<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule
240.14a-12
ADAPTEC, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(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:
----------------------------------------------------------
(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:
----------------------------------------------------------
(4) Date Filed:
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</TABLE>
<PAGE>
[LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 24, 2000
------------------------
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Adaptec, Inc. (the "Company"), a Delaware corporation, will be held on
August 24, 2000 at 10:00 a.m., local time, at the Company's office located at
801 South Milpitas Boulevard, Milpitas, California 95035, for the following
purposes:
1. To elect the following directors to serve for the ensuing year and until
their successors are elected: Laurence B. Boucher; Carl J. Conti; John
East; Ilene H. Lang; Robert J. Loarie; B.J. Moore; W. Ferrell Sanders;
Robert N. Stephens; and Phillip E. White.
2. To approve the Company's 2000 Director Option Plan and the reservation
for issuance thereunder of 1,000,000 shares of Common Stock.
3. To ratify and approve the appointment of PricewaterhouseCoopers LLP as
the independent public accountants of the Company for the fiscal year
ending March 31, 2001.
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on June 26, 2000 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to deliver your proxy by telephone or the Internet or to complete, sign
and return the enclosed proxy card as promptly as possible in the postage-
prepaid envelope enclosed for that purpose. Any stockholder attending the Annual
Meeting may vote in person even if he or she returned a proxy.
By Order of the Board of Directors
Henry P. Massey, Jr.
SECRETARY
Milpitas, California
July 14, 2000
YOUR VOTE IS IMPORTANT
To assure your representation at the Annual Meeting, you are requested to
deliver your proxy by telephone or the Internet or to complete, sign and
date the enclosed proxy as promptly as possible and return it in the
enclosed envelope, which requires no postage if mailed in the United States.
<PAGE>
ADAPTEC, INC.
----------------
PROXY STATEMENT
---------------------
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Adaptec, Inc. (the "Company") for use at the Annual Meeting of Stockholders to
be held August 24, 2000 at 10:00 a.m., local time, or at any adjournment or
postponement thereof, for the purposes set forth in this Proxy Statement and in
the accompanying Notice of Annual Meeting of Stockholders. The Annual Meeting
will be held at the Company's office located at 801 South Milpitas Boulevard,
Milpitas, California 95035. The Company's telephone number at that location is
(408) 945-8600.
These proxy solicitation materials were mailed on or about July 14, 2000 to
all stockholders entitled to vote at the Annual Meeting.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on June 26, 2000 are
entitled to notice of and to vote at the Annual Meeting. As of June 26, 2000,
99,124,506 shares of the Company's Common Stock were issued and outstanding. No
shares of the Company's Preferred Stock were outstanding.
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 ChaseMellon Shareholder
Services, L.L.C., Attention: Paul Collins, Inspector of Elections, at
235 Montgomery Street, 23rd Floor, San Francisco, California 94104, a written
notice of revocation or a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person. The mere presence at the
Annual Meeting of the stockholder who has appointed a proxy will not revoke the
prior appointment. If not revoked, the proxy will be voted at the Annual Meeting
in accordance with the instructions indicated on the proxy card, or if no
instructions are indicated, will be voted FOR the slate of directors described
herein, FOR Proposals Two and Three, and as to any other matter that may
properly be brought before the Annual Meeting, in accordance with the judgment
of the proxy holders.
VOTING AND SOLICITATION
Each stockholder is entitled to one vote for each share of Common Stock on
all matters presented at the Annual Meeting. Stockholders do not have the right
to cumulate their votes in the election of directors. Most stockholders have a
choice of voting over the Internet, by telephone or by using a traditional proxy
card. Check your proxy or voting instruction card to see which options are
available to you. Voting instructions are included on the proxy or voting
instruction card.
This solicitation of proxies is made by the Company, and all costs
associated with soliciting proxies will be borne by the Company. The Company has
retained the services of ChaseMellon Shareholder Services, L.L.C. to aid in the
solicitation of proxies from brokers, bank nominees and other institutional
owners. The Company estimates that it will pay ChaseMellon Shareholder
Services, L.L.C. a fee not to exceed $9,500 for its services and will reimburse
them for certain out-of-pocket expenses that are usual and proper. In addition,
the Company will reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners.
2
<PAGE>
Proxies may be solicited by certain of the Company's directors, officers and
regular employees, without additional compensation, personally or by telephone,
facsimile or telegram.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The required quorum for the transaction of business at the Annual Meeting is
a majority of the shares of Common Stock issued and outstanding on the record
date. All shares represented at the meeting, whether in person or by a general
or limited proxy, will be counted for the purpose of establishing a quorum.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions (including "Withheld"), the Company
believes that abstentions should be counted for purposes of determining both
(i) the presence or absence of a quorum for the transaction of business and
(ii) the total number of shares present and entitled to vote ("Votes Cast") with
respect to a proposal (other than the election of directors). In the absence of
controlling precedent to the contrary, the Company intends to treat abstentions
in this manner. Accordingly, abstentions will have the same effect as a vote
against the proposal.
Under current Delaware case law, while broker non-votes (i.e. the votes of
shares held of record by brokers as to which the underlying beneficial owners
have given no voting instructions) should be counted for purposes of determining
the presence or absence of a quorum for the transaction of business, broker
non-votes should 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. Accordingly, the Company intends to treat broker non-votes in this
manner. Thus, a broker non-vote will make a quorum more readily obtainable, but
the broker non-vote will not otherwise affect the outcome of the voting on a
proposal.
STOCKHOLDER NOMINATIONS AND PROPOSALS
The Company's Bylaws provide that only persons nominated by or at the
direction of the Board of Directors or by a stockholder who has given timely
written notice to the Secretary of the Company prior to the meeting will be
eligible for election as directors. In all cases, to be timely, notice must be
received by the Company not less than twenty (20) days prior to the meeting;
provided, however, if fewer than thirty (30) days notice or prior public
disclosure of the meeting date is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the tenth day
following the day on which such notice was mailed or such public disclosure was
made. In the notice, the stockholder must provide (a) as to each person, whom
the stockholder proposes to nominate for election as a director: (i) the name,
age, business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of shares of
the corporation which are beneficially owned by such person, (iv) any other
information relating to such person that is required by law to be disclosed in
solicitations of proxies for election of directors; and (b) as to the
stockholder giving the notice: (i) the name and address, as they appear on the
Company's books, of such stockholder, (ii) the class and number of shares of the
Company which are beneficially owned by such stockholder, and (iii) a
description of all arrangements or understandings between such stockholder and
each nominee and any other person or persons (naming such person or persons)
relating to the nomination.
