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UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K/A


(Amendment No. 1)





|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For the fiscal year ended April 1, 2006                                                     
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to           .                                 

Commission file number 0-23418


MTI TECHNOLOGY CORPORATION


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|Delaware                                                           |  | 95-3601802                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. employer
    identification no.)

17595 Cartwright Road


Irvine, California 92614


(Address of principal executive offices, zip code)


Registrants telephone number, including area code:
(949) 251-1101


Securities registered pursuant to Section 12(b) of the
Act: None


Securities registered pursuant to Section 12(g) of the
Act:


Common stock, $0.001 par value


(Title of class)


o þ


o þ


þ o


S-K 10-K 10-K. o


12b-2




|                              |                         |                            
|----------------------------- | ----------------------- | ---------------------------
|Large accelerated filer     o | Accelerated filer     o | Non-accelerated filer     þ

12b-2 o þ






DOCUMENTS INCORPORATED BY REFERENCE:












---

TABLE OF CONTENTS



|                 |                                                                                                          |  |  |  |  |  |  | 
|---------------- | -------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|EXPLANATORY NOTE
|PART III        
|                 | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                             
|                 | ITEM 11. EXECUTIVE COMPENSATION                                                                         
|                 | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERS MATTERS
|                 | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                 
|                 | ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                         
|SIGNATURES      
|EXHIBIT INDEX   
|EXHIBIT 31.1    
|EXHIBIT 31.2    



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EXPLANATORY NOTE


10-K/ 10-K 10-K 120-day





PART III







|         |                                                   
|-------- | --------------------------------------------------
|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT





Directors


|                        |  |     |    |  |             |                                                                                        |              |                                   
|----------------------- |  | --- | -- |  | ----------- | -------------------------------------------------------------------------------------- | ------------ | ----------------------------------
|Name                    |  | Age |    |  | Position(s) |                                                                                        | Committee(s)
|                        |  |     |    |  |             |                                                                                        |             
|Thomas P. Raimondi, Jr. |  |     | 48 |  |             | Chairman of the Board of Directors, President and Chief
    Executive Officer, Nominee |              |                                   
|William Atkins          |  |     | 67 |  |             | Nominee                                                                                |              |                                   
|Lawrence P. Begley(1)   |  |     | 50 |  |             | Director, Nominee                                                                      |              | Audit, Compensation and Nominating
|Franz L. Cristiani(2)   |  |     | 64 |  |             | Director, Nominee                                                                      |              | Audit and Nominating              
|Ronald E. Heinz, Jr.    |  |     | 47 |  |             | Nominee                                                                                |              |                                   
|William Mustard(3)      |  |     | 53 |  |             | Director                                                                               |              | Nominating                        
|Michael Pehl(4)         |  |     | 45 |  |             | Director, Nominee                                                                      |              |                                   
|John T. Repp            |  |     | 68 |  |             | Director                                                                               |              | Compensation                      
|Kent D. Smith           |  |     | 57 |  |             | Director, Nominee                                                                      |              | Audit and Compensation            






|    |                                                   
|--- | --------------------------------------------------
|(1) | Chairman of the Compensation Committee.           
|   
|(2) | Chairman of the Audit Committee and Lead Director.
|   
|(3) | Chairman of the Nominating Committee.             
|   
|(4) | Series A Director.                                

Thomas P. Raimondi, Jr.


William Atkins


1



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Lawrence P. Begley


Franz L. Cristiani


Ronald E. Heinz, Jr.


William Mustard start-up


Michael Pehl


2



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John T. Repp


Kent D. Smith


Executive Officers




|                                  |  |     |    |  |             |                                                                                     
|--------------------------------- |  | --- | -- |  | ----------- | ------------------------------------------------------------------------------------
|Name                              |  | Age |    |  | Position(s)
|                                  |  |     |    |  |            
|Thomas P. Raimondi, Jr.           |  |     | 48 |  |             | Chairman, President and Chief Executive Officer                                     
|Edward C. Ateyeh, Jr. (Ed Taylor) |  |     | 53 |  |             | Executive Vice President, U.S. Services and President of
    Collective Technologies
|Keith Clark                       |  |     | 52 |  |             | Executive Vice President, Europe                                                    
|Scott Poteracki                   |  |     | 53 |  |             | Executive Vice President, Chief Financial Officer and Secretary                     
|Richard L. Ruskin                 |  |     | 47 |  |             | Executive Vice President, U.S. Sales and Marketing                                  
|Todd Williams                     |  |     | 30 |  |             | Vice President, Corporate Controller and Principal Accounting
    Officer           

Thomas P. Raimondi, Jr.


