<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or Rule 14a-12.
Ciprico 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.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE> 2
CIPRICO INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------
The Annual Meeting of Shareholders of Ciprico Inc. will be held on
Thursday, January 27, 2000, at 3:30 p.m. (Minneapolis time), at the Radisson
Plaza Hotel, 35 South Seventh Street, Minneapolis, Minnesota, for the following
purposes:
1. To set the number of directors at six (6).
2. To elect two Class III directors for the ensuing year.
3. To consider and act upon such other matters as may properly come before
the meeting and any adjournments thereof.
Only shareholders of record at the close of business on December 9, 1999,
are entitled to notice of and to vote at the meeting or any adjournment thereof.
Your vote is important. We ask that you complete, sign, date and return the
enclosed proxy in the envelope provided for your convenience. The prompt return
of proxies will save the Company the expense of further requests for proxies.
By Order of the Board of Directors
Robert H. Kill
Chairman and President
Plymouth, Minnesota
December 17, 1999
<PAGE> 3
CIPRICO INC.
ANNUAL MEETING OF SHAREHOLDERS
JANUARY 27, 2000
---------------
PROXY STATEMENT
---------------
INTRODUCTION
Your Proxy is solicited by the Board of Directors of Ciprico Inc. ("the
Company") for use at the Annual Meeting of Shareholders to be held on January
27, 2000, at the location and for the purposes set forth in the notice of
meeting, and at any adjournment thereof.
The cost of soliciting proxies, including the preparation, assembly and
mailing of the proxies and soliciting material, as well as the cost of
forwarding such material to beneficial owners of stock, will be borne by the
Company. Directors, officers and regular employees of the Company may, without
compensation other than their regular remuneration, solicit proxies personally
or by telephone.
Any shareholder giving a proxy may revoke it at any time prior to its
use at the meeting by giving written notice of such revocation to the Secretary
of the Company. Proxies not revoked will be voted in accordance with the choice
specified by shareholders by means of the ballot provided on the Proxy for that
purpose. Proxies which are signed but which lack any such specification will,
subject to the following, be voted in favor of the proposals set forth in the
Notice of Meeting and in favor of the number and slate of directors proposed by
the Board of Directors and listed herein. If a shareholder abstains from voting
as to any matter, then the shares held by such shareholder shall be deemed
present at the meeting for purposes of determining a quorum and for purposes of
calculating the vote with respect to such matter, but shall not be deemed to
have been voted in favor of such matter. Abstentions, therefore, as to any
proposal will have the same effect as votes against such proposal. If a broker
returns a "non-vote" proxy, indicating a lack of voting instructions by the
beneficial holder of the shares and a lack of discretionary authority on the
part of the broker to vote on a particular matter, then the shares covered by
such non-vote shall be deemed present at the meeting for purposes of determining
a quorum but shall not be deemed to be represented at the meeting for purposes
of calculating the vote required for approval of such matter.
The mailing address of the principal executive office of the Company is
2800 Campus Drive, Plymouth, Minnesota 55441. The Company expects that this
Proxy Statement, the related proxy and notice of meeting will first be mailed to
shareholders on or about December 17, 1999.
-1-
<PAGE> 4
OUTSTANDING SHARES AND VOTING RIGHTS
The Board of Directors of the Company has fixed December 9, 1999, as
the record date for determining shareholders entitled to vote at the Annual
Meeting. Persons who were not shareholders on such date will not be allowed to
vote at the Annual Meeting. At the close of business on December 9, 1999,
4,960,278 shares of the Company's Common Stock were issued and outstanding. The
Common Stock is the only outstanding class of capital stock of the Company
entitled to vote at the meeting. Each share of Common Stock is entitled to one
vote on each matter to be voted upon at the meeting. Holders of Common Stock are
not entitled to cumulative voting rights.