The Company's Bylaws also provide that all business which can be conducted
at the meeting must be properly brought before the meeting. To be properly
brought before an annual meeting, business must be: (a) as specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the Board of Directors, (b) otherwise properly brought before the meeting by or
at the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder. Business to be brought before the meeting
by a stockholder shall not be considered properly brought if the stockholder has
not given timely notice thereof in writing to the Secretary of the Company. To
be timely, a stockholder's notice must be delivered to the principal executive
offices of the Company not less than
3
<PAGE>
forty five (45) days prior to the date on which the Company first mailed proxy
materials for the prior year's annual meeting; PROVIDED, HOWEVER, that if the
Company's annual meeting of stockholders occurs on a date more than thirty
(30) days earlier or later than the Company's prior year's annual meeting, then
the Company's Board of Directors shall determine a date a reasonable period
prior to the Company's annual meeting of stockholders by which date the
stockholders notice must be delivered and publicize such date in a filing
pursuant to the Securities Exchange Act of 1934, as amended, or via press
release. Such publication shall occur at least ten (10) days prior to the date
set by the Board of Directors. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting: (i) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address of the stockholder proposing such business,
(iii) the class and number of shares of the Company, which are beneficially
owned by the stockholder, (iv) any material interest of the stockholder in such
business, and (v) any other information that is required by law to be provided
by the stockholder in his capacity as proponent of a stockholder proposal.
DEADLINES FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Stockholders of the Company are entitled to present proposals for
consideration at forthcoming stockholder meetings provided that they comply with
the proxy rules promulgated by the Securities and Exchange Commission and the
Bylaws of the Company. Stockholders wishing to present a proposal at the
Company's 2001 Annual Stockholder Meeting must submit such proposal to the
Company by March 16, 2001 if they wish for it to be eligible for inclusion in
the proxy statement and form of proxy relating to that meeting. In addition,
under the Company's Bylaws, a stockholder wishing to make a proposal at the 2001
Annual Stockholder Meeting must submit such a proposal to the Company prior to
May 30, 2001.
4
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A board of nine directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's nine nominees named below, all of whom are presently directors
of the Company. John G. Adler, a current member of the Board of Directors, will
not stand for reelection. Proxies cannot be voted for a greater number of
persons than the number of nominees named. If any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting, the
proxies will be voted for any nominee designated by the present Board of
Directors to fill the vacancy. Management has no reason to believe that any of
the nominees will be unable or unwilling to serve if elected. If additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such manner as will assure the election of
as many of the nominees listed below as possible. In this event, the specific
nominees to be voted for will be determined by the proxy holders. The term of
office of each person elected as a director will continue until the next Annual
Meeting of Stockholders or until his or her successor has been elected and
qualified.
All nominees are presently directors of the Company and were last elected at
the Annual Meeting of Stockholders held on September 9, 1999.
The names of the nominees, their ages as of the date of this Proxy Statement
and certain information about them are set forth below:
<TABLE>
<CAPTION>
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
--------------- -------- ---------------------------------------------------- --------
<S> <C> <C> <C>
Laurence B. Boucher............ 57 President and Chief Executive Officer of 1981
Alacritech, Inc., a company engaged in developing
and manufacturing high speed network interface
devices; Chairman of the Company's Board of
Directors
Carl J. Conti.................. 62 Independent management consultant 1995
John East...................... 55 Chief Executive Officer and director of Actel 1995
Corporation, a manufacturer of field programmable
gate arrays
Ilene H. Lang.................. 56 Independent management consultant 1997
Robert J. Loarie............... 57 Managing Director of Morgan Stanley Dean 1981
Witter & Co., a diversified investment firm
B.J. Moore..................... 63 Independent management consultant 1984
W. Ferrell Sanders............. 63 Venture partner of Alloy Ventures, a venture capital 1982
and investment management firm
Robert N. Stephens............. 54 President and Chief Executive Officer of the Company 1998
Phillip E. White............... 57 Independent marketing consultant 1994
</TABLE>
Except as set forth below, each of the nominees has been engaged in his or
her principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
MR. BOUCHER has, since March 1997, served as President and Chief Executive
Officer of Alacritech, Inc., a company engaged in the development and
manufacture of high speed network interface devices. Mr. Boucher served as
President from December 1987 to June 1995, as Chief Executive Officer from
December 1987 to March 1996, as Chairman of the Board of Directors from
February 1994 to June 1996, as a director from December 1987 to January 1997,
and as a consultant from July 1996 to
5
<PAGE>
March 1997 of Auspex Systems, Inc., a manufacturer of network file servers. He
is a founder of the Company and served as Chairman of the Board of Directors
since April 1999 and from May 1981 to May 1990, as interim Chief Executive
Officer from July 1998 to April 1999 and as Chief Executive Officer from
May 1981 to December 1986.
MR. CONTI is an independent management consultant. From 1959 to 1991, he
held a variety of technical and managerial positions with International Business
Machines Corporation, a manufacturer of computer hardware and software,
concluding with four years as a Senior Vice President.
MR. EAST has, since December 1988, served as a director, President and Chief
Executive Officer of Actel Corporation, a manufacturer of field programmable
gate arrays.
MS. LANG is an independent management consultant. From May 1999 to
May 2000, Ms. Lang served as President and Chief Executive Officer of
Individual.com, Inc. a wholly-owned subsidiary of Office.com, Inc., a provider
of news to corporations. From August 1998 to March 1999, Ms. Lang served as
Chief Executive Officer of Essential.com, Inc., an eCommerce company that sells
communication and energy services over the Internet. From July 1996 to
August 1997, Ms. Lang served as President and Chief Executive Officer of
AltaVista Internet Software Inc., a wholly-owned subsidiary of Digital Equipment
Corporation, a manufacturer of computer systems. From November 1995 to
June 1996, Ms. Lang served as Vice President of the Internet Software Business
Unit of Digital Equipment Corporation. From January 1993 to September 1995,
Ms. Lang served first as Vice President of International Product Development
and, more recently, as Senior Vice President of the Desktop Business Group at
Lotus Development Corporation, a software manufacturer.
