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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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SYQUEST TECHNOLOGY, INC.
47071 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
(510) 226-4000
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------
TO BE HELD THURSDAY, MARCH 19, 1998
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
Thursday, March 19, 1998, at 10:00 a.m., Pacific Standard Time, at the
Company's principal executive offices at 47071 Bayside Parkway, Fremont,
California 94538, for the following purposes:
1. To elect five directors to serve for the ensuing year and until their
successors are elected.
2. To approve an amendment to increase the number of shares of common
stock reserved for issuance under the 1992 Employee Stock Purchase Plan by
2,000,000 shares.
3. To ratify the appointment of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending September 30, 1998.
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 January 27, 1998 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
January 28, 1998
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.
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SYQUEST TECHNOLOGY, INC.
47071 BAYSIDE PARKWAY
FREMONT, CALIFORNIA 94538
----------------
PROXY STATEMENT FOR ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON THURSDAY, MARCH 19, 1998
----------------
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 Thursday, March 19, 1998, at 10:00 a.m., Pacific
Standard Time, or at any continuation or adjournment thereof, for the purposes
set forth herein and 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, 1997 ("Fiscal 1997"),
will first be mailed to stockholders entitled to vote at the meeting on or
about February 12, 1998.
GENERAL INFORMATION
RECORD DATE AND VOTING SECURITIES
Only holders of record of the Company's Common Stock, $.0001 par value (the
"Common Stock"), at the close of business on January 27, 1998 (the "Record
Date"), are entitled to notice of and to vote at the meeting. On the Record
Date, 71,721,583 shares of the Company's Common Stock 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
Each share of Common Stock is entitled to one vote on each proposal
presented in this Proxy Statement. 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 five nominees for director listed
herein, for approval of the amendment to the 1992 Employee Stock Purchase
Plan, for ratification of the appointment of the independent accountants and,
to transact any other business which may properly come before the meeting. 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. Attending the
Annual Meeting in and of itself does not constitute revocation of a proxy.
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 with respect to any
matter, the shares represented thereby will be considered to be present or
represented at the meeting for purposes of determining the existence of a
quorum for the transaction of business, but will not be considered as present
or represented with respect to that matter.
Abstentions will be treated as shares that are present or represented 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 approving any matter
submitted to the stockholders for a vote. Thus, abstentions have the same
effect as a negative vote. Shares held by brokers that are present, but not
voted on a particular matter because the brokers were prohibited
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from exercising discretionary authority on that matter (that is, "broker non-
votes"), will also be treated as present or represented for determining the
presence of a quorum for the meeting, but will not be considered as present or
represented 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 regular employees by personal interview, telephone
or facsimile; no compensation will be paid for such solicitation. The Company
has retained Morrow & Co., Inc., at an estimated cost of $5,500 plus
reimbursement of reasonable expenses, to assist in the solicitation of proxies
from brokers, nominees, other institutional owners 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 five nor more than nine and the exact number of directors is currently
fixed at five. Accordingly, a board of five 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 five nominees named below, all of
whom are currently directors of the Company:
JOSEPH BAIA
EDWIN L. HARPER
C. RICHARD KRAMLICH
EDWARD L. MARINARO
STANLEY L. PACE
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 or unwilling 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 1999 and until a successor is elected and qualifies. The
following sets forth certain information concerning the nominees which is based
on information furnished by them.
JOSEPH BAIA, age 66, 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 January 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.
EDWIN L. HARPER, age 53, 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 June 1993 to June 1996, Mr.
Harper was Chairman, 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 board of directors of Network Associates, Inc. and Apex PC
Solutions, Inc. Additionally, he serves as the Chairman of the Compensation
Committee of Apex PC Solutions, Inc.
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C. RICHARD KRAMLICH, age 62, has been a director of the Company since 1983.
Mr. Kramlich has been a General Partner of New Enterprise Associates, a venture
capital firm, since 1978. Mr. Kramlich serves on the Board of Directors of
Chalone Inc., Silicon Graphics, Inc., Lumisys, Inc., Ascend Communications,
Inc. and Macromedia, Inc. Additionally, Mr. Kramlich serves on the Compensation
Committees of Ascend Communications and Silicon Graphics.
EDWARD L. MARINARO, age 59, 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 Chief Operating Officer of TMG, a
management consulting firm.
STANLEY L. PACE, age 44, has been a director of the Company since October
1997. Since June 1997 Mr. Pace has acted as a consultant to various firms. Mr.
Pace was the President and Chief Executive Officer of American Trans Air from
August 1996 to June 1997. From 1978 to 1996, Mr. Pace was with Bain & Company,
a strategy consulting firm, in various capacities last serving as a senior
partner and director of the firm.
