<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EXODUS COMMUNICATIONS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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<PAGE>
EXODUS COMMUNICATIONS, INC.
2831 Mission College Blvd.
Santa Clara, California 95054
February 10, 1999
To Our Stockholders:
You are cordially invited to attend a Special Meeting of Stockholders of
Exodus Communications, Inc. to be held at 2831 Mission College Blvd., Santa
Clara, California, on Thursday, March 18, 1999, at 11:00 a.m., local time.
The matter expected to be acted upon at the meeting is described in detail
in the following Notice of Special Meeting of Stockholders and Proxy Statement.
It is important that you use this opportunity to take part in the affairs of
Exodus by voting on the business to come before this meeting. Whether or not
you expect to attend the meeting, please complete, date, sign and promptly
return the accompanying proxy in the enclosed postage-paid envelope, so that
your shares may be represented at the meeting. Returning the proxy does not
deprive you of your right to attend the meeting and to vote your shares in
person.
We look forward to seeing you at the meeting.
Sincerely,
/s/ Richard S. Stoltz
_____________________________________
Richard S. Stoltz
Executive Vice President, Finance
Chief Operating Officer and Chief
Financial Officer
<PAGE>
EXODUS COMMUNICATIONS, INC.
2831 Mission College Blvd.
Santa Clara, California 95054
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Our Stockholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Exodus
Communications, Inc. will be held at 2831 Mission College Blvd., Santa Clara,
California, on Thursday, March 18, 1999, at 11:00 a.m., local time for the
following purposes:
1. To approve an amendment to Exodus' Restated Certificate of Incorporation
to increase the authorized number of shares of Common Stock issuable by
the Company from 50,000,000 to 100,000,000.
2. To transact such other business as may properly come before the meeting
or any adjournment or postponement 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, 1999 are
entitled to notice of and to vote at the meeting or any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Richard S. Stoltz
_____________________________________
Richard S. Stoltz
Executive Vice President, Finance
Chief Operating Officer and Chief
Financial Officer
Santa Clara, California
February 10, 1999
Whether or not you expect to attend the meeting, please complete, date, sign
and promptly return the accompanying proxy in the enclosed postage-paid
envelope so that your shares may be represented at the meeting.
<PAGE>
EXODUS COMMUNICATIONS, INC.
2831 Mission College Blvd.
Santa Clara, California 95054
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PROXY STATEMENT
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February 10, 1999
The accompanying proxy is solicited on behalf of the Board of Directors of
Exodus Communications, Inc., a Delaware corporation (the "Company" or
"Exodus"), for use at a Special Meeting of Stockholders of the Company to be
held at 2831 Mission College Blvd., Santa Clara, California, on Thursday, March
18, 1999 at 11:00 a.m., local time (the "Meeting"). Only holders of record of
the Company's Common Stock at the close of business on January 27, 1999 will be
entitled to vote at the Meeting. At the close of business on January 27, 1999,
the Company had 20,209,545 shares of Common Stock outstanding and entitled to
vote. A majority of such shares, present in person or represented by proxy,
will constitute a quorum for the transaction of business. This Proxy Statement
and the accompanying form of proxy were first mailed to stockholders on or
about February 10, 1999.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Holders of Exodus Common Stock are entitled to one vote for each share held
as of the above record date. Approval of the amendment to the Company's
Restated Certificate of Incorporation to increase the number of shares of
Common Stock authorized for issuance by the Company requires the affirmative
vote of the majority of all outstanding shares of Common Stock entitled to
vote. All votes will be tabulated by the inspector of election appointed for
the Meeting, who will tabulate affirmative and negative votes, abstentions and
broker non-votes. Abstentions and broker non-votes will be counted towards a
quorum and have the same effect as negative votes with regard to the proposal.
The expenses of soliciting proxies to be voted at the Meeting will be paid
by the Company. Following the original mailing of the proxies and other
soliciting materials, the Company and/or its agents may also solicit proxies by
mail, telephone, telegraph or in person. Following the original mailing of the
proxies and other soliciting materials, the Company will request that brokers,
custodians, nominees and other record holders of the Company's Common Stock
forward copies of the proxy and other soliciting materials to persons for whom
they hold shares of Common Stock and request authority for the exercise of
proxies. In such cases, the Company, upon the request of the record holders,
will reimburse such holders for their reasonable expenses. Skinner & Co. will
assist the Company in obtaining the return of proxies at an estimated cost to
the Company of $5,500.
