been President, Chief Executive Officer and a
director of Powerwave Technologies, Inc., a manufacturer of power amplifiers for
wireless telecommunications applications. Mr. Edwards was employed by AST
Research, Inc., a computer company, as Senior Vice President and Chief Financial
Officer from 1988 until July 1994 and as Executive Vice President, Chief
Financial Officer and a director from July 1994 to December 1995. Mr. Edwards is
also a director of Diamond Multimedia Systems, Inc.
2
<PAGE> 5
Neil M. Garfinkel joined the Company's Board of Directors in January 1996.
Since January 1997, he has been a Vice President of Summit Partners, L.P., a
venture capital partnership ("Summit Partners"). From June 1995 to December
1996, he was a Senior Associate of Summit Partners. From May 1994 to May 1995,
he was an associate at Wilson Sonsini Goodrich & Rosati, Professional
Corporation, a law firm. From September 1992 to April 1994, he was an associate
at Cravath, Swaine & Moore, a law firm.
Walter G. Kortschak joined the Company's Board of Directors in November
1995. Since August 1991, he has been a General Partner of Summit Partners, where
he has been employed since June 1989. From June 1986 to June 1989, he was a Vice
President at Crosspoint Venture Partners, a venture capital partnership. He is
also a director of McAfee Associates, Inc., Mecon, Inc., Diamond Multimedia
Systems, Inc., Simulation Sciences, Inc. and several privately held companies.
Robert G. Teal joined the Company's Board of Directors in January 1996.
Since July 1988, he has been a General Partner of Capform Partners, a venture
capital limited partnership. From April 1982 to February 1988, he was a Senior
Vice President of Maxtor Corporation, a disk drive company, which he co-founded.
From April 1992 to October 1996, he held various positions with Portable Energy
Products, Inc., a battery manufacturer, including as Director, Chairman and
Chief Executive Officer. Portable Energy Products, Inc. filed for federal
bankruptcy protection in 1994 and emerged from bankruptcy in July 1995. Mr. Teal
is also a director of ION Systems, Inc. and is Vice President and Chief
Financial Officer of Quinta Corporation, a data storage company, where he is a
co-founder.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended March 31, 1997, the Board of Directors held
seven meetings. The Board has an Audit Committee and a Compensation Committee.
The Company does not have a standing Nominating Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained; and
receives and considers the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial controls. The Audit Committee is composed of two non-employee
directors, Messrs. Edwards and Kortschak. It met once during such fiscal year.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants under
the Company's stock option plans and otherwise determines compensation levels
and performs such other functions regarding compensation as the Board may
delegate. In connection with the award of stock options to employees and
consultants, the Committee has delegated limited authority to the Company's
Chief Executive Officer for making such awards. The Compensation Committee is
currently composed of two non-employee directors, Messrs. Teal and Kortschak. It
met three times during such fiscal year.
During the fiscal year ended March 31, 1997, each current director attended
75% or more of the aggregate of the requisite meetings of the Board and of the
committees on which he served, held during the period for which he was a
director or committee member, respectively.
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year ending March 31, 1998 and has
further directed that management submit the selection of independent auditors
for ratification by the stockholders at the Annual Meeting. Coopers & Lybrand
L.L.P.
3
<PAGE> 6
has audited the Company's financial statements since December 1995.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
Stockholder ratification of the selection of Coopers & Lybrand L.L.P. as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Coopers & Lybrand
L.L.P. to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the Audit Committee
and the Board will reconsider whether or not to retain that firm. Even if the
selection is ratified, the Audit Committee and the Board in their discretion may
direct the appointment of different independent auditors at any time during the
year if they determine that such a change would be in the best interests of the
Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of Coopers & Lybrand L.L.P.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
In December 1995, the Company decided to retain Coopers & Lybrand L.L.P. as
the independent accountants for the Company and dismissed Ernst & Young LLP, the
Company's former accountants. The decision to change independent accountants was
approved by the Company's Board of Directors and was made in connection with the
leveraged recapitalization effected on November 30, 1995. There were no
disagreements with the former accountants regarding any matters with respect to
accounting principles or practices, financial statement disclosure or auditing
scope or procedures through December 1995, or with respect to the Company's
financial statements for the fiscal years ended March 31, 1994 and 1995. The
former accountants' reports as of and for the fiscal years ended March 31, 1994
and 1995 are not a part of the consolidated financial statements of the Company
included in its annual report on Form 10-K and the related consolidated
financial statement schedules. Such reports did not contain an adverse opinion
or disclaimer of an opinion or qualifications as to uncertainty, audit scope or
accounting principles. Prior to retaining Coopers & Lybrand L.L.P., the Company
had not consulted with Coopers & Lybrand L.L.P. regarding accounting principles.
