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 ss. 240.14a-11(c) or ss. 240.14a-12
SAVOIR TECHNOLOGY GROUP, INC.
- --------------------------------------------------------------------------------
(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)(1) 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.:
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3) Filing Party:
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4) Date Filed:
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<PAGE>
SAVOIR TECHNOLOGY GROUP, INC.
254 EAST HACIENDA AVENUE
CAMPBELL, CA 95008
(408) 379-0177
SAVOIR TECHNOLOGY GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of SAVOIR TECHNOLOGY GROUP, INC.:
The Annual Meeting of Stockholders of Savoir Technology Group, Inc.
(the "Company") will be held at 254 East Hacienda Avenue, Campbell, California
95008, on August 5, 1998 at 10:30 a.m. for the purpose of considering and
acting upon the following proposals:
(1) To elect a Board of seven (7) directors to hold office
until the next annual meeting of stockholders or until their respective
successors have been elected and qualified;
(2) To approve an amendment to the Company's 1994 Stock Option
Plan increasing the number of shares reserved for option grants;
(3) To ratify the designation of Coopers & Lybrand L.L.P. as
independent accountants for the period ending December 31, 1998; and
(4) To transact such other business as may properly come
before the meeting or any postponement or adjournment thereof.
The Board of Directors has fixed the close of business on July 1, 1998
as the record date for determination of stockholders entitled to notice of and
to vote at the Annual Meeting and at any postponements or adjournments thereof.
A list of stockholders entitled to vote will be available at 254 East Hacienda
Avenue, Campbell, California 95008 for ten days prior to the Annual Meeting.
The Company's December 31, 1997 Annual Report to stockholders
accompanies this Notice of Annual Meeting of Stockholders and Proxy Statement.
By Order of the Board of Directors
P. Scott Munro
Secretary
Campbell, California
July 7, 1998
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
SAVOIR TECHNOLOGY GROUP, INC.
254 EAST HACIENDA AVENUE
CAMPBELL, CA 95008
(408) 379-0177
--------------------
PROXY STATEMENT
--------------------
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 5, 1998
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Savoir Technology Group, Inc. (the "Company") of
proxies for use at the Annual Meeting of Stockholders of the Company to be held
on August 5, 1998 at 10:30 a.m. at the principal executive offices of the
Company located at 254 East Hacienda Avenue, Campbell, California 95008. This
proxy statement and the accompanying form of proxy are being mailed to
stockholders on or about July 7, 1998.
VOTING RIGHTS
Stockholders of record of the Company as of the close of business on
July 1, 1998 have the right to receive notice of and to vote at the Annual
Meeting. On July 1, 1998, the Company had issued and outstanding 9,914,097
shares of Common Stock and 2,024,900 shares of Series A Preferred Stock. Each
share of Common Stock and Series A Preferred Stock is entitled to one vote for
as many separate nominees as there are directors to be elected and for or
against all other matters presented. For action to be taken at the Annual
Meeting, the majority of the shares entitled to vote must be represented at the
meeting in person or by proxy. Director nominees receiving the highest number of
affirmative votes up to the number of directors to be elected will be elected.
Votes withheld with respect to director nominees have no legal effect. The
affirmative vote of a majority of the shares voting and a majority of the
required quorum is the minimum approval necessary and is required to approve an
amendment to the Company's 1994 Stock Option Plan and the ratification of
Coopers & Lybrand L.L.P. as independent accountants. Because abstentions with
respect to any matter are treated as shares present or represented and entitled
to vote for the purposes of determining whether that matter has been approved by
the stockholders, abstentions have the same effect as negative votes. If the
number of abstentions is such that the affirmative votes do not constitute the
requisite vote, the proposal will be defeated. Broker non-votes and shares as to
which proxy authority has been withheld with respect to any matter are not
deemed to be present or represented for purposes of determining whether
stockholder approval of that matter has been obtained.
PROXIES
Proxies for use at the Annual Meeting are being solicited by the Board
of Directors of the Company from its stockholders.
Shares represented by properly executed proxies received by the Company
will be voted at the Annual Meeting in accordance with the instructions thereon.
It is intended that shares represented by proxies received by the Company with
no instructions will be voted in favor of all proposals set forth in the Notice
of Meeting and for the nominees as described below.
Any person giving a proxy in the form accompanying this Proxy Statement
has the power to revoke it at any time before its exercise by (i) filing with
the Secretary of the Company a signed written statement revoking his or her
proxy or (ii) submitting an executed proxy bearing a date later than that of the
proxy being revoked. A proxy may also be revoked by attendance at the Annual
Meeting and the election to vote in person. Attendance at the Annual Meeting
will not by itself constitute the revocation of a proxy.
-1-
<PAGE>
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
At the Annual Meeting, a Board of seven (7) directors will be elected.
The Board of Directors currently consists of six (6) directors. At a Meeting of
the Board of Directors on May 13, 1998, the Board unanimously approved the
amendment to Article III, Section 3.2 of the Amended and Restated Bylaws of the
Company to provide that the authorized number of directors shall be increased,
effective the commencement of the 1998 Annual Meeting, to seven (7) directors.
Except as set forth below, unless otherwise instructed, the proxy holders will
vote the proxies received by them for Management's nominees named below. Six (6)
of the nominees are presently directors of the Company. Mr. Guy M. Lammle shall
become a member of the Board of Directors upon stockholder approval. In the
event that any Management nominee shall become unavailable, the proxy holders
will vote in their discretion for a substitute nominee. It is not expected that
any nominee will be unavailable. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders or until a
successor has been elected and qualified.
THE NAME AND PRINCIPAL OCCUPATION FOR THE PAST FIVE YEARS OF THE DIRECTORS
NOMINATED BY MANAGEMENT ARE:
P. SCOTT MUNRO, 41, has served as Chief Executive Officer, President
and Secretary of the Company since July 1995. Mr. Munro has also served as
Chairman of the Board since January 1998 and served as a Director of the Company
from July 1995. From January 1993 to July 1995, Mr. Munro was President,
Computer Systems Division of the Company, and from July 1990 to January 1993, he
served as Senior Vice President, Computer Systems Division of the Company. Prior
to 1990, Mr. Munro served as a General Manager for both Future Electronics,
Inc., a distributor of electronic components, and Arrow Electronics, Inc., a
distributor of computer products.