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REVOCABILITY OF PROXIES
Any person signing a proxy in the form accompanying this Proxy Statement has
the power to revoke it prior to the Meeting or at the Meeting prior to the vote
pursuant to the proxy. A proxy may be revoked by a writing delivered to the
Company stating that the proxy is revoked, by a subsequent proxy that is signed
by the person who signed the earlier proxy and is presented at the Meeting, or
by attendance at the Meeting and voting in person. Please note, however, that
if a stockholder's shares are held of record by a broker, bank or other nominee
and that stockholder wishes to vote at the Meeting, the stockholder must bring
to the Meeting a letter from the broker, bank or other nominee confirming that
stockholder's beneficial ownership of the shares.
PROPOSAL NO. 1--AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION
On January 26, 1999, the Board of Directors approved an amendment to the
Company's Restated Certificate of Incorporation, subject to stockholder
approval, to increase the authorized number of shares of Common Stock of the
Company from 50,000,000 shares, $0.001 par value per share, to 100,000,000
shares, $0.001 par value per share. The number of authorized shares of
preferred stock will remain unchanged at 5,000,000 shares.
At January 27, 1999, 20,209,545 shares of Exodus Common Stock were issued
and outstanding, 4,958,557 shares were reserved for issuance upon exercise of
outstanding options and 66,666 shares were reserved for issuance upon exercise
of outstanding warrants. Thus, as of that date, the Company had fewer than
25,000,000 shares of Common Stock available for issuance. Also as of that date
an additional 2,669,520 shares of Exodus Common Stock were reserved for
issuance under its existing stock and stock option plans. The proposed increase
in the number of authorized shares of Common Stock from 50,000,000 to
100,000,000 would result in additional shares being available for, among other
things, issuance in a proposed two-for-one stock split to be effected in the
form of a stock dividend, which will not require any additional stockholder
approval, to the Company's stockholders of record on March 19, 1999 (subject to
receiving such stockholder approval). These additional shares of Common Stock
would also be available for issuance from time to time for other corporate
purposes, such as acquisitions of companies or assets, sales of stock or
securities convertible into stock and issuances pursuant to stock options or
other employee benefit plans. The Company currently has no specific plans,
arrangements or understandings with respect to the issuance of these additional
shares, except for the proposed stock dividend, and no other change in the
rights of stockholders is proposed. The Company believes that the availability
of the additional shares will provide it with the flexibility to meet business
needs as they arise, to take advantage of favorable opportunities and to
respond to a changing corporate environment.
If the stockholders approve the amendment, the Company will file a
Certificate of Amendment of its Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware reflecting the increase in
authorized shares. Shortly thereafter, without further stockholder action, the
Company intends to effect the two-for-one stock split on its Common Stock in
the form of a stock dividend (record date expected to be March 19, 1999),
although the Company's Board of Directors, in its sole discretion, may postpone
or terminate the proposed stock dividend. The two-for-one stock split in the
form of a stock dividend will not be effected if the proposed increase in the
authorized common stock is not approved.
The Board of Directors recommends a vote FOR the amendment to the
Company's Restated Certificate of Incorporation to increase the number of
shares of Common Stock authorized to be issued by the Company.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of January 27, 1999,
with respect to the beneficial ownership of the Company's Common Stock by (i)
each stockholder known by the Company to be the beneficial owner of more than
5% of the Company's Common Stock, (ii) each director, (iii) each person who
served as a chief executive officer of the Company in 1998, (iv) the three
other most highly compensated executive officers who were executive officers as
of December 31, 1998 and earned more than $100,000 in 1998, (v) two additional
individuals who were executive officers during 1998, and (vi) all current
directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership(1) Percent of Class
- ------------------------------------ ----------------------- ----------------
<S> <C> <C>
Thadeus J. Mocarski.................. 1,149,226 5.7%
Fleet Funds (2)
K.B. Chandrasekhar (3)............... 775,498 3.8
B.V. Jagadeesh (4)................... 418,918 2.1
John R. Dougery (5).................. 373,127 1.8
Kanwal S. Rekhi (6).................. 349,554 1.7
Frederick W.W. Bolander.............. 243,373 1.2
Apex Funds (7)
Ellen M. Hancock (8)................. 233,241 1.2
Richard S. Stoltz (9)................ 214,147 1.1
Mark Dubovoy......................... 209,605 1.0
ITV Partnerships (10)
Peter A. Howley (11)................. 123,669 *
Robert V. Sanford III (12)........... 55,881 *
Daniel C. Lynch (13)................. 46,000 *
Sam S. Mohamad (14).................. 21,104 *
Herbert Dollahite (15)............... 12,601 *
Max D. Hopper (16)................... 12,515 *
All current executive officers and
directors as a group
(15 persons) (17)................... 3,778,660 18.5%
</TABLE>
- --------
* Represents less than 1% of the Company's outstanding Common Stock.