MR. LOARIE has served as a Managing Director of Morgan Stanley Dean
Witter & Co., a diversified investment firm, since December 1997, and served as
a Principal of that company from August 1992 until December 1997. Mr. Loarie
also has served as a general partner of several venture capital investment
partnerships affiliated with Morgan Stanley Dean Witter & Co. since
August 1992. Prior to that time, Mr. Loarie was a general partner of Weiss,
Peck & Greer, an investment management firm, and of several venture capital
partnerships affiliated with Weiss Peck & Greer. Mr. Loarie is also a director
of Evolving Systems, Inc and Websense, Inc.
MR. MOORE is an independent management consultant. Mr. Moore served as
President of Outlook Technology, Inc., a company engaged in the development,
manufacture and marketing of digital test instrumentation, from February 1986 to
July 1991. Mr. Moore is also a director of Dionex Inc. and American XTAL
Technology, Inc.
MR. SANDERS has served as a general or venture partner of Alloy Ventures
(formerly known as Asset Management Associates) since March 1987.
MR. STEPHENS became Chief Executive Officer of the Company in April 1999.
Mr. Stephens has served as President since October 1998, and from November 1995
to March 1999, he was Chief Operating Officer. From November 1993 until
November 1995, Mr. Stephens founded and was Chairman of the Board of Directors
of Power I/O, Inc.
MR. WHITE is an independent marketing consultant. From January 1989 to
August 1997, Mr. White served as President, Chief Executive Officer, director
and Chairman of the Board of Directors of Informix Software, Inc., a software
company. Prior to that time, Mr. White was President of Wyse Technology, Inc., a
manufacturer of computers and computer terminals. Mr. White is also a director
of Legato Systems, Inc. and TIBCO Software, Inc, a provider of high performance
I/O solutions.
6
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of eleven meetings during
the fiscal year ended March 31, 2000. The committees of the Board of Directors
include an Audit Committee, a Compensation Committee and a Nominating Committee.
The Audit Committee of the Board of Directors currently consists of
Messrs. Adler, Conti and Loarie and held five meetings during the last fiscal
year. The Audit Committee recommends engagement of the Company's independent
accountants and is primarily responsible for approving the services performed by
the Company's independent accountants and for reviewing and evaluating the
Company's accounting principles and its system of internal accounting controls.
The Compensation Committee of the Board of Directors consists of
Messrs. East, Lang and Sanders and held six meetings during the last fiscal
year. Mr. White was a member of the Compensation Committee until his resignation
in March 2000, when he was replaced by Mr. Sanders. The Compensation Committee
establishes the Company's executive compensation policy, determines the salary
and bonuses of the Company's executive officers and recommends to the Board of
Directors stock option grants for executive officers.
The Nominating Committee consists of Messrs. Moore and Sanders. The
Nominating Committee is responsible for reviewing the qualifications of
potential candidates for membership on the Board of Directors and recommending
such candidates to the Board of Directors. The Nominating Committee will
consider nominees recommended by management and stockholders. Such
recommendations may be delivered in writing to the attention of the Nominating
Committee in care of the Secretary at the Company's principal executive offices.
The Nominating Committee held no meetings during the prior fiscal year.
No director attended fewer than 75% of the sum of the total number of
meetings of the Board of Directors and committees thereof upon which that
director served, held subsequent to his or her becoming a director or his or her
appointment to such committee.
DIRECTOR COMPENSATION
CASH COMPENSATION
Non-employee directors receive $3,000 per fiscal quarter and $2,000 for each
meeting of the Board of Directors attended other than telephonic meetings and
are reimbursed for their expenses incurred in attending meetings of the Board of
Directors. The chairmen of the Compensation and Audit Committees receive an
additional $5,000 per year as compensation for their services as chairmen.
Directors do not receive compensation for committee or telephonic meetings other
than the Company's Special Litigation Committee (see below). Employee directors
do not receive additional compensation for attendance at meetings of the Board
of Directors.
Ms. Lang and Mr. Conti also served on the Company's Special Litigation
Committee, which was formed to investigate the merits of a derivative action
brought against certain current and former officers and directors of the
Company. The Company paid Mr. Conti and Ms. Lang $3,000 per day and reimbursed
them for all expenses incurred in connection with their duties as members of the
Special Litigation Committee. During fiscal 2000 the Company paid $27,750 and
$38,250 to Ms. Lang and Mr. Conti, respectively, for their services on the
Special Litigation Committee.
DEFERRED COMPENSATION PROGRAM
Effective April 1, 2000, non-employee directors may choose to either
(i) receive their quarterly payment in cash, (ii) defer the payment by investing
it in the Adaptec, Inc. Deferred Compensation Plan, or (iii) elect a combination
of (i) and (ii).
7
<PAGE>
1990 DIRECTORS' OPTION PLAN
Pursuant to the Company's 1990 Directors' Option Plan, Messrs. Adler, Conti,
East, Loarie, Moore, Sanders and White and Ms. Lang were each granted options to
purchase 15,000 shares of Common Stock on March 31, 2000 at an exercise price of
$41.4375 per share. Such options become exercisable for 25% of the shares
subject to the options for each full quarter after the date of grant so long as
each such person remains a director.
REQUIRED VOTE
If a quorum is present, the nine nominees receiving the highest number of
votes will be elected to the Board of Directors. Votes withheld from any nominee
will have no legal effect.
PROPOSAL TWO
APPROVAL OF THE 2000 DIRECTOR OPTION PLAN
On April 6, 2000, the Board of Directors adopted the Company's 2000 Director
Option Plan (the "2000 Director Plan") and, subject to stockholder approval,
reserved for issuance thereunder of 1,000,000 shares of Common Stock. The 2000
Director Plan is intended to replace the 1990 Director Option Plan, which by its
terms expires this year. As of June 26, 2000, no options had been granted
pursuant to the 2000 Director Plan. There are currently eight directors who are
eligible to participate under the 2000 Director Plan. Each of these directors
will receive options to purchase an aggregate of 120,000 shares (15,000 shares
each) of Common Stock on March 31, 2001 if they are all non-employee directors
of the Company on such date.
The Company believes that the 2000 Director Plan will facilitate attracting
highly qualified directors, permit equity participation in the Company by the
non-employee directors of the Company as consideration for their service on the
Board of Directors and provide directors with an equity incentive associated
with the success of the Company's business.
For a description of the principal features of the Plan, see
"Appendix A--Description of the Adaptec, Inc. 2000 Director Option Plan."
REQUIRED VOTE
Approval of the Plan requires the affirmative vote of a majority of the
Votes Cast on the proposal at the Annual Meeting.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE APPROVAL OF THE
2000 DIRECTOR OPTION PLAN AND THE RESERVATION OF 1,000,000 SHARES OF COMMON
STOCK FOR ISSUANCE THEREUNDER.
