<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Advanced Digital Information Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
ADVANCED DIGITAL INFORMATION CORPORATION
10201 WILLOWS ROAD, P.O. BOX 97057
REDMOND, WASHINGTON 98073-9705
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 19, 1997
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Advanced Digital Information
Corporation, a Washington corporation ("ADIC" or the "Company"), will be held on
Wednesday, February 19, 1997 at 10:00 a.m., local time, at the Hyatt Regency
Bellevue at Bellevue Place, 900 Bellevue Way N.E., Bellevue, Washington, for the
following purposes:
1. To elect two directors, each to hold office for a three-year term;
2. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Only holders of record of shares of ADIC Common Stock at the close of
business on January 3, 1997, the record date for the Annual Meeting, are
entitled to notice of and to vote at the Annual Meeting and adjournments or
postponements thereof. Shareholders are cordially invited to attend the meeting
in person.
By Order of the Board of Directors
/s/ Charles H. Stonecipher
----------------------------------
CHARLES H. STONECIPHER
Secretary
Redmond, Washington
January 22, 1997
PLEASE COMPLETE, DATE, SIGN AND MAIL PROMPTLY THE ENCLOSED PROXY IN THE RETURN
ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
<PAGE> 3
ADVANCED DIGITAL INFORMATION CORPORATION
10201 WILLOWS ROAD
REDMOND, WASHINGTON 98073-9705
PROXY STATEMENT
This Proxy Statement, which was first mailed to shareholders of Advanced
Digital Information Corporation ("ADIC" or the "Company") on January 22, 1997,
is furnished to shareholders of the Company (the "Shareholders") in connection
with the solicitation of proxies by the Board of Directors of the Company for
the Annual Meeting of Shareholders to be held February 19, 1997, and any
adjournment or postponement thereof (the "Annual Meeting"). A proxy may be
revoked in writing at anytime before it is exercised by filing with the
Secretary of the Company a written revocation or a duly executed proxy bearing a
later date. A proxy may also be revoked by attending the Annual Meeting and
voting in person. If the enclosed form of proxy is properly executed and
returned, it will be voted in accordance with the instructions given, but may be
revoked at any time to the extent it has not been exercised. There were
8,035,638 shares of the Company's common stock (the "Common Stock"), the only
security of the Company entitled to vote at the Annual Meeting, outstanding at
January 3, 1997. Holders of a majority of those shares, present in person or
represented by proxy, will constitute a quorum. Shareholders are entitled to one
vote for each share of Common Stock held of record at the close of business on
January 3, 1997, the record date for the Annual Meeting.
The cost of soliciting proxies will be borne by the Company. Proxies will
be solicited by certain of the Company's directors, officers and regular
employees ("Team Members"), without additional compensation, personally or by
telephone or telefax. In addition, the Company may reimburse brokerage firms and
other persons representing beneficial owners of shares of Common Stock for their
expenses in forwarding solicitation materials to such beneficial owners.
Each shareholder will be entitled to one vote for each share of Common
Stock held. Directors will be elected by a plurality of the shares of Common
Stock present by proxy or in person at the Annual Meeting. Holders of Common
Stock are not entitled to cumulate votes in the election of directors.
Abstention from voting and broker nonvotes on the election of directors will
have no impact on the outcome of this proposal.
The Company is not aware, as of the date hereof, of any matters to be voted
upon at the Annual Meeting other than as stated in the accompanying Notice of
Annual Meeting of Shareholders. The enclosed Proxy gives discretionary authority
to the persons named therein to vote the shares in their best judgment if any
other matters are properly brought before the Annual Meeting.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. Each director was
elected in 1996, prior to the spin-off from Interpoint Corporation
("Interpoint"), to hold office for one, two or three years to provide for
staggered election of directors to three year terms. One class is elected each
year by the Shareholders. At the Annual Meeting, two directors will be elected
to serve for terms of three years, expiring on the date of the Annual Meeting of
Shareholders in 2000. Each director elected will continue in office until a
successor has been elected or until resignation or removal in the manner
provided by the Bylaws of the Company. The names of nominees to the Board of
Directors, each of whom is presently a director of the Company, and the names of
directors whose terms will continue after the Annual Meeting are listed below.
