SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
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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
Quantum Corporation
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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)
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5) Total fee paid:
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[Quantum Logo]
QUANTUM CORPORATION
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
August 22, 2000
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TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Quantum
Corporation (the "Company" or "Quantum"), a Delaware corporation, will be held
on Tuesday, August 22, 2000 at 11:00 a.m., local time, at Quantum Corporation's
principal executive offices located at 500 McCarthy Boulevard, Building 2,
Milpitas, California 95035, for the following purposes:
1. To elect six directors to serve until the next Annual Meeting of
Stockholders or until their successors are elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending March 31, 2001;
3. To approve and ratify the adoption of the Annual Incentive Plan for
the Company's Chief Executive Officer; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on July 6, 2000 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to vote,
sign, date and return the enclosed Proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she previously returned a Proxy.
Sincerely,
/s/ Richard L. Clemmer
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Richard L. Clemmer
Executive Vice President, Finance and Chief
Financial Officer
Milpitas, California
July 21, 2000
<PAGE>
QUANTUM CORPORATION
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PROXY STATEMENT
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INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of Quantum Corporation (the
"Company" or "Quantum") for use at the Annual Meeting of Stockholders to be held
Tuesday, August 22, 2000 at 11:00 a.m., or at any adjournment thereof (the
"Annual Meeting" or "Meeting"), for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting will
be held at the Company's principal executive offices located at 500 McCarthy
Boulevard, Building 2, Milpitas, California 95035. The Company's telephone
number is (408) 894-4000.
These proxy solicitation materials were mailed on or about July 21, 2000 to
all stockholders entitled to vote at the Meeting.
Record Date; Outstanding Shares
Stockholders of record at the close of business on July 6, 2000 (the
"Record Date") are entitled to notice of and to vote at the Meeting. At the
Record Date, 147,340,799 shares of the Company's DLT and Storage Systems group
Common Stock, $0.01 par value (the "DSS Common Stock"), and 81,241,515 shares of
the Company's Hard Disk Drive group Common Stock, $0.01 par value (the "HDD
Common Stock" and, collectively with the DSS Common Stock, the "Common Stock"),
respectively, were issued and outstanding. The closing price of the DSS Common
Stock on the Record Date, as reported by the New York Stock Exchange, was
$9.4375 per share. The closing price of the HDD Common Stock on the Record Date,
as reported by the New York Stock Exchange, was $10.0625 per share.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company or its
transfer agent a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Meeting and voting in person.
Voting and Solicitation
Each share of DSS Common Stock has one vote and each share of HDD Common
Stock has 1.086 votes, calculated as provided in the Company's Restated
Certificate of Incorporation. Accordingly, a total of 235,569,084 votes may be
cast at the Meeting. The DSS Common Stock and HDD Common Stock vote together as
a single class on all matters covered by this proxy statement. For voting with
respect to the election of directors, stockholders may cumulate their votes. See
"ELECTION OF DIRECTORS--REQUIRED VOTE."
The cost of soliciting proxies will be borne by the Company. The Company
may reimburse brokerage firms and other persons representing beneficial owners
of shares for their expenses in forwarding solicitation material to such
beneficial owners. Proxies may also be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone, telegram, telefax, email or otherwise.
<PAGE>
Stockholder Proposals
Proposals of stockholders for the Company's 2001 Annual Meeting must be
received by the Secretary of the Company no later than March 23, 2001 to be
considered for inclusion in the proxy materials relating to that meeting.
Alternatively, under the Company's Bylaws, a proposal that the stockholder does
not seek to include in the Company's proxy materials must be received by the
Secretary of the Company for the 2001 Annual Meeting not less than sixty (60)
days nor more than ninety (90) days prior to the meeting; provided, however,
that in the event that less than seventy (70) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made. The
stockholder's submission must include the information specified in the Company's
Bylaws.
Proposals not meeting these requirements will not be entertained at the
annual meeting. Stockholders should contact the Secretary of the Company in
writing at 500 McCarthy Blvd., Milpitas, CA 95035 to make any submission or to
obtain additional information as to the proper form and content of submissions.
The Company has not been notified by any stockholder of his or her intent
to present a stockholder proposal from the floor at this year's Annual Meeting.
The enclosed proxy card grants the proxy holders discretionary authority to vote
on any matter properly brought before the Annual Meeting.
Quorum; Abstentions; Broker Non-Votes
The required quorum for the transaction of business at the Annual Meeting
is a majority of the votes eligible to be cast by holders of shares of Common
Stock and issued and outstanding on the Record Date. Shares that are voted
"FOR", "AGAINST", "WITHHOLD ALL", "FOR ALL EXCEPT" or "ABSTAIN" on a matter are
treated as being present at the meeting for purposes of establishing a quorum
and are also treated as shares entitled to vote (the "Votes Cast") at the Annual
Meeting with respect to such matter. Accordingly, with the exception of the
proposal for the election of directors, abstentions will have the same effect as
a vote against the proposal. Because directors are elected by a plurality vote,
votes that are withheld from a candidate in the election of directors have no
impact once a quorum exists.
Broker non-votes will be counted for purposes of determining the presence
or absence of a quorum for the transaction of business, but will not be counted
for purposes of determining the number of Votes Cast with respect to the
particular proposal on which the broker has expressly not voted. Broker
non-votes with respect to proposals set forth in this Proxy Statement will
therefore be counted only for purposes of determining the presence or absence of
a quorum and will not be considered Votes Cast. Accordingly, broker non-votes
will not affect the determination as to whether the requisite majority of Votes
Cast has been obtained with respect to a particular matter.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires the Company's Section 16
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Such
executive officers, directors and greater than ten-percent stockholders are also
required by SEC rules to furnish the Company with copies of all forms that they
file pursuant to Section 16(a). Based solely on its review of the copies of such
reports received by the Company, or on written representations from certain
reporting persons that no other reports were required for such persons, the
Company believes that, during the fiscal year ended March 31, 2000, all Section
16(a) filing requirements applicable to its Section 16 officers, directors and
greater than ten-percent stockholders were complied with.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Nominees
A board of six (6) directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for management's nominees named below. Each nominee has consented to be named as
a nominee in the proxy statement and to serve as a director if elected. In the
event that any management nominee becomes unable or declines to serve as a
director, the proxies will be voted for any nominee who shall be designated by
the current Board of Directors to fill the vacancy. In the event that additional
persons are nominated at the time of the Annual Meeting, the proxy holders
intend to vote all proxies received by them in such a manner (in accordance with
cumulative voting) as will ensure the election of as many of the nominees listed
below as possible (or, if new nominees have been designated by the Board of
Directors, in such a manner as to elect such nominees). In such event, the
specific nominees for whom such votes will be cumulated will be determined by
the proxy holders. The Company is not aware of any reason that any nominee will
be unable or will decline to serve as a director. The term of office of each
person elected as a director will continue until the next Annual Meeting of
Stockholders or until a successor has been elected and qualified. There are no
arrangements or understandings between any director or executive officer and any
other person pursuant to which he is or was to be selected as a director or
officer of the Company.