However, Hitachi Metals, Ltd. ("Hitachi Metals") and certain stockholders of HMT
had consulted Coopers & Lybrand L.L.P. for the limited purpose of determining
appropriate accounting treatment of the leveraged recapitalization of the
Company completed in November 1995.
4
<PAGE> 7
MANAGEMENT
Set forth below is information regarding current executive officers of the
Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- -------------------------- ---- ---------------------------------------
<S> <C> <C>
Ronald L. Schauer 53 President, Chief Executive Officer and
Chairman of the Board
Ronald J. Buschur 33 Vice President, Quality Assurance
George J. Hall 52 Vice President, Operations
Peter S. Norris 46 Vice President, Finance, Chief
Financial Officer, Treasurer and
Assistant Secretary
Michael A. Russak, Ph.D. 50 Vice President, Research and
Development
Jon R. van Bronkhorst 37 Vice President, Business Development
</TABLE>
Biographical information about Mr. Schauer is set forth under "Proposal I"
above.
Ronald J. Buschur joined the Company as Director of Quality Systems in June
1994 and was appointed Vice President, Quality Assurance in February 1995. From
December 1993 to June 1994, he was a Customer Account Manager at StorMedia, a
thin-film disk manufacturer. From July 1993 to December 1993, he was a Supplier
Accounts Manager at Maxtor, a disk drive company. From May 1987 to July 1993, he
held various managerial positions at Digital Equipment Corporation, a computer
manufacturer. Mr. Buschur holds a B.A. in Business Administration and Management
from the University of Phoenix and an Associate Degree in Electrical Engineering
Technology from ITT Technical Institute.
George J. Hall joined the Company as Vice President, Operations in February
1995. From December 1990 to February 1995, he was General Manager of the Rigid
Media Division of Sequel, Inc., a media drive company. From 1988 to 1989, he was
Director of Operations at Seagate Magnetics, a media manufacturer. From 1985 to
1988, he was employed in development of rigid disk media for vertical recording
at Censtor Corporation, a thin film media/head company. From 1983 to 1985, he
was Vice President of Operations of Domain Technology, a thin film manufacturer,
which he co-founded. Prior to 1983, he held various positions relating to the
manufacture of rigid disk media at IBM Corporation, a computer company ("IBM").
Mr. Hall holds a B.S. in Industrial Technology from San Jose State University.
Peter S. Norris joined the Company as Vice President, Finance, Chief
Financial Officer and Treasurer in December 1995. From 1975 to December 1995, he
held various positions at General Instrument Corporation, an electronics
company, most recently as Assistant Treasurer since 1981. Mr. Norris holds a
B.A. in Economics from Upsala College.
Michael A. Russak joined the Company as Vice President, Research and
Development in August 1993. From October 1988 to August 1992, he was a manager
at the Research Division of IBM Corporation. He then transferred to IBM's
Storage Products Division in San Jose, California in 1992. Dr. Russak holds a
B.S. in Ceramic Engineering and a Ph.D. in Materials Science from Rutgers
University.
Jon R. van Bronkhorst joined the Company as Vice President, Business
Development in January 1997. From December 1993 to January 1997, he was a Vice
President and Senior Research Analyst at Robertson, Stephens & Company, an
investment banking firm. From May 1988 to November 1993, he held various
positions at Seagate Technology, a disk drive company, most recently as Director
of Investor Relations.