Edward C. Ateyeh, Jr. (Ed Taylor)


Keith Clark


3



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Scott Poteracki


Richard L. Ruskin


Todd Williams


Audit Committee




Mr. Cristiani


Stockholder Recommendation of Board Candidates




4



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Section 16(a) Beneficial Ownership Reporting
Compliance




Code of Business Conduct







ITEM 11.     EXECUTIVE
COMPENSATION


Compensation of Directors and Executive Officers And Other
Information




SUMMARY COMPENSATION TABLE


|                            |                                             |      |      |                     |     |              |            |         |           |                     |     |            |          |     |           |         |     |  |              |         |     |  |   |           |    |  |        |        |     
|--------------------------- | ------------------------------------------- | ---- | ---- | ------------------- | --- | ------------ | ---------- | ------- | --------- | ------------------- | --- | ---------- | -------- | --- | --------- | ------- | --- |  | ------------ | ------- | --- |  | - | --------- | -- |  | ------ | ------ | ----
|                            |                                             |      |      |                     |     |              |            |         |           | Long Term           |     |            |         
|                            |                                             |      |      |                     |     |              |            |         |           | Compensation Awards |     |            |         
|                            |                                             |      |      |                     |     |              |            |         |          
|                            |                                             |      |      | Annual Compensation |     |              |            |         | Number of |                     |     |           
|                            |                                             |      |      |                     |     |              | Restricted |         |           | Securities          |     |            |         
|                            |                                             |      |      |                     |     | Other Annual |            |         | Stock     |                     |     | Underlying |          |     | All Other |        
|                            |                                             |      |      | Salary              |     |              | Bonus      |         |           | Compensation        |     |            | Award(s) |     |           | Options |     |  | Compensation |        
|Name and Principal Position |                                             | Year |      |                     | ($) |              |            | ($)     |           |                     | ($) |            |          | ($) |           |         | (#) |  |              | ($)     |    
|                            |                                             |      |      |                     |     |              |            |         |           |                     |     |            |          |     |           |         |     |  |              |         |    
|Thomas P. Raimondi, Jr      |                                             |      | 2006 |                     |     |              | 387,884    | (1)     |           |                     |    |            |          |     | *         |         |     |  |             |         |     |  |  |           |    |  | 21,087 | (3)   
|                            | President, Chief Executive                  |      |      | 2005                |     |              |            | 337,000 | (1)       |                     |     |           |          |     |           | *       |     |  |              | 540,000 | (2) |  |   | 300,000** |    |  |        | 39,784 | (3) 
|                            | Officer and Chairman                        |      |      | 2004                |     |              |            | 337,000 |           |                     |     |           |          |     |           | *       |     |  |              |        |     |  |   | 450,000** |    |  |        | 30,968 | (4) 
|                            | of the Board                                |      |      |                     |     |              |            |         |           |                     |     |            |          |     |           |         |     |  |              |         |     |  |   |           |    |  |        |        |     
|Keith Clark                 |                                             |      | 2006 |                     |     |              | 344,243    | (5)     |           |                     |    |            |          |     | 40,709    | (6)     |     |  |             |         |     |  |  |           |    |  | 3,833  | (7)   
|                            | Executive Vice                              |      |      | 2005                |     |              |            | 362,657 | (5)       |                     |     |           |          |     |           | 47,368  | (6) |  |              |        |     |  |   | 90,000    |    |  |        | 6,756  | (7) 
|                            | President, Europe                           |      |      | 2004                |     |              |            | 330,333 | (5)       |                     |     | 26,782     |          |     |           | 41,218  | (6) |  |              |        |     |  |   | 200,000   |    |  |        | 6,222  | (7) 
|Scott Poteracki(8)          |                                             |      | 2006 |                     |     |              | 270,000    |         |           |                     |    |            |          |     | *         |         |     |  |              |         |     |  |  |           |    |  | 19,177 | (10)  
|                            | Executive Vice President,                   |      |      | 2005                |     |              |            | 109,039 |           |                     |     | 25,000     |          |     |           | 79,500  | (9) |  |              |        |     |  |   | 350,000   |    |  |        | 6,018  | (10)
|                            | Chief Financial Officer and Secretary       |      |      |                     |     |              |            |         |           |                     |     |            |          |     |           |         |     |  |              |         |     |  |   |           |    |  |        |        |     
|Richard L. Ruskin           |                                             |      | 2006 |                     |     |              | 310,568    | (11)    |           |                     |    |            |          |     | *         |         |     |  |             |         |     |  |  |           |    |  | 13,659 | (12)  
|                            | Executive Vice President,                   |      |      | 2005                |     |              |            | 364,447 | (11)      |                     |     | 10,379     |          |     |           | *       |     |  |              |        |     |  |   | 150,000   |    |  |        | 8,529  | (12)
|                            | U.S. Sales And Marketing                    |      |      | 2004                |     |              |            | 158,654 |           |                     |     |           |          |     |           | *       |     |  |              |        |     |  |   | 200,000   |    |  |        | 618    | (4) 
|Todd Williams(13)           |                                             |      | 2006 |                     |     |              | 150,385    | (14)    |           |                     |    |            |          |     | *         |         |     |  |             |         |     |  |  |           |    |  |       |       
|                            | Vice President, Corporate                   |      |      | 2005                |     |              |            | 129,808 |           |                     |     |           |          |     |           | *       |     |  |              |        |     |  |   | 80,000    | ** |  |        |       |     
|                            | Controller and Principal Accounting Officer |      |      |                     |     |              |            |         |           |                     |     |            |          |     |           |         |     |  |              |         |     |  |   |           |    |  |        |        |     






| |   |                                                                                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------
| | * | Amount does not exceed the lesser of $50,000 or ten percent of
    the total annual salary and bonus reported for the individual.



| |    |                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------
| | ** | These options will be cancelled and exchanged for shares of
    restricted stock upon stockholder approval at this years
    annual meeting.

