<PAGE>
SCHEDULE 14A
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:
[X] Preliminary Proxy Statement [_] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SYQUEST TECHNOLOGY, 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:
- --------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROXY
SYQUEST TECHNOLOGY, INC.
47071 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
(510) 226-4000
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1997
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
SYQUEST TECHNOLOGY, INC. (the "Company"), a Delaware corporation, will be held
on May 6, 1997, at 9:00 a.m., Pacific Daylight Savings Time, at the Company's
principal executive offices at 47071 Bayside Parkway, Fremont, California 94538,
for the following purposes:
1. To elect directors to serve for the ensuing year and until
their successors are elected.
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the Company's
Common Stock from 60,000,000 to 120,000,000 and to decrease the stated par
value of the Company's Common Stock and Preferred Stock from $0.001 to
$0.0001.
3. To ratify the appointment of Price Waterhouse LLP as
independent accountants of the Company for the fiscal year ending September
30, 1997.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 4, 1997,
are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in
person. To assure your representation at the meeting, however, you are urged to
mark, sign, date and return the enclosed proxy card as promptly as possible in
the postage-prepaid envelope enclosed for that purpose. Any stockholder
attending the meeting may vote in person even if he or she has returned a proxy.
By Order of the Board of Directors,
/s/ Thomas C. Tokos
Thomas C. Tokos
Secretary
Fremont, California
April 4, 1997
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED ENVELOPE.
<PAGE>
SYQUEST TECHNOLOGY, INC.
47071 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
----------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 6, 1997
----------------------------
The accompanying Proxy is solicited on behalf of the Board of Directors of
SYQUEST TECHNOLOGY, INC. (the "Company") for use at the Annual Meeting of
Stockholders to be held on Tuesday, May 6, 1997, at 9:00 a.m., Pacific Daylight
Savings Time, or at any continuation or adjournment thereof, for the purposes
set forth in the accompanying Notice of Annual Meeting of Stockholders. The
Annual Meeting will be held at the Company's principal executive offices, 47071
Bayside Parkway, Fremont, California 94538. The Company's telephone number at
that location is (510) 226-4000.
These proxy solicitation materials and the accompanying Annual Report to
Stockholders for the fiscal year ended September 30, 1996, will first be mailed
to stockholders on or about April 15, 1997.
GENERAL INFORMATION
RECORD DATE AND VOTING SECURITIES
Only holders of record of the Company's Common Stock, $.001 par value, at
the close of business on April 4, 1997 (the "Record Date"), are entitled to
notice of and to vote at the meeting. On the Record Date, 38,076,723 shares of
the Company's Common Stock, $.001 par value, were issued and outstanding. For
information concerning beneficial owners of more than five percent of the
Company's Common Stock, see "Security Ownership of Management and Certain
Beneficial Owners."
VOTING AND REVOCABILITY OF PROXIES
The Common Stock represented by valid proxies received, properly dated and
executed, and not revoked, will be voted at the Annual Meeting in accordance
with the instructions thereon. If, however, voting instructions are not given
on the proxy, the shares represented thereby will be voted for the four nominees
for director listed herein, and for each other proposal described in this Proxy
Statement. Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time prior to the time it is voted by delivering to the
Secretary of the Company, no later than the start of the Annual Meeting, a
written notice of revocation or a duly executed proxy bearing a later date than
the revoked proxy, or by attending the Annual Meeting and voting in person.
Each holder of shares of Common Stock is entitled to one vote for each
share on the proposals presented in this Proxy Statement. The Company's Bylaws
provide that a majority of all of the shares of the stock entitled to vote,
whether present in person or represented by proxy, shall constitute a quorum for
the transaction of business at the meeting. If a proxy is accompanied by
instructions to withhold authority, or is marked with an abstention, the shares
represented thereby will be considered to be present at the meeting for purposes
of determining the existence of a quorum for the transaction of business.
Abstentions will be treated as shares that are present and entitled to vote
for purposes of determining the presence of a quorum, but the Company will not
treat abstentions as votes in favor of
1
<PAGE>
approving any matter submitted to the stockholders for a vote. Shares held by
brokers that are present, but not voted on a particular matter because the
brokers were prohibited from exercising discretionary authority on that matter
(that is, "broker non-votes"), will also be treated as present for determining
the presence of a quorum for the meeting, but will not be considered as present
with respect to that matter. The Company believes that these tabulation
procedures are consistent with Delaware statutory requirements concerning voting
of shares and determination of a quorum.
SOLICITATION EXPENSES
The Company will bear the expense of preparing, printing and mailing this
Proxy Statement and the proxies solicited hereby and will reimburse brokerage
firms and other persons representing beneficial owners of shares of Common Stock
for their expenses in forwarding solicitation material to such beneficial
owners. In addition to the solicitation of proxies by mail, solicitation may be
made by certain officers and other employees by personal interview, telephone or
facsimile; no additional compensation will be paid for such solicitation. The
Company has retained McKenzie Partners, at an estimated cost of $7,500.00 plus
reimbursement of reasonable expenses, to assist in the solicitation of proxies
from brokers, nominees, institutions and individuals.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
The Company's By-laws provide that the number of directors shall not be
less than four nor more than nine and the exact number of directors is currently
fixed at four. Accordingly, a board of four directors is to be elected at the
Annual Meeting. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's four nominees named below, all of
whom are currently directors of the Company:
JOSEPH BAIA
EDWIN L. HARPER
C. RICHARD KRAMLICH
EDWARD L. MARINARO
If any such nominee is unable or unwilling to accept nomination or
election, the proxies will be voted for such substitute nominee as the Board of
Directors may designate. The Board of Directors knows of no reason why any
nominee might be unable to refuse to accept nomination or election. The term of
office for each person elected as a director will continue until the Annual
Meeting of Stockholders in 1998 and until their successors are elected and
qualify. The following sets forth certain information concerning the nominees:
JOSEPH BAIA, age 65, has been a director of the Company since July 1996.