5
<PAGE> 8
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of April 15, 1997 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of the Company's Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP (1)
-------------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL (%)
------------------------------------------------------ ---------- ----------
<S> <C> <C>
Summit Partners, L.P.(2).............................. 14,720,691 35.8
499 Hamilton Avenue, Suite
200 Palo Alto, CA 94301
Walter G. Kortschak(2)................................ 14,720,691 35.8
Neil M. Garfinkel..................................... -- --
Hitachi Metals, Ltd................................... 5,146,744 12.5
Chiyoda Building, 2nd Floor
1-2 Marunouchi
Tokyo 100 Japan
Bruce C. Edwards(3)................................... 46,500 *
Robert G. Teal(4)..................................... 46,500 *
Ronald L. Schauer(5).................................. 3,146,000 7.7
c/o HMT Technology Corporation
1055 Page Avenue
Fremont, CA 94538
Ronald J. Buschur(6).................................. 928,426 2.3
George J. Hall(7)..................................... 683,215 1.7
Michael A. Russak(8).................................. 840,524 2.1
Peter S. Norris(9).................................... 559,545 1.4
Jon R. van Bronkhorst(10)............................. 250,000 *
Larry J. Anderson(11)................................. 465,491 1.1
All directors and executive officers
as a group (11 persons)(12)......................... 21,686,892 52.8
</TABLE>
- ---------------
* Represents beneficial ownership of less than 1%.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, and subject to community property laws where applicable, the
persons named in the table above have sole voting and investment power with
respect to all shares of Common Stock shown as beneficially owned by them.
Percentage of beneficial ownership is based on 41,106,881 shares of Common
Stock outstanding as of April 15, 1997.
(2) Includes (i) 6,778,429 shares beneficially owned by Summit Ventures III,
L.P. ("Summit III"), (ii) 6,778,429 shares beneficially owned Summit
Venture IV, L.P. ("Summit IV"), (iii) 253,952 shares beneficially owned by
Summit Investors II, L.P. ("Summit Investors II") and (iv) 909,881 shares
beneficially owned by Summit Subordinated Debt Fund, L.P. ("Summit Sub Debt
Fund"). Mr. Kortschak, a director of the Company, is a general partner of
Summit Partners, L.P., the general partner of Summit III, Summit IV, Summit
Investors II and Summit Sub Debt Fund. Mr. Kortschak disclaims beneficial
ownership of such shares held by Summit III, Summit IV, Summit Investors II
and Summit Sub Debt Fund, except to the extent of his pecuniary interest
therein.
(3) Includes 31,969 shares that are subject to a right of repurchase in favor
of the Company that expires ratably through January 2000.
6
<PAGE> 9
(4) Includes 31,969 shares that are subject to a right of repurchase in favor
of the Company that expires ratably through January 2000.
(5) Represents 3,146,000 shares held by The Schauer Living Trust under
agreement dated March 15, 1996 ("Schauer Living Trust"). Mr. Schauer is
co-trustee of the Schauer Living Trust. Includes 1,191,433 shares that are
subject to a right of repurchase in favor of the Company that expires
ratably through November 1999 and 188,380 shares that are subject to a
right of repurchase in favor of the Company that expires upon the earlier
of the Company achieving certain performance goals or ratably beginning
December 2000 through December 2004.
(6) Represents 889,986 shares held by The Buschur Living Trust under agreement
dated March 11, 1996 ("Buschur Living Trust"), 19,220 shares held by The
Ryan Buschur 1996 Irrevocable Trust under agreement dated February 9, 1996
("Ryan Buschur Trust") and 19,220 shares held by The Lynsey Buschur 1996
Irrevocable Trust under agreement dated February 6, 1996 ("Lynsey Buschur
Trust"). Mr. Buschur is a co-trustee of the Buschur Living Trust. Ryan
Buschur, the beneficiary of the Ryan Buschur Trust, and Lynsey Buschur
Trust, are the children of Mr. Buschur. Mr. Buschur disclaims beneficial
ownership of the shares held in the Ryan Buschur Trust and the Lynsey
Buschur Trust. Includes 328,600 shares that are subject to a right of
repurchase in favor of the Company that expires ratably through November
1999 and 51,949 shares that are subject to a right of repurchase in favor
of the Company that expires upon the earlier of the Company achieving
certain performance goals or ratably beginning December 2000 through
December 2004.