The Board of Directors' key roles include, but are not limited to,
selection and evaluation of the Chief Executive Officer and other members of
senior management, advising the Chief Executive Officer and the management team
on strategic goals and directions for the Company, approval of material
acquisitions or strategic partnerships that support the Company's goals and
providing general guidance and counsel to senior management. The criteria used
by the Company in nominating directors include: a nominee's knowledge and
familiarity with high technology companies, a nominee's prior board experience
and a nominee's personal characteristics, including objectivity, integrity and
independence of judgment. The Company believes its current board members meet
each of these criteria.
The names of the nominees, all of whom are currently directors of the
Company, and certain information about them as of June 1, 2000, are set forth
below.
<TABLE>
<CAPTION>
Director
Name of Nominee Age Since Principal Occupation Since
--------------- --- -------- --------------------------
<S> <C> <C> <C>
Stephen M. Berkley.................... 56 1987 President of SMB Associates, 1992
David A. Brown........................ 55 1988 Retired management consultant to various high technology
companies, 1992
Michael A. Brown...................... 41 1995 President and Chief Executive Officer of Quantum, 1995;
Chairman of the Board of Quantum, 1998
Robert J. Casale*+.................... 61 1993 Retired Group President, Brokerage Information Services Group
of Automatic Data Processing, Inc., 1988
Edward M. Esber, Jr.*+................ 48 1988 Chairman of the Board of Solopoint, Inc., 1998
Gregory W. Slayton*+.................. 40 2000 President, Chief Executive Officer and Director, ClickAction
Inc., 1997
</TABLE>
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* Member of Audit Committee.
+ Member of Compensation Committee.
Except as set forth below, each of the nominees has been engaged in his
principal occupation described above during the past five years. There is no
family relationship between any directors or executive officers of the Company.
Mr. Stephen M. Berkley joined the Company in October 1981 as Vice
President, Marketing. In October 1983, he became the founding President and
Chief Executive Officer of Plus Development Corporation, then a wholly-owned
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subsidiary of the Company ("Plus"), where he continued to serve as such until
July 1988. From May 1987 to March 1992, he served as Chairman of the Board and
Chief Executive Officer of Quantum. From April 1992 to July 1993, Mr. Berkley
served as Chairman of the Board of both Quantum and Plus. From August 1995 to
May 1998, Mr. Berkley served as Chairman of the Board of Quantum. Mr. Berkley
served as Chairman of the Board and Chief Executive Officer of Coactive Computer
Corporation, a computer networking company ("Coactive"), from February 1993 to
June 1993 and from June 1993 to July 1994 he served solely as Chairman of the
Board of Coactive. Mr. Berkley has been an investor in and has served as a
consultant to various high technology firms since May 1992. Mr. Berkley also
served as a member of the Board of Directors of Edify Corporation until it was
merged with Security First Corporation in November 1999.
Mr. David A. Brown, a founder of the Company, has been with the Company
since its inception in February 1980. Initially, Mr. Brown served as Vice
President of Engineering of the Company. In 1983, he co-founded Plus and became
its Executive Vice President of Operations. He returned to Quantum in September
1986 to lead the engineering organization and direct Quantum's effort in the 3
1/2-inch disk drive market. From May 1987 to April 1990, Mr. Brown served as
President of the Company and from April 1990 to February 1992, he served as its
Vice Chairman of the Board of Directors and Chief Operating Officer. Mr. Brown
has also been a management consultant and board member for various high
technology companies since February 1992. Mr. Brown is also a member of the
Board of Directors of HearMe, Inc.
Mr. Michael A. Brown has been Chairman of the Board and Chief Executive
Officer since 1998 and 1995, respectively. Mr. Brown was President of the
Desktop Storage Division from 1993 to 1995 and Executive Vice President of
Marketing from 1992 to 1993. Previously, Mr. Brown held senior positions in
product and marketing management since joining Quantum's marketing organization
in August 1984. Before joining Quantum, Mr. Brown served in the marketing
organization at Hewlett-Packard and provided management consulting services at
Braxton Associates. Mr. Brown is also a member of the board of Digital Impact, a
publicly-held internet marketing company.
Mr. Robert J. Casale served as Group President of the Brokerage Information
Services Group of Automatic Data Processing, Inc., an information services
company, from February 1988 to October 1997. Mr. Casale also served as a
Director of Automatic Data Processing, Inc. From 1986 to February 1988, he was a
Managing Director with Kidder Peabody and Company, Inc. He is a former member of
the Board of Directors of Compression Laboratories and Tricord Systems and is a
current member of the Board of Directors of The BISYS Group, Inc., Provident
Life Insurance, Inc. and Wall Street Access.
Mr. Edward M. Esber, Jr. has served as Chairman of the Board of Solopoint,
Inc., a personal communications management products company ("Solopoint"), since
March 1998. From October 1993 to March 1998, he served as a director of
Solopoint and also served as President and Chief Executive Officer of Solopoint
from October 1995 to March 1998. He served as Chairman, President and Chief
Executive Officer of Creative Insights, Inc., a computer toys company, from
March 1994 to June 1995. From May 1993 to May 1994, he was President and Chief
Operating Officer of Creative Labs, Inc., a multimedia company. From February
1991 to the present, he has been President of the Esber Group, a consulting
firm.
Mr. Gregory W. Slayton has been President, Chief Executive Officer and a
Director of ClickAction Inc., an e-marketing services company, since December
1997. From March 1996 to July 1997, Mr. Slayton was the President, Chief
Operating Officer, and a Director of ParaGraph International, a VRML tools
provider. In August 1994, Mr. Slayton co-founded Worlds, Inc. and served as
Senior Vice President and Chief Financial Officer until November 1995. Prior to
founding Worlds, Inc., Mr. Slayton served as Vice President and Chief Financial
Officer of the Paramount Technology Group at Paramount Communications Inc. Mr.