8
<PAGE>
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected
PricewaterhouseCoopers LLP, independent public accountants, to audit the
financial statements of the Company for the fiscal year ending March 31, 2001
and recommends that the stockholders ratify this selection. In the event of a
negative vote on such ratification, the Board of Directors will reconsider its
selection. Representatives of PricewaterhouseCoopers LLP are expected to be
available at the Annual Meeting with the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF PRICE WATERHOUSE COOPERS LLP AS THE COMPANY'S INDEPENDENT
PUBLIC ACCOUNTANTS.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The table below sets forth information for the three most recently completed
fiscal years concerning the compensation of (i) the Chief Executive Officer of
the Company during fiscal 2000 and (ii) the four other most highly compensated
executive officers of the Company who were serving as executive officers at the
end of fiscal 2000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL -------------------------
COMPENSATION SECURITIES
-------------------- RESTRICTED UNDERLYING ALL OTHER
FISCAL SALARY BONUS STOCK OPTIONS/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) AWARD ($) (#) ($)(1)
--------------------------- -------- -------- --------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Stephens ................... 2000 $569,288 1,200,000 -- 505,000 $1,750
President, Chief Executive Officer 1999 425,000 250,000 -- 330,000 1,682
and Director 1998 423,846 -- -- 350,000 1,877
Robert L. Schultz, Jr.(2) ............ 2000 215,384 350,000 -- 200,000 378
Chief Operating Officer 1999 -- -- -- -- --
1998 -- -- -- -- --
Andrew J. Brown ...................... 2000 224,230 350,000 -- 5,000 14
Vice President, Finance, Chief 1999 198,769 110,000 -- 215,000 334
Financial Officer and Assistant 1998 171,077 66,000 -- 59,000 516
Secretary
Faye W. Pairman ...................... 2000 239,384 350,000 -- 5,000 702
Vice President & General Manager, 1999 212,307 120,000 -- 100,000 490
Host I/O 1998 147,980 64,000 -- 20,000 417
Thomas J. Shea ....................... 2000 217,769 275,000 -- 5,000 347
Vice President and General Manager, 1999 196,698 90,000 -- 100,000 299
Software Products Group 1998 149,756 72,000 -- 18,000 318
</TABLE>
------------------------
(1) Represents life insurance premiums.
(2) Mr. Schultz began his employment with the Company in August 1999.
9
<PAGE>
The table below provides certain information concerning grants of options to
purchase the Company's Common Stock made during the fiscal year ended March 31,
2000 to the persons named in the Summary Compensation Table:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------ VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- ------------ ------------ ----------- ---------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Stephens........ 500,000(3) 8.75% $24.4375 04/06/09 $ 7,633,403 $ 19,392,486
5,000(4) 0.09% 49.8750 01/03/10 216,387 492,273
Robert L. Schultz, Jr..... 200,000(3) 3.50% 41.8750 07/19/09 5,287,354 13,380,015
Andrew J. Brown........... 5,000(4) 0.09% 49.8750 01/03/10 216,387 492,273
Faye W. Pairman........... 5,000(4) 0.09% 49.8750 01/03/10 216,387 492,273
Thomas J. Shea............ 5,000(4) 0.09% 49.8750 01/03/10 216,387 492,273
All Stockholders.......... N/A N/A N/A N/A 2,494,697,063 6,321,829,717
</TABLE>
------------------------
(1) Potential gains are net of exercise price, but before taxes associated with
exercise. The amounts represent certain assumed rates of appreciation only,
based on the Securities and Exchange Commission rules. Actual gains, if any,
on stock option exercises are dependent on the future performance of the
Common Stock, overall market conditions and the option holders' continued
employment through the vesting period. The amounts reflected in this table
may not necessarily be achieved and do not reflect the Company's estimate of
future stock price growth.
(2) In the case of all stockholders, indicates the potential stockholder return
over a 10-year period at the respective rate determined from the closing
sale price on the Nasdaq National Market of $38.625 on March 31, 2000. On
March 31, 2000, there were 102,699,358 shares of Common Stock issued and
outstanding.
(3) These options were granted pursuant to the Company's 1990 Stock Plan. The
option exercise prices were at the fair market value of the Company's Common
Stock on the date of grant. All options expire 10 years from the date of
grant, are not transferable by the optionee (other than by will or the laws
of descent and distribution), and are exercisable during the optionee's
lifetime only by the optionee. The options become exercisable at the rate of
12.5% of the shares subject to the option six months after the date of grant
and at the rate of 6.25% of the shares subject to the option at the end of
each of the next 14 quarters. To the extent exercisable at the time of
employment termination, options may be exercised for an additional three
months unless termination is the result of total and permanent disability,
in which case the options may be exercised within six months following
termination, or unless termination is the result of death, in which case
unvested options become exercisable to a maximum of 50,000 shares per
individual and may be exercised within six months following death by the
individual's estate or other successor.
(4) These options were granted pursuant to the Company's 1999 Stock Plan. The
option exercise prices were at the fair market value of the Company's Common
Stock on the date of grant. All options expire 10 years from the date of
grant, are not transferable by the optionee (other than by will or the laws
of descent and distribution), and are exercisable during the optionee's
lifetime only by the optionee. The options become exercisable at the rate of
12.5% of the shares subject to the option six months after the date of grant
and at the rate of 6.25% of the shares subject to the option at the end of
each of the next 14 quarters. To the extent exercisable at the time of
employment termination,
10
<PAGE>
options may be exercised for an additional three months unless termination
is the result of total and permanent disability, in which case the options
may be exercised within six months following termination, or unless
termination is the result of death, in which case unvested options become
exercisable to a maximum of 50,000 shares per individual and may be
exercised within six months following death by the individual's estate or
other successor.
The table below provides certain information concerning the exercise of
options to purchase the Company's Common Stock in the fiscal year ended
March 31, 2000 and the unexercised options held as of March 31, 2000 by the
persons named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES VALUE OPTIONS AT FY-END (#) AT FY-END ($)
ACQUIRED ON REALIZED --------------------------- ------------------------------
NAME EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(2)
---- ------------- ---------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert N. Stephens.......... 265,247 $7,417,732 260,479 743,000 $4,114,602 $12,477,039
Robert L. Schultz, Jr....... -- -- -- 200,000 -- --
Andrew J. Brown............. 67,712 2,530,374 43,975 158,563 777,673 4,082,613
Faye W. Pairman............. 59,300 1,940,186 50,450 103,250 1,128,021 2,199,614
Thomas J. Shea.............. 57,688 1,104,538 20,874 100,501 465,333 2,047,854
</TABLE>
------------------------
(1) Market value of underlying securities on date of exercise, minus the
exercise or base price.