He has been Vice President of Operations at Indigita Corporation since September
1996. From September 1995 to September 1996, Mr. Baia was an independent
consultant in the area of operations and management. From 1994 to September
1995, Mr. Baia was a consultant to Q Logic Corporation acting in the capacity of
Vice President of Manufacturing and Quality. From 1988 to 1993, Mr Baia was
President of Manufacturing Concepts and Technologies, Inc., a consulting firm.
Mr. Baia was also a co-founder of Western Digital Corporation.
2
<PAGE>
EDWIN L. HARPER, age 52, joined the Company as President in May 1996 and
has served as Director, President and Chief Executive Officer of the Company
since June 1996. Prior to joining the Company, from May 1993 to April 1995, Mr.
Harper was President and Chief Executive Officer of Combyte, Inc., a
manufacturer of storage products. Mr. Harper was employed by Colorado Memory
Systems, Inc., a manufacturer of tape storage products, in various capacities
from 1988 to 1993, including President and Chief Executive Officer. Mr. Harper
serves on the boards of directors of McAfee Associates, Inc. and Apex PC
Solutions, Inc.
C. RICHARD KRAMLICH, age 61, has been a director of the Company since 1983.
Mr Kramlich has been the Managing General Partner of New Enterprise Associates,
a venture capital firm, since 1978. He is also a General Partner of four
affiliated venture capital investment funds. Mr. Kramlich serves on the Board
of Directors of Chalone, Inc., Sierra Monitor Corporation, Silicon Graphics,
Inc., Lumisys, Inc., Ascend Communications, Inc., Macromedia, Inc. and Graphix
Zone, Inc.
EDWARD L. MARINARO, age 58, has been Chairman of the Board of the Company
since May 1996 and has been a director since February 1996. From January 1996
through August 1996, Mr. Marinaro served as Vice Chairman of the Board of
Directors for Network Computing Devices ("NCD"). He served as President and
Chief Executive Officer of NCD from September 1994 to January 1996. From
October 1989 to September 1994, he served as Director and executive consultant
to a number of companies, such as World Wide Technology, a synchronous hardware
and software products company; Computone Corporation, a synchronous
communication products company; and Radius Corporation, a manufacturer of
personal computer monitors, video graphic and multimedia products. From June
1988 to October 1989, Mr. Marinaro was President and Chief Operating Officer of
Cipher Data Products, a tape storage company. Prior to that, he held various
management positions at Western Digital Corporation, Memorex Corporation,
Digital Corporation and IBM.
David I. Caplan, age 67, and a director of the Company since 1987, has
informed the Company that he does not intend to stand for re-election to the
Board. Accordingly, his name has not been placed in nomination for re-election.
Mr. Caplan is a member of the Company's Audit Committee, Stock Option Committee,
Compensation Committee and Human Resources Committee. His replacement on these
committees has yet to be determined.
VOTE REQUIRED: The four nominees for director receiving the highest number
of affirmative vote of the shares entitled to vote at the Annual Meeting will be
elected.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE NOMINEES LISTED ABOVE.
BOARD MEETINGS AND COMMITTEES
3
<PAGE>
The Board of Directors of the Company held a total of sixteen meetings during
fiscal 1996, and no director attended fewer than seventy-five percent of the
meetings of the Board of Directors and committees thereof, if any, on which such
director served and which meetings were held during the period that such person
served on the Board or such committee. The Board of Directors has an Audit
Committee, a Stock Option Committee, a Compensation Committee and a Human
Resources Committee.
The Audit Committee, which consists of Messrs. Kramlich and Caplan, met two
times during fiscal 1996. The Audit Committee makes recommendations to the
Board of Directors concerning the employment of independent accountants, the
audited and unaudited financial statements of the Company and the Company's
financial and accounting controls and systems.
The Stock Option Committee, which consists of Messrs. Kramlich and Caplan,
met four times during fiscal 1996. This committee administers the Company's
1991 Stock Option Plan and authorizes the grant of options thereunder.
The Compensation Committee, which consists of Messrs. Kramlich and Caplan,
met four times during fiscal 1996. This committee administers the Company's
1992 Employee Stock Purchase Plan and reviews proposals and makes
recommendations to the Board of Directors concerning corporate compensation and
benefits.
The Human Resources Committee, which consists of Messrs. Kramlich and
Caplan, met four times during fiscal 1996. This committee reviews and makes
recommendations to the Board of Directors concerning matters involving employees
of the Company (other than matters within the authority of the Compensation
Committee or the Stock Option Committee), including incentive programs
generally, management methods, employee review procedures, termination and
disciplinary matters, plant security, employee attitudes, prerequisite programs
and officer status changes.
As discussed above, Mr. Caplan will not seek re-election to the Board. His
replacement on these committees has yet to be determined.
The Board of Directors has no nominating committee or any other committee
performing a similar function.
OTHER EXECUTIVE OFFICERS
The following are additional executive officers of the Company. All
executive officers serve at the discretion of the Board of Directors, subject to
the terms of any employment agreements:
CHESTER A. BROWN, Jr. age 58, was named Executive Vice President, Sales and
Marketing of the Company in February 1996. Prior to joining the Company, from
April 1994 to December 1995, he served as President and CEO of Cubic Memory
Incorporated, a direct random access memory array manufacturer. From February
1993 to April 1994, Mr. Brown was Vice President of Marketing and Operations of
Q Logic Corporation, a fast input/output semiconductor company. Since January
1990 Mr. Brown has served as a member of the board of directors of Prisma
Devices, Inc., a high-end video semiconductor company.