PRINCIPAL SHAREHOLDERS
The following table provides information concerning persons known to
the Company to be the beneficial owners of more than 5% of the Company's
outstanding Common Stock as of the dates indicated in the respective footnotes
to the table.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT OF CLASS
------------------- ------------------ ----------------
<S> <C> <C>
Perkins Capital Management, Inc. 644,113 (1) 13.0%
730 E. Lake Street
Wayzata, MN 55391
Fidelity Research & Management, Inc. 421,300 (2) 8.5%
1 Federal Street
Boston, MA 02109
Heartland Advisors, Inc. 353,000 (3) 7.1%
790 North Milwaukee Street
Milwaukee, WI 53202
Dimensional Fund Advisors, Inc. 276,125 (4) 5.6%
1299 Ocean Avenue
Santa Monica, CA 90401
</TABLE>
(1) Perkins Capital Management, Inc. has indicated that as of September 30,
1999, it beneficially owns 644,113 shares, that it has no voting power
as to 425,713 of such shares and that it has sole dispositive power
over all of such shares.
(2) Such shares were owned as of September 30, 1999 according to a report
provided to the Company by Nasdaq AMEX Online.
-2-
<PAGE> 5
(3) Heartland Advisors, Inc. has indicated that as of December 2, 1999, it
beneficially owns 353,000 shares, that it has no voting power as to any
of such shares and sole dispositive power as to all of such shares.
(4) Dimensional Fund Advisors, Inc. ("Dimensional"), an investment advisor
registered under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies registered
under the Investment Company Act of 1940, and serves as investment
manager to certain other investment vehicles, including commingled
group trusts. (These investment companies and investment vehicles are
the "Portfolios"). In its role as investment advisor and investment
manager, Dimensional possesses both voting and investment power over
276,125 shares of the Company's Common Stock as of September 30, 1999.
The Portfolios own all of such shares and Dimensional disclaims
beneficial ownership of such securities.
MANAGEMENT SHAREHOLDINGS
The following table sets forth the number of shares of Common Stock
beneficially owned as of December 9, 1999 by each executive officer of the
Company named in the Summary Compensation Table, by each current director and
nominee for director of the Company and by all directors and executive officers
(including the named individuals) as a group. Unless otherwise indicated, the
shareholders listed in the table have sole voting and investment powers with
respect to the shares indicated.
<TABLE>
<CAPTION>
NAME OF DIRECTOR/NOMINEE OR NUMBER OF SHARES
IDENTITY OF GROUP BENEFICIALLY OWNED PERCENT OF CLASS (1)
------------------------------------- ------------------ --------------------
<S> <C> <C>
Robert H. Kill 115,036 (2) 2.3%
Donald H. Soukup 62,250 (3)(4) 1.2%
Stephen R. Hansen 48,738 (5) *
Gary L. Deaner 35,100 (3)(6) *
William N. Wray 33,000 (3)(4) *
Joan K. Berg 8,000 (7) *
Bruce J. Bergman 6,000 (3)(8) *
Thomas F. Burniece 1,000 (3)(8) *
All officers and directors as a
group (8 persons) 309,124 (9) 6.0%
</TABLE>
--------------------------------------
* Less than 1%
(1) Shares not outstanding but deemed beneficially owned by virtue
of the right of a person to acquire them as of December 9,
1999, or within sixty days of such date, are treated as
outstanding only when determining the percent owned by such
individual and when determining the percent owned by a group.
-3-
<PAGE> 6
(2) Amount includes 20,000 shares held by Mr. Kill's wife and
52,500 shares purchasable upon exercise of options presently
exercisable or exercisable within sixty days of December 9,
1999.
(3) Does not include an option for 6,000 shares which will be
granted to such individual as of the date of the Annual
Meeting and which will become exercisable as of the date of
the Company's 2000 Annual Meeting pursuant to an automatic
grant under the Company's 1999 Amended and Restated Stock
Option Plan.
(4) Amount includes 30,000 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 9, 1999.
(5) Amount includes 37,128 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 9, 1999.
(6) Amount includes 28,500 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 9, 1999.
(7) Amount includes 5,000 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 9, 1999.
(8) Such shares are not outstanding but are purchasable upon
exercise of options presently exercisable or exercisable
within sixty days of December 9, 1999.
(9) Amount includes 190,128 shares purchasable upon exercise of
options presently exercisable or exercisable within sixty days
of December 9, 1999.