5



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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Effective May 25, 2005, Mr. Raimondis annual
    base salary was increased from $337,000 to $400,000.                                                                                                                                                                                                                                                                                                                                                  
|
| | (2) | 200,000 shares of Restricted Stock awarded on
    February 10, 2005, multiplied by the closing price of our
    Common Stock on the Nasdaq Capital Market on February 10,
    2005 ($2.70). Shares vest over 3 years, 33.33% on the first
    anniversary of the date of grant and the remaining unvested
    shares will vest 4.16% at the end of the 13th month and
    each month thereafter.                                                        
|
| | (3) | Includes the amounts of $17,290 and $36,812 for medical
    reimbursements for fiscal year 2006 and 2005, respectively. Also
    includes the amounts of $820 and $830 we paid for life insurance
    premium for fiscal year 2006 and 2005, respectively, with
    respect to term life insurance for the benefit of
    Mr. Raimondi. Also includes $2,977 and $2,142 we paid for
    health insurance for fiscal year 2006 and 2005, respectively.   
|
| | (4) | Represents medical reimbursements.                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (5) | Mr. Clarks salary was paid in British Pounds and
    translated to U.S. Dollars at the applicable exchange
    rates. The annual salary changes were due to the fluctuation of
    the U.S. Dollar against the British Pound.
    Mr. Clarks annual base salary has not changed since
    fiscal year 2002.                                                                                                                                           
|
| | (6) | Includes the amounts of $20,913, $26,528, and $22,025 for auto
    allowance for fiscal year 2006, 2005, and 2004, respectively.
    Also includes the amounts of $19,796, $20,840, and $19,193 for
    pension for fiscal year 2006, 2005, and 2004, respectively.                                                                                                                                                                                     
|
| | (7) | Includes the amounts of $2,721, and $2,506 for medical
    reimbursements for fiscal year 2005, and 2004, respectively.
    Mr. Clark did not file claims for medical reimbursements in
    fiscal 2006. Also includes the amounts of $3,833, $4,035, and
    $3,716 we paid for life insurance premium for fiscal year 2006,
    2005, and 2004, respectively, with respect to term life
    insurance for the benefit of the Named Executive Officers.
|
| | (8) | Mr. Poteracki joined us in November 2004.                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (9) | Includes the amounts of $4,500 for auto allowance for fiscal
    year 2005, respectively. Also includes $75,000 for relocation
    costs for fiscal year 2005.                                                                                                                                                                                                                                                                                          



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes the amounts of $9,770 and $4,410 for medical
    reimbursements for the fiscal year 2006 and 2005, respectively.
    Also includes amounts of $6,430 and $1,607 we paid for life
    insurance premium for fiscal year 2006 and 2005, respectively,
    with respect to term life insurance for the benefit of the Named
    Executive Officers. Also includes $2,977 for health insurance we
    paid for the fiscal year 2006.
|    
|(11) | Includes the amounts of $85,568 and $139,447 for commissions for
    fiscal year 2006 and 2005, respectively. Mr. Ruskins
    current annual base salary is $225,000.                                                                                                                                                                                                                                                                   
|    
|(12) | Includes the amounts of $9,942 and $7,974 for medical
    reimbursements for the fiscal year 2006 and 2005. Also includes
    $740 and $555 we paid for life insurance premium for fiscal year
    2006 and 2005, respectively, with respect to term life insurance
    for the benefit of the Named Executive Officers. Also includes
    $2,977 for health insurance we paid for the fiscal year 2006.                                 
|    
|(13) | Mr. Williams was appointed Vice President, Corporate
    Controller and Principal Accounting Officer in February 2005.                                                                                                                                                                                                                                                                                                                   
|    
|(14) | Mr. Williams annual base salary increased in April
    2006 from $150,000 to $165,000.                                                                                                                                                                                                                                                                                                                                                  

Summary of Option Grants




6



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Summary of Options Exercised




AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR


AND FISCAL YEAR-END OPTION VALUES


|                        |  |              |   |  |                |                        |         |                           |                      |             |                              |  |  |  |           | 
|----------------------- |  | ------------ | - |  | -------------- | ---------------------- | ------- | ------------------------- | -------------------- | ----------- | ---------------------------- |  |  |  | --------- | 
|                        |  |              |   |  |                | Number of Securities   |         |                           | Value of Unexercised |            
|                        |  |              |   |  |                | Underlying Unexercised |         |                           | In-the-Money         |            
|                        |  |              |   |  |                | Options at Fiscal Year |         |                           | Options at Fiscal    |            
|                        |  | Shares       |   |  |                |                        | End (#) |                           |                      | Year End($) |                             
|                        |  | Acquired on  |   |  | Value          |                        |         |                           |                      |             |                              | 
|Name                    |  | Exercise (#) |   |  | Realized(1)($) |                        |         | Exercisable/Unexercisable |                      |             | Exercisable/Unexercisable(2) | 
|                        |  |              |   |  |                |                        |         |                           |                      |             |                              | 
|Thomas P. Raimondi, Jr. |  |              |  |  |                |                        |        |                           |                      |             | 997,189/291,549              |  |  |  | 149,797/0 | 
|Keith Clark             |  |              |  |  |                |                        |        |                           |                      |             | 801,848/101,902              |  |  |  | 220,208/0 | 
|Scott Poteracki         |  |              |  |  |                |                        |        |                           |                      |             | 155,634/194,366              |  |  |  | 0/0       | 
|Richard L. Ruskin       |  |              |  |  |                |                        |        |                           |                      |             | 266,701/83,299               |  |  |  | 0/0       | 
|Todd Williams           |  |              |  |  |                |                        |        |                           |                      |             | 42,794/37,206                |  |  |  | 0/0       | 