VOTE REQUIRED
The five nominees for director receiving the highest number of affirmative
votes 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" EACH OF THE FIVE NOMINEES LISTED ABOVE.
BOARD MEETINGS AND COMMITTEES
The Board of Directors (the "Board") of the Company held a total of 13
meetings during Fiscal 1997, 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 Compensation Committee, a Nominating
Committee and a Business Practices Committee.
The Audit Committee consisted of Messrs. Kramlich and Baia during Fiscal
1997. Although the Audit Committee did not formally meet during Fiscal 1997,
issues which it would normally address were discussed and addressed by the full
Board. On October 22, 1997, the Board appointed Mr. Pace to the Audit
Committee. The Audit Committee makes recommendations to the Board 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 Compensation Committee which consisted of Messrs. Kramlich and Baia met 2
times during Fiscal 1997. On October 22, 1997, the Board appointed Mr. Pace to
the Compensation Committee and Mr. Kramlich withdrew from the Committee. The
Compensation Committee reviews proposals and makes recommendations to the Board
concerning corporate compensation and benefits and administers and recommends
policies relating to the Company's various incentive compensation and benefit
plans. During Fiscal 1997 the Stock Option Committee and Human Resources
Committee were consolidated into the Compensation Committee.
The Nominating Committee, established by the Board on July 22, 1997, is
comprised of Messrs. Marinaro, Harper and Kramlich. The Nominating Committee
develops criteria for selection of candidates to serve on the Board, makes
recommendations to the full Board to fill Board vacancies and makes
recommendations concerning committee assignments. The Nominating Committee did
not meet during Fiscal 1997.
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The Business Practices Committee, established by the Board on July 22, 1997,
is comprised of Messrs. Harper and Kramlich. The functions of this committee
are to establish and review business objectives; to review the basic policies
of the Company concerning business integrity, ethics and conflicts of
interest; and to identify public issues which may affect the Company. The
Business Practices Committee did not meet during Fiscal 1997.
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:
BOB L. COREY, age 46, was named Executive Vice President and Chief Financial
Officer of the Company in July 1997. Mr. Corey served as Vice President and
Chief Financial Officer of Primavera Systems, Inc., a PC software company from
April 1996 to July 1997. From July 1993 to March 1996, he served as the
Executive Vice President, Chief Financial Officer and Secretary of MTI
Technology Corporation, a storage manufacturer. Mr. Corey served as Senior
Vice President and Chief Financial Officer of Emulex Corporation, a computer
storage and networking products manufacturer from January 1992 to July 1993.
He also served as Vice President, Controller and Chief Accounting Officer of
Ashton Tate Corporation, a software company, from October 1989 to January
1992.
JOHN R. MacKAY, age 52, was named Chief Operating Officer of the Company in
August 1997 and served as a project consultant to the Company from May to
August 1997. Prior to joining the Company, Mr. MacKay was employed as the
Chief Executive Officer of Headway Technologies, a magno-resistence head
technology company from January 1996 to May 1997. From May 1993 to January
1996, Mr. MacKay was Chief Executive Officer of Jem Solutions, an equipment
development company. Mr. MacKay was the Senior Vice President of Operations of
Western Digital Corporation, a disk drive manufacturer, from January 1983 to
May 1993.
DALE W. PILGERAM, age 54, 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 operated his own consulting
practice, 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.
GARY B. JONES, age 43, was named Executive Vice President of Sales of the
Company in April 1997. From September 1990 to April 1997, Mr. Jones was
employed by Iomega Corporation, a removable storage manufacturer. During his
tenure at Iomega, Mr. Jones held the following positions: from September 1990
to July 1993 he served as Director--Pan-Am/Asia Sales; from July 1993 through
December 1994 he served as Vice President--Sales and from January 1995 to
April 1997 he served as Director--Distribution Sales of the Americas.
GARY S. MARKS, age 39, was named Executive Vice President, Marketing of the
Company in November 1996. Before joining the Company, Mr. Marks served as
Vice-President of Marketing of Conner Peripherals, a disk drive manufacturer,
from October 1994 to May 1996. He also served as Vice President of Marketing
at Western Digital Corporation, a disk drive manufacturer, from September 1987
to September 1994.
JOSEPH B. SMITH, age 56, was named Executive Vice President, Global
Operations of the Company in September 1996. Mr. Smith was retired for the
period of July 1993 to August 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 45, joined the Company in December 1996 as Vice
President, General Counsel and Secretary. From October 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.