Unless otherwise instructed, the persons named in the accompanying proxy
intend to vote shares represented by properly executed proxies for the two
nominees named below. If any nominee becomes unavailable for any reason or if a
vacancy occurs before the election (which events are not anticipated), the
proxies may be voted for a person to be selected by the Board of Directors.
2
<PAGE> 4
NOMINEES
<TABLE>
<CAPTION>
NAME AND AGE DIRECTOR SINCE
------------------------------------------------------ --------------
<S> <C>
Christopher T. Bayley, age 58......................... 1996
</TABLE>
Mr. Bayley has served as a Director of Interpoint since 1987. He has served
as Chairman of Dylan Bay Companies since 1995 and New Pacific Partners (Seattle
and Hong Kong-based investment bank) since 1992. He served as President and
Chief Executive Officer, Glacier Park Company (real estate development), and as
Senior Vice President, Corporate Affairs, Burlington Resources Inc. (oil and gas
exploration and production company) from 1985 to 1992 and 1989 to 1992,
respectively. He is a Director of The Commerce Bank, Lawyer Selection Advisors
and a member of the Board of Trustees of Scenic America, the International Music
Festival of Seattle and the E.B. Dunn Historic Garden Trust.
<TABLE>
<S> <C>
Russell F. McNeill, age 85............................ 1996
</TABLE>
Mr. McNeill has served as a Director of Interpoint since 1977. Mr. McNeill
has also served as Secretary Emeritus of Interpoint since 1992 and served as its
Secretary from 1977 to 1992. He is the former President of Old National Bank of
Washington, and serves as Trustee Emeritus for Whitman College.
CONTINUING DIRECTORS
<TABLE>
<CAPTION>
NAME AND AGE TERM EXPIRES DIRECTOR SINCE
---------------------------------------- ------------ --------------
<S> <C> <C>
Walter P. Kistler, age 77............... 1998 1996
</TABLE>
Mr. Kistler served as a Director of ADIC for 11 years prior to its
acquisition by Interpoint in 1994 and has served as a Director of Interpoint
since 1972. Mr. Kistler has served as Chairman of the Board of Directors of
Kistler Aerospace Corporation, since 1993. Mr. Kistler has served as Chairman
Emeritus of the Board of Directors of Interpoint since 1987, and served as its
Chairman from 1974 to 1987. Mr. Kistler has also served as Chairman of
Kistler-Morse Corporation (electronic equipment manufacturer), from 1972 to
1995.
<TABLE>
<S> <C> <C>
Walter F. Walker, age 42................ 1998 1996
</TABLE>
Mr. Walker has served as a Director of Interpoint since 1995. Mr. Walker
has served as President of the Seattle Supersonics National Basketball
Association basketball team (a subsidiary of Ackerley Communications, Inc.)
since 1994. Prior to this, he served as President, Walker Capital (a money
management firm), from March 1994 to September 1994 and as Vice President,
Goldman Sachs & Co. (an investment banking firm), from 1987 to 1994. Mr. Walker
also serves as a Director of Redhook Ale Brewery, Incorporated and Gargoyles
Inc. (eyeware manufacturer).
<TABLE>
<S> <C> <C>
John W. Stanton, age 41................. 1999 1996
</TABLE>
Mr. Stanton served as a Director of ADIC for five years prior to its
acquisition by Interpoint in 1994 and has served as a Director of Interpoint
since 1988. Mr. Stanton has served as Chairman and Chief Executive Officer of
Western Wireless Corporation and its predecessor companies since 1992.
Previously, he was a Director of McCaw Cellular Communications, Inc. from 1987
to 1994, serving as Vice Chairman from 1988 to 1991. Mr. Stanton is a director
of SmarTone Inc., a Hong Kong wireless communications company and also serves as
a Trustee of Whitman College.
3
<PAGE> 5
<TABLE>
<S> <C> <C>
Peter H. van Oppen, age 44.............. 1999 1996
</TABLE>
Mr. van Oppen has served as Chairman, President and Chief Executive Officer
of ADIC since its acquisition by Interpoint in 1994. He also served as a
Director of ADIC for eight years prior to its acquisition by Interpoint in 1994.