|    |                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Value realized is based on estimated fair market value of Common
    Stock on the date of exercise minus the exercise price.                       
|   
|(2) | Value is based on the closing price of our Common Stock on the
    Nasdaq Capital Market as of April 1, 2006 ($1.39), minus
    the exercise price.

Directors Fees and Options










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S-8.




Employment and Severance Arrangements








10-K






| |   |                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any incentive payments earned will be paid during the first
    quarter following the close of the current fiscal year;                                                        
|
| |  | annual operating profitability for the company, as determined by
    the Compensation Committee in its discretion, is a prerequisite
    for any annual incentive payments; and

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| |   |                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the specific incentive elements for each executive will be
    established by the Compensation Committee based on the approved
    annual financial plan.

10-K




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | If the employees employment is terminated (i) by the
    company for cause or disability (each as defined in the
    agreement), (ii) as a result of the employees death
    or (iii) other than for good reason (as defined in the
    agreement), then the employee will receive his accrued
    compensation, and, if the termination was a result of the
    employees death or disability, the employee will also
    receive a pro rata bonus based on the number of days he was
    employed in the calendar year in which the termination occurred.                                                                                                                                                                                                                                                                  
|
| |  | If the employees employment is terminated for any reason
    other than those described above, then (i) the employee
    will receive his accrued compensation and a pro rata bonus,
    (ii) the employee will receive severance pay equal to the
    sum of his base salary at the time of the termination (or, if
    greater, within the 90 days prior thereto) plus his target
    bonus for the fiscal year in which the termination occurred,
    (iii) the employees stock options that would have
    vested in the twelve (12) months following the termination
    assuming continued employment will become vested and
    exercisable, and (iv) the employees health insurance,
    life insurance and other benefits will be continued at company
    expense for twelve (12) months following the termination.



Compensation Committee Interlocks and Insider
Participation




Compensation Committee Report on Executive Compensation






9



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Compensation Committee Report






| |                             
| | ----------------------------
| | General Compensation Policy.





| |                                   
| | ----------------------------------
| | Stock Option and Restricted Stock.







| |                                      
| | -------------------------------------
| | Chief Executive Officer Compensation.







10



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|                         |                                       |               |           |                 |                 |   |                  |                   |  |   |                  |  |          |            |           |  |  |   |      |  | 
|------------------------ | ------------------------------------- | ------------- | --------- | --------------- | --------------- | - | ---------------- | ----------------- |  | - | ---------------- |  | -------- | ---------- | --------- |  |  | - | ---- |  | 
|                         |                                       |               |           | Market Price of |                 |   |                  |                   |  |   |                 
|                         |                                       |               |           | Common Stock at |                 |   |                  |                   |  |   |                 
|                         |                                       |               |           | Time the Board  |                 |   | Weighted-Average |                   |  |   |                  | 
|                         |                                       | Number of     |           |                 | Approved the    |   |                  | per Share         |  |   |                  |  | Price of |           
|                         |                                       | Stock Options |           |                 | Cancellation of |   |                  | Exercise Price of |  |   | Number of        |  |          | Restricted |          
|                         |                                       | to be         |           |                 | Stock Options   |   |                  | Stock Options to  |  |   | Restricted Stock |  |          | Stock per  |          
|                         |                                       | Cancelled     |           |                 | (May 18, 2006)  |   |                  | be Cancelled      |  |   | to be Awarded    |  |          | Share      |          
|                         |                                       |               |           |                 |                 |   |                  |                   |  |   |                  |  |          |            |          
|Thomas P. Raimondi, Jr., |                                       |               | 1,094,175 |                 |                 | $ | 1.27             |                   |  | $ | 3.11             |  |          |            | 1,400,000 |  |  | $ | 0.01 | 
|                         | President and Chief Executive Officer |               |           |                 |                 |   |                  |                   |  |   |                  |  |          |            |           |  |  |   |      |  | 





| |                      
| | ---------------------
| | Executive Bonus Plan.









| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Cancellation of Stock Options held by Executive Officers
    in Exchange for Shares of Restricted Stock.