HENRY C. MONTGOMERY, age 61, joined the Company as its Executive Vice
President, Finance and Chief Financial Officer in November 1996. Prior to
joining the Company, from September 1995 to November 1996, Mr. Montgomery served
as President and Chief Executive Officer of New Media
4
<PAGE>
Corporation, a privately held company which provides PCMCIA products for the
computer industry. Since 1986, Mr. Montgomery has served as Founder and Chairman
of Montgomery Financial Services Corporation and its predecessor firm, a private
management consulting, financial and accounting services company. Mr. Montgomery
has served on the board of directors of Swift Energy Company, a public oil and
gas company since 1987. Previously, he served on the boards of directors of
Catalyst Semiconductor, Inc. (1989 to 1995) and Southwall Technologies, Inc.
(1972 to 1995).
DALE W. PILGERAM, age 53, was named Executive Vice President and Chief
Technical Officer of the Company in March 1996. Before joining the Company,
from March 1994 to February 1996, Mr. Pilgeram was employed as a consultant with
the consulting firm of Time to Market Solutions. From August 1992 to February
1994, Mr. Pilgeram was Vice President of the Open Systems Storage Business Unit
at IBM. From 1989 to August 1992, he served as Vice President of Storage
Products Development at IBM.
JOSEPH B. SMITH, age 55, was named Executive Vice President, Global
Operations of the Company in September 1996. Previously, Mr. Smith was vice
president of operations at Western Digital Corporation, a disk drive
manufacturer, from January 1987 until his retirement in July 1993.
THOMAS C. TOKOS, age 44, joined the Company in December 1996 as Vice
President, General Counsel and Secretary. From 1994 until joining the Company,
Mr. Tokos was Assistant General Counsel and Assistant Secretary of VLSI
Technology, Inc., a semiconductor manufacturer. Mr. Tokos was a partner in the
corporate law firm of Keck, Mahin & Cate from March 1993 to September 1994 and
was associated with the corporate law firm of Shearman & Sterling from 1988 to
1993.
5
<PAGE>
PROPOSAL NO. 2
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has adopted a resolution to amend
paragraph (A) of Article IV of the Restated Certificate of Incorporation of the
Company to read in its entirety as follows:
(A) CLASSES OF STOCK. This corporation is authorized to issue the
following classes of stock: Common Stock ("Common Stock" or "Common") and
Preferred Stock ("Preferred Stock" or "Preferred"). The total number of
shares which the corporation is authorized to issue is One Hundred Twenty-
Four Million (124,000,000). One Hundred Twenty Million (120,000,000)
shares shall be Common Stock and Four Million (4,000,000) shares shall be
Preferred Stock. Each share of Common and Preferred Stock shall have a par
value of $0.0001.
The purpose of such amendment is to increase the number of authorized
shares of the Company's Common Stock from 60,000,000 to 120,000,000 shares and
to decrease the stated par value of the Company's Common and Preferred Stock
from $0.001 to $0.0001. As of March 3, 1997 the Company had outstanding
37,654,594 shares of Common Stock and approximately 16,100,000 shares of Common
Stock reserved for issuance as follows:
<TABLE>
<CAPTION>
................................................................................
Common shares reserved for:
<S> <C>
Conversion of Preferred Stock and exercise of
Warrants(1)..................................................12,292,058
Exercise of 6% Convertible Debenture.......................... 400,000
Issuance under 1991 Stock Option Plan......................... 2,756,305
Issuance under the 1992 Non-Employee
Director Stock Option Plan.................................. 160,000
Issuance under the 1992
Employee Stock Purchase Plan................................ 296,867
Issuance under
Accrued Vacation Exchange Plan.............................. 170,140
</TABLE>
(1) Amount of shares reserved is based on the hypothetical conversion of
preferred stock and exercise of warrants on March 3, 1997.
As reported by the Company in its filings with the Securities and Exchange
Commission, the Company had significant losses in fiscal 1996 (aggregating
$136,651,000), and will need additional cash to meet its commitments. As set
forth above, the Company currently has a total of sixty million (60,000,000)
shares of Common Stock authorized and as of March 3, 1997 has issued or reserved
nearly 54,000,000 shares of Common Stock. Without an increase in the authorized
number of shares, the Company believes that it will not be able to raise that
cash, because the number of shares of Common Stock currently authorized is
inadequate to permit the Company to issue a sufficient number of additional
shares of Common Stock, warrants to purchase Common Stock or Preferred Stock
convertible into Common Stock, to raise additional capital. In addition, given
the Company's losses, it may be necessary for the Company to raise additional
equity to satisfy the listing requirements for the Nasdaq Stock Market. The
capital that would be raised from the sale of the increased number of authorized
shares would assist the Company in meeting the Nasdaq listing requirements.
This amendment will, in the opinion
6
<PAGE>
of the Board Directors, increase the Company's financial flexibility in
attempting to raise additional capital. The Board of Directors of the Company
believes that the complexity of business financing and acquisition transactions
require greater flexibility in the Company's capital structure than now exists.
Preferred Stock is available for issuance, but this amendment will permit the
Company to offer additional shares of Preferred Stock that are convertible into
Common Stock, from time to time as determined by the Board for any corporate
purpose. Such purposes could include, without limitation, issuance in public or
private sales for cash as a means of obtaining capital for use in the Company's
business and operations or in cancellation of existing indebtedness, as part or
all of the consideration for acquisitions by the Company of other businesses or
properties, and issuance under employee benefit plans.