(7) Represents 653,715 shares held by The George J. Hall Family Trust ("Hall
Family Trust") and 29,500 shares held by The Anne T. Hall Foundation ("Hall
Foundation"). Mr. Hall is a co-trustee of the Hall Family Trust and trustee
of the Hall Foundation. Mr. Hall disclaims beneficial ownership of the
shares held in the Hall Foundation. Includes 328,600 shares that are
subject to a right of repurchase in favor of the Company that expires
ratably through November 1999 and 51,949 shares that are subject to a right
of repurchase that expires upon the earlier of the Company achieving
certain performance goals or ratably beginning December 2000 through
December 2004.
(8) Represents 818,889 shares held by The Russak Living Trust U/A/D under
agreement dated May 31, 1996 ("Russak Living Trust"). Mr. Russak is
co-trustee of the Russak Living Trust. Includes 21,000 shares held by The
Mary Lynn Russak 1996 Irrevocable Trust ("Mary Lynn Russak Trust") and 635
shares held by Dr. Russak's spouse. Mary Lynn Russak, the beneficiary of
the Mary Lynn Russak Trust, is a daughter of Dr. Russak. Dr. Russak
disclaims beneficial ownership of the shares held in the Mary Lynn Russak
Trust. Includes 328,600 shares that are subject to a right of repurchase in
favor of the Company that expires ratably through November 1999 and 51,949
shares that are subject to a right of repurchase that expires upon the
earlier of the Company achieving certain performance goals or ratably
beginning December 2000 through December 2004.
(9) Includes 265,773 shares that are subject to a right of repurchase in favor
of the Company that expires ratably through November 1999 and 29,214 shares
that are subject to a right of repurchase in favor of the Company that
expires upon the earlier of the Company achieving certain performance goals
or ratably beginning December 2000 through December 2004.
(10) Consists of 250,000 shares issuable upon the exercise of options, all of
which are subject to a right of repurchase in favor of the Company that
expires January 2001 if such options are exercised.
(11) Includes 328,600 shares that are subject to a right of repurchase in favor
of the Company that expires ratably through November 1999. Mr. Anderson
resigned his position with the Company in May 1997.
(12) Includes 2,771,606 shares that are subject to a right of repurchase in
favor of the Company that expires ratably through November 1999, 63,938
shares that are subject to a right of repurchase in favor of the Company
that expires ratably through January 2000, 250,000 shares that are subject
to a right of repurchase in favor of the Company that expires in January
2001 and 373,441 shares that are subject to a right of repurchase which
expires upon the earlier of the Company achieving certain performance goals
or ratably beginning December 2000 through December 2004.
7
<PAGE> 10
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,
to file with the Securities Exchange Commission (the "Commission") initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than ten
percent stockholders are required by Commission regulation to furnish the
Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 1997, all Section
16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners were complied with, except that an initial report
on Form 3 was filed late by Mr. Jon R. van Bronkhorst.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Non-employee directors are paid $1,500 per meeting for attendance at
meetings of the Board of Directors and $500 per meeting for attendance at
meetings of any committee thereof. In the fiscal year ended March 31, 1997, the
total cash compensation paid to non-employee directors was $48,000. Directors
are reimbursed for reasonable out-of-pocket expenses incurred in connection with
attendance at such meetings in accordance with Company policy.
Each non-employee director of the Company (other than employees or
affiliates of Summit Partners) receives stock options under the 1996
Non-Employee Directors' Stock Option Plan (the "Directors' Plan) as compensation
for services of the Board of Directors. Option grants under the Directors' Plan
are automatic and non-discretionary. The Directors' Plan provides for the grant
of an option to purchase 8,000 shares of Common Stock to each person who is
first elected as a non-employee director after the plan's adoption date. Each
director who continues to serve as a non-employee director is granted an
additional option to purchase 2,000 shares of Common Stock on the anniversary of
the date of his or her initial grant or annually commencing with the fourth
anniversary of the plan's adoption date. During the last fiscal year, no options
to purchase shares of the Company's Common Stock were granted under the
Directors' Plan. As of April 15, 1997, no options had been exercised under the
Directors' Plan.
The 1996 Equity Incentive Plan (the "Incentive Plan") provides for grants
of incentive stock options to employees (including officers and employee
directors) and nonstatutory stock options, restricted stock purchase awards,
stock bonuses and stock appreciation rights to employees (including officers and
employee directors). The Incentive Plan is administered by the Compensation
Committee, which determines recipients and types of awards to be granted,
including the exercise price, number of shares subject to the award and the
exercisability thereof. Restricted stock purchase awards granted under the
Incentive Plan may be granted pursuant to a repurchase option in favor of the
Company in accordance with a service vesting schedule determined by the Board.