CARLTON JOSEPH MERTENS II, 32, has served as a Director of the Company
and as Chief Executive Officer and President of the Company's subsidiary,
Business Partners Solutions, Inc., since September 1997. From 1984 to September
1997, Mr. Mertens was an active member of Star Management System's ("SMS")
management team, and served as Executive Vice President of SMS from 1991 to
September 1997 prior to its acquisition by the Company.
ANGELO GUADAGNO, 56, has served as a Director of the Company since
August 1997. From 1989 to 1997, he was the Vice President of Worldwide Channel
Sales of Data General, a manufacturer of servers, storage systems and related
software. During his tenure at Data General he also served as: Vice President of
U.S. Sales from 1994 to 1996; Vice President, American Sales and Services from
1990 to 1994; and Vice President of North American Sales Division from 1989 to
1990.
JAMES J. HEFFERNAN, 56, has served as a Director of the Company since
October 1995. Since January 1996, he has been a director of USWeb Corporation,
an Internet consulting firm, and was Chief Financial Officer from January 1996
to May 1998. From March 1995 to January 1996, he was Chief Financial Officer of
Interlink Computer Sciences, a software company. Prior to such time, Mr.
Heffernan was Chairman of the Board and Chief Financial Officer of Panoramic,
Inc., a software company. From June 1994 to June 1995, Mr. Heffernan was a
director of International Microcomputer Software, Inc., a software company.
K. WILLIAM SICKLER, 49, has served as a Director of the Company since
July 1993. Mr. Sickler has served as Chief Executive Officer and President of
Gadzoox Networks, Inc., a provider of gigabit fibre channel networking products
since April 1996. From July 1995 to April 1996, he was Executive Director of
Software Business Development for Seagate Technology, a software developer and
manufacturer of disk drives, with responsibility for analysis of potential
software company acquisitions. From December 1992 to July 1995, Mr. Sickler was
President and Chief Executive Officer of Network Computing, Inc., a provider of
network management software for local area networks.
-2-
<PAGE>
J. LARRY SMART, 50, has served as a Director of the Company since
October 1995. From October 1995 to January 1998, he also served as Chairman of
the Board of the Company. Since March 1997, Mr. Smart has served as President
and Chief Executive Officer of Visioneer, Inc., a developer of personal desktop
management hardware and software imaging products, and served as Chairman of the
Board of Directors of that company from February 1997 until assuming the
position of President and Chief Executive Officer. From July 1995 until March
1997, he was Chairman of the Board, President and Chief Executive Officer of
StreamLogic Corporation, a data storage company. From March 1994 to February
1995, Mr. Smart was President and Chief Executive Officer of Maxtor Corporation,
a data storage company. From July 1991 to February 1995, Mr. Smart was President
and Chief Executive Officer of Southwall Technologies, Inc., a materials
sciences company.
GUY M. LAMMLE, 46, is not currently a member of the Board of Directors.
He has served as Chairman of the Board, Chief Executive Officer and Director of
NXTrend Technology, Inc. since February 1980 and assumed the additional title of
President in October 1996. From 1974 to 1980, Mr. Lammle was employed with The
Burroughs Corporation, a computer hardware company, progressing from Sales
Representative to Zone Manager and finally District Product Manager.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" MANAGEMENT'S
NOMINEES.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The total number of regular and special meetings of the Board of
Directors held in the last fiscal year was fifteen (15). All directors attended
at least seventy-five percent (75%) of the Board meetings and the meetings of
the committees of the Board on which such director served.
The Audit Committee of the Board of Directors, which presently consists
of Messrs. Heffernan and Smart, met once during the last fiscal year. The Audit
Committee has the responsibility to review the scope of the annual audit,
recommend to the Board of Directors the appointment of the independent
accountants, and meet with the independent accountants for review and analysis
of the Company's systems, the adequacy of controls and the sufficiency of
financial reporting and legal accounting compliance.
The Compensation Committee of the Board of Directors, which presently
consists of Messrs. Guadagno and Sickler, met once during the last fiscal year.
The Compensation Committee has the responsibility for determining the
compensation to be paid to each of the Company's executive officers.
The Stock Option Committee of the Board of Directors, which presently
consists of Messrs. Guadagno and Sickler, met once during the last fiscal year.
The Stock Option Committee administers the Company's Amended and Restated
Incentive and Non-Incentive Stock Option Plans and the 1994 Stock Option Plan
(collectively, the "Stock Options Plans").
The Nominating Committee of the Board of Directors, which presently
consists of Messrs. Munro, Sickler and Smart, met once as part of a larger Board
meeting during the last fiscal year. The Nominating Committee recommends to the
Board of Directors persons for nomination to the Board. The Nominating Committee
will consider recommendations from stockholders which should be addressed to the
attention of the Secretary, Savoir Technology Group, Inc., 254 East Hacienda
Avenue, Campbell, California 95008.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules of the Securities and Exchange Commission (the
"Commission") thereunder require the Company's executive officers, directors and
certain stockholders to file reports of ownership and changes in ownership of
the Common Stock with the Commission. Based upon a review of such reports, the
Company believes that all reports required by Section 16(a) of the Exchange Act
to be filed by its executive officers and directors during the last fiscal year
were filed on time, except that Messrs. Guadagno and O'Reilly filed their Forms
3 approximately five months late.
-3-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as to the beneficial
ownership of the capital stock of the Company as of June 26, 1998, by: (i) each
person known to the Company to beneficially own more than five percent (5%) of
the capital stock of the Company; (ii) each of the Company's directors and
director nominees; (iii) each of the Named Executive Officers (as defined on
page of this Proxy Statement); and (iv) all executive officers and directors as
a group.