4
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PROPOSAL NO. 2
AMENDMENT TO THE 1992 EMPLOYEE STOCK PURCHASE PLAN
TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSSUANCE BY 2,000,000 SHARES
BACKGROUND
The 1992 Employee Stock Purchase Plan (the "Purchase Plan") is voluntary and
was designed to be a broad-based equity compensation plan. The Purchase Plan
encourages and motivates employees ("employees" or "participants") to
participate in the Company's future through direct stock ownership. The Share
Reserve (the "Share Reserve") represents the number of shares available for
purchase in the Purchase Plan. The Board believes that the availability of a
sufficient number of shares in the Share Reserve of the Purchase Plan is
integral to attract, retain and motivate qualified employees fundamental to
the success of the Company. Subject to stockholder approval, the Board has
amended the Purchase Plan to increase the number of shares reserved for
issuance under the Purchase Plan from 500,000 shares to 2,500,000 shares.
SUMMARY OF THE PURCHASE PLAN
The following summary of the Purchase Plan is qualified in its entirety by
the specific language of the Purchase Plan. Copies of the Purchase Plan are
available to any stockholder upon request addressed to: Ms. Jean King, Legal
Department, SyQuest Technology, Inc., 47071 Bayside Parkway, Fremont, CA
94538.
The Company established the Purchase Plan to allow the employees of the
Company, and its designated subsidiaries, to acquire Common Stock of the
Company (the "Common Stock") through accumulated payroll deductions. Subject
to stockholder approval, the Board amended the Purchase Plan on October 22,
1997 to increase the number of shares reserved for issuance under the Purchase
Plan by 2,000,000 shares. As of August 1, 1997, only 32,014 shares remained
available for purchase under the Purchase Plan. The Purchase Plan provides
that appropriate adjustments will be made in the shares subject to purchase
and in the purchase price per share in the event of any changes in the
capitalization of the Company, such as stock splits or stock dividends,
mergers, consolidations or similar occurrence. In the event that any purchase
right is terminated under the Purchase Plan, the shares subject to such
purchase right are returned to the Purchase Plan.
The Purchase Plan may be administered by the Board, or by a committee of the
Board. Currently the Purchase Plan is administered by the Compensation
Committee. The Board may at any time change the duration of the Offering (as
defined below) periods with respect to future Offerings; amend or terminate
the Purchase Plan except the Board may not terminate any purchase right
previously granted which would adversely affect the rights of any participant
of the Purchase Plan. The Board may not amend the Purchase Plan to increase
the number of shares available for issuance thereunder without the approval of
the Company's stockholders, materially modify the eligibility requirements or
materially increase the benefits which may accrue to participants under the
Purchase Plan. The Purchase Plan will terminate the earlier of the date on
which the Purchase Plan is terminated by the Board or on February 28, 2002.
Any person who has been an employee of the Company, or its designated
subsidiaries (including any officer or director who is also an employee), is
eligible to participate in the Purchase Plan as long as the employee is
customarily employed for more than 5 months in any calendar year and for at
least 20 hours per week. Participation in the Purchase Plan is limited to
employees who have completed at least 3 months of continuous employment as of
the commencement of an Offering. No employee who owns or holds options to
purchase, or who would as a result of participation in the Purchase Plan own
or hold options to purchase, 5% or more of the Company's Common Stock may
participate in the Purchase Plan.
The Purchase Plan, which qualifies under Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), is implemented by two separate
offerings of Common Stock each year (each an "Offering"). Each Offering is for
a period of six months. One Offering commences on or about February 1 of each
year and the
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other Offering commences on or about August 1 of each year. Employees may elect
to participate in each of the Offerings if they meet the eligibility criteria
set forth above. In order to participate in an Offering, eligible employees
must authorize payroll deductions which may not exceed 15% of the participant's
compensation for any pay period during an Offering. The purchase price per
share at which the shares of Company's Common Stock are sold under the Purchase
Plan is equal to 85% of the lesser of the fair market value of the Common Stock
on (i) the first day of the Offering or (ii) the last day of the Offering. The
fair market value of Company's Common Stock on a given date is determined by
reference to the closing sales price on the Nasdaq National Market System, or
in the event that the Company's Common Stock is listed on a stock exchange, the
value shall be the closing price on such exchange on such date. The number of
shares of the Company's Common Stock a participant purchases in each Offering
is determined by dividing the total amount of payroll deductions withheld from
the participant's compensation by the per share purchase price. The fair market
value of the total number of shares a participant may purchase under the
Purchase Plan in any calendar year, together with the fair market value of the
total number of shares purchased under all other employee stock purchase plans
(as described in Section 423 of the Code) in any calendar year, may not exceed
$15,000 as determined at the time such options are granted.