During the last fiscal year, 109 employee and consultants received options to
purchase 556,700 shares of the Company's Common Stock. As of April 15, 1997, no
options had been exercised under the Incentive Plan.
COMPENSATION OF EXECUTIVE OFFICERS
BONUS PLAN. The Company has a discretionary bonus program for certain
designated key employees of the Company, including all executive officers,
pursuant to which such employees are paid cash bonuses based upon the attainment
of certain specified corporate goals for the year established by the Board of
Directors. The amount of the cash bonus to which each such employee is entitled
is determined by the Board.
PROFIT SHARING PLAN. In May 1996, the Board of Directors approved an
incentive-based profit sharing plan for employees of the Company, including all
executive officers. Under this Plan, employees are paid cash
8
<PAGE> 11
bonuses on a quarterly basis based upon the attainment of certain specified
corporate goals determined by the Board of Directors.
In addition to cash compensation, the Company's executive officers are
eligible to receive stock options under the Employee Stock Purchase Plan (the
"Purchase Plan") and Incentive Plan. For a description of the Incentive Plan,
see "Compensation of Directors," above. The Purchase Plan is intended to qualify
as an employee stock purchase plan within the meaning of Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). An aggregate of 500,000
shares of Common Stock have been reserved for issuance under the Purchase Plan.
Under the Purchase Plan, eligible employees, including officers, may participate
in periodic offerings by the Company for a maximum 27 month offering period.
Employees who participate in an offering can have up to 15% of their earnings
withheld pursuant to the Purchase Plan to purchase shares of Common Stock of the
Company on specified dates determined by the Board of Directors. The price of
Common Stock purchased under the Purchase Plan will be equal to 85% of the lower
of the fair market value of the Common Stock on the commencement date of each
offering period or the specified purchase date. The Purchase Plan provides that,
in the event of dissolution, merger, consolidation or similar transaction in
which the Company is not the surviving corporation, the Board of Directors has
discretion to provide that each right to purchase Common Stock will be assumed
or an equivalent right substituted by the surviving entity, or the Board may
shorten the offering period and provide for all sums collected by payroll
deductions to be applied to purchase stock immediately prior to such merger or
other transaction.
The following table shows for the fiscal years ended March 31, 1997, 1996
and 1995, certain compensation awarded or paid to, or earned by, the Company's
Chief Executive Officer and its other four most highly compensated executive
officers (the "Named Executive Officers") at March 31, 1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------------- AWARDS/
OTHER SECURITIES
FISCAL ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(#) COMPENSATION($)
- ------------------------------ ------ --------- -------- ------------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Ronald L. Schauer 1997 271,635 105,165 1,535 -- 2,344(2)
President and Chief 1996 249,995 113,557 -- 3,596,000 3,592(3)
Executive Officer 1995 220,001 15,000 184,542 -- --
Mr. George J. Hall 1997 179,286 69,411 -- -- 2,313(4)
Vice President, 1996 165,675 63,811 -- 992,000 3,012(5)
Operations 1995 22,212 -- -- --
Dr. Michael A. Russak 1997 190,861 59,164 12,704 -- 2,951(6)
Vice President, 1996 176,673 18,360 73,331 992,000 3,043(7)
Research and 1995 163,652 15,000 54,035 -- --
Development
Mr. Peter S. Norris 1997 152,125 39,989 93,467 -- 2,835(8)
Vice President and 1996 42,001 22,692 -- 558,000 --
Chief Financial Office
Mr. Larry J. Anderson(9) 1997 146,693 39,917 72,823(10) -- 2,742(11)
Former Vice President, 1996 29,022 10,000 -- 465,000 --
Marketing and Sales
</TABLE>
- ---------------
(1) Consists of relocation payments.
(2) Consists of $252 paid by the Company in life insurance premiums and $2,092
in 401(k) employer matching contributions.
(3) Consists of $306 paid by the Company in life insurance premiums and $3,286
in 401(k) employer matching contributions.
(4) Consists of $252 paid by the Company in life insurance premiums and $2,061
in 401(k) employer matching contributions.