Slayton was also previously a management consultant with McKinsey & Company for
four years. Mr. Slayton serves on the Board of Directors of ClickAction, Inc.,
inTest Corporation, NetCreations, Inc., each a public company, as well as
Opportunity International, a non-profit organization.
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<PAGE>
Board Meetings and Committees
The Board of Directors of the Company held a total of three (3) meetings
during the fiscal year ended March 31, 2000. During the fiscal year ended March
31, 2000, no director attended fewer than 75% of the meetings of the Board of
Directors and the meetings of committees, if any, upon which such director
served.
The Audit Committee of the Board of Directors currently consists of Mr.
Esber, Chairman of the Committee, Mr. Slayton and Mr. Casale. The Audit
Committee, which generally meets prior to quarterly earnings releases,
recommends engagement of the Company's independent auditors and is primarily
responsible for approving the services performed by the Company's independent
auditors and for reviewing and evaluating the Company's accounting principles
and its systems of internal accounting controls. The Audit Committee held a
total of four (4) meetings during the fiscal year ended March 31, 2000.
The Compensation Committee is currently composed of Mr. Casale, Chairman of
the Committee, Mr. Esber and Mr. Slayton. The Compensation Committee, which
generally meets in conjunction with Board meetings and as deemed necessary by
the Board of Directors, reviews and approves the Company's executive
compensation policy and makes recommendations concerning the Company's employee
benefit policies. The Compensation Committee held a total of seven (7) meetings
during the fiscal year ended March 31, 2000.
The Board of Directors does not have a nominating committee or any
committee performing such function.
Director Compensation
During the year ended March 31, 2000, each director who was not an employee
("Outside Director") received an annual retainer of $34,000 per year. Certain
directors were paid an additional $4,000 per year for chairing the Audit
Committee of the Board and $10,000 per year for chairing the Compensation
Committee of the Board. In addition, each Outside Director was paid $1,250 per
day for any Board meeting attended. Outside Directors serving on Board
committees receive $1,000 per committee meeting for meetings held on days when
there was no regularly scheduled Board meeting. Outside Directors may also
receive consulting fees for projects completed at the request of management.
Employee directors are not compensated for their service on the Board of
Directors or on committees of the Board.
Options may be granted to Outside Directors under the Company's 1996 Board
of Directors Stock Option Plan ("Director Plan"), which was approved by the
Company's stockholders at the 1996 Annual Meeting of Stockholders. The Board, in
its discretion, selects Outside Directors to whom options may be granted, the
time or times at which such options may be granted, the number of shares subject
to each grant and the period over which such options become exercisable. All
options granted to Outside Directors under the Director Plan contain the
following provisions: the exercise price per share of Common Stock is 100% of
the fair market value of the Company's Common Stock on the date the option is
granted; the term of the option may be no more than ten years from the date of
grant; and the option may be exercised only while the Outside Director remains a
director or within 90 days after the date he or she ceases to be a director of
the Company; upon a proposed liquidation or dissolution of the Company, the
options will terminate immediately prior to such action; and in the event of a
merger or sale of substantially all of the Company's assets, each option may be
assumed or an equivalent option substituted by the successor corporation. The
Board may at any time amend, alter, suspend or discontinue the Director Plan,
subject to stockholder approval in certain circumstances.
During fiscal 2000, Mr. Berkley, Mr. David Brown, Mr. Casale and Mr. Esber
each received an option to purchase 6,250 shares of HDD Common Stock at an
exercise price of $5.85 per share and an option to purchase 12,500 shares of DSS
Common Stock at an exercise price of $16.07 per share. Mr. Slayton received an
option to purchase 15,000 shares of HDD Common Stock at an exercise price of
$8.00 per share and an option to purchase 30,000 shares of DSS Common Stock at
an exercise price of $8.69 per share.
Compensation Committee Interlocks and Insider Participation
The members of the Company's Compensation Committee are Robert J. Casale,
Chairman of the Committee, Edward M. Esber, Jr. and Gregory W. Slayton. None of
the members of the Compensation Committee of the Board of
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Directors is currently, nor has any been at any time since the formation of the
Company, an officer or employee of the Company.
Required Vote
Each stockholder voting in the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of votes to which the
stockholder's shares are entitled. Alternatively, a stockholder may distribute
the stockholder's votes on the same principle among as many candidates as the
stockholder thinks fit, provided that votes cannot be cast for more than six
candidates. However, no stockholder shall be entitled to cumulate votes for a
candidate unless such candidate's name has been properly placed in nomination
according to the Company's Bylaws and notice of the intention to cumulate votes
is received at the principal executive offices of the Company at least twenty
(20), and no more than sixty (60), days prior to the Annual Meeting; provided,
however, that in the event less than thirty (30) days notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. The proxy holders may
exercise discretionary authority to cumulate votes and to allocate such votes
among management's nominees in the event that additional persons are nominated
at the Annual Meeting for election of directors.
If a quorum is present and voting, the six nominees for director receiving
the highest number of votes will be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum, but have no other legal effect under Delaware law. See
"INFORMATION CONCERNING SOLICITATION AND VOTING--Quorum; Abstentions; Broker
Non-Votes."
MANAGEMENT RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES LISTED ABOVE.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors of the Company has selected Ernst & Young LLP as the
Company's independent auditors to audit the financial statements of the Company
for the fiscal year ending March 31, 2001. The Board of Directors recommends
that stockholders vote for ratification of such appointment. In the event of a
negative vote or ratification, the Board of Directors will reconsider its
selection. A representative of Ernst & Young LLP is expected to be available at
the Annual Meeting with the opportunity to make a statement if such
representative desires to do so, and is expected to be available to respond to
appropriate questions.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING MARCH
31, 2001.
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PROPOSAL THREE
APPROVAL AND RATIFICATION OF THE ADOPTION OF THE ANNUAL INCENTIVE PLAN
FOR THE COMPANY'S CHIEF EXECUTIVE OFFICER
Under Section 162(m) of the Internal Revenue Code of 1986, as amended, for
compensation in excess of $1,000,000 paid in any year to the Company's chief
executive officer ("CEO") to be deductible by the Company, such compensation
must qualify as "performance-based," as defined in Section 162(m). The
Compensation Committee of the Board of Directors has adopted, subject to
stockholder approval, a new Annual Incentive Plan (the "Plan") for the CEO,
under which annual incentive compensation to be paid to the CEO would be
performance-based for purposes of exemption from the limitations of Section 162
(m).