<TABLE>
<CAPTION>
PERCENT OF SHARES
NUMBER OF SHARES BENEFICIALLY
DIRECTORS, OFFICERS AND CERTAIN BENEFICIAL OWNERS BENEFICIALLY OWNED(1) OWNED(2)
- -------------------------------------------------------- --------------------- ----------------
<S> <C> <C>
Robert Fleming Inc.(3)..................................... 1,503,305 12.5%
Astoria Capital Partners, L.P.(4)
3 Embarcadero Center
San Francisco, CA 94111........................... 999,149 8.3%
Hemisphere Trading Co.(5)
5796 Shelby Oaks Drive, Suite 12
Memphis, TN 38134................................ 753,000 6.3%
ROI Capital Management, Inc. ("ROI") and affiliates(6)
One Bush Street, Suite 1150
San Francisco, CA 94104.......................... 666,478 5.6%
Strome Susskind Investment Management,
L.P. ("SSIM") and affiliates(7)
100 Wilshire Avenue
Santa Monica, CA 90491............................ 590,967 4.9%
Canpartners Investments IV, LLC ("CanIV")
and affiliates(8)
9665 Wilshire Boulevard, Suite 200
Beverly Hills, CA 90212.......................... 517,616 4.3%
Carlton Joseph Mertens II(9)............................... 460,000 3.8%
Michael N. Gunnells(10).................................... 450,000 3.8%
John M. Harkins(11)........................................ 450,000 3.8%
P. Scott Munro(12)......................................... 188,594 1.5%
Guy M. Lammle.............................................. 64,207 *
James W. Dorst(13)......................................... 63,219 *
K. William Sickler(14)..................................... 24,313 *
J. Larry Smart(15)......................................... 22,813 *
Robert O'Reilly(16)........................................ 21,359 *
James J. Heffernan(17)..................................... 8,813 *
Angelo Guadagno(18)........................................ 3,750 *
All executive officers and directors as a group
(9 persons)(19)............................................ 857,068 7.0%
</TABLE>
- ----------
* Less than one percent (1%).
(1) Unless otherwise indicated, the beneficial owner has sole voting and
dispositive power over the shares reported in the table. Includes shares
of Common Stock and shares of Series A Preferred Stock on an as converted
basis. Information with respect to beneficial ownership is based upon
information obtained from the stockholders and from the Company's transfer
agent. To the Company's knowledge, unless otherwise indicated, the persons
and entities named in the table have sole voting and sole investment power
with respect to all shares beneficially owned, subject to community
property laws where applicable. Beneficial ownership is determined in
accordance with the rules of the Commission and includes voting and
investment power with respect to securities. Shares of Common Stock
issuable upon exercise of stock options exercisable within 60 days of June
26, 1998 or upon exercise of warrants that are currently exercisable or
exercisable within 60 days of June 26, 1998 are deemed to be outstanding
and to be
-4-
<PAGE>
beneficially owned by the person presently entitled to exercise for the
purpose of computing the percentage ownership of such person but are not
treated as outstanding for the purpose of computing the percentage
ownership of any other person. Each share of Series A Preferred Stock is
convertible at any time into shares of the Common Stock at a current ratio
of 1.027 shares of Common Stock for each share of Series A Preferred Stock
and is entitled to vote, without conversion, together with the Common
Stock as a single class on an as converted basis.
(2) Based on 9,914,097 shares of Common Stock and 2,024,900 shares of Series A
Preferred Stock outstanding (equivalent to 2,079,572 shares of Common
Stock) on an as converted basis, as of June 26, 1998.
(3) Includes 325,000 shares of Series A Preferred Stock and warrants to
purchase 362,500 shares of Common Stock. The shares of Series A Preferred
Stock and warrants are held as follows: (i) 325,000 shares of Series A
Preferred Stock and warrants to purchase 362,500 shares of Common Stock
are held by Robert Fleming Inc. Based on a Schedule 13G dated May 6, 1998
filed by Robert Fleming, Inc.
(4) Includes 683,060 shares of Common Stock, 207,000 shares of Series A
Preferred Stock and warrants to purchase 103,500 shares of Common Stock.
Common Stock ownership information is based on a Schedule 13G/A dated
March 16, 1998 filed jointly by Richard W. Koe, Astoria Capital
Management, Inc. ("Astoria Management")and Astoria Capital Partners L.P.
("Astoria Partners") reporting ownership as follows:
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK SHARED VOTING AND
BENEFICIALLY OWNED DISPOSITIVE POWER
------------------ -----------------
<S> <C> <C>
Astoria Partners...................... 511,414 0
Astoria Management.................... 683,060 0
Richard W. Koe........................ 683,060 0
</TABLE>
Astoria Partners is an investment limited partnership, whose general
partners are Richard W. Koe and Astoria management. Astoria Management is
an investment adviser registered under Section 203 of the Investment
Advisers Act of 1940. Richard W. Koe is Astoria Management's president and
sole shareholder. The shares of Series A Preferred Stock and warrants to
purchase shares of Common Stock are owned by Astoria Partners. The shares
of Series A Preferred Stock and warrants are not registered pursuant to
Section 12 of the Exchange Act; therefore, ownership of such securities
does not require reporting pursuant to Regulation 13D of the Exchange Act.
The Company has no information about the shared voting and dispositive
power of such securities.
(5) Based on a Schedule 13G dated October 3, 1997 filed by Hemisphere Trading
Co. Hemisphere Trading Co. is an investment adviser registered under
Section 203 of the Investment Advisers Act of 1940 and has sole voting and
dispositive power with regard to all of the 753,000 shares of the Common
Stock covered by the Schedule 13G.
(6) Based on a Schedule 13G dated June 16, 1998 filed by ROI.