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|              |                                                         |               |         |                 |                 |   |                  |                   |  |   |                  |  |          |            |         |  |  |   |      |  | 
|------------- | ------------------------------------------------------- | ------------- | ------- | --------------- | --------------- | - | ---------------- | ----------------- |  | - | ---------------- |  | -------- | ---------- | ------- |  |  | - | ---- |  | 
|              |                                                         |               |         | Market Price of |                 |   |                  |                   |  |   |                 
|              |                                                         |               |         | Common Stock at |                 |   |                  |                   |  |   |                 
|              |                                                         |               |         | time the Board  |                 |   | Weighted-Average |                   |  |   |                  | 
|              |                                                         | Number of     |         |                 | Approved the    |   |                  | per Share         |  |   |                  |  | Price of |           
|              |                                                         | Stock Options |         |                 | Cancellation of |   |                  | Exercise Price of |  |   | Number of        |  |          | Restricted |        
|              |                                                         | to be         |         |                 | Stock Options   |   |                  | Stock Options to  |  |   | Restricted Stock |  |          | Stock      |        
|Name & Title  |                                                         | Cancelled     |         |                 | (May 18, 2006)  |   |                  | be Cancelled      |  |   | to be Awarded    |  |          | per Share  |        
|              |                                                         |               |         |                 |                 |   |                  |                   |  |   |                  |  |          |            |        
|Todd Williams |                                                         |               | 80,000  |                 |                 | $ | 1.27             |                   |  | $ | 3.11             |  |          |            | 80,000  |  |  | $ | 0.01 | 
|              | VP, Corporate Controller & Principal Accounting Officer |               |         |                 |                 |   |                  |                   |  |   |                  |  |          |            |         |  |  |   |      |  | 
|Keith Clark   |                                                         |               | 152,500 |                 |                 | $ | 1.27             |                   |  | $ | 15.09            |  |          |            | 250,000 |  |  | $ | 0.01 | 
|              | Executive VP, Europe                                    |               |         |                 |                 |   |                  |                   |  |   |                  |  |          |            |         |  |  |   |      |  | 





| |                             
| | ----------------------------
| | Change of Control Agreement.





| |                                                
| | -----------------------------------------------
| | Policy Regarding Deductibility of Compensation.





| |                             
| | ----------------------------
| | COMPENSATION COMMITTEE      
|
| | Lawrence P. Begley, Chairman
| | John T. Repp                
| | Kent D. Smith               

The foregoing Report of the Compensation Committee shall not
be deemed filed under the Securities Act of 1933, as
amended (the Securities Act), or the Securities
Exchange Act of 1934, as amended (the Exchange Act),
and shall not be deemed to be incorporated by reference in any
previous or future documents filed by the company with the
Securities and Exchange Commission under the Securities Act or
the Exchange Act, except to the extent that the company
specifically incorporates such Report of the Compensation
Committee by reference in any such document.


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Company Stock Price Performance




The following performance graph shall not be deemed to be
incorporated by reference in any previous or future documents
filed by us with the Securities and Exchange Commission under
the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent that the company specifically
incorporates the following company Stock Price Performance graph
by reference in any such document.


COMPARISON OF 60 MONTHS CUMULATIVE TOTAL RETURN AMONG MTI
TECHNOLOGY


CORPORATION, THE NASDAQ STOCK MARKET-U.S. AND THE NASDAQ
COMPUTER


MANUFACTURER INDEX PERFORMANCE GRAPH





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|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT AND RELATED STOCKHOLDERS MATTERS

Securities Authorized For Issuance Under Equity Compensation
Plans




|                                                           |                            |                      |         |                  |                |                      |                     |                      |  |  |   |           |    
|---------------------------------------------------------- | -------------------------- | -------------------- | ------- | ---------------- | -------------- | -------------------- | ------------------- | -------------------- |  |  | - | --------- | ---
|                                                           |                            |                      |         |                  |                | Number of Securities |                    
|                                                           |                            |                      |         | Weighted-Average |                |                      | Remaining Available |                     
|                                                           |                            | Number of Securities |         |                  | Exercise Price |                      |                     | for Future Issuance  | 
|                                                           |                            | to be Issued Upon    |         |                  | per Share of   |                      |                     | under Equity         | 
|                                                           |                            | Exercise of          |         |                  | Outstanding    |                      |                     | Compensation Plans   | 
|                                                           |                            | Outstanding Options, |         |                  | Options,       |                      |                     | (Excluding           | 
|                                                           |                            | Warrants and         |         |                  | Warrants and   |                      |                     | Securities Reflected | 
|Plan Category                                              |                            | Rights               |         |                  | Rights         |                      |                     | in Column (a))       | 
|                                                           |                            |                      |         |                  |                |                      |                     |                      | 
|                                                           |                            | (a)                  |         |                  | (b)            |                      |                     | (c)                  | 
|Equity compensation plans approved by security holders:    |                            |                      |         |                  |                |                      |                     |                      |  |  |   |          
|                                                           | 2001 Stock Incentive Plan  |                      |         | 6,790,013        |                |                      | $                   | 1.78                 |  |  |   | 2,497,075 | (1)
|Equity compensation plans approved by security holders:    |                            |                      |         |                  |                |                      |                     |                      |  |  |   |          
|                                                           | All Terminated Stock Plans |                      |         | 2,818,897        |                |                      | $                   | 8.32                 |  |  |   |           |    
|Equity compensation plans not approved by security holders |                            |                      | 150,000 | (2)              |                | $                    | 18.75               |                      |  |  |  |          
|                                                           |                            |                      |         |                  |                |                      |                     |                      | 
|                                                           | Total                      |                      |         | 9,758,910        |                |                      |                     |                      |  |  |   | 2,497,075 |    
|                                                           |                            |                      |         |                  |                |                      |                     |                      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Each January 1, the aggregate number of shares of common
    stock available for issuance under our 2001 Stock Incentive Plan
    is increased by a number equal to three percent (3%) of the
    number of shares of common stock outstanding as of
    December 31 of the immediately preceding calendar year.
    Please refer to Proposal One regarding an increase in the
    number of shares available under the plan.
|   
|(2) | Represents a warrant to purchase 150,000 shares of our
    common stock at an exercise price of $18.75 per share. The
    warrant was issued in August 1999 and expires in August 2009 to
    an individual who was affiliated with Canopy in connection with
    services provided to us. The warrant was fully exercisable at
    April 1, 2006.                                                                           

