<PAGE>
================================================================================
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ANDATACO, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
ANDATACO, INC.
10140 Mesa Rim Road
San Diego, CA 92121
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 8, 1999
----------------
TO THE STOCKHOLDERS OF ANDATACO, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Andataco,
Inc., a Massachusetts corporation (the "Company"), will be held on Thursday,
April 8, 1999 at 10:00 a.m. Pacific daylight time at 10140 Mesa Rim Road, San
Diego, CA 92121 for the following purposes:
1. To elect four directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Company for its fiscal year ending October 31,
1999.
3. 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.
The Board of Directors has fixed the close of business on February 16, 1999
as the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
Diane Wong
Clerk
San Diego, California
March 1, 1999
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING.
PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK
OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
ANDATACO, INC.
10140 Mesa Rim
San Diego, CA 92121
----------------
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
April 8, 1999
----------------
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed proxy is solicited on behalf of the Board of Directors of
Andataco, Inc., a Massachusetts corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held on Thursday, April 8, 1999 at 10:00
a.m. Pacific daylight time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at 10140 Mesa Rim Road, San Diego, California. The Company intends to
mail this Proxy Statement and accompanying proxy card on or about March 1,
1999 to all stockholders entitled to vote at the Annual Meeting.
Solicitation
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Class A Common
Stock (the "Common Stock") beneficially owned by others to forward to such
beneficial owners. The Company may reimburse persons representing beneficial
owners of Common Stock for their costs of forwarding solicitation materials to
such beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, telegram or personal solicitation by directors,
officers or other regular employees of the Company. No additional compensation
will be paid to directors, officers or other regular employees for such
services.
Voting Rights and Outstanding Shares
Only holders of record of Common Stock at the close of business on February
16, 1999 will be entitled to notice of and to vote at the Annual Meeting. At
the close of business on February 16, 1999, the Company had outstanding and
entitled to vote 23,819,399 shares of Common Stock.
Except as provided below, each holder of record of Common Stock on such date
will be entitled to one vote for each share held on all matters to be voted
upon at the annual meeting. With respect to the election of directors,
stockholders may exercise cumulative voting rights. Under cumulative voting,
each holder of Common Stock will be entitled to four votes for each share
held. Each stockholder may give one candidate, who has been nominated prior to
voting, all the votes such stockholder is entitled to cast or may distribute
such votes among as many such candidates as such stockholder chooses.
(However, no stockholder will be entitled to cumulate votes unless the
candidate's name has been placed in nomination prior to the voting and at
least one stockholder has given notice at the meeting, prior to the voting, of
his or her intention to cumulate votes). Unless the proxyholders are otherwise
instructed, stockholders, by means of the accompanying proxy, will grant the
proxyholders discretionary authority to cumulate votes.
1
<PAGE>
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's executive office, 10140 Mesa Rim
Road, San Diego, California 92121, a written notice of revocation or a duly
executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
Stockholder Proposals
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2000 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is October 29, 1999. Unless a stockholder who wishes to bring a
matter before the stockholders at the Company's 2000 annual meeting of
stockholders notifies the Company of such matter prior to January 15, 2000,
management will have discretionary authority to vote all shares for which it
has proxies in opposition to such matter.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's directors are elected annually to serve until the next Annual
Meeting and until each such director's successor shall have been duly elected
and qualified, or until such director's earlier death, resignation or removal.
There are four nominees for the four Board positions presently authorized in
the Company's By-laws. Each nominee listed below is currently a director of
the Company, all such directors having been elected by the stockholders at the
1998 Annual Meeting of Stockholders.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the four nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected, and management has no reason to
believe that any nominee will be unable to serve.
The four candidates receiving the highest number of affirmative votes cast
at the meeting will be elected directors of the Company.
The Board of Directors Recommends a Vote in Favor of Each Named Nominee.
Nominees
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
Name Age Positions Held
---- --- --------------
<C> <C> <S>
Harris Ravine........................... 56 Chairman of the Board of Directors and
Chief Executive Officer of the Company;
Chairman of the Board of Directors and
Chief Executive Officer of ANDATACO of
California
W. David Sykes.......................... 42 Vice Chairman of the Board of Directors and
President of the Company; Vice Chairman of
the Board of Directors and President of
ANDATACO of California
Cornelius P. McMullan................... 59 Director of the Company
Melville Straus......................... 60 Director of the Company
</TABLE>
2
<PAGE>
Harris Ravine has served as director of the Company since November 1995. He
was elected Chairman of the Board and appointed Chief Executive Officer of the
Company in June 1997. Mr. Ravine has served as Chief Executive Officer and as
Chairman of the Board of Directors of ANDATACO of California, a California
corporation and wholly-owned subsidiary of the Company ("ANDATACO of
California") since June 1997. From 1995 through May 1997, Mr. Ravine was a
principal in BI Capital, a private venture capital group investing in
technology and medical start-up opportunities. From 1985 to 1994, Mr. Ravine
held senior executive positions with Storage Technology Corporation, most
recently as Executive Vice President, Chief Administrative Officer and Group
Officer for midrange and UNIX applications. Mr. Ravine is a member of the
board of directors of Amplicon Financial, Inc., a publicly-held financial
services company.