ELECTION OF DIRECTORS
(PROPOSALS #1 AND #2)
GENERAL INFORMATION
The Certificate of Incorporation and Bylaws of the Company provide that
the Board of Directors shall consist of not less than three directors and not
more than six directors, that the number of directors to be elected shall be
determined by the shareholders at each annual meeting, and that the number of
directors may be increased by the Board between annual meetings. The Certificate
of Incorporation also provides for the election of three classes of directors
with terms staggered so as to require the election of only one class of
directors each year. Only directors who are members of Class III will be elected
at the Annual Meeting. Directors who are members of Classes I and II will
continue to serve for the terms for which they were previously elected. The
Board recommends that the number of directors be set at six and that two Class
III directors be elected at the Annual Meeting. The affirmative vote of the
holders of a majority of the shares represented and voting at the Annual Meeting
is required to set the number of directors at six. The Board of Directors
nominates Gary L. Deaner and Robert H. Kill for re-election as Class III
directors. If elected, Messrs. Deaner and Kill will each serve for a three year
term as a Class III director and until his successor has been duly elected and
qualified.
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<PAGE> 7
Unless authority is withheld, the proxies solicited hereby will be
voted for the election of Gary L. Deaner and Robert H. Kill as a director for a
term of three years. If, prior to the meeting, it should become known that
either Class III nominee will be unable to serve as a director after the meeting
by reason of death, incapacity or other unexpected occurrence, the proxies will
be voted for such substitute nominee as is selected by the Board of Directors
or, alternatively, not voted for any nominee. The Board of Directors has no
reason to believe that either nominee will be unable to serve. The election of
directors is decided by a plurality of the votes cast. Following is information
about the nominees and all other directors of the Company whose terms continue
beyond the Annual Meeting.
Robert H. Kill (Class III, term ending at 2000 Annual Meeting), age 52,
has been Chairman of the Board of the Company since January 1996, President
since March 1988 and a director since September 1987. Mr. Kill was Executive
Vice President of the Company from September 1987 to March 1988, Secretary from
September 1987 to July 1988 and from November 1989 to October 1993, and Vice
President and General Manager from August 1986 to September 1987. Mr. Kill held
several marketing and sales positions at Northern Telecom, Inc. from 1979 to
1986, his latest position being Vice President, Terminals Distribution.
Gary L. Deaner (Class III, term ending at 2000 Annual Meeting), age 59,
was elected a director of the Company in May 1995. Mr. Deaner has been President
and Chief Executive office of Cross Works, Inc., a software development company,
since May 1999. Mr. Deaner served as a Vice President of Raintree Associates, a
marketing and planning company, from June 1998 to May 1999, as Vice President of
Marketing and Strategic Development for J. River, Inc., a software products
company, from September 1996 to June 1998, and as Vice President and General
Manager, Lan Connect, of Digi International, Inc., a manufacturer of computer
communications products, from January 1995 to September 1996. From August 1991
to January 1995 Mr. Deaner served as President of Arnet Corporation, a
subsidiary of Digi International, and from 1985 to 1991 he was Vice President of
Marketing for Digi International.
Donald H. Soukup (Class I, term ending at 2001 Annual Meeting), age 59,
became a director of the Company in March 1982. Mr. Soukup has been a private
investor for more than five years. Mr. Soukup is also a director of Minntech
Corp. and several privately held companies.
William N. Wray (Class I, term ending at 2001 Annual Meeting), age 71,
has been a director of the Company since July 1993. Prior to his retirement in
1988, Mr. Wray held various management positions at Honeywell, Inc., the most
recent being Executive Vice President of Honeywell Information Systems (from
1985 to 1989) and Executive Vice President of Corporate Marketing (from 1987 to
1988).
Bruce J. Bergman (Class II, term ending at 2002 Annual Meeting), age
58, has been a principal with Bergman & Associates, a high tech consulting
practice, since August 1998. Prior to founding Bergman & Associates, Mr. Bergman
was President and CEO (from 1996 to 1998) of Brocade Communications Systems,
Inc., a provider of gigabit switching hardware and software products, President
and CEO (from 1995 to 1996) of ATG Cygnet, Inc., a supplier of multiple-media,
robotic mass storage libraries, President and CEO (from 1993 to 1994) of
Proteon, Inc., a supplier of internetworking hardware and software products, and
President and CEO (from 1983 to
-5-
<PAGE> 8
1993) of Xylogics, Inc. a provider of computer network access, remote access,
networking and input/output hardware and software products.