(2) Market value of underlying securities at fiscal year end, minus the exercise
or base price.
CHANGE IN CONTROL ARRANGEMENTS
Under the Company's 1990 Stock Plan and 1999 Stock Plan, in the event of a
Change in Control, any Options or Rights (as such terms are defined in the 1990
and 1999 Stock Plans) outstanding upon the date of such Change in Control shall
have their vesting accelerated as to an additional 25% of the shares subject to
such Options or Rights as of the date of such Change in Control. In the event an
optionee is Involuntarily Terminated Without Cause (as defined in the 1990 and
1999 Stock Plans) within 12 months following a Change in Control, any Options or
Rights outstanding upon such Change in Control that are not yet exercisable and
vested on such date shall become 100% exercisable and vested. Such vesting
acceleration may cause part or all of the consideration involved to be treated
as a "parachute payment" under the Code, which may subject the recipient thereof
to a 20% excise tax and which may not be deductible by the participant's
employer.
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW AND PHILOSOPHY
The Compensation Committee (the "Committee") of the Board of Directors
regularly reviews and approves all executive officer pay plans. These include
the following compensation elements: base salaries, annual incentives, stock
options and various benefit plans.
The Committee is composed of three independent, outside directors. It is the
Committee's objective that executive compensation be directly related to the
Company's achievement of its business goals. Specifically, the Company's
executive compensation program is designed to reward exceptional executive
contribution and performance that result in enhanced corporate, economic and
stockholder values over the short and long-term.
11
<PAGE>
The Committee retains independent compensation consultants to provide
objective and expert advice in the review of all executive compensation plans.
Published industry pay survey data is also reviewed and relied upon in the
Committee's assessment of appropriate total compensation levels, including the
Radford Executive Compensation Report for High Technology Industries and data
from a comparable group of companies supplied by the Committee's compensation
consultant, J. Richard & Co.
The Committee recognizes that the industry sector and geographical areas in
which the Company operates are both intensely competitive and are continuing to
undergo rapid globalization with the result that there is heightened demand for
qualified, experienced executive personnel. The Committee considers it crucial
that the Company be assured of retaining and rewarding its top-caliber
executives who are essential to the attainment of the Company's ambitious,
long-term, strategic goals.
For these reasons, the Committee believes the Company's executive
compensation arrangements must remain competitive with those offered by other
higher performing companies of similar size, scope, performance levels and
complexity of operations, including some, but not all, of the companies
comprising the Nasdaq--100 Index and the Nasdaq Computer Industry & Data
Processing Index.
ANNUAL CASH COMPENSATION (BASE SALARY, PLUS PERFORMANCE INCENTIVES)
The Committee believes that annual cash compensation should be paid
commensurate with attained performance to plan. For these reasons, the Company's
executive cash compensation consists of base compensation (salary) and variable
incentive compensation (annual bonus).
Base salaries for executive officers are established considering a number of
factors, including the Company's continued, planned, profitable growth; the
executive's individual performance and measurable contribution to the Company's
success; and pay levels of similar positions with comparable companies in the
industry. The Committee supports the Company's compensation philosophy of
moderation for elements such as base salary and benefits. Base salary decisions
are made as part of the Company's formal annual review process. Generally, base
salaries are maintained at approximately the level of the median salaries of
similar, high-technology companies.
Under the Executive Incentive Plan (the "EIP"), an executive's incentive
performance award generally depends on three performance factors: the overall
financial performance of the Company; the performance of the business unit or
corporate unit/functions the executive is accountable for; and the executive's
individual performance. The performance objectives of the Company and the
business unit or corporate function derive from the Company's Board-approved
annual business plan that includes specific financial performance targets
relating to revenue and profit growth for the fiscal year. The EIP provides no
payment until threshold earnings and revenue targets are met. Long-term
strategic goals may also be incorporated for certain executives. Individual
executive performance is measured against an annual incentive target that
represents a percentage of base salary that the executive can earn as bonus
compensation if performance warrants. This target percentage ranges from 85% to
110% of an executive's base salary. The incentive target is set at a higher
percentage for more senior officers, with the result that the more senior
executive officers have a higher percentage of their potential total cash
compensation at risk. If business plans are exceeded, executives can earn
additional amounts above the established target levels. Executive officers
received cash bonuses above the EIP for the fiscal year ended March 31, 2000,
because both the Company's earnings and revenue targets were significantly
surpassed. The Committee annually reviews and approves specific targets,
maximums, and performance criteria for each executive officer.
LONG-TERM INCENTIVE: STOCK OPTIONS
The Committee approves executive stock options under the 1999 Stock Plan to
foster executive officer ownership, to stimulate a long-term orientation in
decisions and to provide direct linkage with stockholder interests. The
Committee considers the total compensation package, options previously granted,
dilution
12
<PAGE>
effects, industry practices and trends, the executive's accountability level,
and future potential stock values when granting stock options. The Committee
recommends option grant amounts to provide retention considering projected
earnings to be derived from option gains based upon relatively aggressive
assumptions related to Company growth in revenue and earnings. In this manner,
executive option gains closely parallel those of other stockholders. Therefore,
the stock option program serves as an effective, cost-efficient and competitive
long-term incentive and retention tool for the Company's executives, as well as
other employees. The exercise prices of stock options granted to executive
officers are equal to the market value of the stock on the date of grant.
Therefore, stock options provide an incentive to executives to focus on the
Company's profitable growth which ordinarily, over time, should be reflected in
the price of the Company's stock. The Committee believes that the Company's
stock option plan has been administered in a manner comparable to its peer group
and other high performing companies in the high technology sector. The Committee
also regularly reviews the Company's executive stock purchase/ownership policy
to assess progress toward desired ownership levels.
BENEFITS
The Company provides benefits to the named executive officers that are
generally available to all Company employees. The amount of executive level
benefits and perquisites, as determined in accordance with the rules of the
Securities and Exchange Commission relating to executive compensation, did not
exceed 10% of total salary for the fiscal year ended March 31, 2000 for any
executive officer.