W. David Sykes has served as a director of the Company since June 1997. He
founded ANDATACO of California in November 1986 and served as its President
and Chief Executive Officer until June 1997, at which time Mr. Sykes was
elected Vice Chairman of the Board of Directors of the Company and appointed
President of the Company. Mr. Sykes remains President of ANDATACO of
California, and also serves as Vice Chairman of the Board of Directors of
ANDATACO of California. He has served as a director of ANDATACO of California
since November 1986.
Cornelius P. McMullan has served as a director of the Company since January
1996. Since January 1997 he has been Executive Vice President of Ardent
Software, Inc. (formerly VMARK Software, Inc.), a software company, and served
as Independent Technology Consultant of Ardent from January 1996 to December
1996. From December 1992 through January 1996, he was President and Chief
Executive Officer of Sequoia Systems, Inc., a computing technology company.
Melville Straus has served as director of the Company since September 1997.
Mr. Straus is Managing Principal of Straus Asset Management, LLC, a
partnership which invests in small cap stocks, which he formed in January
1998. He remains a limited principal at Weiss, Peck & Greer, an investment
management firm, which he joined in 1973. His primary responsibilities while
at Weiss, Peck & Greer were as head of the Small Cap Growth Group, member of
the Executive Committee, President and Trustee of the WPG Tudor Fund and the
WPG Growth Fund and Executive Vice President and Trustee of the WPG Growth and
Income Fund.
Board Committees and Meetings
During the fiscal year ended October 31, 1998, the Board of Directors held
seven meetings. The Board has an Audit Committee and a Compensation Committee.
The Audit Committee recommends to the Board the independent accountants to
be retained by the Company, meets with the accountants at least annually to
review the results of the annual audit and discuss the financial statements,
and receives and considers the accountants' comments as to controls, adequacy
of staff and management performance and procedures in connection with audit
and financial controls. The Audit Committee is composed of two non-employee
directors: Messrs. McMullan and Straus. During the fiscal year 1998, the Audit
Committee held two meetings.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board
may delegate. The Compensation Committee is composed of two non-employee
directors: Messrs. McMullan and Straus. During the fiscal year 1998, the
Compensation Committee held one meeting.
During the fiscal year ended October 31, 1998, each Board member attended
100% of the aggregate of the meetings of the Board and of the committees on
which he served, held during the period for which he was a director or
committee member, respectively.
3
<PAGE>
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP
("PricewaterhouseCoopers") as the Company's independent accountants for the
fiscal year ending October 31, 1999 and has further directed that management
submit the selection of independent accountants for ratification by the
stockholders at the Annual Meeting. PricewaterhouseCoopers has been the
Company's independent accountant since June 1997. Representatives of
PricewaterhouseCoopers will have an opportunity to make a statement at the
Annual Meeting if they so desire and will be available to respond to
appropriate questions.
Stockholder ratification of the selection of PricewaterhouseCoopers as the
Company's independent accountants is not required by the Company's By-laws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, the
Audit Committee and the Board will reconsider whether to retain that firm.
Even if the selection is ratified, the Audit Committee and the Board in their
discretion may direct the appointment of different independent accountants at
any time during the year if they determine that such a change would be in the
best interests of the Company and its stockholders.
In June 1997, a wholly-owned subsidiary of the Company merged with and into
ANDATACO of California, at which time ANDATACO of California became a wholly-
owned subsidiary of the Company (the "Merger"). Prior to the Merger, Deloitte
& Touche LLP ("Deloitte & Touche") had served as the Company's independent
accountants, and PricewaterhouseCoopers had served as ANDATACO of California's
independent accountants. PricewaterhouseCoopers, as independent accountants
for ANDATACO of California, were consulted by ANDATACO of California's
management on the proposed accounting for the Merger. The new management of
the Company following the Merger determined to engage PricewaterhouseCoopers
as the Company's independent accountants after completion of the Merger and so
notified Deloitte & Touche. On June 10, 1997, the Company's Board of Directors
ratified management's decision to engage PricewaterhouseCoopers as the
Company's independent accountants for the fiscal year ending October 31, 1997.
The reports of Deloitte & Touche for the two fiscal years ended December 31,
1995 and 1996 do not contain an adverse opinion or a disclaimer of opinion,
nor were such reports qualified or modified as to uncertainty, audit scope or
accounting principles, financial statement disclosure or practice, except that
the report for the year ended December 31, 1996 included an explanatory
paragraph related to an uncertainty regarding the ability of the Company
(prior to the Merger) to continue as a going concern. Moreover, during such
two fiscal years and any subsequent interim period preceding the date of the
Company's change in accountants, there were no disagreements with Deloitte &
Touche on any matter of accounting principles or practices, financial
statement disclosure or audit scope or procedure, which disagreements, if not
resolved to the satisfaction of Deloitte & Touche would have caused Deloitte &
Touche to make reference to the subject matter of the disagreement in
connection with their report. The Company has furnished a copy of the
disclosure contained in this section to Deloitte & Touche requesting such firm
to respond as to whether it agrees with the information set forth herein
relating to such firm. Deloitte & Touche has responded that it agrees with the
statements made herein with respect to such firm.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of PricewaterhouseCoopers.
The Board of Directors Recommends a Vote in Favor of Proposal 2.