The Company can give no assurance, however, even if the proposed amendment
is adopted, that the Company will be successful in raising additional capital,
or maintaining its listing on the Nasdaq Market.
Approval of the increase now will eliminate delays and expense that
otherwise would be incurred if stockholder approval were required to increase
the authorized number of shares of Common Stock for possible future transactions
involving the issuance of additional shares. The rules of the National
Association of Securities Dealers, Inc. ("NASD") governing corporations with
securities listed on the Nasdaq Stock Market would nevertheless require
stockholder approval by a majority of the total votes cast in person or by proxy
prior to the issuance of designated securities (a) where the issuance would
result in a change of control of the Company, (b) in connection with the
acquisition of the stock or assets of another company if an affiliate of the
Company has certain interlocking interests with the company to be acquired or
where the Company issues twenty percent or more of its outstanding shares or (c)
in connection with a transaction other than a public offering involving the sale
or issuance of twenty percent or more of the Common Stock or voting power
outstanding before the issuance at less than the book value or market value of
the Company's shares at that time, subject to certain exceptions or application
to Nasdaq if delay in the issuance would impair the financial viability of the
Company. Violation of these rules could result in the Company's Common Stock
being removed from listing on the Nasdaq Stock Market.
The additional shares of Common Stock may be issued, subject to certain
exceptions, by the Company's Board of Directors at such times, in such amounts
and on such terms as the Board may determine, without further approval of the
stockholders. Any such issuance could reduce the current stockholders'
proportionate interests in the Company or dilute the stock ownership of persons
seeking to obtain control of the Company, depending on the number shares issued
and the purpose, terms and conditions of the issuance. Stockholders have no
preemptive rights to subscribe for additional shares although certain holders of
the Company's 7% Cumulative Convertible Preferred Stock, have a right of first
refusal with regard to participation in future financing transactions of the
Company.
7
<PAGE>
Increasing the number of shares of Common Stock authorized for issuance
could discourage attempts to acquire control of the Company by tender offer or
other means, if significant additional shares of Common Stock are issued or
reserved for issuance. It could therefore deprive stockholders of benefits that
could result from such an attempt, such as realization of a premium over the
market price of their shares in a tender offer or the temporary increase in
market price that could result from such an attempt. Moreover, the issuance of
stock to persons friendly to the Board of Directors could make it more difficult
to remove incumbent management and directors from office even if such change
would be favorable to the stockholders generally.
The Board of Directors believes that the financial flexibility offered by
the amendment increasing the number of authorized shares of Common Stock
(particularly in light of the need of the Company to raise additional capital)
outweighs any of its potential disadvantages.
The company currently computes certain state taxes on the basis of the par
value of the Company's authorized stock. The purpose of the proposed reduction
in par value of the Company's authorized stock is to reduce the amount of such
taxes.
VOTE REQUIRED
The approval of the amendment of the Company's Restated Certificate of
Incorporation requires the affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote. CONSEQUENTLY, ABSTENTIONS
AND BROKER NON-VOTES WILL HAVE THE EFFECT OF A VOTE AGAINST THE PROPOSED
AMENDMENT.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO
THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION.
8
<PAGE>
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Company has appointed the accounting firm of Price Waterhouse LLP to
act as its independent accountants for the fiscal year ending September 30,
1997, and recommends that stockholders vote to ratify such appointment. If the
appointment is not ratified, the Board of Directors will reconsider the
Company's selection.
The Company had engaged the accounting firm of Ernst & Young LLP ("E&Y") as
its independent auditors from 1982 until the Company dismissed E&Y on January
23, 1997. E&Y confirmed its dismissal to the Company by letter dated January
24, 1997, and received by the Company on January 27, 1997. The Company's
decision to replace E&Y with Price Waterhouse LLP as the Company's independent
accountants was concurred with by the Company's Audit Committee and approved by
its Board of Directors.
E&Y's reports on the Company's financial statements for the past two fiscal
years did not contain an adverse opinion or a disclaimer of opinion nor were
they qualified or modified as to uncertainty, audit scope or accounting
principles. During the Company's two most recent fiscal years ended September
30, 1996, and for all subsequent interim periods preceding the dismissal of E&Y
on January 23, 1997, there were no disagreements, as that term is used in
paragraph (a)(1)(iv) of Item 304 ("Item 304") of Regulation S-K promulgated by
the Securities and Exchange Commission (the "SEC"), between the Company and E&Y,
which, if not resolved to the satisfaction of E&Y, would have caused E&Y to
refer thereto in their reports on the Company's financial statements for such
periods. During the Company's two most recent fiscal years, and for all
subsequent interim periods preceding the dismissal of E&Y on January 23, 1997,
there were no reportable events, as defined in paragraph (a)(1)(v) of Item 304,
with respect to E&Y, except as set forth in a letter from E&Y to the Company's
Audit Committee, dated December 11, 1996, but not provided to the Company until
January 29, 1997, noting a material weakness in the Company's internal control
structure relative to the preparation of accurate financial statements in a
timely fashion for the Company's fiscal year ended September 30, 1996. During
the Company's two most recent fiscal years ended September 30, 1996, and for all
subsequent interim periods preceding the dismissal of E&Y on January 23, 1997,
the Company did not consult Price Waterhouse LLP regarding the application of
accounting principles to a specified transaction or the type of audit opinion
that might be rendered on the Company's financial statements or regarding any
matter that was either subject to a disagreement or a reportable event, as those
terms are used in paragraphs (a)(1)(iv) and (a)(1)(v), respectively, of Item
304.