CHIEF EXECUTIVE OFFICER PERFORMANCE AND COMPENSATION
In setting Mr. Stephens' base salary for the fiscal year ended March 31,
2000, the Committee considered the Company's overall business performance for
the fiscal year ended March 31, 1999, as well as its market capitalization
improvement. Mr. Stephens cash bonus was determined by a corporate performance
formula that was established under the EIP. In fiscal 2000, the Company
significantly improved earnings and exceeded revenue targets. As a result,
Mr. Stephens received a $1,200,000 cash bonus for fiscal 2000. The Compensation
Committee has estimated that the total cash compensation of $1,769,288 that was
paid to Mr. Stephens in fiscal 2000 is close to the market median of comparable
companies as reported in published surveys and the researched proxy statements
of peer group companies.
The Committee determines the number of shares of Common Stock underlying
stock options granted to Mr. Stephens after analyzing stock option grants made
to chief executive officers of comparable companies, retention effectiveness and
the number of options previously granted to Mr. Stephens.
STOCK OWNERSHIP POLICY
The Compensation Committee has established stock ownership requirements for
the Chief Executive Officer and other executive officers of the Company. The
ownership levels are expressed in terms of multiples of base salaries to be
achieved over the next year for current executives and over a two-year period
for newly appointed corporate officers. The Compensation Committee believes that
this policy will further align the interests of the officers with interests of
the stockholders.
A similar stock ownership policy has been implemented for non-employee
Directors.
The Compensation Committee
John East
Ilene H. Lang
Ferrell Sanders
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Neither John East, Ilene H. Lang nor W. Ferrell Sanders, the members of the
Company's Compensation Committee, is an executive officer of any entity for
which any executive officer of the Company serves as a director or a member of
the Compensation Committee.
PERFORMANCE GRAPH
The following graph shows a comparison, since March 31, 1995, of cumulative
total return for the Company, the Nasdaq Stock Market-U.S. and the Nasdaq
Computer and Data Processing Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
NASDAQ STOCK NASDAQ
<S> <C> <C> <C>
ADAPTEC MARKET - U.S. COMPUTER & DP
3/95 100 100 100
3/96 146 136 142
3/97 217 151 155
3/98 119 229 271
3/99 138 309 442
3/00 234 574 790
</TABLE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended or the Securities
and Exchange Act of 1934, as amended (the "Exchange Act") that might incorporate
future filings, including this Proxy Statement, in whole or in part, the
preceding Compensation Committee Report on Executive Compensation and the
preceding Performance Graph shall not be incorporated by reference into any such
filings, nor shall such Report or Graph be incorporated by reference into any
future filings.
14
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT; PRINCIPAL STOCKHOLDERS
The table below sets forth as of May 31, 2000 certain information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding shares of Common Stock; (ii) each director of the Company,
(iii) each executive officer named in the Summary Compensation Table, and
(iv) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES APPROXIMATE
BENEFICIALLY PERCENT
NAME OF PERSON OR IDENTITY OF GROUP OWNED(1)(2) OWNED(3)
----------------------------------- ------------- -----------
<S> <C> <C>
FMR Corp.(4) ............................................... 11,820,761(5) 11.8%
82 Devonshire Street
Boston, MA 02109
Capital Research and Management Company(6) ................. 8,411,040(7) 8.4
333 South Hope Street
Los Angeles, CA 90071
Amvescap Plc, AVZ, Inc., AIM Management Group Inc., ........ 7,176,549 7.2
Amvescap Group Services, Inc., Invesco., Inc., Invesco
North American Holding, Inc., Invesco Capital
Management, Inc., Invesco Funds Group, Inc., Invesco
Management & Research, Inc., Invesco Realty
Advisers, Inc., and Invesco (NY) Asset
Management, Inc.,(8) 11 Devonshire Square
London EC2M 4YR, England
John G. Adler .............................................. 66,289 *
Laurence B. Boucher ........................................ 178,184(9) *
Carl J. Conti .............................................. 105,580 *
John East .................................................. 75,750 *
Ilene H. Lang .............................................. 56,250 *
Robert J. Loarie ........................................... 106,354 *
B.J. Moore ................................................. 95,720 *
W. Ferrell Sanders ......................................... 139,750 *
Robert N. Stephens ......................................... 441,829 *
Phillip E. White ........................................... 63,750 *
Andrew J. Brown ............................................ 86,132 *
Faye W. Pairman ............................................ 45,607 *
Robert L. Schultz, Jr. ..................................... 51,193 *
Thomas J. Shea ............................................. 40,471 *
All current directors and officers as a group
(20 persons) ............................................. 1,914,355 1.9%
</TABLE>
------------------------
* Less than 1%
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons and entities named in the
table have sole voting and sole investment power with respect to all shares
of Common Stock beneficially owned. Amounts shown include the following
number of shares, options for which are presently exercisable or will become
exercisable within 60 days of May 31, 2000: Mr. Adler, 66,251; Mr. Boucher,
101,255; Mr. Conti, 88,750; Mr. East, 70,750;
15
<PAGE>
Ms. Lang, 56,250; Mr. Loarie, 58,750; Mr. Moore, 58,750; Mr. Sanders,
58,750; Mr. Stephens, 386,604; Mr. White, 53,750; Mr. Brown, 73,912;
Mr. Pairman, 39,825; Mr. Schultz, 50,000; Mr. Shea, 35,250; and all current
executive officers and directors as a group, 1,529,919.
(2) Ownership guidelines have been established for non-employee Directors and
executive management. See "Report of the Compensation Committee--Stock
Ownership Policy."
(3) Based on 100,081,402 shares of Common Stock outstanding on May 31, 2000.
(4) Fidelity Management and Research Company ("Fidelity"), a wholly-owned
subsidiary of FMR Corp., beneficially owns 11,223,558 shares as a result of
acting as an investment adviser to various investment companies. FMR Corp.,
through its control of Fidelity, claims sole dispositive power with respect
to all of such shares. Fidelity Management Trust Company ("FMTC"), a wholly
owned subsidiary of FMR Corp., beneficially owns 597,203 shares as a result
of its serving as investment manager of various institutional accounts. FMR
Corp., through its control of FMTC, claims sole dispositive power with
respect to 597,203 of such shares and sole voting power with respect to
271,803 of such shares. Information provided herein based on the joint
filing of Schedule 13G on February 11, 2000 by FMR Corp., Edward C.