(7) Includes 387,012 shares of Series A Preferred Stock and warrants to
purchase 193,506 shares of Common Stock. The shares of Series A preferred
Stock and warrants are held as follows: (i) 126,852 shares of Series A
Preferred Stock and warrants to purchase 63,426 shares of Common Stock are
held by Strome Offshore Limited; (ii) 125,098 share of Series A Preferred
Stock and warrants to purchase 62,549 of Common Stock are held by Strome
Susskind Hedgecap Fund, LP; (iii) 103,788 shares of Series A Preferred
Stock and warrants to purchase 51,894 shares of Common Stock are held by
Strome Partners L.P.; and (iv) 31,274 shares of Series A Preferred Stock
and warrants to purchase 15,637 shares of Common Stock are held by Strome
Hedgecap Limited. The Series A Preferred Stock and warrants are not
registered pursuant to Section 12 of the Exchange Act; therefore,
ownership of such securities does not require reporting pursuant to
Regulation 13D of the Exchange Act. The Company has no information about
the shared voting and dispositive power of such securities.
-5-
<PAGE>
(8) Includes 208,000 shares of Series A Preferred Stock and warrants to
purchase 304,000 shares of Common Stock. Common Stock ownership
information is based on a Schedule 13D dated September 30, 1997 filed
jointly by CanIV, Canyon Capital Management, L.P. ("CCM"), Canpartners
Incorporated ("Canpartners"), Mitchell R. Julis, Joshua S. Friedman and R.
Christian B. Evensen, each of whom beneficially owns 512,000 shares and
shares voting and dispositive power over all such shares. Messrs. Julis,
Friedman and Evensen are the sole stockholders of Canpartners. Messrs.
Julis, Friedman and Evensen and Canpartners are the members of CanIV,
which is an investment limited partnership formed to hold securities
through participation agreements for accounts managed by CCM. Canpartners
is the managing general partner of CanIV. CCM is a registered investment
adviser controlled by Canpartners. In addition, 208,000 shares of Series A
Preferred Stock and warrants to purchase 304,000 shares of Common Stock
are held by CanIV. The Series A Preferred Stock and warrants are not
registered pursuant to Section 12 of the Exchange Act; therefore,
ownership of such securities does not require reporting pursuant to
Regulation 13D of the Exchange Act. The Company has no information about
the shared voting and dispositive power of such securities.
(9) Based on a Schedule 13D dated September 30, 1997 filed by Mr. Mertens.
(10) Based on a Schedule 13D dated June 5,1998 filed by Mr. Gunnells.
(11) Based on a Schedule 13D dated June 5, 1998 filed by Mr. Harkins.
(12) Includes 177,968 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(13) Includes 46,250 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(14) Includes 18,813 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(15) Includes 8,813 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(16) Includes 20,000 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(17) Includes 8,813 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(18) Includes 3,750 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
(19) Includes 284,407 shares subject to stock options that are presently
exercisable or will become exercisable within 60 days of June 26, 1998.
-6-
<PAGE>
EXECUTIVE COMPENSATION
The following table provides certain summary information concerning
compensation paid to the Company's Chief Executive Officer and to the Company's
two other named executive officers (the "Named Executive Officers"), for the
fiscal years ended December 31, 1997, 1996 and 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION
--------------------------------------------- SECURITIES
NAME AND FISCAL OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) COMPENSATION($)
-------------------- ------ --------- -------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
P. Scott Munro 1997 302,485 119,398 -- 150,000 --
Chairman of the 1996 221,286 122,564 -- 125,000 --
Board, Chief 1995 173,660 152,530 -- 60,000 --
Executive Offi-
cer, President
and Secretary
James W. Dorst 1997 192,333 51,872 -- 30,000 --
Chief Financial 1996 150,000 47,867 -- 20,000 --
Officer 1995 100,000 30,640 20,833(1) 50,000 --
Robert O'Reilly 1997(2) 142,517 36,578 -- 30,000 --
Senior Vice
President
</TABLE>
- ----------
(1) Mr. Dorst served as a consultant to the Company from February 1995
until he was hired by the Company in May 1995. During his consultancy
with the Company, he was paid $20,833.
(2) Mr. O'Reilly became an executive officer of the Company during 1997.
-7-
<PAGE>
The following table sets forth certain information regarding options
granted during the fiscal year ended December 31, 1997 to the Named Executive
Officers.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM ($)(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------
NAME GRANTED(#) FISCAL YEAR(1) ($/SHARE) DATE 5% 10%
- --------------- ------------ -------------- ------------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
P. Scott Munro 75,000(3) 13.2% 11.375 5/16/07 536,526 1,359,662
75,000(4) 13.2% 11.375 5/16/07 536,526 1,359,662
James W. Dorst 15,000(3) 2.6% 11.375 5/16/07 107,305 271,932
15,000(4) 2.6% 11.375 5/16/07 107,305 271,932
Robert O'Reilly 15,000(3) 2.6% 11.375 5/16/07 107,305 271,932
15,000(4) 2.6% 11.375 5/16/07 107,305 271,932
</TABLE>
- ----------
(1) Based on options to purchase an aggregate of 567,000 shares of Common
Stock granted during fiscal 1997.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These
gains are based on assumed rates of stock appreciation of five percent
(5%) and ten percent (10%) compounded annually from the date the
respective options were granted to their expiration date and are not
presented to forecast possible future appreciation, if any, in the price
of the Common Stock. The gains shown are net of the option exercise price,
but do not include deductions for taxes or other expenses associated with
the exercise of the options or the sale of the underlying shares. The
actual gains, if any, on the stock option exercises will depend on the
future performance of the Common Stock, the optionee's continued
employment through applicable vesting periods and the date on which the
options are exercised.
(3) These options have a 10-year term and vest at the rate of twenty-five
percent (25%) per year over a four-year period. These options have
accelerated vesting upon a change of control of the Company.
(4) These options have a 10-year term and vest based on the price of the
Common Stock expressed as a 30-day consecutive average, with one hundred
percent (100%) vesting after five years in any event. These options have
accelerated vesting upon a change of control of the Company.