SUMMARY OF THE TAX CONSEQUENCES OF THE PURCHASE PLAN
The following description is a general guide to the federal income tax
consequences under current federal law with respect to participation in the
Purchase Plan and does not purport to describe state or local income tax
consequences or tax consequences for participants in countries other than the
United States.
Rights granted under the Purchase Plan are intended to qualify for favorable
federal tax treatment associated with rights granted under an employee stock
purchase plan which qualifies under provisions of Section 423 of the Code. The
Purchase Plan is not subject to any provisions of the Employee Retirement
Income Security Act ("ERISA") of 1974, as amended.
Participants are taxed on amounts withheld for the purchase of shares as if
such amounts were actually received. The Company deducts all payroll taxes
(e.g. FICA) applicable to participation in the Purchase Plan. Participating
employees recognize no taxable income either as a result of participating in
the Purchase Plan or purchasing shares of the Company's Common Stock under the
terms of the Purchase Plan. The excess of the actual gain over the amount
realized as ordinary income is a capital gain.
If a participant disposes of shares acquired under the Purchase Plan after
holding the shares for a period of more than one year after the date of
purchase and more than two years from the beginning of the applicable Offering
period, the participant realizes ordinary income on a sale to the extent of the
lesser of: (i) 15% of the fair market value of the shares at the beginning of
the Offering period; or (ii) the actual gain (the amount by which the fair
market value of the shares on the date of sale exceeds the purchase price).
If the participant disposes of shares acquired under the Purchase Plan prior
to the expiration of either of the holding periods described above (a
"disqualifying disposition"), then the participant realizes ordinary income at
the time of the disqualifying disposition in the amount that the fair market
value of the shares on the date of purchase exceeds the purchase price. This
amount constitutes ordinary income in the year of the disqualifying disposition
even if no gain is realized on the sale. The difference, if any, between the
proceeds of the sale and the fair market value of the shares on the date of
purchase is a capital gain or loss.
There are no federal income tax consequences to the Company by reason of the
grant or exercise of rights under the Purchase Plan. The Company is entitled to
a deduction in connection with the disposition of shares under the Purchase
Plan only to the extent that the participant realized ordinary income on a
disqualifying disposition of shares. No deduction is available if the
participant meets the holding period requirement.
VOTE REQUIRED
The affirmative vote of a majority of the shares of the Common Stock present
or represented and entitled to vote at the Annual Meeting is required for
approval of this Proposal.
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RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE AMENDMENT TO
INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE UNDER THE PURCHASE PLAN.
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, 1998,
and recommends that stockholders vote to ratify such appointment. Price
Waterhouse first became the Company's independent accountants in January 1997.
Audit services of Price Waterhouse LLP during Fiscal 1997 included the
examination of the Company's consolidated financial statements and services
related to filings with the SEC and other regulatory bodies. If the appointment
is not ratified, the Board of Directors will reconsider the Company's
selection.
Representatives of Price Waterhouse LLP are expected to be present at the
Annual 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.
VOTE REQUIRED
The affirmative vote of a majority of the shares of the Common Stock present
or represented and entitled to vote at the Annual Meeting is required for
approval of this Proposal.
RECOMMENDATION
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF PRICE WATERHOUSE LLP AS INDEPENDENT ACCOUNTANTS.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth beneficial ownership of Common Stock of the
Company as of December 10, 1997, by (i) each director and nominee, (ii) each
named executive officer of the Company described in the section of this Proxy
Statement entitled "Executive Compensation and Other Matters", (iii) all
current director nominees and current executive officers as a group, and (iv)
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.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED(1)
----------------------
NUMBER PERCENT
NAME OF SHARES OF SHARES
---- -------------- -----------
<S> <C> <C>
Edward L. Marinaro........................... 268,281(2) *
Edwin L. Harper.............................. 109,300(3) *
C. Richard Kramlich.......................... 138,844(4) *
Joseph Baia.................................. 35,000(5) *
Stanley L. Pace.............................. 0 *
Dale W. Pilgeram............................. 25,000(6) *
Joseph Smith................................. 40,000(7) *
Gary Marks................................... 17,500(8) *
New Enterprises Associates VII LP............ 7,205,606(9) 9.12%
Fletcher International Limited............... 10,853,999(10) 13.8%
All current directors, nominees and current
executive officers of the Company as a group
(12 persons)................................. 660,425(11) *
</TABLE>
- --------
* Less than one percent.