Thomas F. Burniece (Class II, term ending at 2002 annual Meeting), age
58, was elected a director of the Company in November 1999 to fill a vacancy
created by the resignation of a former director. For more than five years Mr.
Burniece has been owner and President of Thomas Burniece Consulting, a firm
offering technical, marketing and management consulting services across a wide
range of high technology markets. Mr. Burniece has also been Chief Executive
Officer since April 1997 of Voelker Technologies, Inc., a startup company
developing an intelligent physical layer switching product. In addition, in June
1998 he co-founded and served as the original Chief Executive Officer of Rutilus
Software, Inc., and is currently a director of such company. Rutilus is a
startup company developing a unique, centrally-managed approach to the backup of
network-attached desktop computers.
There are no arrangements or understandings between any of the
directors or any other person (other than arrangements or understandings with
directors acting as such) pursuant to which any person was selected as a
director or nominee of the Company. There are no family relationships among the
Company's directors.
COMMITTEE AND BOARD MEETINGS
The Company's Board of Directors has two standing committees, the Audit
Committee and the Compensation Committee. The Audit Committee members are Donald
H. Soukup and Bruce J. Bergman. This committee is responsible for reviewing the
Company's internal audit procedures and quarterly and annual financial
statements, reviewing with the Company's independent accountants the results of
the annual audit, and implementing and monitoring the Company's cash investment
policy. The Audit Committee met once during fiscal 1999. The Compensation
Committee members are Gary L. Deaner and William N. Wray. The Compensation
Committee recommends to the Board of Directors from time to time the salaries
and other compensation to be paid to executive officers of the Company and
administers the Company's stock option and restricted stock plans. The
Compensation Committee met twice during fiscal 1999.
The Board and Committee members often communicate informally to discuss
the affairs of the Company and, when appropriate, take formal Board and
Committee action by unanimous written consent of all Board or Committee members,
in accordance with Delaware law, rather than hold formal meetings. During fiscal
1999, the Board of Directors held six meetings. Each incumbent director attended
75% or more of the total number of meetings (held during the period(s) for which
he has been a director or served on committee(s)) of the Board and of
committee(s) of which he was a member.
DIRECTORS FEES
Directors who are not employees of the Company receive $500 for each
Board meeting attended. In addition, under the terms of the Company's 1999
Amended and Restated Stock Option Plan, each nonemployee director who is elected
or re-elected to the Board, or whose term of office continues after an annual
meeting of shareholders, will receive a seven-year option for 6,000 shares at an
exercise price equal to the closing price of the Company's Common Stock on the
date of grant,
-6-
<PAGE> 9
exercisable one year from the date of grant if the director has continued to
serve on the Board throughout such period. On January 28, 1999, Messrs. Bergman,
Deaner, Soukup and Wray each received an option to purchase 6,000 shares at
$9.875 per share. Such options will become exercisable on January 27, 2000. In
addition, in connection with his election to the Board on November 24, 1999, Mr.
Burniece received an option to purchase 1,000 shares at $12.875 per share, which
becomes exercisable on November 24, 2000.
During the fiscal year ended September 30, 1999, Gary L. Deaner
provided consulting services to the Company in reviewing the Company's strategic
plan. As consideration for such services, Mr. Deaner was awarded a total of
3,600 shares of restricted stock under the Company's 1996 Restricted Stock Plan.
Such shares had an aggregate market value of $24,863 as of the dates of grant.
The restrictions on the shares lapse two years after the date of the awards.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation. The
Compensation Committee of the Board of Directors of the Company is currently
composed of directors William N. Wray and Gary L. Deaner. None of the members of
the Committee is an employee or officer of the Company and none is affiliated
with any entity other than the Company with which an executive officer of the
Company is affiliated.
Overview and Philosophy. The Company's executive compensation program
is comprised of base salaries, annual and quarterly performance bonuses,
long-term incentive compensation in the form of stock options and restricted
stock grants and various benefits, including the Company's savings plan and
employee stock purchase plan in which all qualified employees of the Company
participate. In addition, the Compensation Committee from time to time may award
special cash bonuses, stock options and restricted stock grants in connection
with new hiring, promotions or non-recurring, extraordinary performance.