-8-
<PAGE>
The following table shows the number of shares of Common Stock
represented by outstanding stock options held by each of the Named Executive
Officers as of December 31, 1997.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES(1)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------------- ------------------------------ -----------------------------
<S> <C> <C>
P. Scott Munro...................... 134,218 / 302,500 718,549 / 628,438
James W. Dorst...................... 30,000 / 70,000 210,000 / 233,750
Robert O'Reilly..................... 11,250 / 63,750 32,344 / 97,031
</TABLE>
- ----------
(1) Based on a per share price of $10.375, the closing price of the Common
Stock as reported by The Nasdaq Stock Market on December 31, 1997 the
last trading day of the fiscal year.
COMPENSATION OF DIRECTORS
The Company's outside directors (i.e., those who are not employees of
the Company) receive an annual retainer of $20,000, plus $750 for each board
meeting attended. The Company pays for directors' liability insurance and has
entered into indemnification agreements with each of its directors. The
Company's 1994 Stock Option Plan provides for the grant of an option covering
15,000 shares of the Common Stock to certain directors who are not employees
following their initial election or appointment and the grant of an option for
4,000 shares at every regular annual meeting thereafter at which they are
elected. The exercise price is the fair market value of the Common Stock on the
date of each respective grant and the options vest over a four (4) year period.
In May 1997, the Board of Directors made discretionary grants of nonstatutory
stock options to each of the outside directors to purchase 6,250 shares at an
exercise price of $11.00.
CHANGE IN CONTROL
Stock options held by the Company's directors and Named Executive
Officers under the Company's Stock Option Plans will become fully vested and
exercisable following a change in control of the Company. A "change in control"
means the occurrence of any of the following events: (i) stockholder approval of
a merger or consolidation of the Company with any other corporation resulting in
a change in fifty percent (50%) or more of the total voting power of the
Company; (ii) stockholder approval of a plan of complete liquidation of the
Company or an agreement for the sale or disposition of all or substantially all
of the Company's assets; or (iii) any person becomes the beneficial owner of
more than fifty percent (50%) of the Company's total outstanding securities.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with P. Scott
Munro dated May 1, 1998. Pursuant to the terms of the agreement Mr. Munro
receives a base salary of $360,000 per year and is eligible to receive a bonus
of up to $170,000 a year and a one-time bonus of $40,000, subject to achievement
of certain performance goals. If Mr. Munro is terminated without cause or
terminates for good reason, he will be entitled to (i) continuation of his base
salary, his stock option vesting and his most recently paid regular quarterly
bonus annualized, payable on a salary continuation basis, for a period of one
(1) year following termination. His health care benefits will continue until the
earlier of the end of the twelve (12) months period or until he becomes eligible
for comparable benefits at another employer. If Mr. Munro is terminated without
cause or terminates for good reason following a change in control of the
Company, he will be entitled to the product of 1.5 times his
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base salary and most recently paid regular annual bonus in a cash lump sum, and
his health care benefits will continue until the earlier of (i) twelve (12)
months following the termination of employment or the date he becomes eligible
for comparable benefits at another employer. Mr. Munro's stock options will
fully vest upon a change in control of the Company.
The Company has also entered into employment agreements with other
management personnel as follows: (i) an employment agreement with James W. Dorst
dated January 22, 1998, pursuant to which Mr. Dorst receives a base salary of
$200,000 per year and is eligible to receive a bonus of up to $60,000 per year
and one-time bonuses of up to $30,000, subject to achievement of certain
performance goals; and (ii) an employment agreement with Robert O'Reilly dated
January 22, 1998, pursuant to which Mr. O'Reilly receives a base salary of
$150,000 per year and is eligible to receive a bonus of up to $50,000 a year and
a one-time bonus of $12,500 subject to achievement of performance goals. In
addition to the foregoing, pursuant to each of their agreements with the
Company, if Mr. Dorst or Mr. O'Reilly is terminated for cause, such person will
be entitled to receive his base salary and bonus due through the date of his
termination. If Mr. Dorst or Mr. O'Reilly is terminated without cause, such
person will be entitled to receive his base salary for a period following his
termination, nine (9) months for Mr. Dorst and six (6) months for Mr. O'Reilly.
If Mr. Dorst's or Mr. O'Reilly's responsibilities are reduced within twelve (12)
months following a change in control and such reduction in responsibilities is
not for cause, any resignation of employment as a consequence of such reduction
in responsibilities will be treated as a termination of employment without
cause.
The Company has entered into an employment agreement with Carlton
Joseph Mertens II dated September 30, 1997, pursuant to which Mr. Mertens
receives a base salary of $270,000 per year and is eligible to receive a bonus
of up to $130,000 a year, subject to achievement of certain performance goals.
If Mr. Mertens is terminated for cause, he will be entitled to receive his base
salary and bonus due through the date of his termination. If Mr. Mertens is
terminated without cause or if Mr. Mertens terminates his employment with the
Company for certain specified reasons, he will be entitled to receive his base
salary for nine (9) months following his termination; such reasons include
assignment or alteration by the Company of Mr. Mertens' duties, responsibilities
or obligations materially inconsistent with his position with the Company after
notice of Mr. Mertens' objections thereto, failure of the Company to provide to
Mr. Mertens the salary or bonuses described above, relocation of the Company's
Business Partner Solutions, Inc.'s principal offices outside of San Antonio,
Texas, any requirement by the Company for Mr. Mertens to relocate anywhere other
than San Antonio, Texas and instructions by the Company given to Mr. Mertens to
violate any applicable law after notice of Mr. Mertens' objections. In addition,
the Company has entered into an noncompetition agreement with Mr. Mertens dated
September 30, 1997 (the "Mertens Non-Compete"). The Mertens Non-Compete was made
in connection with the sale by Mr. Mertens of all of his shares of SMS to the
Company. Under the Mertens Non- Compete, Mr. Mertens agreed that, with respect
to certain geographic areas, including all of the states of the United States of
America (but excluding certain California counties), Canada, Mexico and Puerto
Rico, he would not sell computer hardware, software or services to value-added
resellers, resellers or systems integrators or approach, contract or solicit any
employee of the Company (or any affiliate of the Company) to leave the employ of
the Company (or any of its affiliates) except through general employment
advertising. The Mertens Non- Compete expires on the earlier of September 30,
1999 or the date on which final payment of any salary due to Mr. Mertens is
made. The Mertens Non-Compete may terminate earlier upon the Company's failure
to pay timely accrued interest on certain promissory notes held by Mr. Mertens.