7
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( 1) The table does not include several holders of the Company's outstanding
convertible preferred stock because such holders are not permitted to
convert shares of such stock into the Company's Common Stock if to do so
would cause the holder and all other persons whose holdings would be
aggregated with such holder for purposes of calculating beneficial
ownership in accordance with Sections 13(d) and 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the
regulations thereunder, to have beneficial ownership of more than four
and nine-tenths percent (the "4.9% Restriction") of the outstanding
Common Stock of the Company. However, assuming (1) the 4.9% Restriction
did not apply, and (2) the holders of the Company's convertible preferred
stock and the warrants issued in connection therewith converted such
stock and exercised such warrants as of December 10, 1997, the Company
would have approximately 74,209,119 additional shares of Common Stock
issued and outstanding. Details of the sales of the Company's convertible
preferred stock are reported in various reports on Form 8-K dated June
14, 1996, October 31, 1996, November 11, 1996, February 28, 1997, May 30,
1997, August 4, 1997 and October 4, 1997. Assuming further that the
holders of all other outstanding warrants or options exercised those
warrants and options as of December 10, 1997, the Company would have
approximately 153 million shares of Common Stock issued and outstanding.
(2) Includes options to purchase 256,667 shares which are presently
exercisable.
(3) Includes options to purchase 97,500 shares which are presently
exercisable.
(4) Includes options to purchase 50,000 shares which are presently
exercisable.
(5) Includes options to purchase 35,000 shares which are presently
exercisable.
(6) Includes options to purchase 25,000 shares which are presently
exercisable.
(7) Includes options to purchase 40,000 shares which are presently
exercisable.
(8) Includes options to purchase 12,500 shares which are presently
exercisable.
(9) The information reported in the table was compiled from the Company's
records.
(10) The information reported in the table was compiled from the Company's
records. In November 1996, Fletcher International, Ltd. ("Fletcher")
purchased 1,500,000 shares of Common Stock and a warrant to acquire
additional shares, the number of which was fixed at 1,875,000 shares in
July 1997. In April 1997, Fletcher purchased 50,000 shares of the
Company's 5% Cumulative Convertible Preferred Stock, Series 3, and a
warrant to acquire an additional 5,000,000 shares of Common Stock. Those
two transactions are reported in the Company's Reports on Form 8-K dated
November 11, 1996 and April 14, 1997. Fletcher subsequently converted all
of its Series 3 preferred shares, for a total of 2,478,999 shares of
Common Stock. The warrants are presently exercisable and are not
transferable. For the purposes of reporting beneficial ownership in the
table, the Company assumes that Fletcher continues to own the 3,978,999
shares of Common Stock acquired.
(11) Includes options to purchase 26,500 shares which are presently
exercisable.
8
<PAGE>
EXECUTIVE COMPENSATION AND OTHER MATTERS
GENERAL
Shown below is information concerning the annual and long-term compensation
paid or accrued by the Company for services in all capacities to the Company
for the fiscal years ended September 30, 1997 and 1996, of the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers with the Company as of the end of Fiscal 1997 (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. No named individual served as an executive officer of the
Company during Fiscal 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
------------
NUMBER OF
SHARES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL --------------------- OPTIONS COMPENSATION
POSITIONS YEAR SALARY($) BONUS ($) GRANTED ($)
------------------ ------ --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Edwin L. Harper(1)...... 1997 307,200 0 0 0
President and Chief
Executive Officer..... 1996 113,665 0 390,000 14,175(2)
Edward L. Marinaro(3)... 1997 307,200 0 0 0
Chairman of the Board 1996 99,662 0 390,000 8,500(4)
Dale W. Pilgeram(5)..... 1997 243,000 0 0 0
Vice President, Chief
Technical Officer 1996 139,927(6) 0 100,000 1,000(7)
Joseph Smith(8)......... 1997 210,000 0 0 0
Executive Vice
President, Global
Operations 1996 55,095 0 130,000 0
Gary Marks(9)........... 1997 191,740 0 50,000 0
Executive Vice
President, Marketing 1996 0 0 0 0
</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) Joined the Company in March 1996.
(6) Includes $10,000 paid to Mr. Pilgeram as a private contractor prior to his
employment with the Company.
(7) Represents the Company's maximum contribution to Mr. Pilgeram's 401(k)
plan.
(8) Joined the Company in August 1996.
