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