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COMPENSATION COMMITTEE REPORT ON COMPENSATION
The compensation of the Company's executive officers is determined by
the Compensation Committee of the Board of Directors (the "Compensation
Committee") on an annual basis. The Chief Executive Officer's recommendations of
compensation to be paid to other executive officers of the Company are
considered by the Compensation Committee in its decision-making process. The
Compensation Committee is currently composed of two (2) non-employee directors.
The Stock Option Committee of the Board of Directors administers the
Company's Stock Option Plans and determines grants to executive officers. The
Stock Option Committee is composed of two non-employee directors, as defined by
Rule 16b-3 under the Exchange Act.
The Compensation Committee's policy on executive compensation is to
attract and retain highly qualified personnel while tying compensation to
performance. Consequently, the Compensation Committee seeks to establish
compensation that will reward individuals for Company performance as well as
individual performance and motivate and reward executives for achievement of
strategic business objectives.
The primary factors used by the Compensation Committee in determining
the compensation of the Company's executive officers are as follows:
1. The executive officer's individual performance and contributions
to the Company;
2. The financial results of the Company, including return on assets;
and
3. The compensation of executive officers employed by companies
in similar industries with similar revenue levels. The
Compensation Committee takes into account surveys of
competitive pay practices prepared by an independent
consulting firm, Westward Pay Strategies.
EXECUTIVE COMPENSATION GENERALLY
The compensation of executive officers is composed of (i) base salary,
(ii) a cash bonus and (iii) stock options.
BASE SALARY. The base salaries of the Company's executive officers are
set forth in the employment agreements negotiated by each such officer. See
"Employment Agreements" on page of this Proxy Statement. In each case, the
Compensation Committee determined the appropriate amount of competitive base pay
on the basis of a report prepared by Westward Pay Strategies of competitive
practices of comparable companies, the majority of which were not members of the
Company's Self-Determined Peer Group.
BONUS. All of the executive officers were eligible to receive a cash
bonus. The bonus amount was based on the degree to which specific financial
performance, e.g., return on assets, was achieved in relation to targeted goals.
The target bonus amounts for these executive officers were designed to represent
a percentage of annual base salary: 38%, 30% and 33%, for Mr. Munro, Mr. Dorst
and Mr. O'Reilly, respectively.
STOCK OPTIONS. In May 1997, the Company's current executive officers
received stock options which are set forth in the Summary Compensation Table on
page of this Proxy Statement. Stock options were granted to the Company's
current executive officers on the basis of a report prepared by Westward Pay
Strategies of competitive practices of comparable companies, the majority of
which were not members of the Company's Self-Determined Peer Group.
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<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION
Effective July 1, 1997, Mr. Munro's base salary was increased to
$325,000 based on a compensation survey conducted by Westward Pay Strategies of
comparable companies. The Company also entered into a new employment agreement
with Mr. Munro, which superseded his then-existing employment agreement and this
increased his base salary to $360,000, effective January 1, 1998. See
"Employment Agreements" on page of this Proxy Statement.
Based on the Company's 1997 performance, Mr. Munro was paid a bonus of
$119,398.
Based on a report of competitive annual stock option grants, prepared
by Westward Pay Strategies, Mr. Munro received options in 1997 to purchase
75,000 shares of Company stock that vest over four years. Additionally, Mr.
Munro received options in 1997 to purchase 75,000 shares of the Company that
vest based on the price of the Common Stock. See "Summary Compensation Table" on
page of this Proxy Statement.
OTHER
The Company generally intends to qualify compensation under Section
162(m) of the Internal Revenue Code of 1986, as amended, however, the Company
reserves the right to pay compensation that may not be deductible.
COMPENSATION COMMITTEE
ANGELO GUADAGNO
K. WILLIAM SICKLER
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<PAGE>
PERFORMANCE GRAPH
The Commission requires that the Company include in this Proxy
Statement a line-graph presentation comparing cumulative, five (5) year
stockholder returns on an indexed basis with (i) a broad equity market index and
(ii) an industry index or peer group. Set forth below is a line graph comparing
cumulative total stockholder return on the Common Stock against the Center for
Research in Security Prices ("CRSP") Index for the Nasdaq Stock Market (U.S.
companies) and a Self-Determined Peer Group. "Total return," for the purpose of
this graph, assumes reinvestment of all dividends.
[LINE GRAPHIC]
LEGEND
<TABLE>
<CAPTION>
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- ------ ---------------------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
[GRAPHIC] Savoir Technology Group, Inc. 100.0 224.2 154.5 127.3 297.0 251.5
[GRAPHIC] Nasdaq Stock Market (U.S. companies) 100.0 114.8 112.2 158.7 195.2 239.5
[GRAPHIC] Self-Determined Peer Group 100.0 181.0 101.8 107.8 201.8 173.2
</TABLE>
Companies in Self-Determined Peer Group:
Ameriquest Technologies Inc. Compucom Systems Inc.
Inacom Corp. Intelligent Electronics Inc.
Microage Inc. Pomeroy Computer Resources Inc.
Tech Data Corp. Vanstar Corp.
Notes:
A. The lines represent monthly index levels derived from compounding
daily returns that include all dividends.
B. The indexes are reweighed daily, using the market capitalization
on the previous trading day.