(9) Joined the Company in November 1996.
9
<PAGE>
The following table sets forth information with respect to each grant of
options to purchase the Company's Common Stock made during the last fiscal
year to each of the Named Executive Officers named in the Summary Compensation
Table.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
--------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES
NO. OF OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM($)(3)
OPTIONS IN FISCAL PRICE(2) EXPIRATION -------------------
GRANTED YEAR ($/SHARES) DATE 5% 10%
---------- ---------- ---------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edwin L. Harper......... 1,000,000(3) 15.89% $2.281 02/25/07 $491,570 $1,434,509
Edward L. Marinaro...... 1,000,000(3) 15.89% $2.281 02/25/07 $491,570 $1,434,509
Dale W. Pilgeram........ 200,000(3) 3.17% $2.281 02/25/07 $ 98,314 $ 286,902
Joseph Smith............ 200,000(3) 3.17% $2.281 02/25/07 $ 98,314 $ 286,902
Gary Marks.............. 200,000(3) 3.17% $2.281 02/25/07 $ 98,314 $ 286,902
50,000(4) .079% $ 5.69 11/13/01 $ 61,312 $ 132,036
</TABLE>
OPTION GRANTS IN FISCAL YEAR 1997
- --------
(1) 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. Options vest over four years at the rate of 25% per year and
are excercisable immediately upon vesting.
(2) 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.
(3) During Fiscal 1997, the Board authorized the granting of these options
pursuant to the 1997 Stock Incentive Plan, subject to stockholder approval
of the plan at the November 5, 1997 Special Meeting of Stockholders. That
plan was approved, however, the option agreements have not yet been
issued.
(4) Options were granted under the Company's 1991 Stock Option Plan.
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 1997
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END(2)
ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edwin L. Harper......... -- -- 97,500 292,500 0 0
Edward L. Marinaro...... -- -- 256,667 133,333 0 0
Dale W. Pilgeram........ -- -- 25,000 75,000 0 0
Joseph Smith............ -- -- 40,000 90,000 0 0
Gary Marks.............. -- -- 12,500 37,500 0 0
</TABLE>
- --------
(1) No options were exercised by the Named Executive Officers during Fiscal
1997.
(2) "In the money" options are options whose base (or exercise) price was less
than the market price of Common Stock at September 30, 1997. None of the
unexercised options listed in this table were "in the money" at the end of
Fiscal 1997.
10
<PAGE>
CHANGE IN CONTROL PROVISIONS
The 1991 Stock Option Plan of the Company provided 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 was not the
surviving corporation or on a sale of all or substantially all of the assets
of the Company, if the successor entity did not assume the outstanding options
or provide options in substitution for the outstanding options.
The 1997 Stock Incentive 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 employment agreements, if there is a change in
control of the Company, each of Mr. Harper and Mr Marinaro, upon termination
other than for cause, will be entitled to twenty-four months salary, a bonus
equal to a pro-rata portion of annual salary, immediate vesting and
exercisability of outstanding options and continuation of benefits for twenty-
four months. A change in control will be deemed to occur if (i) any person
becomes a beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act), of 50% or more of the total voting power represented by the
Company's then outstanding voting securities, (ii) within a two year period
there is a change in the composition of the Board of Directors, as a result of
which fewer than a majority of the Directors are incumbent Directors, (iii)
the stockholders approve a merger or consolidation of the Company other than a
merger or consolidation whereby the outstanding securities prior to such event
continue to represent at least 50% of the total voting power of the Company's
voting securities, or (iv) the stockholders approve a plan of complete
liquidation or sale of all or substantially all the Company's assets.
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 non-employee 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 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.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
C. Richard Kramlich, a director of the Company, is a general partner of NEA
Partners VII, L.P., which is the general partner of New Entrerprise Associates
VII L.P. ("NEA VII"). Mr. Kramlich's indirect equity interest in NEA VII is
less than 1%. On May 1, 1997, NEA VII purchased from the Company 50,000 shares
of the Company's 5% Cumulative Convertible Preferred Stock, Series 4 (the
"Series 4 Preferred Stock") for an aggregate price of $5,000,000, and received
in connection with that transaction a warrant to purchase up to 5,000,000
shares of the Company's Common Stock. The terms of the conversion of the
Series 4 Preferred Stock and the exercise of the warrant are disclosed in
detail in the Company's Report on Form 8-K dated May 30, 1997.