Representatives of Price Waterhouse LLP are expected to be present at the
meeting with the opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth beneficial ownership of Common Stock of
the Company as of March 3, 1997 by (i) each present director and nominee, (ii)
each executive officer of the Company, including certain former executive
officers of the Company named in the Summary Compensation Table set forth below,
(iii) all present directors and executive officers as a group, and (iv) all
persons known to the Company to be the beneficial owners of more than five
percent of the Company's Common Stock, the only class of voting securities of
the Company outstanding. The table does not include the holders of the Company's
outstanding 7% Cumulative Convertible Preferred Stock, Series 1 (the "7%
Convertible Preferred") because a holder of 7% Convertible Preferred Stock is
not permitted to convert shares of Preferred Stock at any time when the
conversion would result in such holder and its affiliates having beneficial
ownership of more than four and nine-tenths percent (the "4.9% Restriction") of
the outstanding Common Stock of the Company.(1)
10
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned (1)
----------------------
Number of Shares Percent of Shares
---------------------- -----------------
<S> <C> <C>
All current directors and executive officers of _ *
the Company as a group (9 persons)
</TABLE>
- ---------
* Less than one percent.
(1) At March 3, 1997, assuming the 4.9% Restriction did not apply, the
outstanding 7% Cumulative Convertible Preferred Stock was convertible into
3,891,261 shares of Common Stock (10.34% of the outstanding shares of
Common Stock) and holders of the 7% Cumulative Convertible Preferred Stock
also held 5,902,379 shares of Common Stock (15.67% of the outstanding
Common Stock). Additionally, the Convertible Preferred Stock was converted
into a total of 3,333,372 shares of Common Stock or the 8.85% Series 1 of
the outstanding shares of Common Stock. The Convertible Preferred Stock
Series 1 holders also hold warrants to purchase and additional 1,096,670
shares of Common Stock or 2.91% of the outstanding shares of Common Stock.
All 5% Cumulative Preferred Stock Series 2 Stock was converted into a total
of 12,440,448 shares of Common Stock or 33.03% of the outstanding shares of
Common Stock. The 5% Cumulative Convertible Preferred Stock Series 2
stockholders also hold warrants to purchase an additional 4,146,810 shares
of Common Stock or 11.01% of the outstanding shares of Common Stock.
11
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
GENERAL
Shown below is information concerning the annual and long-term compensation
for services in all capacities to the Company for the fiscal years ended
September 30, 1996, 1995 and 1994, of the Chief Executive Office of the Company
and the four other most highly compensated executive officers with the Company
at the year ended September 30, 1996, along with information for the two most
highly compensated executive officers employed by the Company during fiscal 1996
that are no longer with the Company (collectively the "Named Executive
Officers"). Compensation information is only included for those years during
which the named individual served as an executive officer of the Company.
12
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term All Other
--------------------------- Compensation Compensation
Awards ($)
------------ ------------
Name and Principal Positions Fiscal Salary ($) Bonus ($) Number of
- ----------------------------- Year ---------- --------- Shares
------ Underlying
Options
Granted
-------
<S> <C> <C> <C> <C> <C>
Edwin L. Harper (1) 1996 113,665 0 390,000 14,175(2)
President and Chief
Executive Officer
Edward L. Marinaro (3) 1996 99,662 0 390,000 8,500(4)
Chairman of the Board
Chester A. Brown 1996 161,267 0 100,000 1,000(5)
Executive Vice
President,
Sales and Marketing
Dale W. Pilgeram (6) 1996 139,927 0 100,000 1,000(7)
Vice President,
Chief Technical Officer
Syed H. Iftikar (8) 1996 314,765 0 20,000 1,000(8)
Chairman of the Board, 1995 320,811 0 0 1,000(9)
President and Chief 1994 319,992 0 45,000 500(9)
Executive Officer
Michael J. Perez (10) 1996 16,538 0 0 188,574(11)
Senior Vice President- 1995 215,543 0 0 0
Finance, Chief Financial 1994 203,342 0 0 0
Officer
Robert E. Lyon (12) 1996 187,039 0 9,750 0
Vice President, Human 1995 127,778 0 30,000 0
Resources
</TABLE>
- ------------
(1) Joined the Company in May 1996. Fiscal 1996 salary includes $29,423,
deferred until fiscal 1997 at Mr. Harper's election. Such deferred
compensation accrues interest at ten percent per annum, compounded
quarterly.
(2) Represents moving expenses.
(3) Joined the Company in May 1996. Fiscal 1996 salary includes $29,423,
deferred until fiscal 1997 at Mr. Marinaro's election. Such deferred
compensation accrues interest at ten percent per annum, compounded
quarterly.
(4) Represents the Company's maximum contribution to Mr. Marinaro's 401(k) plan
($1,000), plus $7,500 paid to Mr. Marinaro for his attendance at meetings
of the Board of Directors before he became Chairman of the Board.
(5) Represents the Company's maximum contribution to Mr. Brown's 401(k) plan.
(6) Includes $10,000 paid to Mr. Pilgeram as a private contractor prior to his
employment with the Company.
(7) Represents the Company's maximum contribution to Mr. Pilgeram's 401(k)
plan.
<PAGE>
(8) Left the Company in July 1996.
(9) Represents the Company's maximum contribution to Mr. Iftikar's 401(k) plan.
(10) Left the Company in October 1995.
(11) Represents severance compensation paid upon departure from the Company.
(12) Left the Company in August 1996.