The Plan is designed to reward the CEO to the extent the Company achieves
certain performance levels ("Metrics") established by the Compensation Committee
and to qualify the payments thereunder as performance-based compensation, so
that the Company may continue to receive a federal income tax deduction for the
payment of incentive bonuses to the CEO. The Metrics may include any of the
following: revenue and revenue growth, business growth, market share, operating
income, net income, earnings before interest and/or income tax, earnings per
share, cash flow, return on capital, shareholder value, total shareholder
return, market share, return on equity, before- or after-tax return on assets,
customer satisfaction indices, economic value added; and such criteria as may
relate to one or any combination of two or more of corporate, group, business
unit, division, affiliate or individual performance.
The Board has no discretion to increase payments in the Plan. The CEO may
not receive annual incentive compensation in excess of $4,100,000.
MANAGEMENT RECOMMENDS A VOTE "FOR" THE APPROVAL AND RATIFICATION OF THE
ADOPTION OF THE ANNUAL INCENTIVE PLAN FOR THE COMPANY'S CHIEF EXECUTIVE OFFICER.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation
The following table shows, as to any person serving as Chief Executive
Officer during fiscal 2000 and each of the four other most highly compensated
executive officers whose salary plus bonus exceeded $100,000 (the "Named
Executive Officers"), information concerning compensation paid for services to
the Company in all capacities during the fiscal year ended March 31, 2000, as
well as the total compensation paid to each such individual for the Company's
previous two fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation (1)
---------------------------------------- ---------------------------------------------------
Other Annual Restricted Securities Underlying All Other
Name and Fiscal Compensation Stock Options/SARs(#) Compensation
Principal Position Year Salary($) Bonus ($) ($)(2) Awards ($) HDD (3) DSS(3) ($)(4)
------------------ ---- -------- -------- ------------ ---------- --------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Michael A. Brown ................... 2000 929,365 500,000 -- 894,526(5) 160,000 320,000 5,830
President, Chief Executive 1999 791,770 275,000 -- 0 140,000 280,000 4,991
Officer and Chairman of the 1998 721,828 248,765 -- 0 100,000 200,000 3,636
Board
Richard L. Clemmer ................. 2000 543,193 288,750 75,625(6) 521,812(5) 88,001 176,000 5,951
Executive Vice President, 1999 484,111 120,000 177,583(7) 0 42,001 84,000 5,005
Finance, Chief Financial 1998 465,083 112,799 -- 0 20,000 40,000 4,782
Officer, and Secretary
W. Curt Francis (8) ................ 2000 394,863 153,000 37,500(6) 347,869(5) 48,500 97,000 5,557
Vice President, Corporate 1999 243,462 50,000 -- 0 29,001 58,000 4,831
Development
John B. Gannon (9) ................. 2000 519,231 325,000 80,250(6) 496,965(5) 138,001 276,000 5,834
President, Hard Disk Drive 1999 340,648 85,000 119,074(10) 1,002,000(11) 62,000 124,000 4,523
Group
Jerald L. Maurer (12) .............. 2000 451,232 239,250 67,500(6) 433,552(5) 65,000 130,000 5,280
Executive Vice President, 1999 120,962 -- -- 0 112,500 225,000 --
Human Resources, Real Estate
and Corporate Services
</TABLE>
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(1) The Company has not granted any stock appreciation rights and does not have
any long-term incentive plans as that term is defined in regulations
promulgated by the SEC.
(2) Other annual compensation in the form of perquisite and other personal
benefits, securities or property has been omitted in those cases where the
aggregate amount of such compensation is the lesser of either $50,000 or
10% of the total annual salary and bonus reported for such executive
officer.
(3) The Company's common stock was traded in the over-the-counter market under
the Nasdaq symbol QNTM for the period beginning December 10, 1982, the date
of the Company's initial public offering, through August 3, 1999. Effective
as of the close of business on August 3, 1999, following approval by the
Company's shareholders of the tracking stock proposal on July 23, 1999,
each authorized share of QNTM common stock was exchanged for one share of
DSS Common Stock and one-half share of HDD Common Stock (the
"Recapitalization"). On August 4, 1999, DSS Common Stock and HDD Common
Stock began trading on the New York Stock Exchange under the symbols DSS
and HDD, respectively. These numbers were calculated as if the
Recapitalization occurred prior to the time these options were granted.
(4) Represents amounts contributed by the Company to the defined contribution
plan approved under Internal Revenue Code Section 401(k) and maintained by
the Company for each executive officer, except as expressly indicated
otherwise.
(5) The aggregate value is based on $8 11/16 per share of DSS Common Stock and
$8 per share of HDD Common Stock, the fair market value of the DSS Common
Stock and HDD Common Stock, respectively, on the date of grant. The vesting
for these grants is as follows: 50% of the shares vest on January 1, 2001
and 50% of the shares vest on January 1, 2002. Shares of restricted stock
are entitled to receive dividends payable on Common Stock when, as and if
declared by the Board of Directors of
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<PAGE>
the Company. Cash dividends have not been paid on Common Stock. The number of
shares of the restricted stock grants to the Named Executive Officers in fiscal
2000, and their aggregate value as of March 31, 2000, the Company's fiscal year
end, are set forth in the following table. The aggregate value is based on $11
15/16 per share of DSS Common Stock and $11 1/4 per share of HDD Common Stock,
the fair market value of the DSS Common Stock and HDD Common Stock,
respectively, on March 31, 2000.
<TABLE>
<CAPTION>
HDD Common Stock DSS Common Stock
-----------------------------------------------------------------------
Number of Value at Fiscal Number of Value at Fiscal
Shares Year End Shares Year End
--------- --------------- --------- ---------------
<S> <C> <C> <C> <C>
Michael A. Brown ......................... 35,294 $396,705 70,588 $841,938
Richard L. Clemmer ....................... 20,588 231,409 41,177 491,139
W. Curt Francis .......................... 13,725 154,269 27,451 327,422
John B. Gannon ........................... 19,608 220,394 39,216 467,749
Jerald L. Maurer ......................... 17,059 191,743 34,117 406,931
</TABLE>
(6) Represents loan forgiveness.
(7) Represents reimbursement of expenses associated with relocation to
Milpitas, California of $43,833 and loan forgiveness of $133,750.
(8) Mr. Francis joined the Company on May 22, 1998.
(9) Mr. Gannon joined the Company on May 15, 1998.