C. If the monthly interval, based on the fiscal year end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 12/31/92.
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PROPOSAL NUMBER 2
AN AMENDMENT TO THE
COMPANY'S 1994 STOCK OPTION PLAN
The stockholders are being asked to vote on a proposal to approve an
amendment to the Company's 1994 Stock Option Plan (the "1994 Plan") that will
increase the number of shares of Common Stock available for issuance under the
1994 Plan by 325,000 shares. The Board believes the amendment is necessary in
order to provide the Company with a sufficient reserve of Common Stock for
future option grants needed to attract and retain the services of key
individuals essential to the Company's long-term success.
The principal terms and provisions of the 1994 Plan as modified by the
recent amendment are summarized below. The summary however, is not intended to
be a complete description of all the terms of the 1994 Plan. A copy of the 1994
Plan as amended will be furnished by the Company to any stockholder upon written
request to the Secretary of the Company.
SHARES SUBJECT TO THE 1994 PLAN
Prior to the amendment of the 1994 Plan, 2,321,802 shares of Common
Stock had been authorized for option grants. Upon approval of this amendment by
the stockholders, a total of 2,646,802 shares will be authorized under the Plan.
The authorized shares issuable in connection with the 1994 Plan are subject to
adjustment in the event of stock splits, stock dividends and other situations.
As of June 26, 1998, under the 1994 Plan there were options outstanding
to purchase an aggregate of 1,813,448 shares of Common Stock, at exercise prices
ranging from $2.00 to $13.00 per share, or a weighted average per share exercise
price of $8.88. If any option granted under the 1994 Plan expires or terminates
for any reason without having been exercised in full, then the unpurchased
shares subject to that option will once again be available for additional option
grants. As of June 26, 1998, without giving effect to the increase contemplated
by this Proposal Number 2, a total of 149,572 shares of Common Stock were
available for future issuance under the 1994 Plan.
PARTICIPANTS
Any person who is an employee of the Company is eligible to receive
options under the 1994 Plan. Optionees will be selected by the Stock Option
Committee.
The 1994 Plan also provides for automatic formula grants for
non-employee directors. Non-employee directors will automatically receive
nonstatutory options to purchase 15,000 shares of the Common Stock upon their
initial appointment or election as a non-employee director and will receive
nonstatutory options to purchase 4,000 shares of the Common Stock for every
regular annual meeting thereafter at which they are elected. The non-employee
director options will have ten (10) year terms and will be exercisable ratably
at twenty-five percent (25%) a year from the date of the annual meeting of
stockholders on which date the options are granted. Such options will become one
hundred percent (100%) vested upon death, disability or a change in control of
the Company. If a non-employee director or advisory director dies or becomes
disabled, his or her option shall be fully exercisable during the twelve (12)
months following the date of his or her death or disablement. If a non-employee
director or advisory director voluntarily retires from service as a director or
advisory director at or after age 60, his or her options that are vested shall
be exercisable for a period of twelve (12) months following retirement. In all
other cases, a non-employee director's or advisory director's options that are
vested upon termination of service shall remain exercisable for ninety (90) days
following the date of his or her termination of service. The 1994 Plan also
permits discretionary grants of nonstatutory options to be made to non-employee
directors by the Board of Directors.
ADMINISTRATION
The 1994 Plan is administered by the Stock Option Committee. The Stock
Option Committee consists of two directors appointed by the Board of Directors
and has the power and authority to grant options to
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participants in the 1994 Plan. The Stock Option Committee may delegate certain
of its responsibilities to other persons; provided, however, the Stock Option
Committee may not delegate matters relating to the Company's officers subject to
Section 16 of the Exchange Act. The members of the Stock Option Committee are
non-employee directors as defined in Rule 16b-3 promulgated under the Exchange
Act. The Board of Directors may fill vacancies on the Stock Option Committee and
may from time to time remove or add members and may also administer the 1994
Plan.
The Stock Option Committee may periodically adopt rules and regulations
for carrying out the 1994 Plan. The Board of Directors may amend the 1994 Plan,
as desired, without further action by the Company's stockholders except as
required by applicable law.
TERMS OF STOCK OPTIONS
Awards under the 1994 Plan consist of nonstatutory stock options
("NSOs") and incentive stock options ("ISOs"). Except with respect to options
automatically granted to non-employee directors, options granted pursuant to the
1994 Plan need not be identical.
The purchase price under each option is established by the Stock Option
Committee but in no event can the option price for ISOs and non-employee
director options be less than one hundred percent (100%) of the fair market
value of the stock on the date of grant. The last sale price per share of the
Common Stock as reported on the Nasdaq Stock Market on June 26, 1998 was $11.25.
The option price must be paid in full at the time of exercise. The price may be
paid in cash or, if permitted by the Stock Option Agreement, by delivery of an
irrevocable direction to a securities broker to sell shares and to deliver part
of the sale proceeds to the Company, by the surrender of shares of the Company
owned by the participant exercising the option and having a fair market value on
the date of exercise equal to the option price, or by any combination of the
foregoing.
Except with respect to automatic options for non-employee directors,
options have such terms and are exercisable in such manner and at such times as
the Stock Option Committee may determine. In addition, no optionee may be
granted options in any calendar year in excess of 300,000 shares of the Common
Stock; provided, however, that options granted to an optionee in the calendar
year in which he or she is newly hired shall in no event cover more than 500,000
shares of the Common Stock, subject to certain adjustments. However, each option
must expire within a period of not more than ten (10) years from the grant date.
Unless the Option Agreement otherwise provides, each option is
transferable only by will or the law of descent and distribution and shall only
be exercisable by the participant during his or her lifetime.
The Stock Option Committee may modify, extend or renew outstanding
options or may accept the cancellation of outstanding options in return for the
grant of new options at the same or a different price, except the optionee must
consent to any modification, extension or renewal which impairs his or her
rights or increases his or her obligations under such option.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion of the federal income tax consequences of the
1994 Plan is intended to be a summary of applicable federal law. State and local
tax consequences may differ. Because the federal income tax rules governing
options and related payments are complex and subject to frequent change,
optionees are advised to consult their tax advisors prior to exercise of options
or dispositions of stock acquired pursuant to option exercise.