Johnson 3d. and Abigail P. Johnson. FMR Corp. filed such Schedule 13G on a
voluntary basis as if an additional 33,000 shares that are beneficially
owned by Fidelity International Limited ("FIL") are beneficially owned by
FMR Corp. and FIL on a joint basis. FMR Corp. and FIL are of the view that
they are not acting as a "group" for purposes of Section 13(d) under the
Securities Exchange Act of 1934, as amended, (the "Exchange Act") and that
they are not otherwise required to attribute to each other the beneficial
ownership of securities beneficially owned by the other corporation within
the meaning of Rule 13d-3 promulgated under the Exchange Act. If such 33,000
shares are added to FMR Corp.'s above listed beneficially owned shares, FMR
Corp. would beneficially own 11,853,761 shares.
(5) Amount shown includes 31,939 shares which may be acquired upon conversion of
convertible notes.
(6) Capital Research and Management Company, in its capacity as an investment
advisor, may be deemed to beneficially own 8,411,040 shares. Capital
Research and Management Company claims sole dispositive power as to
8,411,040 shares. Capital Research and Management Company disclaims
beneficial ownership of such shares pursuant to Rule 13d-4 under the
Securities Exchange Act of 1934, as amended. Information provided herein is
based solely on Capital Research and Management Company's Schedule 13G/A
dated March 10, 2000.
(7) Amount shown includes 300,040 shares which may be acquired upon conversion
of convertible notes.
(8) This information is provided based on the Schedule 13G dated February 4,
2000 filed jointly by the named entities. The named entities claim shared
voting and dispositive power as to all such shares.
(9) Includes 40 shares beneficially owned by the Boucher Living Trust.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company and Morgan Stanley Dean Witter entered into an engagement letter
pursuant to which Morgan Stanley Dean Witter will provide financial advisory
services to the Company in connection with a potential corporate realignment of
the Company's software products group. Mr. Loarie is a managing director of
Morgan Stanley Dean Witter.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10 percent of a registered
class of the Company's equity securities, to file with the Securities and
Exchange Commission (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
16
<PAGE>
than ten 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 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 March 31, 2000, all
officers, directors and greater than ten percent beneficial owners complied with
all Section 16(a) filing requirements.
OTHER MATTERS
The Company knows of no other matters to be submitted to the Annual Meeting.
If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed Proxy to vote the shares they
represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
Henry P. Massey, Jr.
SECRETARY
Dated: July 14, 2000
17
<PAGE>
APPENDIX A
Description of the Adaptec, Inc. 2000 Director Option Plan
GENERAL. The purpose of the Director Plan is to attract and retain the best
available non-employee personnel for service as directors ("Outside Directors"),
to provide additional incentive to the Outside Directors and to encourage their
continued service on the Board. Options granted under the Director Plan are
nonstatutory stock options.
ADMINISTRATION. The Director Plan may generally be administered by the
Board (the "Administrator"), although grants made under the Director Plan are
automatic and non-discretionary.
ELIGIBILITY. Options may be granted under the Director Plan only to Outside
Directors.
TERMS AND CONDITIONS OF OPTIONS. Each option is evidenced by a stock option
agreement between the Company and the optionee, and is subject to the following
terms and conditions:
(a) OPTION GRANTS. All grants of options to Outside Directors are
automatic and nondiscretionary. Each Outside Director is granted a first option
to purchase 40,000 shares of the Common Stock of the Company (the "First
Option") on the date on which he or she first becomes an Outside Director. Each
Outside Director is granted a subsequent option to purchase 15,000 shares of the
Common Stock of the Company (the "Subsequent Option") on March 31 each year,
provided that on such date the Outside Director is then an Outside Director.
(b) EXERCISE PRICE. The exercise price per share is 100% of the fair
market value of the Common Stock on the date such option is granted. The fair
market value of the Common Stock is generally determined with reference to the
closing sale price for the Common Stock (or the closing bid if no sales were
reported) on the last market trading day prior to the date the option is
granted.
(c) EXERCISE OF OPTION; FORM OF CONSIDERATION. The First Option becomes
exercisable as to 25% of the shares subject to the option on the first
anniversary of its date of grant and as to 6.25% of the shares subject to the
option on each full calendar quarter thereafter, provided the Outside Director
continues to serve as a director on such dates. The Subsequent Option becomes
exercisable as to 25% of the shares subject to the option on the last day of
each full calendar quarter after its date of grant, provided the Outside
Director continues to serve as a director on such dates. The means of payment
for shares issued upon exercise of an option is specified in each option
agreement. The Director Plan permits payment to be made by cash, check, other
shares of Common Stock of the Company (with some restrictions), cashless
exercise, promissory note, any combination thereof or any other method permitted
by applicable law.
(d) TERM OF OPTION. The term of an option may be no more than 10 years
from the date of grant. No option may be exercised after the expiration of its
term.
(e) TERMINATION OF DIRECTOR STATUS. If an optionee's status as a director
terminates for any reason (other than death or disability), then the optionee
may exercise the option, but only within three (3) months following the date of
such termination, and only to the extent that the optionee was entitled to
exercise the option on the date of such termination. The Director Plan provides
for up to six (6) months for the option to be exercised after the optionee's
death or disability. To the extent the option is exercisable at the time of such
termination, the optionee (or the optionee's estate or the person who acquires
the right to exercise the option by bequest or inheritance) may exercise all or
part of his or her option at any time before termination.
(f) SUSPENSION OR TERMINATION OF OPTIONS. If the Company reasonably
believes that an optionee has committed an act of misconduct, the Company may
suspend his or her right to exercise an option pending a determination by the
Board. If the Board determines that an optionee has committed an act of
embezzlement, fraud, dishonesty, or other breaches of his or her obligations to
the Company, has made an unauthorized disclosure of any Company trade secret or
confidential information, has engaged in unfair
18
<PAGE>
competition, or induced any customer to breach a contract with the Company,
neither the optionee nor the optionee's estate shall be entitled to exercise any
option.
(g) NONTRANSFERABILITY OF OPTIONS. Options granted under the Director Plan
are not transferable other than by will or the laws of descent and distribution,
and may be exercised during the optionee's lifetime only by the optionee.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. In the event that the stock of
the Company changes by reason of any stock split, reverse stock split, stock
dividend, combination, reclassification or other similar change in the capital
structure of the Company effected without the receipt of consideration,
appropriate adjustments shall be made in the number and class of shares of stock
subject to the Director Plan, the number and class of shares of stock subject to
any option outstanding under the Director Plan, and the exercise price of any
such outstanding option.
EFFECT OF DISSOLUTION OR LIQUIDATION. In the event of a liquidation or
dissolution, any unexercised options will terminate. The Board may, in its
discretion, give each optionee the right to exercise his option as to all of the
shares subject thereto.