EMPLOYMENT AGREEMENTS
The Company has written employment agreements with the following Named
Executive Officers, which are summarized below:
Edward L. Marinaro, Chairman of the Board
Annual Base Salary: $307,200
Eligibility in the Company's Incentive Compensation Plan
Full health benefits
If terminated other than for cause and other than after a change in
control, Mr. Marinaro will be entitled to salary continuation for
eighteen months, a pro-rata portion of any performance bonus otherwise
payable to him, benefits continuation for twenty-four months, and his
options will continue to vest for
11
<PAGE>
a period of twelve months after termination. If terminated after a
change in control, other than for cause, Mr. Marinaro will be entitled
to a payment equal to twenty-four months of salary, a bonus equal to a
pro-rata portion of his annual salary, twenty-four months of benefits
and immediate vesting of all options. In the event of death or
disability, his salary will be continued for a period of twelve months
and his stock options will continue to vest during that period with
continued exercisability of such options for a period of 90 days. If
terminated for cause or upon a voluntary resignation, Mr. Marinaro will
be entitled to all accrued salary, unused vacation, certain bonuses,
and other benefits as may then be established under the Company's
existing serverance policies through the date of termination.
Edwin L. Harper, President and Chief Executive Officer
Annual Base Salary: $307,200
Eligibility in the Company's Incentive Compensation Plan
Full health benefits
If terminated other than for cause and other than after a change in
control, Mr. Harper will be entitled to salary continuation for
eighteen months, a pro-rata portion of any performance bonus otherwise
payable to him, benefits continuation for twenty-four months, and his
options will continue to vest for a period of twelve months after
termination. If terminated after a change in control, other than for
cause, Mr. Harper will be entitled to a payment equal to twenty-four
months of salary, a bonus equal to a pro-rata portion of his annual
salary, twenty-four months of benefits and immediate vesting of all
options. In the event of death or disability, his salary will be
continued for a period of twelve months and his stock options will
continue to vest during that period with continued exercisability of
such options for a period of 90 days. If terminated for cause or upon a
voluntary resignation, Mr. Harper will be entitled to all accrued
salary, unused vacation, certain bonuses, and other benefits as may
then be established under the Company's existing serverance policies
through the date of termination.
The Company is in the process of negotiating and preparing written employment
agreements for certain of its other executive officers, none of which were
executed as of the date of this Proxy Statement.
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 stockholder return on
the Company's Common Stock during the fiscal periods ended September 30, 1992
to September 30, 1997, against the cumulative total return on the Nasdaq
Composite (US) Index and two peer groups constructed by the Company over the
same period.
The "Old Peer Group" was comprised of Connor Peripherals, Inc., Maxtor
Corporation, Micropolis Corporation, Quantum Corporation, Western Digital
Corporation, Iomega Corporation and Exabyte Corporation. Three companies of the
Old Peer Group, Connor Peripherals, Inc., Maxtor Corporation and Micropolis
Corporation, were acquired by other companies and no data is available for
these companies after February 1996.
The "New Peer Group" is comprised of JTS Corporation, Quantum Corporation,
Seagate Technology, Western Digital Corporation, Iomega Corporation and Exabyte
Corporation.
The Stock Performance Graph and table assume that $100 was invested on
September 30, 1992, at the closing sale price of the Company's Common Stock, in
the Nasdaq Composite (US) Index and both the Old and New Peer Groups, 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 both
the Old and New Peer Groups are weighted based on market capitalization at each
data point.
12
<PAGE>
LOGO
SYQUEST TECHNOLOGY
HISTORICAL QUARTERLY PRICE--CLOSE
RELATIVE TO DISK DRIVE COMPANIES AND SELECTED MARKET INDICES
<TABLE>
<CAPTION>
SEP. 92 DEC. 92 MAR. 93 JUNE 93 SEP. 93
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SyQuest Technologies,
Inc............ 100 148 75 64 61
Old Peer Group.. 100 122 94 77 80
New Peer Group.. 100 131 100 94 102
Nasdaq Composite
(US)........... 100 116 119 121 131
<CAPTION>
DEC. 93 MAR. 94 JUNE 94 SEP. 94 DEC. 94
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SyQuest
Technologies,
Inc............ 59 64 54 59 103
Old Peer Group.. 113 147 113 138 148
New Peer Group.. 140 157 127 155 160
NASDAQ Composite
(US)........... 134 128 122 132 131
<CAPTION>
MAR. 95 JUNE 95 SEP. 95 DEC. 95 MAR. 96
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SyQuest
Technologies,
Inc............ 70 75 77 58 34
Old Peer Group.. 136 192 184 205 256
New Peer Group.. 165 234 237 263 320
Nasdaq Composite
(US)........... 142 163 182 185 193
</TABLE>
<TABLE>
<CAPTION>
JUNE 96 SEP. 96 DEC. 96 MAR. 97 JUNE 97
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SyQuest
Technologies,
Inc............ 46 37 21 14 13
Old Peer Group.. 389 404 441 471 529
New Peer Group.. 373 406 495 543 496
Nasdaq Composite
(US)........... 209 216 227 215 254
<CAPTION>
SEP. 97
-------
<S> <C> <C> <C> <C> <C>
SyQuest
Technologies,
Inc............ 18
Old Peer Group.. 776
New Peer Group.. 616
Nasdaq
Composite...... 297
</TABLE>
13
<PAGE>
REPORT OF COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended (the "Securities
Act"), or the Exchange Act, that might incorporate all or portions of future
filings, including this Proxy Statement, the following report of the
Compensation Committee shall not be incorporated by reference into any such
filing, nor shall it be deemed to be soliciting material or deemed filed with
the SEC under the Securities Act or the Exchange Act.