The Compensation Committee has followed a policy of paying annual base
salaries which are on the moderate side of being competitive in its industry and
of awarding cash bonuses based on achievement of operating profit goals and
secondarily on achievement of revenue goals. If minimum operating profit goals
are achieved, the officer receives a cash bonus in an amount equal to the
percentage of goal achieved multiplied by the established target bonus which is
a minimum of 50% and a maximum of 150% of annual base salary. The goals are
established annually by the Compensation Committee or President of the Company.
The Company does not have formal employment agreements with any of its officers.
The Company's Chief Executive Officer, Chief Financial Officer and Vice
President Product Development and Operations are the only executive officers of
the Company. These executive officers participate in the Company's stock option
and restricted stock plans as well as the management cash bonus plan described
above. Cash bonuses earned by executive officers in fiscal 1999 are set forth in
the Summary Compensation Table.
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<PAGE> 10
General. The Company provides medical and insurance benefits to its
executive officers which are generally available to all Company employees. The
Company has a savings plan in which all qualified employees, including the
executive officers, may participate. Each year the Company contributes to the
savings plan an amount equal to two percent of gross wages for each employee who
contributes four percent and the Company may contribute an additional two
percent of gross wages based on the operating profit of the Company for the
fiscal year and plan contributions by the individual employee. The amount of
perquisites allowed to executive officers, as determined in accordance with
rules of the Securities and Exchange Commission, did not exceed 10% of salary in
fiscal 1999.
Chief Executive Officer Compensation. Robert H. Kill served as the
Company's Chief Executive Officer in fiscal 1999. His annual base salary and
eligibility for a cash bonus was determined in accordance with the policies
described above as applicable to all executive officers. His base salary
remained at $175,000 for fiscal 1999.
In 1999 in order to continue providing incentive for participation in
long term appreciation in shareholder value, the Committee granted Mr. Kill an
option to purchase 15,000 shares at the market price on the date of grant, 25
percent of which will vest on each of the first four anniversaries of the date
of grant. Grants of stock options are based on qualitative rather than
quantitative factors and reflect the desire of the Board of Directors and
Compensation Committee to retain key executives, encourage excellent performance
and increase Company stock ownership by key executives in order to align their
interests with those of shareholders generally.
Summary. The Compensation Committee annually reviews its compensation
policies but anticipates generally continuing its policy of paying relatively
moderate base salaries, basing bonuses on specific revenue and operating profit
goals and granting stock options and restricted stock to provide long-term
incentives.
MEMBERS OF THE COMPENSATION COMMITTEE:
William N. Wray
Gary L. Deaner
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<PAGE> 11
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation paid
during each of the Company's last three fiscal years to the Company's Chief
Executive Officer and to the other executive officers whose total salary and
bonus for fiscal 1999 exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
Awards Payouts
------ -------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Position Year ($) ($) ($) ($)(2) (#) ($) ($)(3)
- ------------------- ------ -------- -------- ------------- ----------- ----------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. Kill, 1999 175,000 88,268 -0-(1) -0- 15,000 -0- $4,229
President and 1998 171,667 -0- -0- 69,375 15,000 -0- 5,045
CEO 1997 161,333 80,558 -0- 73,750 15,000 -0- 7,397
Joan K. Berg, Vice 1999 120,000 42,143 -0- -0- 9,000 -0- $2,726
President-Finance 1998 10,000 -0- -0- 16,408 20,000 -0- 200
and CFO 1997 -0- -0- -0- -0- -0- -0- -0-
Stephen R. Hansen, 1999 104,756 36,275 -0- 8,125(4) 9,000 -0- $2,372
Vice President 1998 94,750 2,559 -0- 6,900 7,500 -0- $2,364
1997 90,000 31,275 -0- -0- 15,500 -0- $5,707
</TABLE>
(1) Does not include automobile allowance, the amount of which was less
than 10% of the individual's listed compensation.
(2) Dividends, if declared by the Company, will be paid on the shares.