(10) Represents reimbursement of expenses associated with relocation to
Milpitas, California.
(11) Mr. Gannon's restricted stock grant in fiscal 1999, calculated as if the
Recapitalization occurred prior to such time, consisted of 50,000 shares of
DSS Common Stock and 25,000 shares of HDD Common Stock, that each vest as
follows: 55% of the shares vested on May 1, 1999, 20% of the shares vested
on May 1, 2000 and 25% of the shares vest on May 1, 2001. The aggregate
value is based on $17.98 per share of DSS Common Stock and $6.55 per share
of HDD Common Stock, the fair market value of the DSS Common Stock and HDD
Common Stock, respectively, on the date of grant. Shares of restricted
stock are entitled to receive dividends payable on Common Stock when, as
and if declared by the Board of Directors of the Company. Cash dividends
have not been paid on Common Stock. The aggregate value of Mr. Gannon's
restricted stock grant in fiscal 1999 as of March 31, 2000, the Company's
fiscal year end, is $877,375, based on $11 15/16 per share of DSS Common
Stock and $11 1/4 per share of HDD Common Stock, the fair market value of
the DSS Common Stock and HDD Common Stock, respectively, as of March 31,
2000.
(12) Mr. Maurer joined the Company on November 2, 1998.
-9-
<PAGE>
Stock Option Grants and Exercises
The following tables show, as to each Named Executive Officer, information
concerning stock options granted during the fiscal year ended March 31, 2000.
OPTION GRANTS IN LAST FISCAL YEAR
HDD COMMON STOCK
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------- Potential Realizable
Number of Percent of Value at Assumed
Securities Total HDD Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Terms(2)
Granted Employees in Price Expiration ------------------------
Name (#)(1) Fiscal Year ($/share) Date 5% ($) 10% ($)
---- ---------- ------------ --------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Brown ................. 60,000(3) 0.87% 5.85 6/04/09 220,895 559,791
100,000(4) 1.45% 8.00 1/11/10 503,115 1,274,994
Richard L. Clemmer ............... 38,001(5) 0.55% 5.85 6/04/09 139,904 354,544
50,000(4) 0.73% 8.00 1/11/10 251,558 637,497
W. Curt Francis .................. 18,500(3) 0.27% 5.85 6/04/09 68,109 172,602
30,000(4) 0.44% 8.00 1/11/10 150,935 382,498
John B. Gannon ................... 63,001(6) 0.92% 5.85 6/04/09 231,943 587,790
75,000(4) 1.09% 8.00 1/11/10 377,337 956,245
Jerald L. Maurer ................. 15,000(3) 0.22% 5.85 6/04/09 55,224 139,948
50,000(4) 0.73% 8.00 1/11/10 251,558 637,497
</TABLE>
(1) The exercise price of each option is determined by the Compensation
Committee of the Board of Directors and in fiscal 2000 was not less than
100% of the fair market value of the HDD Common Stock on the date of grant.
The options expire not more than ten years from the date of grant, and may
be exercised only while the optionee provides services to the Company or
within such period of time following termination of services as is
determined by the Compensation Committee. These amounts reflect the
Recapitalization as if it had occurred at the beginning of the fiscal year.
(2) Potential realizable value is based on an assumption that the stock price
of the HDD Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the ten-year option term.
These numbers are calculated based on the regulations promulgated by the
SEC based on an arbitrarily assumed annualized compound rate of
appreciation of the market price of 5% and 10%, less the exercise price,
from the date the option was granted to the end of the option term. Actual
gains, if any, on option exercises are dependent on the future performance
of the HDD Common Stock.
(3) These options vest monthly over the four year period beginning April 1,
1999.
(4) These options vest monthly over the two year period beginning January 1,
2000.
(5) 25,501 of these options vest monthly over the four year period beginning
April 1, 1999. Of the remaining options, 6,250 vest on April 1, 2004 and
6,250 vest on April 1, 2005, subject to acceleration if performance-based
objectives are met.
(6) 25,501 of these options vest monthly over the four year period beginning
April 1, 1999. Of the remaining options, 18,750 vest on April 1, 2004 and
18,750 vest on April 1, 2005, subject to acceleration if performance-based
objectives are met.
-10-
<PAGE>
DSS COMMON STOCK
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------- Potential Realizable
Number of Percent of Value at Assumed
Securities Total DSS Annual Rates of Stock
Underlying Options Price Appreciation
Options Granted to Exercise for Option Terms(2)
Granted Employees in Price Expiration -------------------------
Name (#)(1) Fiscal Year ($/share) Date 5% ($) 10% ($)
---- ------ ----------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
Michael A. Brown ................ 120,000(3) 1.15% 16.07 6/04/09 1,212,985 3,073,942
200,000(4) 1.92% 8.69 1/11/10 1,092,704 2,769,128
Richard L. Clemmer .............. 76,000(5) 0.73% 16.07 6/04/09 768,224 1,946,830
100,000(4) 0.96% 8.69 1/11/10 546,352 1,384,564
W. Curt Francis ................. 37,000(3) 0.36% 16.07 6/04/09 374,004 947,799
60,000(4) 0.58% 8.69 1/11/10 327,811 830,738
John B. Gannon .................. 126,000(6) 1.21% 16.07 6/04/09 1,273,634 3,227,638
150,000(4) 1.44% 8.69 1/11/10 819,528 2,076,846
Jerald L. Maurer ................ 30,000(3) 0.29% 16.07 6/04/09 303,246 768,485
100,000(4) 0.96% 8.69 1/11/10 546,352 1,384,564
</TABLE>
----------
(1) The exercise price of each option is determined by the Compensation
Committee of the Board of Directors and in fiscal 2000 was not less than
100% of the fair market value of the DSS Common Stock on the date of grant.
The options expire not more than ten years from the date of grant, and may
be exercised only while the optionee provides services to the Company or
within such period of time following termination of services as is
determined by the Compensation Committee. These amounts reflect the
Recapitalization as if it had occurred at the beginning of the fiscal year.
(2) Potential realizable value is based on an assumption that the stock price
of the DSS Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of the ten-year option term.
These numbers are calculated based on the regulations promulgated by the
SEC based on an arbitrarily assumed annualized compound rate of
appreciation of the market price of 5% and 10%, less the exercise price,
from the date the option was granted to the end of the option term. Actual
gains, if any, on option exercises are dependent on the future performance
of the DSS Common Stock.
(3) These options vest monthly over the four year period beginning April 1,
1999.