The Compensation Committee (the "Committee") of the Board of Directors,
comprised of two non-employee directors, determines and administers the
Company's incentive compensation policies and programs.
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 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 range from
twenty-five to one hundred 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 1997, no incentive bonuses were
awarded to the executive officers and no profit sharing payments were
awarded to the employees for 1997.
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. Stock options granted are generally exercisable over a four-
year period, thus providing an incentive to remain in the Company's employ.
14
<PAGE>
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. 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 Code).
COMPANY PERFORMANCE AND CEO COMPENSATION
Edwin L. Harper was named Chief Executive Officer and President of the
Company during fiscal 1996. In setting compensation levels for the Chief
Executive Officer, the Committee reviews competitive information reflecting
compensation practices for technology 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 technology industry.
In establishing his compensation, 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, 1997, Mr. Harper received $307,200.
Mr. Harper did not earn an incentive bonus in fiscal year 1997. Overall, Mr.
Harper's base and incentive compensation are below the median compensation for
technology companies, but within the competitive range.
With respect to matters of executive compensation, stock option grants and
to all other elements of compensation, the Committee submits the foregoing
report as of September 30, 1997.
Joseph Baia
C. Richard Kramlich
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act 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 also required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. Specific due dates for these reports have been established, and the
Company is required to disclose in this Proxy Statement, any failure to file
such reports on a timely basis. 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 these requirements were satisfied
during Fiscal 1997.
15
<PAGE>
OTHER MATTERS
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 October 13, 1998, to be considered
for inclusion in the proxy statement and form of proxy relating to that
meeting.
By Order Of The Board of Directors
/s/ Thomas C. Tokos
Thomas C. Tokos
Vice President, General Counseland
Secretary
Fremont, California
Dated: January 28, 1998
16
<PAGE>
SKU #1083-PS-98
<PAGE>
P
R
O
X
Y
DETACH HERE
SYQ F
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SYQUEST TECHNOLOGY, INC.
MARCH 19, 1998 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of SYQUEST TECHNOLOGY, INC., a Delaware
corporation ("Company"), hereby acknowledges receipt of the Notice of the
Annual Meeting of Stockholders and Proxy Statement, each dated February 12,
1998, and hereby appoints Edwin L. Harper and Bob L. Corey, 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
Thursday, March 19, 1998, at 10:00 a.m. Pacific Standard 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
DETACH HERE
<PAGE>
SYQ F
Please mark
votes as in
[X] this example.
The Board of Directors Recommends Voting FOR Proposals 1, 2 and 3.
---
<TABLE>
<CAPTION>
FOR WITHHELD
<S> <C> <C> <C>
1. To elect the Company's nominees to [_] [_] [_]
serve as directors for the ensuing
year and until their successors For all nominees as listed except
are elected.
Nominees: C. Richard Kramlich, Joseph Baia, Edwin L. _________________________________
Harper, Edward L. Marinaro,
Stanley L. Pace
FOR AGAINST ABSTAIN
2. To approve an amendment to the [_] [_] [_]
1992 Employee Stock Purchase
Plan to increase the Share Reserve
by 2,000,000 shares.
FOR AGAINST ABSTAIN
3. To ratify the appointment of Price [_] [_] [_]
Waterhouse as independent accountants
of the Company for the fiscal year
ending September 30, 1998.
4. To transact such other business
as may properly come before the
meeting or any adjournment thereof.
</TABLE>
(This proxy should be marked, dated and signed by the stockholder(s) exactly as
his or her name(s) 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 _____