4
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of January 31, 1999 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company
as a group; and (iv) all those known by the Company to be beneficial owners of
more than five percent of its Common Stock.
<TABLE>
<CAPTION>
Beneficial Ownership
(1)
---------------------
Number of Percent of
Beneficial Owner Shares Total
---------------- ---------- ----------
<S> <C> <C>
W. David Sykes (2)................................... 18,021,281 75.7%
Harris Ravine (3).................................... 350,550 *
Melville Straus(4)................................... 42,000 *
Richard A. Hudzik.................................... 40,000 *
8889 Ragweed Court
San Diego, Ca 92129
Cornelius McMullan (5)............................... 31,800 *
All executive officers and directors as a group (5
persons) (6)........................................ 18,485,631 77.6%
</TABLE>
- --------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G, if any, filed with the
Securities and Exchange Commission (the "SEC"). Unless otherwise indicated
in the footnotes to this table and subject to community property laws
where applicable, the Company believes that each of the stockholders named
in this table has sole voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are based
on 23,819,399 shares outstanding on January 31, 1999, adjusted as required
by rules promulgated by the SEC. Except as shown otherwise in the table
the address of each stockholder listed is in care of the Company at 10140
Mesa Rim Road, San Diego, California 92121.
(2) Includes 1,034,083 shares held in trust for the Sykes Children's Trust
with respect to which Mr. Sykes disclaims beneficial ownership and
16,987,198 shares held in trust for the Sykes Family Trust. As trustee of
the Sykes Family Trust, Mr. Sykes, acting as trustee, has voting and
investment power with respect to such shares and may be deemed to be the
beneficial owner of such shares.
(3) Includes 350,550 shares subject to options exercisable within 60 days of
January 31, 1999.
(4) Includes 2,000 shares subject to options exercisable within 60 days of
January 31, 1999. Mr. Straus is Mr. Sykes' uncle.
(5) Includes 31,800 shares subject to options exercisable within 60 days of
January 31, 1999.
(6) Includes 384,350 shares subject to options exercisable within 60 days of
January 31, 1999.
Compliance with Section 16(a) of the Securities Exchange Act of 1934, As
Amended
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than ten
5
<PAGE>
percent stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended October 31, 1998, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with, except for the
form 3s required to be filed by Jack Corrao and Diane Wong following their
appointment as officers of the Company in August 1998. These reports instead
were filed on January 14, 1999
EXECUTIVE COMPENSATION
Compensation of Directors
Each non-employee director of the Company receives a meeting fee of $2,000
for each meeting of the Board which he attends in person and a meeting fee of
$1,000 for each meeting of the Audit Committee and the Compensation Committee
of the Board which he attends in person as a member of such committee. No
additional fees are payable for any meeting of any committee of the Board
which is held in connection with a meeting of the Board or for any conference
call meeting of the Board or any committee of the Board. The members of the
Board of Directors are also eligible for reimbursement for their reasonable
out-of-pocket expenses incurred in connection with such director's travel to
and attendance at Board and Committee meetings in accordance with Company
policy. In the fiscal year ended October 31, 1998, the total compensation paid
to non-employee directors was $14,000.
In addition, all of the directors who are not employees of the Company are
eligible to participate in the 1993 Director Stock Option Plan (the
"Directors' Plan"). Option grants under the Directors' Plan are intended by
the Company not to qualify as incentive stock options under the Code and are
nondiscretionary. Each non-employee director is automatically granted under
the Directors' Plan, without further action by the Company, the Board of
Directors or the stockholders of the Company, an initial option to purchase
10,000 shares of Common Stock of the Company upon election as a director. The
exercise price of options granted under the Plan is 100% of the fair market
value of the Common Stock subject to the option on the date of the option
grant. Options granted under the Directors' Plan become exercisable as to 20%
of the option shares on the date one year after the date of grant and 20% of
the option shares become exercisable at each subsequent annual meeting
thereafter, provided that the optionee has, during the period beginning on the
date of grant for such option and ending on such vesting date, continuously
served as a non-employee director. Furthermore, an additional option for 2,000
shares is automatically granted to each non-employee director upon annual
reelection as a director, which option will become exercisable at the
commencement of business on the first annual meeting thereafter, with such
option becoming exercisable only if the non-employee director is a member of
the Board at the opening of business on the date of such subsequent annual
meeting. The term of options granted under the Directors' Plan is ten years
from the date of grant. In the event of a change of control of the Company, an
optionee would be entitled to receive upon exercise and payment in accordance
with the terms of the option, the same shares the optionee would have been
entitled to receive under the option.
During the last fiscal year, the Company granted an option to purchase 2,000
shares of Common Stock each to Messrs. McMullan and Straus for their services
as a director. As of October 31, 1998, options to purchase an aggregate of
32,000 shares had been granted under the Directors' Plan, and no such options
had been exercised.