Aggregate shares of restricted stock held by the named executive
officers at September 30, 1999 and the value of such shares on that
date (based on a closing stock price of $11.125 per share) are as
follows: Mr. Kill held 7,500 shares valued at $83,438; Ms. Berg held
2,500 shares valued at $27,813; and Mr. Hansen held 1,000 shares valued
at $11,125.
(3) Amounts reflect Company contributions to the Company's Savings Plan, a
401(k) plan.
(4) During fiscal 1999, Mr. Hansen received an award of 1,000 shares of
restricted stock. The restrictions on the shares lapse after two years.
OPTION/SAR GRANTS DURING 1999 FISCAL YEAR
The following table sets forth information regarding stock options
granted to the named executive officers during the fiscal year ended September
30, 1999. The Company has not granted stock appreciation rights.
-9-
<PAGE> 12
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN EXERCISE OR BASE EXPIRATION ------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10%($)
---- ------------ ----------- ------------ ---- ------ ------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Kill
15,000 (1) 5.8% 9.875 1/28/06 60,302 140,529
Joan K. Berg
9,000 (2) 3.5% 9.25 7/7/04 23,000 50,825
Stephen R. Hansen
9,000 (2) 3.5% 9.25 7/7/04 23,000 50,825
</TABLE>
(1) Such option is exercisable annually as to 25% of the total number of
shares, commencing January 28, 2000.
(2) Such option is exercisable annually as to 25% of the total number of
shares, commencing July 7, 2000.
AGGREGATED OPTION/SAR EXERCISES DURING 1999 FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
The following table provides information related to options exercised
by the named executive officers during fiscal 1999 and the number and value of
options held at fiscal year end.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FY-END(#) FY-END ($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE (1)
------ ----------------- -------------- --------------- -----------------
<S> <C> <C> <C> <C>
Robert H. Kill 15,000 83,745 37,500 / 37,500 108,120 / 18,750
Joan K. Berg 0 N/A 5,000 / 24,000 22,810 / 85,305
Stephen R. Hansen 8,250 48,688 37,128 / 27,372 56,604 / 33,044
</TABLE>
(1) These amounts represent the difference between the exercise price of
the in-the-money options and the market price of the Company's Common
Stock on September 30, 1999. The closing price of the Company's Common
Stock on that day on the Nasdaq Stock Market was $11.125. Options are
in-the-money if the market value of the shares covered thereby is
greater than the option exercise price.
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<PAGE> 13
STOCK PERFORMANCE CHART
The following chart compares the cumulative total shareholder return on
the Company's Common Stock with the S&P SmallCap 600 Index and the Computers
(Peripherals) Small Index. The comparison assumes $100 was invested on September
30, 1994 in the Company's Common Stock and in each of the foregoing indices and
assumes reinvestment of dividends.
INDEXED RETURNS
<TABLE>
<CAPTION>
BASE YEARS ENDING
PERIOD
COMPANY / INDEX SEP94 SEP95 SEP96 SEP97 SEP98 SEP99
- --------------- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
CIPRICO INC 100 244.43 666.67 504.17 243.73 370.83
S&P SMALLCAP 600 INDEX 100 126.18 145.50 199.29 162.08 190.51
COMPUTERS(PERIPHERALS)-SMALL 100 188.31 107.84 111.79 49.83 53.41
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors of the Company, and persons who beneficially own more
than 10 percent of the Company's outstanding shares of Common Stock, to file
initial reports of ownership and reports of changes in ownership of securities
of the Company with the Securities and Exchange Commission. Officers, directors
and greater than 10 percent shareholders are required by Securities and Exchange
Commission regulations to furnish the Company with copies of all Section 16(a)
forms they file.
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<PAGE> 14
Based upon a review of the copies of such reports furnished to or
obtained by the Company and upon other information known to the Company, the
Company believes that during the fiscal year ended September 30, 1999, all
filing requirements applicable to its directors, officers or beneficial owners
of more than 10% of the Company's outstanding shares of Common Stock were
complied with except that one report covering one transaction was filed late by
Stephen R. Hansen and Bruce J. Bergman's Form 3 was filed late.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
Grant Thornton LLP acted as the Company's independent accountants for
fiscal 1999. The Company has not yet selected its independent auditors for the
current fiscal year ending September 30, 2000. Representatives of Grant Thornton
LLP are expected to be present at the Annual Meeting, will be given an
opportunity to make a statement regarding financial and accounting matters of
the Company if they so desire, and will be available at the meeting to respond
to appropriate questions from the Company's shareholders.