(5) Consists of $306 paid by the Company in life insurance premiums and $2,706
in 401(k) employer matching contributions.
9
<PAGE> 12
(6) Consists of $252 paid by the Company in life insurance premiums and $2,699
in 401(k) employer matching contributions.
(7) Consists of $306 paid by the Company in life insurance premiums and $2,737
in 401(k) employer matching contributions.
(8) Consists of $252 paid by the Company in life insurance premiums and $2,583
in 401(k) employer matching contributions.
(9) Mr. Anderson resigned from the Company in May 1997.
(10) Consists of $66,823 in relocation payments and $6000 car allowance.
(11) Consists of $252 paid by the Company in life insurance premiums and $2,490
in 401(k) employer matching contributions.
EMPLOYMENT AND SEVERANCE AGREEMENTS
SEVERANCE PLAN. In January 1996, the Company adopted an Executive Severance
Plan (the "Severance Plan") providing for certain benefits to executive officers
of the Company in the event an executive's employment is involuntarily
terminated without cause (generally meaning without any misconduct on the
executive's part) or that the executive voluntarily terminates employment with
good reason (generally meaning that the executive's responsibilities, title or
compensation was materially reduced). Upon the occurrence of such an event, the
Severance Plan provides for salary continuation for a period no greater than one
year. In addition, the Severance Plan provides for continued health benefits
coverage to the extent permitted by the Consolidated Omnibus Budget
Reconciliation Act of 1985 and the Company's group health policies.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(1)
During the fiscal year ended March 31, 1997, the Compensation Committee of
the Board of Directors (the "Committee") was composed of two non-employee
directors, Messrs. Kortschak and Teal. The Committee is responsible for
establishing the Company's compensation programs for all employees, including
executives. For executive officers, the Committee evaluates performance and
determines compensation policies and levels.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract and
retain the highest quality executive officers and other key employees, reward
them for the Company's progress and motivate them to enhance long-term
stockholder value. Key elements of this philosophy are as follows:
- The Company pays competitively with comparable technology companies, both
inside and outside its industry, with which the Company competes for
talent. To ensure that compensation is competitive, the Company compares
its practices with data storage companies and sets its parameters based
on this comparison.
- The Company maintains short- to long-term incentive opportunities
sufficient to provide motivation to achieve specific operating goals and
to generate rewards that bring total compensation to competitive levels.
- ---------------
1The material in this report is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference into any filing
of the Company under the Securities Act or the Exchange Act, whether made before
or after the date hereof and irrespective of any general incorporation language
in any such filing.
10
<PAGE> 13
- The Company provides significant equity-based incentives for executives
and other key employees to ensure that they are motivated over the
long-term to respond to the Company's business challenges and
opportunities as owners and not just as employees.
BASE SALARY. The Committee annually reviews each executive officer's base
salary. When reviewing base salaries, the Committee considers individual and
corporate performance, levels of responsibility, prior experience, breadth of
knowledge and competitive pay practices. Base salaries for executive officers
were increased by 6% to 11.2% for fiscal 1997 compared to fiscal 1996. The
increases were due to fiscal 1996 financial performance and the need to remain
within the range of competitive salaries for comparable companies.
NEAR-TERM INCENTIVES. In May 1996, the Company adopted the HMT Employee
Quarterly Profit Sharing Plan (the "Profit Sharing Plan"), an incentive award
plan for certain designated key employees of the Company, including all
executive officers. The actual incentive award earned depends on the achievement
of specified financial goals of the Company and individual performance
objectives. The Committee and the full Board of Directors review and approve the
annual performance objectives for the Company. The Company objectives consist of
operating, strategic and financial goals that are considered to be critical to
the Company's fundamental long-term goal of building stockholder value.
The Company has also adopted a Key Employee Quarterly Bonus Plan (the
"Quarterly Bonus Plan") for employees of the Company, including all executive
officers. Cash bonuses are paid on a quarterly basis based upon achievement of
certain specified corporate goals. The Board of Directors determines the
percentage of salary to be paid on an individual basis.
Amounts reflected as "bonuses" in the "Summary Compensation Table" above,
were paid based on the criteria set forth in the Profit Sharing Plan and the
Quarterly Bonus Plan.