Compensation of Executive Officers
The following table shows for the fiscal years ended October 31, 1998, 1997
and 1996, compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer, its other three most highly compensated executive officers
who earned in excess of $100,000 at October 31, 1998, and two former executive
officers who departed from the Company during the last fiscal year
(collectively, the "Named Executive Officers"):
6
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation All Other
Name and Principal Annual Compensation (1) Awards Compensation
Position ------------------------------- ------------ ------------
Other Shares
Fiscal Annual Underlying
Year Salary Bonus Compensation Options
------ -------- ----- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Harris Ravine.......... 1998 $287,500 275,000(7)
Chief Executive
Officer 1997 $125,000 700,000(7)
W. David Sykes......... 1998 $237,500 $200,004(6)
President 1997 $104,167(5) $193,992(6)
Arun Taneja (2)........ 1998 $133,797 400,000
Senior Vice President
of Marketing
Jack Corrao............ 1998 $100,000 80,000
Vice President of
Operations
Peter W. Bell(3)....... 1998 $145,000 190,000(8)
Former Vice President 1997 $ 50,000 480,000(8)
of Worldwide Sales
Richard A. Hudzik(4)... 1998 $101,250 25,000 $106,000(9)
Former Vice 1997 $ 56,250 $3,375
President--Finance,
Chief Financial
Officer, Treasurer
and Clerk
</TABLE>
- --------
(1) As permitted by rules promulgated by the SEC, no amounts are shown with
respect to perquisites where such amounts do not exceed the lesser of 10%
of the sum of the amount in the salary and bonus columns or $50,000.
(2) Mr. Taneja was appointed Senior Vice President of Marketing effective
February 1998.
(3) Mr. Bell resigned from the Company effective July 31, 1998.
(4) Mr. Hudzik resigned from the Company effective July 31, 1998.
(5) Mr. Sykes received an aggregate salary of $729,000 in 1997 by ANDATACO of
California prior to the Merger. See "Employment Agreements."
(6) Mr. Sykes and the Company entered into a noncompetition agreement in
connection with the Merger pursuant to which the Company is obligated to
pay Mr. Sykes $1,000,020, payable in 60 equal monthly installments of
$16,667 per month. See "Employment Agreements."
(7) An option to purchase 700,000 shares of Common Stock was granted to Mr.
Ravine pursuant to an employment agreement entered into between ANDATACO
of California and Mr. Ravine in May 1997. Such option was amended on
November 5, 1997, pursuant to which the number of shares underlying the
option was reduced from 700,000 to 475,000 by canceling 225,000 shares
which were subject to performance-based vesting. Mr. Ravine was granted an
additional option on November 5, 1997 to purchase 275,000 shares of the
Company's Common Stock. See "Employment Agreements."
(8) An option to purchase 480,000 shares of Common Stock was granted to Mr.
Bell pursuant to an employment offer letter dated July 9, 1997. Such
option was amended on November 5, 1997, pursuant to which the number of
shares underlying the option was reduced from 480,000 to 320,000 by
canceling 160,000 shares which were subject to performance-based vesting.
Mr. Bell was granted an additional option on November 5, 1997 to purchase
190,000 shares of the Company's Common Stock. See "Employment Agreements."
Mr. Bell's options terminated on October 31, 1998.
(9) Pursuant to an employment offer letter entered into between Andataco and
Mr. Hudzik, ANDATACO of California was obligated to issue 51 shares of
ANDATACO of California's Common Stock to Mr. Hudzik upon consummation of
the Merger. Such shares were converted into 92,199 shares of the Company's
Common Stock. The dollar amount shown in the table reflects the Company's
stock price of $1.125 as quoted on Nasdaq on June 3, 1997.
7
<PAGE>
Stock Option Grants And Exercises
The Company grants options to its executive officers under the 1997 Equity
Incentive Plan (the "1997 Plan") and the 1996 Consolidated Equity Plan (the
"1996 Plan"). As of January 31, 1999, options to purchase a total of 1,512,695
shares and 737,000 shares were outstanding under the 1997 Plan and the 1996
Plan, respectively. Options to purchase 1,182,305 shares and 568,000 shares
remained available for grant under the 1997 Plan and the 1996 Plan,
respectively, in addition to shares that might in the future be returned to
the 1997 Plan or 1996 Plan as a result of cancellations or expirations of
options. 633,500 shares remained available for future grant under the
Company's 1991/1993 Consolidated Equity Plan (the "1993 Plan"), in addition to
shares that might in the future be returned to the 1993 Plan as a result of
cancellations or expirations of options. The Company currently does not, and
in the future does not intend to, grant any options under the 1993 Plan.
Option Grants in the Last Fiscal Year
The following table sets forth certain information regarding each grant of
stock options made during the fiscal year ended October 31, 1998 to each of
the Named Executive Officers:
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------
Potential
Realizable Value
at
Assumed Annual
Rates
% of Total of Stock Price
Number Options Appreciation
of Shares Granted to for Option Term
Underlying Employees Exercise (3)
Options In Price Expiration -----------------
Name Granted Fiscal Year (1) ($/sh) (2) Date 5% ($) 10% ($)
---- ---------- -------------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Harris Ravine........... 275,000(4) 13.5% $1.75 11/5/07 $303,188 $765,188
Arun Taneja............. 200,000(5)(6) 9.8 .75 2/09/08 94,500 238,500
200,000(4) 9.8 .69 10/01/08 86,940 219,420
Jack Corrao............. 10,000(4) * .75 8/5/08 4,725 11,925
50,000(4)(6) 2.5 .75 10/7/07 20,885 51,549
20,000(5)(6) 1.0 .75 6/8/08 9,132 22,973
Peter Bell.............. 190,000(7) 9.4 1.75 11/5/07 209,475 528,675
Richard Hudzik.......... 25,000(8) 1.2 1.69 6/8/08 26,531 67,236
</TABLE>
- --------
* Less than one percent
(1) Based on options to purchase 2,031,000 shares of Common Stock granted to
employees in the last fiscal year, including the Named Executive Officers.