ISOs and NSOs are treated differently for federal income tax purposes.
ISOs are intended to comply with the requirements of Section 422 of the Internal
Revenue Code. NSOs need not comply with such requirements.
An employee is not subject to ordinary income tax on the grant or
exercise of an ISO. The difference between the exercise price and the fair
market value on the exercise date of the shares acquired under an ISO will,
however, be a preference item for purposes of the alternative minimum tax. If an
optionee holds the shares acquired upon exercise of an ISO for at least two (2)
years following grant and at least one (1) year following
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<PAGE>
exercise, the optionee's gain, if any, upon a subsequent disposition of such
shares is long-term capital gain, with a holding period of more than eighteen
(18) months required for the lowest capital gain tax rate to apply. The measure
of the gain is the difference between the proceeds received on disposition and
the optionee's basis in the shares (which generally equals the exercise price).
If an optionee disposes of stock acquired pursuant to exercise of an ISO before
satisfying the one (1) and two (2) year holding periods described above, the
optionee may recognize both ordinary income and capital gain in the year of
disposition. The amount of the ordinary income will be the lesser of (i) the
amount realized on disposition less the optionee's adjusted basis in the stock
(usually the option exercise price) or (ii) the difference between the fair
market value of the stock on the exercise date and the option exercise price.
The balance of the consideration received on such a disposition will be capital
gain (long-term capital gain if the stock had been held for at least one (1)
year following exercise of the ISO, with a holding period of more than eighteen
(18) months required for the lowest capital gain tax rate to apply). The Company
is not entitled to an income tax deduction on the grant or exercise of an ISO or
on the optionee's disposition of the shares after satisfying the holding period
requirement described above. If the holding periods are not satisfied, the
Company will be entitled to a deduction in the year the optionee disposes of the
shares, in an amount equal to the ordinary income recognized by the optionee,
provided it satisfies a reporting obligation with respect to the gain.
An employee is not taxed on the grant of an NSO. On exercise, however,
the optionee recognizes ordinary income equal to the difference between the
option price and the fair market value of the shares on the date of exercise.
The Company is entitled to an income tax deduction in the year of exercise in
the amount recognized by the optionee as ordinary income, provided it satisfies
a reporting obligation with respect to the gain. Any gain on subsequent
disposition of the shares is long-term capital gain if the shares are held for
more than one (1) year following exercise. The Company does not receive a
deduction for this gain.
NEW PLAN BENEFITS
With respect to all future grants, the Stock Option Committee has full
discretion to determine the number and amount of options to be granted to
employees under the 1994 Plan, subject to an annual limitation on the total
number of options that may be granted to any employee. Therefore, other than as
described in this paragraph, the benefits and amounts that will be received by
each of the officers named in the Summary Compensation Table above, the
executive officers as a group and all other employees under the 1994 Plan are
not presently determinable. The number of options to be received automatically
by each non-employee director is fixed under the 1994 Plan.
REQUIRED APPROVAL
The affirmative vote of the holders of a majority of shares of capital
stock represented and voting at a duly held meeting at which a quorum is present
is required to approve the amendment of the 1994 Plan as it relates to the
325,000 new shares available for issuance under the 1994 Plan. Unless marked to
the contrary, proxies received will be voted "FOR" approval of the amendment of
the 1994 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT OF THE 1994 PLAN.
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PROPOSAL NUMBER 3
DESIGNATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has approved the retention of Coopers & Lybrand
L.L.P. as independent accountants for the Company until revoked by further
action. Coopers & Lybrand L.L.P. has been the Company's independent accountants
since 1977.
The stockholders are asked to ratify the designation of Coopers &
Lybrand L.L.P. as independent accountants for the Company for the fiscal year
ending December 31, 1998. A representative of Coopers & Lybrand L.L.P. is
expected to be present at the Annual Meeting to make a statement if he or she
desires to do so, and such representative is expected to be available to respond
to appropriate questions.
Should the stockholders fail to ratify the designation of Coopers &
Lybrand L.L.P. as independent accountants, retention of the firm for the fiscal
year ending December 31, 1998 will be reconsidered by the Board of Directors.
Unless marked to the contrary, proxies received will be voted "FOR"
ratification of the designation of Coopers & Lybrand L.L.P. as independent
accountants for the Company's fiscal year ending December 31, 1998.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICA-
TION OF THE COMPANY'S INDEPENDENT ACCOUNTANTS.
OTHER MATTERS
PROPOSALS INTENDED TO BE PRESENTED AT NEXT ANNUAL MEETING. Proposals of
security holders intended to be presented at the Company's 1999 Annual Meeting
of Stockholders must be received by the Company for inclusion in the Company's
proxy statement and form of proxy no later than March 9, 1999.
OTHER MATTERS. Management knows of no business that will be presented
for consideration at the Annual Meeting other than as stated in the Notice of
Meeting. If, however, other matters are properly brought before the meeting, it
is the intention of the persons named in the accompanying form of proxy to vote
the shares represented thereby on such matters in accordance with their best
judgment.
PROXY SOLICITATION. The expense of solicitation of proxies will be
borne by the Company. In addition to solicitation of proxies by mail, certain
officers, directors and Company employees who will receive no additional
compensation for their services may solicit proxies by telephone, telegraph or
personal interview. The Company is required to request brokers and nominees who
hold stock in their name to furnish this proxy material to beneficial owners of
the stock and will reimburse such brokers and nominees for their reasonable
out-of-pocket expenses in so doing.
ANNUAL REPORT. The Company will provide a copy of its 1997 Annual
Report to stockholders, without charge, to any stockholder who makes a written
request to Mr. P. Scott Munro, Secretary, Savoir Technology Group, Inc., 254
East Hacienda Avenue, Campbell, California 95008.
By Order of the Board of Directors,
P. Scott Munro
Secretary
Campbell, California
July 7, 1998
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