Equity Securities and Principal Holders Thereof








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COMMON STOCK


|                                                       |                                                      |                     |            |  |         |  |       |   | 
|------------------------------------------------------ | ---------------------------------------------------- | ------------------- | ---------- |  | ------- |  | ----- | - | 
|                                                       |                                                      | Shares Beneficially |           
|                                                       |                                                      | Owned(2)            |           
|                                                       |                                                      |                     |           
|Name and Address of Beneficial Owner(1)                |                                                      | Number              |            |  | Percent | 
|                                                       |                                                      |                     |            |  |         | 
|The Canopy Group, Inc(3)                               |                                                      |                     | 14,588,285 |  |         |  | 21.09 | %
|                                                       | 333 South 520 West, Suite 300
    Lindon, Utah 84042 |                     |            |  |         |  |       |   | 
|Advent International Corporation(4)                    |                                                      |                     | 22,832,669 |  |         |  | 33.07 | %
|                                                       | 75 State Street, 29th Floor
    Boston, MA 02109     |                     |            |  |         |  |       |   | 
|EMC Corporation(5)                                     |                                                      |                     | 7,808,405  |  |         |  | 11.31 | %
|                                                       | 176 South Street
    Hopkinton, MA 01748             |                     |            |  |         |  |       |   | 
|Thomas P. Raimondi, Jr.(6)                             |                                                      |                     | 1,250,760  |  |         |  | 1.78  | %
|Lawrence P. Begley(7)                                  |                                                      |                     | 41,667     |  |         |  | *     |  
|Franz L. Cristiani(8)                                  |                                                      |                     | 136,667    |  |         |  | *     |  
|William Mustard(9)                                     |                                                      |                     | 16,667     |  |         |  | *     |  
|Michael Pehl(10)                                       |                                                      |                     | 22,866,003 |  |         |  | 33.10 | %
|John T. Repp(11)                                       |                                                      |                     | 121,667    |  |         |  | *     |  
|Kent D. Smith(12)                                      |                                                      |                     | 116,667    |  |         |  | *     |  
|Edward C. Ateyeh, Jr(13)                               |                                                      |                     | 851,100    |  |         |  | 1.23  | %
|Keith Clark(14)                                        |                                                      |                     | 842,321    |  |         |  | 1.21  | %
|Scott Poteracki(15)                                    |                                                      |                     | 304,226    |  |         |  | *     |  
|Richard L. Ruskin(16)                                  |                                                      |                     | 291,526    |  |         |  | *     |  
|Todd Williams(17)                                      |                                                      |                     | 60,760     |  |         |  | *     |  
|All directors and officers as a group (12 persons)(18) |                                                      |                     | 26,900,031 |  |         |  | 37.38 | %






|  |             
|- | ------------
|* | Less than 1%

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##### Table of Contents



SERIES A AND B CONVERTIBLE PREFERRED STOCK


|                                                                 |       |                              |         |         |          |  |         |           |  |  |       |        |  
|---------------------------------------------------------------- | ----- | ---------------------------- | ------- | ------- | -------- |  | ------- | --------- |  |  | ----- | ------ | -
|                                                                 |       | Shares Beneficially Owned(2) |        
|                                                                 |       |                              |        
|                                                                 |       | Series A                     |         |         | Series B |  |         |          
|                                                                 |       | Number                       |         |         | Number   |  |         | Percent   | 
|                                                                 |       |                              |         |         |          |  |         |           | 
|Digital Media & Communications III Limited
    Partnership(19)   |       |                              | 87,007  |         |          |  | 248,370 |           |  |  | 15.59 | %     
|Digital Media & Communications III-A Limited
    Partnership(19) |       |                              | 41,661  |         |          |  | 118,925 |           |  |  | 7.46  | %     
|Digital Media & Communications III-B Limited
    Partnership(19) |       |                              | 15,418  |         |          |  | 44,012  |           |  |  | 2.76  | %     
|Digital Media & Communications III-C Limited
    Partnership(19) |       |                              | 216,073 |         |          |  | 616,803 |           |  |  | 38.72 | %     
|Digital Media & Communications III-D C.V.(19)                    |       |                              | 28,568  |         |          |  | 81,550  |           |  |  | 5.12  | %     
|Digital Media & Communications III-E C.V.(19)                    |       |                              | 19,045  |         |          |  | 54,366  |           |  |  | 3.41  | %     
|Advent Partners DMC III Limited Partnership(19)                  |       |                              | 6,122   |         |          |  | 17,475  |           |  |  | 1.10  | %     
|Advent Partners II Limited Partnership(19)                       |       |                              | 1,757   |         |          |  | 5,015   |           |  |  | 0.31  | %     
|EMC Corporation(20)                                              |       |                              | 151,146 |         |          |  | 395,507 |           |  |  | 25.52 | %     
|                                                                 |       |                              |         |         |          |  |         |           | 
|                                                                 | TOTAL |                              |         | 566,797 |          |  |         | 1,582,023 |  |  |       | 100.00 | %






| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Unless otherwise indicated, the address for each beneficial
    owner is c/o MTI Technology Corporation, Attn: Corporate
    Secretary, 17595 Cartwright Road, Irvine, California 92614.                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (2) | The number and percentage of shares beneficially owned have been
    determined in accordance with the rules of the SEC, and are
    based on 38,404,335 issued and outstanding shares of our common
    stock (not including shares issuable upon exercise of options or
    warrants except to the extent held by the named person) and
    2,148,820 issued and outstanding shares of Series A Stock
    and B Stock, each as of July 11, 2006. The data included in
    this table reflects shares of common stock issuable upon
    conversion of these outstanding shares of convertible preferred
    stock.
|
| | (3) | Based on the Schedule 13G filed with the SEC on
    February 24, 2004. Includes 125,000 warrants issued on
    June 20, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| | (4) | Includes 5,640,599 shares issuable upon exercise of
    warrants. Please see discussion regarding Series A Stock
    and B Stock financing and the proxy agreement among Canopy and
    the holders of Series A Stock under Certain
    Relationships and Related Transactions.                                                                                                                                                                                                                                                                                                                                  
|
| | (5) | Includes 1,916,296 shares issuable upon exercise of
    warrants. Please see discussion regarding the Series A
    Stock and Series B Stock financing and the proxy agreement
    among Canopy and the holders of Series A Stock under
    Certain Relationships and Related Transactions.                                                                                                                                                                                                                                                                                                                       
|
| | (6) | Includes 1,101,314 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006. Includes
    94,446 shares vested and released as of July 11, 2006
    of the 200,000 restricted stock awarded on February 10,
    2005. See Proposal No. Two for a description of the
    proposed Executives Repurchase.                                                                                                                                                                                                                                                                           
|
| | (7) | Includes 16,667 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (8) | Includes 126,667 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (9) | Represents 16,667 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.
    Mr. Mustard was President and Chief Executive Officer of
    Canopy until his resignation on December 23, 2005.                                                                                                                                                                                                                                                                                                                                                                                    



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Represents shares and warrants owned by Advent International
    Corporation, plus 33,334 shares issuable upon exercise of
    options exercisable within 60 days of July 11, 2006.
    Mr. Pehl is an Operating Partner of Advent. Except to the
    extent of his pecuniary interest therein, Mr. Pehl
    disclaims beneficial ownership of all shares held by Advent.
    Please see discussions regarding our private placements of the
    Series A Stock and Series B Stock and regarding the
    proxy agreement among Canopy and the holders of Series A
    Stock and Series B Stock under Certain Relationships
    and Related Transactions.
|    
|(11) | Represents 121,667 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    
|(12) | Represents 116,667 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(13) | On July 5, 2006, Mr. Ateyeh received
    851,100 shares of common stock and a warrant to
    purchase 300,000 shares of common stock in connection
    with the Asset Purchase Agreement dated June 6, 2006, as
    amended June 28, 2006 and July 5, 2006, by and between
    MTI Technology Corporation and Collective Technologies, LLC. The
    warrants are exercisable on July 5, 2007.                                                                                                                                                                                                                                                                                                      
|    
|(14) | Includes 842,109 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006. See
    Proposal Two for a description of the proposed
    Executives Repurchase.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    
|(15) | Includes 204,226 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|(16) | Includes 287,526 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    
|(17) | Includes 53,901 shares issuable upon exercise of options
    exercisable within 60 days of July 11, 2006. See
    Proposal Two for a description of the proposed
    Executives Repurchase.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    
|(18) | Represents shares held by entities affiliated with directors and
    executive officers as described above, including an aggregate of
    8,561,345 shares issuable upon exercise of stock options
    and warrants exercisable within 60 days of July 11,
    2006.                                                                                                                                                                                                                                                                                                                                                                                                                               
|    
|(19) | The address for this entity is c/o Advent International
    Corporation, 75 State Street, 29th Floor, Boston,
    Massachusetts 02109. Advent International Corporation holds sole
    voting and investment power (including dispositive power) over
    the securities held by this entity. Michael Pehl, one of our
    directors, is an Operating Partner with Advent International
    Corporation, and therefore may be deemed to exercise voting and
    investment power (including dispositive power), over the shares
    held by this entity. Mr. Pehl disclaims beneficial
    ownership of the shares held by this entity, except to the
    extent of his pecuniary interest therein.
|    
|(20) | The address for EMC Corporation is 176 South Street, Hopkinton,
    Massachusetts 01748.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           






|         |                                               
|-------- | ----------------------------------------------
|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships and Related Transactions




| |                                 
| | --------------------------------
| | Canopy Group  Letter of Credit.