(4) These options vest monthly over the two year period beginning January 1,
2000.
(5) 51,000 of these options vest monthly over the four year period beginning
April 1, 1999. Of the remaining options, 12,500 vest on April 1, 2004 and
12,500 vest on April 1, 2005, subject to acceleration if performance-based
objectives are met.
(6) 51,000 of these options vest monthly over the four year period beginning
April 1, 1999. Of the remaining options, 37,500 vest on April 1, 2004 and
37,500 vest on April 1, 2005, subject to acceleration if performance-based
objectives are met.
-11-
<PAGE>
The following table provides information regarding options exercised by
Named Executive Officers during the fiscal year ended March 31, 2000 and options
held by them at fiscal year end.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of
Securities Underlying Unexercised Options Held Value of Unexercised
at Fiscal Year-End (#) In-the-Money
---------------------------------------------- Options Held at Fiscal
Shares Acquired Exercisable Unexercisable Year-End ($)(2)
Exercise (#) Value ---------------------- ----------------- --------------------------
Name HDD DSS ($)(1) HDD DSS HDD DSS Exercisable Unexercisable
---- --- --- ------ --- --- --- --- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Michael A. Brown ... 160,005 138,009 2,654,575 453,420 1,088,840 250,001 500,003 5,694,171 1,693,388
Richard L. Clemmer . -- -- -- 144,504 289,011 127,973 255,939 2,113,565 1,122,807
W. Curt Francis .... -- -- -- 18,594 37,185 58,907 117,815 103,281 426,659
John B. Gannon ..... -- -- -- 14,842 29,686 185,159 370,314 106,241 1,260,224
Jerald L. Maurer ... -- -- -- 42,759 85,520 34,741 269,480 231,265 887,892
</TABLE>
----------
(1) Total value realized is calculated based on fair market value of the HDD
Common Stock or DSS Common Stock, as the case may be, at the close of
business on the date of exercise, less the exercise price.
(2) Total value of unexercised options based on $11 15/16 per share of DSS
Common Stock and $11 1/4 per share of HDD Common Stock, the fair market
value of the DSS Common Stock and HDD Common Stock, respectively, as of
March 31, 2000.
Employment Terms, Termination of Employment and Change-In-Control Arrangements
The Company has entered into agreements (the "Agreements") with its certain
officers, including the Named Executive Officers, whereby in the event there is
a "change of control" of the Company, which is defined in the Agreements to
include, among other things, a merger or sale of assets of the Company or a
reconstitution of the Company's Board of Directors, the exercisability and
vesting of all stock-based compensation awards granted to the officers shall be
accelerated. Under the Agreements, upon a change of control, 50% of the unvested
shares or options to purchase shares held by an officer become exercisable and
the remaining 50% of such unvested shares or options to purchase shares become
vested and exercisable upon the earlier of the date of the first anniversary of
the change of control or upon such officer's "Involuntary Termination" after the
change of control. Under the Agreements, "Involuntary Termination" is defined to
include, among other things, any termination without "cause" by the Company of
the employee without such employee's express written consent or a significant
reduction of or addition to the employee's duties. Additionally, such officers
receive twelve (12) months severance pay and continued health and medical
benefits during the severance period. The purpose of the Agreements is to assure
that the Company will have the continued dedication of its officers by providing
such individuals with certain compensation arrangements, competitive with those
of other corporations, to provide sufficient incentive to the individuals to
remain with the Company, to enhance their financial security, as well as protect
them against unwarranted termination in the event of a change of control.
-12-
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Introduction
The Compensation Committee of the Board of Directors (the "Committee") for
fiscal 2000 was made up of Outside Directors of the Company. The Committee
generally determines base salary levels and determines targets under the
All-Inclusive Bonus Plan ("AIB Plan") for executive officers of the Company at
the start of the fiscal year. Each year the Committee evaluates the Company's
compensation practices and equity programs based on comparisons with other
companies in the industry, and compares the Company's performance to a group of
peer companies in making determinations with respect to compensation plans.
Compensation Philosophy
The Company's executive compensation policies are designed to attract and
retain experienced and qualified executive officers critical to the success of
the Company, and to provide incentive for such individuals to maximize the
Company's corporate performance and accomplishment of strategic objectives. The
target level of an executive officer's total compensation package is intended to
be competitive at the 50th percentile in average performance years, above
average when the Company's performance is above average, below average when the
Company's performance is below average, compared to executives in the Company's
industry, taking into account corporate performance and individual contribution.
With respect to Section 162(m) of the Code (which limits deductibility of
executive compensation exceeding $1 million per individual per year unless
certain conditions are met), the Company has in the past qualified its Chief
Executive Officer's Annual Incentive Plan and the 1993 Long-Term Incentive Plan
for an exemption from Section 162(m). In addition, stockholder approval of the
Chief Executive Officer's Annual Incentive Plan is being sought at this meeting
in order to meet an exemption from Section 162(m). The Company will continue to
evaluate its other compensation programs in light of Section 162(m), although it
has no current plans to qualify any of its other compensation programs for
exemptions.
Compensation Plans
The principal components of executive compensation are described below:
Base Compensation. Base salaries for executive officers are set by the
Committee, in consultation with the Chief Executive Officer, after considering
factors such as position and responsibility, the competitive environment,
corporate performance and overall experience and contribution levels of the
individuals. The Company obtains competitive salary information from independent
survey sources of peer companies, which includes both direct competitors of the
Company and other companies in competition for similar executive talent. These
survey data are analyzed by independent consultants and the Company to provide
necessary information to the Committee.
All-Inclusive Bonus Plan. The AIB Plan provides for cash bonuses to be paid
to all employees of the Company subject to the Company meeting certain
performance targets set by the Committee at the beginning of the fiscal year.
The purposes of the AIB Plan are to (i) tie compensation to achievement of
performance measures that provide an optimum return on total capital in the
current fiscal year, (ii) achieve business-specific operational objectives that
drive shareholder value and (iii) ensure that payments are targeted to provide a
competitive level of compensation, taking into account the Company's performance
against its peers in the high technology industry. In fiscal 2000, performance
was largely at or above the AIB Plan threshold level. The Committee approved
pool available for executive officer bonuses was at the target level determined
by the AIB Plan.