<PAGE>
The following table sets forth information with respect to each grant of
options to purchase the Company's Common Stock made during the last fiscal year
to each of the Named Executive Officers named in the Summary Compensation Table.
OPTION GRANTS IN FISCAL YEAR 1996
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------
Name No. of % of Total Exercise Expiration Potential Realizable Value
- ---- Securities Options or Base Date at Assumed Annual Rates
Underlying Granted to Price (2) ---------- of Stock Price Appreciation
Options Employees ($/Shares) for Option Term(3)
Granted(1) in Fiscal --------- ---------------------------
---------- Year 5% 10%
---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Edwin L. Harper 390,000(4) 18.247 4.9380 05/13/01 415,026 893,773
Edward L. Marinaro 5,000 0.2339 6.7180 02/28/03 7,239 15,589
385,000(5) 18.0135 4.9380 05/13/01 409,705 882,314
Chester A. Brown 60,000(4) 2.8073 7.3750 02/28/01 95,362 205,364
40,000(4) 1.8715 4.9380 05/13/01 42,567 91,669
Dale W. Pilgeram 40,000(4) 1.8715 7.0000 02/28/01 63,574 136,910
60,000(4) 2.8073 4.9380 05/13/01 63,850 137,504
Syed H. Iftikar (6) 20,000(6) 0.9357 11.3750 02/28/01 (6) (6)
Robert E. Lyon 7,500 0.3509 7.3750 02/28/01 (6) (6)
2,250 0.1025 4.9380 05/13/01
Michael J. Perez -- -- -- -- -- --
</TABLE>
- -----------
(1) All options were granted under the Company's 1991 Stock Option Plan, except
with respect to Mr. Marinaro, who has 5,000 shares under the 1992 Non-
Employee Directors Plan.
(2) Options were granted at an exercise price equal to the fair market value of
the Company's Common Stock as determined by reference to the closing price
reported on the Nasdaq National Market system on the last trading day prior
to the date of grant. Exercise price and tax withholding obligations may be
paid in cash or by an alternate method of payment if authorized by the
Board of Directors, such as by delivery of already-owned shares subject to
certain conditions, or pursuant to a cashless exercise procedure.
(3) Potential realizable value is based on an assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant to the expiration date. These values are calculated as a
result of regulations promulgated by the Securities and Exchange Commission
and do not reflect the Company's estimate of future stock price
appreciation. Actual gains, if any, are dependent on the future market
price of the Company's stock. Gains are reported net of the option exercise
price but before taxes associated with exercise.
(4) Options vest over four years.
(5) 128,334 vested immediately upon grant date and the remaining 261,666 will
vest over three years.
(6) Not applicable to Mr. Iftikar's and Mr. Lyon's options, which expired on
termination of their respective employment with the Company.
<PAGE>
The following table sets forth information with respect to option exercises
and year-end stock option values for each of the Named Executive Officers.
AGGREGATED OPTIONS EXERCISED IN FISCAL YEAR 1996
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money Options
Acquired Value Options at FY-End at Fiscal Year End(1)
-------- ----- --------------------------------- --------------------------------
Name on Exercise Realized (1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edwin L. Harper - - - 390,000 - $536,250
Edward L. Marinaro - - 128,334 261,666 $176,459 $352,916
Chester A. Brown - - - 40,000 - $ 55,000
Dale W. Pilgeram - - - 60,000 - $ 82,500
Syed H. Iftikar 231,623 $960,032 40,000 - - -
Robert E. Lyon - - 7,500 - - -
Michael J. Perez 25,000 $ 96,875 - - - -
</TABLE>
- ------------------
(1) Calculated as the difference between the market value of the Company's
Common Stock at exercise date or fiscal year end, as the case may be, and
the exercise price.
CHANGE OF CONTROL PROVISIONS
The 1991 Stock Option Plan of the Company provides for the automatic
acceleration of the vesting of all options outstanding under the Plan on a
merger or consolidation of the Company in which the Company is not the surviving
corporation or on a sale of all or substantially all of the assets of the
Company, if the successor entity does not assume the outstanding options or
provide options in substitution for the outstanding options.
Pursuant to their respective offers of employment, if there is a change in
control of the Company, each of Mr. Harper and Mr. Marinaro, at his option, will
be entitled to twelve months salary, having his outstanding options immediately
vest, and having his health benefits will continue for 12 months.
COMPENSATION OF DIRECTORS
Each member of the Board of Directors who is not an employee of the Company
receives an annual retainer of $15,000 for serving as a director during the
fiscal year. Each nonemployee director is also paid a fee of $1,500 for each
Board meeting and $500 for each committee meeting attended. An amendment to the
1992 Non-Employee Director Stock Option Plan granting each director a one time
option to acquire 30,000 shares of the Company's Common Stock was approved at
the special meeting of the stockholders of the Company on September 26, 1996.
Each director is also granted an option each year to purchase 10,000 shares of
the Company's Common Stock. All options are valued at the fair market value of
the Company's Common Stock on the date of the grant.
<PAGE>
EMPLOYMENT AGREEMENTS
The Company has previously reported in its Form 10K/A filed January
28,1997, that it has written employment agreements with certain named executive
officers. Although the information previously reported was correct, upon further
review, it has been determined that such agreements have not yet been reduced to
final form. The Company is in the process of completing these written
agreements, the final terms of which may vary from the terms previously
discussed in the Form 10K/A.
STOCK PERFORMANCE GRAPH
The Stock Performance Graph below shall not be deemed incorporated by
reference in any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under either of such Acts.