(2) On September 10, 1998, all existing stock options held by participating
employees with an exercise price in excess of $0.88 per share were
converted to stock options having a per share exercise price of $0.75, the
fair market value of the Common Stock at the time of conversion (the
"Repriced Options"). No portion of the Repriced Options are exercisable
prior to September 11, 1999.
(3) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years). It is calculated assuming that
the stock price on the date of grant appreciates at the indicated annual
rate, compounded annually for the entire term of the option, and that the
option is exercised and sold on the last day of its term for the
appreciated stock price. These amounts represent certain assumed rates of
appreciation only, in accordance with the rules of the SEC, and do not
reflect the Company's estimate or projection of future stock price
performance. Actual gains, if any, are dependent on the actual future
performance of the Company's Common Stock and no gain to the optionee is
possible unless the stock price increases over the option term, which will
benefit all stockholders.
(4) The shares underlying the options vest 25% one year from the date of
grant, and 25% for each full year thereafter.
(5) The shares underlying the options vest 20% one year from the date of
grant, and 20% for each full year thereafter.
(6) Represents Repriced Options not exercisable prior to September 11, 1999.
(7) Mr. Bell's options terminated on October 31, 1998.
(8) Mr. Hudzik's options terminated on October 31, 1998.
8
<PAGE>
Aggregated Fiscal Year-End Option Values
There were no option exercises by the Named Executive Officers during the
fiscal year ended October 31, 1998. The following table sets forth information
with respect to the number and value of securities underlying unexercised
options held by the Named Executive Officers as of October 31, 1998:
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money
Options at Options at
Fiscal Year-End (1) Fiscal Year End(2)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Harris Ravine............ 350,550 436,450 -- --
Arun Taneja.............. -- 400,000 -- $12,000
Jack Corrao.............. -- 80,000 -- --
</TABLE>
- --------
(1) Includes both "in-the-money" and "out-of-the-money" options. "In-the-
money" options are options with exercise prices below the market price of
the Company's Common Stock.
(2) Amounts reflected are based upon $0.75 closing sales price of the
underlying shares of Common Stock, as reported on the Nasdaq SmallCap
Market on October 31, 1998, minus the exercise price of the options and do
not indicate that the optionee sold such stock.
Employment Agreements
The Company and W. David Sykes entered into an employment agreement in June
1997 (the "Sykes Employment Agreement"). Pursuant to the Sykes Employment
Agreement, Mr. Sykes was hired as President of the Company. The initial term
of the Sykes Employment Agreement ends June 30, 2002, with additional one-year
terms renewed unless Mr. Sykes or the Company elect not to extend such term.
Mr. Sykes' initial annual base salary under the Sykes Employment Agreement is
$250,000 with cash bonuses up to an amount equal to 50% of Mr. Sykes' then
base salary if the Company meets certain quantified objectives based on an
annual bonus plan approved by the Board each year during the term of his
employment. Effective August 1, 1998, Mr. Sykes and the Company agreed to
reduce his salary to $200,000 in connection with the Company's cost
restructuring. If Mr. Sykes' employment is terminated by the Company without
cause he is entitled to receive his annual base salary of $250,000 for the
number of (or part thereof for any partial) year(s) remaining under the Sykes
Employment Agreement plus any unpaid bonus. In the event that Mr. Sykes'
employment is terminated within 12 months after a change in control of the
Company, he is entitled to receive as severance an amount equal to eighteen
months of his annual base salary plus any unpaid bonus. The Sykes Employment
Agreement also provides for additional benefits including term life insurance
and a car allowance.
The Company and Mr. Sykes entered into a noncompetition agreement (the
"Noncompetition Agreement") in June 1997, pursuant to which Mr. Sykes agreed
not to compete with ANDATACO of California, solicit customers or employees of
ANDATACO of California or its affiliates or disclose any confidential
information. As consideration for entering into the Noncompetition Agreement,
Mr. Sykes will receive 60 monthly payments of $16,667 for a total of
$1,000,020. Mr. Sykes' obligation not to compete terminates at the earliest of
(i) June 3, 2002, (ii) the Company's failure to make payments as described
herein, or (iii) the Company's failure to make payments pursuant to the Sykes
Employment Agreement.
In June 1997, ANDATACO of California and Harris Ravine entered into an
employment agreement (the "Ravine Employment Agreement"). Under the Ravine
Employment Agreement, Mr. Ravine was hired as Chief Executive Officer of
ANDATACO of California. The initial term of the Ravine Employment Agreement
ends June 30, 2002, with additional one-year terms renewed unless the Company
or Mr. Ravine elect not to extend the Ravine Employment Agreement. Mr.