LONG-TERM INCENTIVES. The Company's long-term incentive program consists of
the 1995 Management Stock Option Plan ("Management Plan"), the 1995 Stock Option
Plan ("Stock Plan), the Incentive Plan and the Employee Stock Purchase Plan
("ESPP"). As of March 31, 1996, 8,339,000 shares have been awarded to certain
key officers of the Company under the Management Plan, and 3,945,150 shares have
been granted under the Stock Plan. The Management Plan utilizes a combination of
vesting plans designed to enhance the long-term goals of the Company. A portion
of the options have a performancebased vesting provision which allows the
acceleration of vesting based upon the attainment of a number of performance
milestones. The remainder of the options have a time-based vesting provision
which encourages employees to remain with the Company. The Stock Plan options
vest on a monthly basis which the Company believes provides a strong incentive
for employees to remain with the Company. Through option grants, executives and
employees receive significant equity incentives to build long-term stockholder
value. Grants are made at 100% of fair market value on the date of grant.
Executives receive value from these grants only if the Company's Common Stock
appreciates over the long-term. Because the amount of the existing equity
participation by the executives was deemed adequate for fiscal 1997, no
additional option grants were made to the Named Executive Officers in fiscal
1997. The size of prior option grants was initially determined at the discretion
of the Board of Directors, which adopted the Management Plan and Stock Plan in
connection with the Leveraged Recapitalization of the Company on November 30,
1995. The Board awarded grants in order to provide significant links between
executive compensation and stockholder interests. Such grants were intended to
provide incentive to successfully complete the Company's initial public
offering, to successfully achieve certain specified revenue and profitability
targets and to maximize stockholder value over the next several years.
The Board has elected not to grant any further options under either the
Management Plan or Stock Plan. Future grants will be made under the Incentive
Plan. Employees will also be allowed to participate in the ESPP.
11
<PAGE> 14
CORPORATE PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Schauer's base salary during fiscal 1997 as President and Chief
Executive Officer was $271,635. His bonus for the fiscal year was $105,165. Mr.
Schauer's fiscal 1997 base salary was based largely on fiscal 1996 performance.
In fiscal 1996, the Company achieved several key objectives. These achievements
included achieving record financial performance for the Company, completing the
leveraged recapitalization of the Company and raising net proceeds of
approximately $88.7 million through the Company's initial public offering.
Accordingly, Mr. Schauer received an increase in base salary of $21,640 for
fiscal 1997 over the prior year. Mr. Schauer's fiscal 1997 cash bonus of
$105,165 was paid pursuant to the Profit Sharing Plan and the Quarterly Bonus
Plan. Mr. Schauer did not receive any additional option grants in fiscal 1997
because his existing equity participation was deemed adequate for fiscal 1997.
LIMITATION ON DEDUCTION OF COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
Section 162(m) of the Code limits the Company to a deduction for federal
income tax purposes of no more than $1 million of compensation paid to certain
Named Executive Officers in a taxable year. Compensation above $1 million may be
deducted if it is "performance-based compensation" within the meaning of the
Code.
The statute containing this law and the applicable proposed Treasury
regulations offer a number of transitional exceptions to this deduction limit
for pre-existing compensation plans, arrangements and binding contracts. As a
result, the Compensation Committee believes that at the present time it is quite
unlikely that the compensation paid to any Named Executive Officer in a taxable
year which is subject to the deduction limit will exceed $1 million. Therefore,
the Compensation Committee has not yet established a policy for determining
which forms of incentive compensation awarded to its Named Executive Officers
shall be designed to qualify as "performance-based compensation."
CONCLUSION
Through the plans described above, a significant portion of the Company's
executive compensation program, including Mr. Schauer's compensation, is
contingent on Company performance, and realization of benefits is closely linked
to increases in long-term stockholder value. The Company remains committed to
this philosophy of pay for performance, recognizing that the competitive market
for talented executives and the volatility of the Company's business may result
in highly variable compensation for a particular time period.
Walter G. Kortschak
Robert G. Teal
12
<PAGE> 15
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the total stockholder return of an investment of
$100 in cash on March 13, 1996 for (i) the Company's Common Stock, (ii) the
Nasdaq Composite (the "Nasdaq Composite") and (iii) the Nasdaq Computer
Manufacturers Index.