OTHER BUSINESS
Management knows of no other matters to be presented at the meeting. If
any other matter properly comes before the meeting, the appointees named in the
proxies will vote the proxies in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any appropriate proposal submitted by a shareholder of the Company and
intended to be presented at the 2001 annual meeting of shareholders must be
received by the Company by August 18, 2000, to be considered for inclusion in
the Company's proxy statement and related proxy for the next annual meeting.
Also, if a shareholder proposal intended to be presented at the next
annual meeting but not included in the Company's proxy statement and proxy is
received by the Company after November 2, 2000, then management named in the
Company's proxy form for the next annual meeting will have discretionary
authority to vote shares represented by such proxies on the shareholder
proposal, if presented at the meeting, without including information about the
proposal in the Company's proxy material.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended September 30, 1999, accompanies this notice of meeting and Proxy
Statement. No part of the Annual Report is incorporated herein and no part
thereof is to be considered proxy soliciting material.
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<PAGE> 15
FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
BEING SOLICITED, UPON WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE
FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES THERETO. THE COMPANY
WILL FURNISH TO ANY SUCH PERSON ANY EXHIBIT DESCRIBED IN THE LIST ACCOMPANYING
THE FORM 10-K, UPON THE PAYMENT, IN ADVANCE, OF REASONABLE FEES RELATED TO THE
COMPANY'S FURNISHING SUCH EXHIBIT(S). REQUESTS FOR COPIES OF SUCH REPORT AND/OR
EXHIBITS(S) SHOULD BE DIRECTED TO MS. JOAN K. BERG, VICE PRESIDENT OF FINANCE,
AT THE COMPANY'S PRINCIPAL ADDRESS. THE COMPANY'S FORM 10-K MAY ALSO BE ACCESSED
THROUGH THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV.
BY ORDER OF THE BOARD OF DIRECTORS
ROBERT H. KILL
Chairman and President
Dated: December 17, 1999
Plymouth, Minnesota
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<PAGE> 16
CIPRICO INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 27, 2000
The undersigned hereby appoints ROBERT H. KILL and JOAN K. BERG,
and each of them, with full power of substitution, as Proxies to
represent and vote, as designated below, all shares of Common Stock
of Ciprico Inc. registered in the name of the undersigned at the
Annual Meeting of Shareholders of the Company to be held at the
Radisson Plaza Hotel, 35 South Seventh Street, Minneapolis,
Minnesota, at 3:30 p.m. (Minneapolis time) on January 27, 2000, and
at any adjournment thereof, and the undersigned hereby revokes all
proxies previously given with respect to the meeting.
The Board of Directors recommends that you vote FOR each proposal
below.
1. Set the number of directors at six (6):
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Elect two Class III directors: [Nominees: Gary L. Deaner and
Robert H. Kill]
[ ] FOR the nominees listed above [ ] WITHHOLD AUTHORITY to vote
for the nominees listed
above
(To withhold authority to vote for either nominee, write that
nominee's name on the line below)
---------------------------------------------------------------------
3. OTHER MATTERS. In their discretion, the Proxies are . . .
[ ] AUTHORIZED [ ] NOT AUTHORIZED . .
.
to vote upon such other business as may properly come before the
Meeting.
(Continued, and TO BE DATED AND SIGNED on the reverse side)
<PAGE> 17
(continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF
NO DIRECTION IS GIVEN FOR A PARTICULAR PROPOSAL, WILL BE VOTED FOR SUCH
PROPOSAL, AND WILL BE DEEMED TO GRANT AUTHORITY UNDER PROPOSAL NUMBER 3.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Dated , 1999
----------------------------
----------------------------
PLEASE DATE AND SIGN ABOVE
EXACTLY AS NAME APPEARS AT
THE LEFT, INDICATING, WHERE
APPROPRIATE, OFFICIAL
POSITION OR REPRESENTATIVE
CAPACITY. FOR STOCK HELD IN
JOINT TENANCY, EACH JOINT
OWNER SHOULD SIGN.