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| |                                  
| | ---------------------------------
| | Jon Caputo  Severance Agreement.





| |                                      
| | -------------------------------------
| | EMC Corporation  Security Agreement.





| |                                                                 
| | ----------------------------------------------------------------
| | Series A Convertible Preferred Stock (the
    Series A Stock).









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| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any amendment of the companys charter or bylaws that
    adversely affects the holders of Series A Stock, as
    applicable;                                                                                                                                          
|
| |  | any authorization of a class of capital stock ranking senior to,
    or on parity with, the Series A Stock, as applicable;                                                                                                                                             
|
| |  | any increase in the size of the companys Board of
    Directors to greater than eight members or any change in the
    classification of the Board of Directors;                                                                                                      
|
| |  | certain redemptions or repurchases of capital stock;                                                                                                                                                                                                                   
|
| |  | acquisitions of capital stock or assets from other entities;                                                                                                                                                                                                           
|
| |  | effecting, or entering into any agreement to effect, any merger,
    consolidation, recapitalization, reorganization, liquidation,
    dissolution, winding up or similar transaction (a
    Liquidation Event) involving the company or any of
    its subsidiaries;
|
| |  | any sale of assets of the company or a subsidiary which is
    outside the ordinary course of business;                                                                                                                                                                
|
| |  | any purchase of assets of or an equity interest in another
    entity for more than $5,000,000; and                                                                                                                                                                    
|
| |  | any incurrence of additional debt for borrowed money in excess
    of $1,000,000.                                                                                                                                                                                      











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| |                                                                 
| | ----------------------------------------------------------------
| | Series B Convertible Preferred Stock (the
    Series B Stock).















| |   |                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any amendment of the companys charter or bylaws that
    adversely affects the holders of Series B Stock, as
    applicable;                                                                                                                                          
|
| |  | any authorization of a class of capital stock ranking senior to,
    or on parity with, the Series B Stock, as applicable;                                                                                                                                             
|
| |  | any increase in the size of the companys Board of
    Directors to greater than eight members or any change in the
    classification of the Board of Directors;                                                                                                      
|
| |  | certain redemptions or repurchases of capital stock;                                                                                                                                                                                                                   
|
| |  | acquisitions of capital stock or assets from other entities;                                                                                                                                                                                                           
|
| |  | effecting, or entering into any agreement to effect, any merger,
    consolidation, recapitalization, reorganization, liquidation,
    dissolution, winding up or similar transaction (a
    Liquidation Event) involving the company or any of
    its subsidiaries;

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| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | any sale of assets of the company or a subsidiary which is
    outside the ordinary course of business;
|
| |  | any purchase of assets of or an equity interest in another
    entity for more than $5,000,000; and    
|
| |  | any incurrence of additional debt for borrowed money in excess
    of $1,000,000.                      















| |                                                  
| | -------------------------------------------------
| | Indemnification and Change of Control Agreements.





| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Edward C. Ateyeh, Jr. (Ed Taylor) 
    Collective Technologies, LLC Acquisition.



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|         |                                       
|-------- | --------------------------------------
|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit, Audit-Related and Tax Fees




FEES PAID TO GRANT THORNTON LLP


|     |  |         |         |  |               |  |         |            |  |  |         | 
|---- |  | ------- | ------- |  | ------------- |  | ------- | ---------- |  |  | ------- | 
|     |  | Audit   |         |  | Audit-Related |  |         | Tax        | 
|     |  | Fees($) |         |  | Fees($)(1)    |  |         | Fees($)(2) | 
|     |  |         |         |  |               |  |         |            | 
|2006 |  |         | 661,821 |  |               |  | 182,493 |            |  |  |        | 
|2005 |  |         | 486,299 |  |               |  | 61,373  |            |  |  | 128,722 | 






|    |                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Audit related fees consisted principally of reviews of
    registration statements, issuance of consents and foreign
    statutory audits.                      
|   
|(2) | Tax fees consisted principally of tax compliance and tax
    consulting services. Services relating to taxes for fiscal year
    2006 were provided by KPMG LLP.

Financial Information Systems Design and Implementation
Fees




All Other Fees




Policy on Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services of Independent Auditor






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SIGNATURES






| |                           
| | --------------------------
| | MTI TECHNOLOGY CORPORATION



| |     |                            
| | --- | ---------------------------
| | By: | /s/ THOMAS P. RAIMONDI, JR.

| |                                                
| | -----------------------------------------------
| |                                                
| | Thomas P. Raimondi, Jr.                        
| | Chairman, President and Chief Executive Officer

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EXHIBIT INDEX


|        |    |             |  |                                                                                                        
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 31 | .1          |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|       
|        | 31 | .2          |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.

25