Ravine's initial annual base salary under the Ravine Employment Agreement is
$300,000, and he will be eligible to receive cash bonuses up to an amount
equal to 50% of Mr. Ravine's then base salary if ANDATACO of California meets
certain quantified objectives based on an
9
<PAGE>
annual business plan approved by the Board each year during the term of his
employment. Effective August 1, 1998, Mr. Ravine and the Company agreed to
reduce his salary to $250,000 in connection with the Company's cost
restructuring. As additional consideration for entering into the Ravine
Employment Agreement, upon consummation of the Merger, the Company granted Mr.
Ravine an option to purchase 700,000 shares of Common Stock at an exercise
price equal to the fair market value of the Company's Common Stock on the date
of grant. Pursuant to the Ravine Employment Agreement, (i) 250,000 shares of
the Company's Common Stock underlying the option vest and become exercisable
monthly and ratably during the first year of the Ravine Employment Agreement;
(ii) an additional 225,000 shares will vest (and the option will become
exercisable with respect to such shares) in four equal installments over the
next four years; and (iii) the remaining 225,000 shares would vest (and the
option would become exercisable with respect to such shares) over the same
four years, but only if the Company met certain objectives. Such stock option
was amended on November 5, 1997 to reduce the number of underlying shares by
225,000, which number represents those shares subject to performance-based
vesting identified in (iii) above. Mr. Ravine was granted an additional option
on November 5, 1997, to purchase 275,000 shares of the Company's Common Stock.
Such shares shall vest at the rate of 68,750 per year at the end of each year
during the four-year period commencing on November 5, 1997. If Mr. Ravine's
employment is terminated by the Company without cause he is entitled to
receive an amount equal to 18 months of his annual base salary of $300,000
plus any unpaid bonus pursuant to the Ravine Employment Agreement. In the
event that Mr. Ravine's employment with the Company is terminated within 12
months of a change of control of the Company, Mr. Ravine is entitled to
receive as severance an amount equal to 18 months of this annual base salary
plus any unpaid bonus. The Ravine Employment Agreement also calls for
additional benefits, including term life insurance and a car allowance.
Pursuant to an employment offer letter entered into between the Company and
Arun Taneja on January 27, 1998, Mr. Taneja receives an annual salary of
$165,000 and a quarterly cash bonus of up to $25,000 if certain financial
objectives are met. In addition, Mr. Taneja was granted an option to purchase
up to 200,000 shares of the Company's Common Stock at an exercise price equal
to the fair market value on the date of grant. If Mr. Taneja's employment is
terminated by the Company without cause he is entitled to receive an amount
equal to six months of his annual base salary if such termination occurs
during the first three years of employment and 12 months of his annual base
salary if such termination occurs after three years of employment with
Company.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(/1/)
The Compensation Committee of the Board of Directors (the "Compensation
Committee") during the year ended October 31, 1998 was composed of Messrs.
McMullen and Strauss. None of the members of the Compensation Committee is a
current or former officer or employee of the Company. The Compensation
Committee is responsible for setting and administering the Company's policies
governing employee compensation and administering the Company's equity
incentive plans.
Compensation Philosophy
The compensation policies adopted by the Compensation Committee are designed
to (i) align compensation with business objectives and performance; (ii)
attract, retain and reward executive officers and other key employees who
contribute to the long-term success of the Company; and (iii) motivate the
Company's executive officers and other key employees to enhance long-term
stockholder value. Key elements of this philosophy are:
. The Company's salaries must be competitive with comparable open systems
storage companies with which the Company competes for highly qualified
and experienced executives. To date, the Compensation Committee has
relied on its members' experience in working with other comparable
companies to ensure executive salaries are competitive.
- --------
(/1/The)material in this report is not "soliciting material," is not deemed
filed with the SEC, and is not to be incorporated by reference into any
filing of the Company under the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, whether made before or after the
date hereof and irrespective of any general incorporation language
contained in such filing.
10
<PAGE>
. The Company maintains annual incentive programs sufficient to provide
motivation to achieve specific operating goals and to generate rewards
that bring total compensation to competitive levels.
. The Company provides significant equity-based incentives for executives
and other key employees to ensure that they are motivated over the long
term to respond to the Company's business challenges and opportunities
as stockholders as well as employees.
The Committee's objective is to set executive compensation within a range
which the Compensation Committee believes is comparable to the average range
of compensation set by companies of similar size in the open systems storage
market. The group of comparable companies is not necessarily the same as the
companies included in the market indices included in the performance graph on
page 13 of this Proxy Statement. The primary components of executive
compensation are base salary, short- and long-term cash incentives and long-
term equity incentives. Each year, the Compensation Committee reviews the
criteria upon which all aspects of employee compensation are based.
Base Salary. In fiscal year 1998 base salaries for executive officers other
than the Chief Executive Officer were set at competitive levels based
primarily on the recommendation of the Chief Executive Officer and assisted by
the Compensation Committee's analysis of published compensation surveys
reflecting compensation data for computer technology companies. Annual
adjustments were made to maintain base salaries at levels competitive with
comparable companies and to maintain an equitable relationship between the
base salaries of executive officers and overall merit increases for the
Company's other employees. In the case of any executive officer joining the
Company, base salary was also determined as one component of a total
compensation package that had to be competitive with compensation granted by
the executive's prior employer and/or other opportunities that might be
available to the executive.