COMPARISON OF 13 MONTH CUMULATIVE TOTAL RETURN ON INVESTMENT(2)
<TABLE>
<CAPTION>
Measurement Period HMT Technology Nasdaq Stock Nasdaq Computer
(Fiscal Year Covered) Corporation Market (U.S.) Manufacturer
<S> <C> <C> <C>
3/13/96 100 100 100
3/96 104 101 98
3/97 123 113 107
</TABLE>
CERTAIN TRANSACTIONS
HITACHI METALS, LTD. AND AFFILIATES
The Company has secured distribution and sales support services from
Hitachi Metals Trading and Hitachi Kizoku Shoji, affiliates of Hitachi Metals,
for sales into the Japanese market. During fiscal 1997, sales of the Company's
products through Hitachi Metals Trading totalled $2,000.
The Company purchases various manufacturing materials from Hitachi Metals
and its affiliates. During fiscal 1997, the Company purchased $11.1 million of
nickel-plated polished substrates through Hitachi Metals Trading. During the
same period, the Company purchased $1.5 million of sputtering process targets
and other parts from Hitachi Metals America, an affiliate of Hitachi Metals.
The Company believes that these transactions with Hitachi Metals and its
affiliates were in the best interests of the Company and were on terms no less
favorable to HMT than could be obtained from unaffiliated third parties. The
Board of Directors has adopted a policy that all material transactions with
affiliates be on terms no less favorable to the Company than those available
from unaffiliated third parties and be subject to review and approval by a
majority of the disinterested members of the Board of Directors.
- ---------------
1 This Section is not "soliciting material," is not deemed "filed" with the SEC
and is not to be incorporated by reference in any filing of the Company under
the 1933 Act or the 1934 Act whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
2 $100 invested on 03/13/96 in stock or index, including reinvestment of
dividends. Fiscal years ended March 31.
13
<PAGE> 16
LOANS TO OFFICERS
In April 1996, in connection with his relocation to California, the Company
made a secured loan in the principal amount of $150,000 to Mr. Norris. The
bridge loan did not bear interest for the first six months. Mr. Norris repaid
the loan in full on October 21, 1996.
INDEMNIFICATION AGREEMENTS
The Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided
therein, for expenses, damages, judgments, fines and settlements he or she may
be required to pay in actions or proceedings which he or she is or may be made a
party by reason of his position as a director, officer or other agent of the
Company, and otherwise to the full extent permitted under Delaware law and the
Company's Bylaws.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
LOGO
Peter S. Norris
Vice President, Finance, Chief
Financial Officer,
Treasurer and Assistant Secretary
July 9, 1997
1491-PS-97
14
<PAGE> 17
HMT TECHNOLOGY CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 14, 1997
The undersigned hereby appoints PETER S. NORRIS and JAMES C. KITCH and
each of them, as proxies of the undersigned, each with full power of
substitution, to vote all of the shares of stock of HMT Technology Corporation
which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of HMT Technology Corporation to be held at Embassy Suites Hotel,
901 East Calaveras Boulevard, Milpitas, California, 95035 on Thursday, August
14, 1997, at 9:00 a.m., local time, and at any and all continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED
BELOW.
PROPOSAL 1: To elect directors to serve for the ensuing year and
until their successors are elected.
[ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote
as marked to the contrary below). for all nominees listed
below.
NOMINEES: Ronald L. Schauer Walter G. Kortschak
Bruce C. Edwards Robert G. Teal
Neil M. Garfinkel
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), WRITE SUCH NOMINEE(S)'
NAME(S) BELOW:
________________________________________________________________________________
________________________________________________________________________________
(Continued on other side)
<PAGE> 18
(Continued from other side)
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSAL 2.
PROPOSAL 2: To ratify the selection of Coopers & Lybrand L.L.P.
as independent auditors of the Company for its fiscal
year ending March 31, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Dated ______________, 1997 ______________________________
______________________________
______________________________
SIGNATURE(S)
Please sign exactly as your name
appears hereon. If the stock
is registered in the names of
two or more persons, each
should sign. Executors,
administrators, trustees,
guardians and
attorneys-in-fact should add
their titles. If signer is a
corporation, please give full
corporate name and have a
duly authorized officer sign,
stating title. If signer is
a partnership, please sign in
partnership name by
authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE, WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
2.