The following line graph compares the cumulative total returns to holders
of the Company's Common Stock during the fiscal periods since the Company's
initial public offering to September 30, 1996, with the NASDAQ Composite (US)
Index and a peer group constructed by the Company, comprising Connor
Peripherals, Inc., Maxtor Corporation, Micropolis Corporation, Quantum
Corporation, Western Digital Corporation, Iomega Corporation and Exabyte
Corporation. (1)
The Stock Performance Graph assumes that $100 was invested on December 18,
1991, at the closing sale price for the Company's Common Stock and in the NASDAQ
Composite (US) Index and Peer Group, and that all dividends were reinvested. No
dividends have been declared or paid on the Company's Common Stock. Stockholder
returns over the indicated period should not be considered indicative of future
stockholder returns. Returns for the Peer Group are weighted based on market
capitalization at each data point.
(1) No data is available for Maxtor Corporation, Micropolis Corporation or
Connor Peripherals, Inc. after February 1996 because these companies were
acquired by other companies.
[TABLE]
[CAPTION]
[CAMERA READY GRAPH]
SYQUEST TECHNOLOGY
HISTORICAL QUARTERLY PRICE - CLOSE
RELATIVE TO DISK DRIVE COMPANIES AND SELECTED MARKET INDICES
<TABLE>
<CAPTION>
Dec. 91 Dec. 91 Mar 92 June 92 Sep 92
<S> <C> <C> <C> <C> <C>
SyQuest Technologies, Inc. 100 122 107 165 135
Peer Group 100 120 139 127 110
NASDAQ Composite (US) 100 109 112 104 109
<CAPTION>
Dec 92 Mar 93 June 93 Sep 93 Dec 93
<S> <C> <C> <C> <C> <C>
SyQuest Technologies, Inc. 200 101 84 82 78
Peer Group 115 83 62 64 90
NASDAQ Composite (US) 126 129 131 142 145
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Mar 94 June 94 Sep 94 Dec 94 Mar 95
<S> <C> <C> <C> <C> <C>
SyQuest Technologies, Inc. 86 75 83 139 95
Peer Group 108 84 96 100 87
NASDAQ Composite (US) 139 135 144 142 155
<CAPTION>
June 95 Sep 95 Dec 95 Mar 96 June 96
<S> <C> <C> <C> <C> <C>
SyQuest Technologies, Inc. 101 104 78 47 62
Peer Group 121 123 77 110 272
NASDAQ Composite (US) 177 198 201 210 227
<CAPTION>
Sep 96
<S> <C>
SyQuest Technologies, Inc. 50
Peer Group 310
NASDAQ Composite (US) 235
</TABLE>
REPORT OF THE STOCK OPTION COMMITTEE, THE COMPENSATION COMMITTEE AND THE HUMAN
RESOURCES COMMITTEE
The role of the Stock Option Committee, the Compensation Committee, and the
Human Resources Committee (the "Committees") is to administer the Company's 1991
Stock Option Plan and authorize the grant of options to all employees, including
the executive officers; administer the Company's 1992 Employee Stock Purchase
Plan; review and recommend salaries and incentive programs and review and
recommend executive officers' compensation under the aforementioned elements.
The Committee comprises two independent non-employee directors.
GENERAL COMPENSATION PHILOSOPHY
The Company's overall compensation philosophy is to provide competitive
levels of total compensation that will enable the Company to attract, motivate,
retain and reward qualified employees. The Committee believes that compensation
should vary with the performance of the Company and any long-term incentive
should be aligned with the interest of the stockholders. The Company's
executive compensation policies are designed to provide competitive levels of
compensation to motivate officers to achieve the Company's business objectives
and to reward such officers based on their achievements. The executive
compensation program primarily consists of three main elements -- Base Salary,
Incentive Bonuses and Stock Options.
Compensation for the Named Executive Officers consists of the following
components:
Base Salary: In setting compensation levels for officers, the
Committee reviews competitive information relating to compensation levels
at other disk drive companies and the information reported in the proxy
statements of those companies. Recommendations by management are examined
by the Committee in the light of this information. Officer base
compensation may vary based on time in position, assessment of individual
performance, salary relative to internal and external equity and critical
nature of the position relative to the success of the Company.
Incentive Bonuses: The incentive bonus program provides a variable
compensation opportunity for the executive officers. A payout, if any, is
based on a combination of corporate financial performance and individual
officer performance relative to achievement of the pre-established
specified strategic objectives (such as new product development milestones,
marketing/sales results, productivity
<PAGE>
enhancements and manufacturing yield improvements). Awards under this
program depend on achieving certain levels of profitability based on after-
tax net income and determined and approved by the Board annually. Target
bonuses for executive officers ranged from twenty-five to fifty percent of
base salary and actual incentive bonus payouts paid in the last fiscal year
(for previous year's performance) ranged from twelve to twenty-seven
percent of base salary of the executive officers. The Company has a profit
sharing plan in existence for employees of the Company who do not
participate in the foregoing bonus arrangements. Since the Company posted a
loss in fiscal 1996, no incentive bonuses were awarded to the executive
officers and no profit sharing payments were awarded to the employees for
1996.
Stock Options: The Committee believes that stock ownership provides
significant incentive to employees by providing an opportunity to receive
additional compensation through building stockholder value. This
compensation element aligns the interests of employees with those of the
stockholders. The long-term incentive is realized through the granting of
stock options to employees and eligible Named Executive Officers. Stock
Options have value for the employee only if the price of the Company's
stock increases above the exercise price, which typically is set at the
fair market value of the Common Stock on the grant date. The number of
shares subject to each stock option grant is based on guidelines that take
into consideration the employee's current and anticipated future
performance and ability to promote achievement of strategic corporate goals
and anticipated future performance, as well as internal equity within the
employee's peer group. The Committee reviews Named Executive Officers'
stock option holdings annually to determine whether additional grants are
appropriate. Each stock option is generally exercisable over a four-year
period, thus providing an incentive to remain in the Company's employ.