Annual Incentive Compensation. The amount of the bonus component in the
total compensation plan for executive officers is established at the beginning
of each year (or upon employment, in the case of newly hired executives). The
percentage of potential direct cash compensation that this component
represents varies for each officer, and for executive officers other than the
Chief Executive Officer it is based on the recommendation of the Chief
Executive Officer and the Compensation Committee's assessment of incentives in
comparable positions in other companies. In 1998 each quarter's bonus
component was only payable if the Company reported a pre-tax profit for the
quarter, and 50% of each executive officer's bonus component was based on the
Company's broader corporate performance against its financial plan for
revenues and/or results of operations. The other half of each executive
officer's bonus was based on performance against business objectives related
to the individual executive officer's responsibilities, including quantified
objectives and, in certain cases, other management objectives that were
expected to provide future competitive advantage for the Company. Examples of
such individualized objectives included development of sales and service
channels, introduction and sales of new products and programs, and management
of manufacturing and financial resources. For all executive officers other
than the Chief Executive Officer, the quantified business objectives were
determined on a quarterly basis by the Chief Executive Officer. The Company
did not achieve its quarterly corporate performance goals for any quarter in
fiscal year 1998. As a result, no personal bonuses were paid.
Long-Term Incentive Compensation. Initial stock option awards for executive
officers are individually determined at or prior to employment at levels which
are designed to attract qualified executives and in certain cases to be
competitive with options granted by their prior employers. Employees from
within the Company who are promoted to positions as executive officers
typically receive additional option grants to bring their total option grants
up to the level that would have been granted to a person hired for such
executive officer position from outside the Company. For additional
information regarding options awards, see the compensation tables preceding
this report.
Section 162(m) of the Code limits the Company to a deduction for federal
income tax purposes of no more than $1 million of compensation paid to certain
officers in a taxable year. Compensation above $1 million may be deducted if
it is "performance-based compensation" within the meaning of the Code. The
Compensation Committee has determined that stock options granted under the
Company's 1997 Plan, 1996 Plan and 1993 Plan
11
<PAGE>
with an exercise price at least equal to the fair market value of the Common
Stock on the date of grant will be treated as performance-based compensation
under the Treasury regulations promulgated under Section 162(m) of the Code.
Executive officers receive value from option grants only if the Common Stock
appreciates over the long term. The amount of individual option grants is
determined based in part on competitive practices at comparable companies and
on the Company's philosophy of significantly linking executive compensation
with stockholder interests. In determining the size of individual grants, the
Committee also considers the number of shares subject to options previously
granted to each executive officer, including the number of shares that have
vested and that remain unvested. The Committee believes that option grants by
the Company to its executive officers and employees are comparable to the
average range for comparable companies. In fiscal year 1998, the Committee
granted options to purchase an aggregate of 970,000 shares of the Company's
Common Stock to five executive officers, Harris Ravine, Peter Bell, Richard
Hudzik, Arun Taneja and Jack Corrao.
Corporate Performance and Chief Executive Officer Compensation
The total compensation program for the Chief Executive Officer is largely
based upon the same policies and criteria used for other executive officers.
Each year the Compensation Committee reviews the Chief Executive Officer's
existing compensation arrangement, the individual performance for the calendar
year under review, as well as the Company's performance relative to its peers.
In setting the base salary for Mr. Ravine, the Compensation Committee
considered industry reports as well as compensation data compiled by members
of the Compensation Committee.
Harris Ravine was appointed as Chief Executive Officer effective June 3,
1997. Under his employment agreement, Mr. Ravine's base salary is $300,000.
Effective August 1, 1998 Mr. Ravine and the Company agreed to reduce his
salary to $250,000 in connection with the Company's cost restructuring.
Pursuant to his employment agreement, Mr. Ravine was granted an option in June
1997 to purchase 700,000 shares of the Company's Common Stock under the 1996
Plan at an exercise price of $1.125, the fair market value of the stock on the
date of grant. Such option was amended on November 5, 1997, pursuant to which
the number of shares underlying the option was reduced from 700,000 to 475,000
by canceling 225,000 shares which were subject to performance-based vesting.
Mr. Ravine was granted an additional option on November 5, 1997 to purchase
275,000 shares of the Company's Common Stock. In determining the base salary
and size of the option grant, the Compensation Committee considered Mr.
Ravine's previous experience and proven leadership in implementing strategic
and financial initiatives designed to augment the Company's development and
commercialization efforts. The Compensation Committee also considered industry
reports as well as industry compensation data. The Compensation Committee
believes the size of the stock option grant was appropriate in order to align
Mr. Ravine's total compensation with the performance of the Company and,
ultimately, the interests of the stockholders.
Conclusion
Through the programs described above, a significant portion of the Company's
compensation program and the compensation of the Company's Chief Executive
Officer are contingent on Company performance, and realization of benefits is
closely linked to increases in long-term stockholder value. The Company
remains committed to this philosophy of pay for performance, recognizing that
the competitive market for talented executives and the volatility of the
Company's business may result in highly variable compensation for a particular
time period.