EFFECT OF A CHANGE IN CONTROL. In the event of a "Change in Control" of the
Company (as defined in the Director Plan), all options will become fully vested
and exercisable.
AMENDMENT AND TERMINATION OF THE DIRECTOR PLAN. The Board may amend, alter,
suspend or terminate the Director Plan, or any part thereof, at any time and for
any reason. No such action by the Board may alter or impair any option
previously granted under the Director Plan without the written consent of the
optionee. The Company shall obtain shareholder approval for any amendment to the
Director Plan to the extent necessary and desirable to comply with applicable
law. Unless terminated earlier, the Director Plan shall terminate ten years from
the date of its approval by the shareholders or the Board of the Company,
whichever is earlier.
FEDERAL INCOME TAX CONSEQUENCES
NONSTATUTORY STOCK OPTIONS. An optionee does not recognize any taxable
income at the time he or she is granted a nonstatutory stock option. Upon
exercise, the optionee recognizes taxable income generally measured by the
excess of the then fair market value of the shares over the exercise price. Upon
a disposition of such shares by the optionee, any difference between the sale
price and the optionee's exercise price, to the extent not recognized as taxable
income as provided above, is treated as long-term or short-term capital gain or
loss, depending on the holding period. Net capital gains on shares held more
than 12 months may be taxed at a maximum federal rate of 20%. Capital losses are
allowed in full against capital gains and up to $3,000 against other income.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION
UPON OPTIONEES AND THE COMPANY WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS
UNDER THE DIRECTOR PLAN. IT DOES NOT PURPORT TO BE COMPLETE, AND DOES NOT
DISCUSS THE TAX CONSEQUENCES OF THE CONSULTANT'S DEATH OR THE PROVISIONS OF THE
INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE
CONSULTANT MAY RESIDE.
19
<PAGE>
-------------------------------------------------------------------------------
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ADAPTEC, INC.
ADAPTEC, INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
AUGUST 24, 2000
The undersigned stockholder(s) of Adaptec, Inc., a Delaware corporation
(the "Company"), hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders and Proxy Statement, each dated July 14, 2000, and hereby
appoints Laurence B. Boucher and Andrew J. Brown, 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 2000
Annual Meeting of Stockholders of Adaptec, Inc. to be held on August 24, 2000
at 10:00 a.m., local time, at the offices of the Company located at 801 South
Milpitas Boulevard, Milpitas, California, 95035 and at any adjournment or
postponement thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if personally present on any of the
following matters and with discretionary authority as to any and all other
matters that may properly come before the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH
THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED
BY THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE PERSONS AND PROPOSALS, AND
FOR SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXY
HOLDERS DEEM ADVISABLE.
-------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
1. Call TOLL FREE 1-800-840-1208 on a Touch-Tone telephone and follow the
instructions on the reverse side. There is NO CHARGE to you for this call.
OR
--
2. Vote by Internet at our Internet Address: http://www.eproxy.com/adpt/
OR
--
3. Mark, sign and date your proxy card and return it promptly in the
enclosed envelope.
IT IS NOT NECESSARY TO MAIL YOUR PROXY CARD, IF YOU VOTE BY TELEPHONE OR
INTERNET.
PLEASE VOTE
<PAGE>
-------------------------------------------------------------------------------
Please mark
your votes as
indicated in
this example /X/
1. Election of Directors to serve one year terms.
FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY TO VOTE
BELOW (EXCEPT AS INDICATED). FOR ALL NOMINEES LISTED BELOW.
/ / / /
IF YOU WISH TO WITHHOLD AUTHORITY FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
01 Laurence B. Boucher 02 Carl J. Conti 03 John East
04 Ilene H. Lang 05 Robert J. Loarie 06 B.J. Moore
07 W. Ferrell Sanders 08 Robert N. Stephens 09 Phillip E. White
2. To approve the Company's 2000 Director Option Plan and the reservation for
issuance thereunder of 1,000,000 shares of Common Stock.
FOR AGAINST ABSTAIN
/ / / / / /
3. To ratify and approve the appointment of PricewaterhouseCoopers LLP as the
independent public accountants of the Company for the fiscal year ending
March 31, 2001.
FOR AGAINST ABSTAIN
/ / / / / /
4. To transact such other business as may properly come before
the meeting or any postponements or adjournments thereof.
(THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY EACH
STOCKHOLDER EXACTLY AS SUCH STOCKHOLDER'S NAME APPEARS
HEREON, AND RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE.
PERSONS SIGNING IN A FIDUCIARY CAPACITY SHOULD SO
INDICATE. A CORPORATION IS REQUESTED TO SIGN ITS NAME BY
ITS PRESIDENT OR OTHER AUTHORIZED OFFICER, WITH THE
OFFICE HELD DESIGNATED. IF SHARES ARE HELD BY JOINT
TENANTS OR AS COMMUNITY PROPERTY, BOTH HOLDERS SHOULD
SIGN.)
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING,
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS
PROMPTLY AS POSSIBLE.
Signature(s) _____________________________________ Dated ____________ , 2000
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^ FOLD AND DETACH HERE AND READ THE REVERSE SIDE ^
VOTE BY TELEPHONE OR INTERNET
QUICK *** EASY *** IMMEDIATE
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shares in the same manner as if you marked, signed and returned your proxy
card.
VOTE BY PHONE: CALL TOLL-FREE ON A TOUCH-TONE TELEPHONE 1-800-840-1208 ANYTIME.
THERE IS NO CHARGE TO YOU FOR THIS CALL.
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in the lower right of this form.
OPTION A: To vote as the Board of Directors recommends on ALL items,
press 1.
The Board recommends FOR items 1, 2 and 3.
OPTION B: If you selected to vote on each proposal separately, press 0.
You will hear these instructions:
PROPOSAL 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR
ALL nominees, press 9. To WITHHOLD FOR AN INDIVIDUAL nominee,
press 0. Please make your selection now.
PROPOSAL 2: You may make your selection at any time: To vote
FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
PROPOSAL 3: You may make your selection at any time: To vote
FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, YOU MUST CONFIRM YOUR VOTE BY PRESSING 1.
IF NO SELECTION IS MADE, YOUR VOTES WILL BE CAST AS THE BOARD OF
DIRECTORS RECOMMENDS.
VOTE BY INTERNET: THE WEB ADDRESS IS http://www.eproxy.com/adpt/
THANK YOU FOR VOTING.