-13-
<PAGE>
Long-Term Incentive Compensation. A key component of the total compensation
package for the Company's executive officers is in the form of stock option
awards. The Company's 1993 Long-Term Incentive Plan provides for long-term
incentive compensation for employees of the Company, including executive
officers. An important objective of the 1993 Long-Term Incentive Plan is to
align the interest of executive officers with those of stockholders by providing
significant equity interest in the Company, thereby providing incentive for such
executive officers to maximize stockholder value. Option awards directly tie
executive compensation to the performance of the Company's stock. The Committee
is responsible for determining, subject to the terms of such plan, the
individuals to whom grants should be made, the timing of grants, the exercise or
purchase price per share and the number of shares subject to each grant. Grants
are determined based on the individual's position in the Company, level of
performance and comparative market data. The option program also utilizes
vesting periods to encourage retention of executive officers and reward
long-term commitment to the Company.
Company Performance and Chief Executive Officer Compensation
The process of determining the compensation for the Company's Chief
Executive Officer and the factors taken into consideration in such determination
are generally the same as the process and factors used in determining the
compensation of all of the Company's executive officers. During 2000, the
Company increased the Chief Executive Officer's base salary based on an analysis
of salaries paid by peer companies and the Chief Executive Officer's individual
performance. In fiscal year 2000, incentive payment was made from the Chief
Executive Officer's Annual Incentive Plan based upon the Company meeting its
return on total capital threshold. The Committee also approved a discretionary
bonus for fiscal 2000 to reflect the Chief Executive Officer's performance in
achieving his individual objectives to better position the Company for future
growth and profitability.
MEMBERS OF THE COMPENSATION COMMITTEE
Robert J. Casale
Edward M. Esber, Jr.
Gregory W. Slayton
THE FOREGOING COMPENSATION COMMITTEE REPORT SHALL NOT BE DEEMED TO BE
"SOLICITING MATERIAL" OR TO BE FILED WITH THE SEC, NOR SHALL SUCH INFORMATION BE
INCORPORATED BY REFERENCE INTO ANY PAST OR FUTURE FILING UNDER THE SECURITIES
ACT OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY
INCORPORATES IT BY REFERENCE INTO SUCH FILING.
-14-
<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total return to stockholders of
the HDD Common Stock and DSS Common Stock at March 31, 2000 since August 4,
1999, the date the stocks first began trading, to the cumulative total return
over such period of (i) the NASDAQ Stock Market (U.S.) Index, and (ii) the Chase
H & Q Computer Hardware Index. The graph assumes the investment of $100 on
August 4, 1999 in DSS Common Stock, HDD Common Stock and each of such indices
and reflects the change in the market price of the Company's Common Stock
relative to the noted indices at October 31, 1999, and December 31, 1999. The
performance shown is not necessarily indicative of future price performance.
CUMULATIVE TOTAL RETURN
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL]
<TABLE>
<CAPTION>
8/4/99 9/99 12/99 3/00
------ ------ ------ ------
<S> <C> <C> <C> <C>
QUANTUM CORP. - HARD DISK DRIVE GROUP 100.00 110.19 102.79 166.67
QUANTUM CORP. - DLT & STORAGE SYSTEMS GROUP 100.00 73.53 79.08 62.42
NASDAQ STOCK MARKET (U.S.) 100.00 108.28 159.95 179.62
CHASE H & Q COMPUTER HARDWARE 100.00 109.97 160.37 182.59
</TABLE>
THE INFORMATION CONTAINED IN THE STOCK PERFORMANCE GRAPH SHALL NOT BE
DEEMED TO BE "SOLICITING MATERIAL" OR TO BE FILED WITH THE SEC, NOR SHALL SUCH
INFORMATION BE INCORPORATED BY REFERENCE INTO ANY FUTURE FILING UNDER THE
SECURITIES ACT OR THE EXCHANGE ACT, EXCEPT TO THE EXTENT THE COMPANY
SPECIFICALLY INCORPORATES IT BY REFERENCE INTO SUCH FILING.
-15-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 6, 2000 certain information with
respect to the beneficial ownership of the Common Stock by (i) each person known
by the Company to be the beneficial owner of more than 5% of the outstanding
shares of DSS Common Stock or HDD Common Stock, (ii) each of the Company's
directors, (iii) each of the Named Executive Officers and (iv) all current
directors and executive officers as a group.
<TABLE>
<CAPTION>
Number of DSS Approximate Number of HDD Approximate
Shares Percentage of Shares Percentage of
Beneficially DSS Shares Owned Beneficially HDD Shares
Name Owned (1) (2) Owned (1) Owned (2)
---- ------------- ---------------- ------------- -------------
<S> <C> <C> <C> <C>
Lazard Freres & Co. LLC .............................. -- -- 4,293,194(3) 5.3
30 Rockefeller Plaza
New York, NY 10020
Mellon Financial Corp. ............................... -- -- 8,915,145(3) 11.0
One Mellon Bank Center
500 Grant Street
Pittsburgh PA, 15258
Sanford C. Bernstein & Co., Inc. ..................... 22,877,409(3) 15.5 11,489,411(3) 14.1
767 Fifth Avenue
New York, NY 10153
Wellington Management Co. LLP ........................ -- -- 10,929,689(3) 13.5
75 State Street
Boston, MA 02109
Capital Research ..................................... 9,286,110(3) 6.3 -- --
333 South Hope Street
Los Angeles, CA 90071
FMR Corp. ............................................ 8,538,433(3) 5.8 -- --
82 Devonshire Street
Boston, MA 02109-3014
Michael Brown ........................................ 1,218,007(4) * 518,004(4) *
Stephen M. Berkley ................................... 274,791(4) * 137,395(4) *
Richard L. Clemmer ................................... 437,497(5) * 218,748(5) *
Robert J. Casale ..................................... 105,000(4) * 52,500(4) *
David A. Brown ....................................... 93,958(4) * 46,979(4) *
John B. Gannon ....................................... 114,061(6) * 57,030(6) *
Edward M. Esber, Jr .................................. 8,958(4) * 4,479(4) *
Jerald L. Maurer ..................................... 137,708(4) * 68,853(4) *
Gregory W. Slayton ................................... 1,000 * 500 *
W. Curt Francis ...................................... 65,840(7) * 32,921(7) *
All directors and executive officers as a group
(11 persons)......................... 2,456,820(8) 1.6 1,137,409(8) 1.4
</TABLE>
----------
* Less than 1%.
(1) Except pursuant to applicable community property laws or as indicated in
the footnotes to this table, to the Company's knowledge, each stockholder
identified in the table possesses sole voting and investment power with
respect to all shares of DSS Common Stock and HDD Common Stock shown as
beneficially owned by such stockholder.