(1) Unless otherwise indicated below, the persons and entities named in the
table have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where
applicable. Shares of Common Stock subject to options that are currently
exercisable or exercisable within 60 days of January 27, 1999 are deemed
to be outstanding and to be beneficially owned by the person holding such
options for the purpose of computing the percentage ownership of such
person but are not treated as outstanding for the purpose of computing
the percentage ownership of any other person.
(2) Represents 631,428 shares held by Fleet Venture Resources, Inc., 271,357
shares held by Fleet Equity Partners VI, L.P., 229,844 shares held by
Chisholm Partners III, L.P. and 16,597 shares held by Kennedy Plaza
Partners. Mr. Mocarski, a director of the Company, is a Senior Vice
President of each of (i) Fleet Venture Resources, Inc., (ii) Fleet Growth
Resources II, Inc., a general partner of Fleet Equity Partners VI, L.P.
and (iii) Silverado III, Corp., the general partner of Silverado III,
L.P., the general partner of Chisholm Partners III, L.P. Mr. Mocarski is
also a general partner of Kennedy Plaza Partners. Mr. Mocarski may be
deemed to share investment and voting power in the aforementioned
securities with Mr. Robert M. Van Degna and Mr. Habib Y. Gorgi in their
capacities as Chairman and Chief Executive Officer, and President,
respectively, of each of (i) Fleet Venture Resources, Inc., (ii) Fleet
Growth Resources II, Inc. and (iii) Silverado III, Corp. and as managing
general partners of Kennedy Plaza Partners. Messrs. Mocarski, Van Degna
and Gorgi disclaim beneficial ownership of such securities except to the
extent of their respective pecuniary interests therein. The address of
Mr. Mocarski and the Fleet Funds is c/o Fleet Equity Partners, Mail Stop:
RI MO F12C, 50 Kennedy Plaza, Providence, Rhode Island 02903.
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(3) Includes 73,998 shares held by Mr. Chandrasekhar and his wife as trustees
for three trusts for their minor children, 1,128 shares held by the K.B.
Chandrasekhar Family Foundation, of which Mr. Chandrasekhar is a trustee,
and 86,501 shares subject to options exercisable within 60 days of January
27, 1999. Mr. Chandrasekhar is the Chairman of the Board of Directors of
the Company.
(4) Includes 28,238 shares held by Mr. Jagadeesh and his wife as trustees for
two trusts for their minor children and 50,133 shares subject to options
exercisable within 60 days of January 27, 1999. Mr. Jagadeesh served as
Vice President, Engineering until October 26, 1998 and is currently Chief
Technology Officer of the Company.
(5) Represents 219,804 shares held in the Dougery Revocable Trust, of which
Mr. Dougery and his wife are the trustees, 111,774 shares held by Mr.
Dougery as trustee of three trusts for his children, 26,150 shares held by
Mr. Dougery's wife as trustee for a separate trust and 15,399 shares held
by Dougery Ventures LLC, of which Mr. Dougery is President. Mr. Dougery is
a director of the Company.
(6) Represents 290,208 shares held by Mr. Rekhi and his wife as trustees for
the Rekhi Family Trust, 4,998 shares held by Mr. Rekhi as custodian for
minor children and 54,348 shares held by Mr. Rekhi, his wife and one other
individual as trustees for two other trusts. Mr. Rekhi is a director of
the Company.
(7) Includes 232,542 shares held by Apex Investment Fund III, L.P. and 10,392
shares held by Apex Strategic Partners, L.L.C. Mr. Bolander, a director of
the Company, is a general partner of the general partner of Apex
Investment Fund III, L.P. and a managing member of Apex Management III,
L.L.C., the manager of Apex Strategic Partners, L.L.C.
(8) Represents 198,361 shares held by Mrs. Hancock and her husband and 34,880
shares subject to options exercisable within 60 days of January 27, 1999.
Mrs. Hancock is Chief Executive Officer, President and a director of the
Company.
(9) Represents 173,014 shares held by Mr. Stoltz and his wife and 41,133
shares subject to options exercisable within 60 days of January 27, 1999.
Mr. Stoltz is Executive Vice President, Finance, Chief Operating Officer
and Chief Financial Officer of the Company.