COMPENSATION COMMITTEE
Cornelius P. McMullan
Melville Straus
12
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON (/1/)
The following graph shows a comparison of cumulative total returns of an
investment of $100 in cash for the Company, the Center for Research in
Securities Prices Index for the NASDAQ Stock Market (United States and Foreign
Companies) (the "CRSP NASDAQ U.S. and Foreign Index"), and the Center for
Research in Securities Prices Index for the NASDAQ Computer and Manufacturer
Stocks (the "CRSP NASDAQ Computer and Manufacturer Index") for the five year
period ended October 31, 1998. The graph assumes that all dividends have been
reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT
(Andataco, Inc., CRSP NASDAQ U.S. and Foreign Index, CRSP NASDAQ Computer
Manufacturer Index)
[PERFORMANCE GRAPH]
ASSUMES $100 INVESTED ON OCT. 31, 1993
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING OCT. 31, 1998
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Index Description 10/31/93 10/31/94 10/31/95 10/31/96 10/31/97 10/31/98
- ----------------------------------------------------------------------------------
Andataco, Inc........... $100.00 $ 43.75 $ 35.94 $ 25.00 $ 25.78 $ 9.38
CRSP Total Return Index
for the NASDAQ Computer
and Manufacturer
Stocks................. $100.00 $113.24 $192.25 $240.80 $317.52 $506.49
CRSP Total Index for the
NASDAQ Stock Market
(U.S. and Foreign)..... $100.00 $100.04 $133.53 $156.97 $206.48 $227.73
</TABLE>
- -------
(/1/This)Section is not "soliciting material," is not deemed filed with the
SEC, and is not to be incorporated by reference into any filing of the
Company under the Securities Act or the Exchange Act whether made before
or after the date hereof and irrespective of any general incorporation
language in such filing.
13
<PAGE>
CERTAIN TRANSACTIONS
Andataco has entered into a ten-year lease with Syko Properties, Inc., a
corporation wholly-owned by W. David Sykes, dated January 1, 1993, for 42,384
square feet of industrial office space located at 10140 Mesa Rim Road, San
Diego, California (the "Lease"). The Lease term commenced on April 1, 1993 and
expires on March 31, 2003. ANDATACO of California has four five-year options
to renew the Lease at market rates. The current monthly rental payment under
the Lease is $27,500.
Pursuant to a Subordinated Promissory Note dated February 10, 1997 (the
"Note"), Andataco has promised to pay W. David Sykes the principal sum of
$5,195,548.87 plus interest at 9% per annum. The Note is due and payable in
full on June 30, 2004. Mr. Sykes receives monthly interest payments from the
Company in the amount of $38,967.
The Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided
for therein, for expenses, damages, judgments, fines and settlements he may be
required to pay in actions or proceedings which he is or may be made a party
by reason of his position as a director, officer or other agent of the
Company, and otherwise to the full extent permitted under Massachusetts law
and the Company's By-laws.
The Company has entered into certain additional transactions with its
directors and executive officers, as described under the captions "Executive
Compensation--Compensation of Directors" and "Executive Compensation--
Employment Agreements."
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
BY ORDER OF THE BOARD OF DIRECTORS
Diane Wong
Clerk
March 1, 1999
A copy of the Company's Annual Report to the Securities and Exchange
Commission on Form 10-K for the fiscal year ended October 31, 1998 is
available without charge upon written request to: Andataco, Inc., 10140 Mesa
Rim Road, San Diego, California 92121.
14
<PAGE>
ANDATACO, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 8, 1999
The undersigned hereby appoints HARRIS RAVINE and DIANE WONG, and each of
them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Andataco, Inc. which the
undersigned may be entitled to vote at the Annual Meeting of Stockholders of
Andataco, Inc. to be held at 10140 Mesa Rim Road, San Diego, California, on
Thursday, April 8, 1999 at 10:00 a.m. (local time), and at any and all
postponements, continuations and adjournments thereof, with all powers that the
undersigned would possess if personally present, upon and in respect of the
following matters and in accordance with the following instructions, with
discretionary authority as to any and all other matters that may properly come
before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2, AS MORE SPECIFICALLY DESCRIBED
IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL
BE VOTED IN ACCORDANCE THEREWITH.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
FOLD AND DETACH HERE
<PAGE>
(CONTINUED FROM OTHER SIDE)
<TABLE>
<CAPTION>
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEE FOR DIRECTOR LISTED BELOW. MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
PROPOSAL 1: To elect four directors to hold office until the 2000 Annual Meeting of Stockholders.
<S> <C> <C>
FOR all nominees WITHHOLD AUTHORITY NOMINEES: Harris Ravine, W. David Sykes, Cornelius P. McMullan and Melville Straus
listed to the right to vote for all
(except as marked nominees listed TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S) WRITE SUCH NOMINEE(S)' NAME(S) BELOW:
to the contrary) to the right.
[____] [____] ---------------------------------------------------------------------------------------
PROPOSAL 2: To ratify selection of PricewaterhouseCoopers LLP as independent accountants of the Company for its fiscal year ending
October 31, 1999.
FOR AGAINST ABSTAIN
[____] [____] [____]
DATED
------------------------------------------------------------------
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SIGNATURE(S)
Please sign exactly as name appears hereon. If the stock is
registered in the names of two or more persons, each should sign.
Executors, administrators, trustees guardians and attorneys-in-
fact should add their titles. If signer is a corporation, please
give full corporate name and have a duly authorized officer sign,
stating title. If signer is a partnership, please sign in
partnership name by authorized person.
PLEASE VOTE, AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
</TABLE>
FOLD AND DETACH HERE