(2) Applicable percentage ownership is based on 147,340,799 shares of DSS
Common Stock and 81,241,515 shares of HDD Common Stock outstanding as of
July 6, 2000. Beneficial ownership is determined in accordance with the
rules of the SEC, based on factors including voting and investment power
with respect to shares. Shares of Common Stock subject to options currently
exercisable, or exercisable within 60 days after July 6, 2000, are
considered beneficially owned by the holder, but such shares are not deemed
outstanding for computing the percentage ownership of any other person.
(3) Based on the most recent public information available to the Company as of
July 6, 2000.
(4) Represents DSS and HDD stock options which were exercisable at July 6, 2000
or within sixty (60) days thereafter.
(5) Represents 62,236 shares of DSS Common Stock, 31,118 shares of HDD Common
Stock, 375,261 shares subject to DSS stock options and 187,630 shares
subject to HDD stock options, each of which options were exercisable at
July 6, 2000 or within sixty (60) days thereafter.
-16-
<PAGE>
(6) Represents 37,500 shares of DSS Common Stock, 18,750 shares of HDD Common
Stock, 76,561 shares subject to DSS stock options and 38,280 shares subject
to HDD stock options, each of which options were exercisable at July 6,
2000 or within sixty (60) days thereafter.
(7) Represents 1,780 shares of DSS Common Stock, 890 shares of HDD Common
Stock, 64,060 shares subject to DSS stock options and 32,031 shares subject
to HDD stock options, each of which options were exercisable at July 6,
2000 or within sixty (60) days thereafter.
(8) Represents 102,516 shares of DSS Common Stock, 51,258 shares of HDD Common
Stock, 2,354,304 shares subject to DSS stock options and 1,086,151 shares
subject to HDD stock options, each of which options were exercisable at
July 6, 2000 or within sixty (60) days thereafter.
CERTAIN TRANSACTIONS
The Company issued a forgivable loan to Richard L. Clemmer on April 28,
1998, in the amount of $250,000 at an annual interest rate of 7% and $67,500 of
such loan was outstanding on July 6, 2000. The Company issued a forgivable loan
to W. Curt Francis on May 21, 1998, in the amount of $150,000 at an annual
interest rate of 7% and $75,000 of such loan was outstanding on July 6, 2000.
The Company issued a forgivable loan to John B. Gannon on May 15, 1998, in the
amount of $300,000 at an annual interest rate of 7% and $150,000 of such loan
was outstanding on July 6, 2000. The Company issued a forgivable loan to Jerald
L. Maurer on December 2, 1998, in the amount of $250,000 at an annual interest
rate of 8% and $182,500 of such loan was outstanding on July 6, 2000.
The Company has entered into indemnification agreements with its executive
officers, directors and certain significant employees containing provisions that
are in some respects broader than the specific indemnification provisions
contained in the General Corporation Law of Delaware. These agreements provide,
among other things, for indemnification of the executive officers, directors and
certain significant employees in proceedings brought by third parties and in
stockholder derivative suits. Each agreement also provides for advancement of
expenses to the indemnified party.
OTHER MATTERS
The Company knows of no other matters to be submitted at the Meeting. Any
proposal that a stockholder intends to submit for the Meeting must be received
by the Secretary of the Company not later than the close of business on the
tenth day following the mailing date of this Notice. Any such submission must
include the information specified in the Company's Bylaws. If any other matters
properly come before the Meeting, it is the intention of the persons named in
the enclosed form of Proxy to vote the shares they represent as the Board of
Directors may recommend.
THE BOARD OF DIRECTORS
Dated: July 21, 2000
-17-
<PAGE>
[Quantum Logo]
[Stock Class]
QUANTUM CORPORATION
C/O PROXY SERVICES
P.O. BOX 9141
FARMINGDALE, NY 11735
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Have your
proxy card in hand when you call. You will be prompted to enter your 12-digit
Control Number which is located below and then follow the simple instructions
the Vote Voice provides you.
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information. Have your proxy card in hand when you access the web
site. You will be prompted to enter your 12-digit Control Number which is
located below to obtain your records and create an electronic voting instruction
form.
VOTE BY MAIL -
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return to Quantum Corporation c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
--------------------------------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
--------------------------------------------------------------------------------
QUANTUM CORPORATION
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1, 2 AND 3
Vote On Directors
1. Proposal to elect Stephen M. Berkley, David A. Brown, Michael A.
Brown, Robert J. Casale, Edward M. Esber, Jr. and Gregory W. Slayton
to the Board of Directors.
For Withhold For All
All All Except
[_] [_] [_]
To withhold authority to vote, mark "For All Except" and write the
nominee's number on the line below.
---------------------------------------------------------------------------
Vote on Proposals
2. Proposal to ratify the appointment of Ernst & Young LLP as Independent
auditors for the fiscal year ending March 31, 2001.
For Against Abstain
[_] [_] [_]
3. Proposal to approve and ratify the adoption of the Annual Incentive
Plan for the Chief Executive Officer.
[_] [_] [_]
4. In their discretion, upon such other matters that may properly
come before the meeting or any adjournment or adjournments thereof.
[_] [_] [_]
The shares represented by this proxy when properly executed will be voted
in the manner directed herein by the undersigned Stockholder(s). If no
direction is made, this proxy will be voted FOR items 1, 2 and 3. If any
other matters properly come before the meeting, or if cumulative voting is
required, the person named in this proxy will vote in their discretion.
-----------------------------------------
Signature [PLEASE SIGN WITHIN BOX] DATE
-----------------------------------------
Signature (Joint Owners) DATE
<PAGE>
--------------------------------------------------------------------------------
QUANTUM CORPORATION
Annual Meeting of Stockholders - August 22, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder(s) of Quantum Corporation, a Delaware
Corporation, hereby acknowledge(s) receipt of the Proxy Statement dated July 21,
2000, and hereby appoint(s) Michael A. Brown and Richard L. Clemmer, and each of
them, proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Stockholders of Quantum Corporation, to be held August 22,
2000 at 11:00 a.m., Pacific Standard Time, at Quantum Corporation, 500 McCarthy
Boulevard, Building 2, Milpitas, California 95035, and at any adjournment or
adjournments thereof, and to vote (including cumulatively, if required) all
shares of Common Stock which the undersigned would be entitled to vote if then
and there personally present, on all matters set forth on the reverse side:
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE.
(Continued, and to be signed and dated, on the reverse side.)