(10) Includes 189,547 shares held by Information Technology Ventures, L.P.,
4,552 shares held by ITV Affiliates Fund, L.P. and 180 shares held by ITV,
LLC. Mr. Dubovoy, a director of the Company, is a principal member of ITV
Management, LLC, the general partner of Information Technology Ventures,
L.P. and ITV Affiliates Fund, L.P.
(11) Includes 12,000 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Howley is a director of the Company.
(12) Includes 14,000 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Sanford is Vice President, Operations of the
Company.
(13) Includes 6,667 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Lynch is a director of the Company.
(14) Represents 21,104 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Mohamad is Executive Vice President, Worldwide Sales
and Professional Services of the Company.
(15) Represents 12,601 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Dollahite is Vice President, Customer Services and
Support and Quality.
(16) Includes 6,667 shares subject to options exercisable within 60 days of
January 27, 1999. Mr. Hopper is a director of the Company.
(17) Includes 236,553 shares subject to options exercisable within 60 days of
January 27, 1999 held by executive officers. Does not include shares or
options owned by Mr. Jagadeesh and Mr. Sanford.
4
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STOCKHOLDER PROPOSALS
The Company's first Annual Meeting of Stockholders as a public company is
currently expected to be held in June 1999. Proposals of stockholders intended
to be presented at the Company's 1999 Annual Meeting of Stockholders must be
received by the Company at its principal executive offices a reasonable time
before the Company begins to print and mail its proxy materials in order to be
included in the Company's proxy statement and form of proxy relating to that
meeting. The Bylaws of the Company require that any notice of nomination or
other business brought by a stockholder for consideration before an annual
meeting of stockholders, for such matter to be properly brought before the
meeting, must be received no earlier than the 90th day before, and no later
than the 60th day before, the first anniversary of the preceding year's annual
meeting.
OTHER BUSINESS
The Board does not presently intend to bring any other business before the
Meeting, and, so far as is known to the Board, no matters are to be brought
before the Meeting except as specified in the Notice of the Meeting. As to any
business that may properly come before the Meeting, however, it is intended
that proxies, in the form enclosed, will be voted in respect thereof in
accordance with the judgment of the persons voting such proxies.
Whether or not you expect to attend the meeting, please complete, date, sign
and promptly return the accompanying proxy in the enclosed postage paid
envelope so that your shares may be represented at the meeting.
5
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PROXY
EXODUS COMMUNICATIONS, INC.
Special Meeting of Stockholders - March 18, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard S. Stoltz and Adam W. Wegner, and each
of them, as proxies of the undersigned, each with full power to appoint his
substitute, and hereby authorizes them to represent and to vote all the shares
of stock of Exodus Communications, Inc. which the undersigned is entitled to
vote, as specified on the reverse side of this card, at the Special Meeting of
Stockholders of Exodus Communications, Inc. (the "Meeting") to be held on March
18, 1999 at 11:00 a.m., local time, at 2831 Mission College Blvd., Santa Clara,
California, and at any adjournment or postponement thereof.
When this Proxy is properly executed, the shares to which this Proxy relates
will be voted as specified and, if no specification is made, will be voted for
the proposal, and this Proxy authorizes the above designated Proxies to vote in
their discretion on such other business as may properly come before the meeting
or any adjournments or postponements thereof to the extent authorized by Rule
14a-4(c) promulgated under the Securities Exchange Act of 1934, as amended.
[See reverse side] (Continued and to be signed on reverse side)
<PAGE>
[X] Please mark votes as in this example
The Board of Directors recommends a vote FOR the Proposal:
To amend the Company's Restated Certificate of Incorporation to increase the
authorized number of shares of Common Stock issuable by the Company from
50,000,000 to 100,000,000.
[_] For [_] Against [_] Abstain
Please sign exactly as your name(s) appear(s) on this Proxy. If shares of
stock stand of record in the names of two or more persons or in the name of
husband and wife, whether as joint tenants or otherwise, both or all of such
persons should sign this Proxy. If shares of stock are held of record by a
corporation, this Proxy should be executed by the president or vice president
and the secretary or assistant secretary. Executors, administrators or other
fiduciaries who execute this Proxy for a deceased stockholder should give their
full title. Please date this Proxy.
[_] Mark here for address change and note below
Signature:__________________________ Date: _________________
Whether or not you plan to attend the meeting in person, you are urged to
complete, date, sign and promptly mail this Proxy in the enclosed return
envelope so that your shares may be represented at the meeting.