Other: In addition to the compensation paid to the Named Executive
Officers as described above, executive officers and all other participating
regular employees of the Company receive each year matching contributions
by the Company of up to $1,000 under the Company's 401(k) plan. In
addition, each of the Named Executive Officers receives an annual car
allowance of up to $7,200. Executive officers, subject to plan provisions,
and all other regular employees are eligible to participate in the
Company's Employee Stock Purchase Plan (which qualifies under section 423
of the Internal Revenue Code of 1986).
COMPANY PERFORMANCE AND CEO COMPENSATION
Edwin L. Harper was named Chief Executive Officer and President of the
Company during fiscal 1996 after Syed Iftikar's resignation as the Company's
Chief Executive Officer, Chairman of the Board and President. In setting
compensation levels for the Chief Executive Officer, the Committee reviews
competitive information reflecting compensation practices for disk drive
companies and examines the Chief Executive Officer's performance relative to
overall Company financial results. The Committee also considers the Chief
Executive Officer's achievements against the same pre-established objectives and
determines whether the Chief Executive Officer's base salary, target bonus and
target total compensation approximate the competitive range of compensation for
chief executive officer positions in the disk drive industry.
While the Committee followed that process to set Mr. Iftikar's compensation
for fiscal 1996, because Mr. Harper was hired in mid-year, the Committee was not
able to measure his past performance with the Company to establish his
compensation. Instead, the Committee reviewed Mr. Harper's qualifications and
past performance and compared them with chief executive officers of other
companies.
In the fiscal year ended September 30, 1996, Mr. Iftikar received $314,765.
Mr. Iftikar did not earn an incentive bonus in fiscal year 1996. Mr. Harper's
annual base salary is $300,000. Overall, both Mr. Harper's and Mr. Iftikar's
base and incentive compensation are below the median compensation for disk drive
companies, but within the competitive range.
With respect to matters of executive compensation, stock option grants and
to all other elements of
<PAGE>
compensation, the Committee submits the foregoing report as of January 28, 1997.
David I. Caplan
C. Richard Kramlich
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC") and the National Association of Securities Dealers, Inc. Executive
officers, directors, and greater than ten percent stockholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file. The Form 3 for director Joseph Baia, who became a director in fiscal
1996, was not filed until October 30, 1996. Based solely on its review of the
copies of such forms received by it, or written representations from certain
reporting persons, the Company believes that all of its other executive officers
and directors complied with applicable filing requirements during the fiscal
year ended September 30, 1996.
OTHER MATTERS
GENERAL
The Company knows of no other matters to be submitted to the stockholders
at the meeting. If any other matters properly come before the meeting, the
persons named in the enclosed form of Proxy intend to vote the shares they
represent in a manner consistent with the recommendations of the Board of
Directors.
STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL MEETING
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 1998 Annual Meeting of Stockholders must
be received by the Company no later than September 30, 1997, to be considered
for inclusion in the proxy statement and form of proxy relating to that meeting.
<PAGE>
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ Thomas C. Tokos
--------------------------------
Thomas C. Tokos
Secretary
Fremont, California
Dated: April 4, 1997
<PAGE>
P
R
O
X
Y
DETACH HERE SYQ 1
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SYQUEST TECHNOLOGY, INC.
1997 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of SYQUEST TECHNOLOGY, INC., a Delaware
corporation ("Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated April 4, 1997, and
hereby appoints Edwin L. Harper and Henry C. Montgomery, or either of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf of and in the name of the undersigned, to represent the undersigned at
the Annual Meeting of Stockholders of SyQuest Technology, Inc. to be held on
May 6, 1997, at 9:00 a.m. local time, at the principal executive offices of
SyQuest Technology, Inc., 47071 Bayside Parkway, Fremont, California 94538, and
at any adjournment or adjournments thereof, and to vote all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR PROPOSALS NOS. 1, 2 AND 3, AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
SEE REVERSE
SIDE
<PAGE>
DETACH HERE SYQ 1
Please mark
votes as in
[X] this example.
The Board of Directors Recommends Voting FOR Proposals 1, 2 and 3.
---
<TABLE>
<CAPTION>
<S> <C> <C>
1. To elect the Company's FOR AGAINST ABSTAIN
nominees to serve as directors 2. To approve an amendment to the [_] [_] [_]
for the ensuing year and until Incorporation to increase the
their successors are elected. number of authorized shares of
Nominees: Joseph Baia, Edwin L. Harper, the Company's Common Stock
C. Richard Kramlich, Edward L. Marinaro from 60,000,000 to
FOR WITHHELD 120,000,000.
[_] [_]
FOR AGAINST ABSTAIN
[_] ______________________________________ 3. To ratify the appointment of [_] [_] [_]
For all nominees except as noted above Price Waterhouse LLP as
independent auditors of the
Company for the fiscal year
ending September 30, 1997.
4. To transact such other business as may come before
the meeting or any adjournment thereof.
(This proxy should be marked, dated and signed by the stockholder(s) exactly as
his or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
jointly or as community property, both stockholders should sign.)
MARK HERE
FOR ADDRESS ________________________
CHANGE AND ________________________
NOTE AT RIGHT [_] ________________________
Signature ________________ Date ______ Signature _________________ Date _____
</TABLE>