He has served as Chairman of the Board of Directors of Interpoint since 1995. He
has served as President and Chief Executive Officer of Interpoint since 1989, as
President and Chief Operating Officer of Interpoint from 1987 to 1989, and as
Executive Vice President for Finance and Operations of Interpoint from 1985 to
1987. He serves as a Director of Seattle FilmWorks, Inc.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the last fiscal year and subsequent to the reconstitution of the
Board of Directors in anticipation of the spin-off, there were three meetings of
the Board of Directors. All directors attended at least seventy-five percent of
the meetings held except that Messrs. Bayley and Kistler did not attend one of
the meetings.
The Board of Directors has established an Audit Committee, a Nominating
Committee and a Compensation and Stock Option Committee. The Audit Committee,
composed of Messrs. Kistler, McNeill, and Walker, reviews with the Company's
independent auditors the scope, results and costs of the audit engagement.
During the last fiscal year, there were no meetings of the Audit Committee.
The Nominating Committee, composed of Messrs. Bayley, van Oppen, and
Walker, nominates and recommends candidates for the Board of Directors. During
the last fiscal year, there were no meetings of the Nominating Committee.
The Compensation and Stock Option Committee, composed of Messrs. Bayley,
Stanton, and Walker, determines the salary and bonus to be paid to the Company's
President and Chief Executive Officer and reviews the salaries and bonuses for
those reporting to the President and Chief Executive Officer. The Committee also
administers the Company's stock option plans and meets either independently or
in conjunction with the Company's full Board of Directors to grant options to
eligible individuals in accordance with the terms of each plan. During the last
fiscal year, there was one meeting of the Compensation and Stock Option
Committee and all Committee members attended the meeting.
COMPENSATION OF DIRECTORS; STOCK OPTION PROGRAM
Nonemployee directors are paid a retainer of $500 per quarter and $500 for
each Board of Directors meeting attended. The employee director is not paid any
fees for serving as a member of the Board of Directors. Audit Committee members
are paid $500 per meeting.
Under the Advanced Digital Information Corporation 1996 Stock Option Plan
("1996 Plan"), each director who is not an employee of the Company (an "Eligible
Director") will receive a nonqualified stock option for 5,500 shares of Common
Stock upon his or her initial election or appointment. Such options will vest in
four equal annual installments of 1,375 shares each beginning one year after the
date of grant. The 1996 Plan also provides for an annual grant of options to
purchase 1,000 shares of Common Stock to each Eligible Director on the date of
each annual meeting of Shareholders. Such options will vest on the date of the
next annual meeting of Shareholders and expire after five years. The 1996 Plan
is administered by the Compensation and Stock Option Committee of the Board of
Directors.
4
<PAGE> 6
EXECUTIVE OFFICERS
The following are executive officers of ADIC who will serve in the
capacities noted until their successors are appointed:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------- --- --------------------------------------------
<S> <C> <C>
Peter H. van Oppen................. 44 Chairman of the Board, President and Chief
Executive Officer
Charles H. Stonecipher............. 35 Senior Vice President and Chief Operating
Officer
Michel R. Grosbost................. 50 President and General Manager, ADIC Europe
William C. Britts.................. 37 Vice President, Sales and Marketing
Barry W. Brugman................... 51 Vice President, Operations and Finance
Nathan H. Searle................... 49 Vice President, Engineering
</TABLE>
Each executive officer of the Company is appointed annually by the Board of
Directors.
For a biographical summary of Mr. van Oppen see "ELECTION OF DIRECTORS".
Charles H. Stonecipher. Mr. Stonecipher has served as Senior Vice
President and Chief Operating Officer of ADIC since 1995. Prior to this, he
served as Vice President, Finance and Administration and Chief Financial Officer
of Interpoint from 1994 to 1995. Prior to joining Interpoint, Mr. Stonecipher
worked as a Manager at Bain & Company in San Francisco.
Michel R. Grosbost. Mr. Grosbost has served as President and General
Manager of ADIC Europe since 1994. From 1988 to 1994, Mr. Grosbost served in
various general management positions with Gigatape and Gigatrend. From 1985 to
1988, Mr. Grosbost served as Vice President, International with Intertechnique.
William C. Britts. Mr. Britts has served as Vice President, Sales and
Marketing of ADIC since 1995. He has also served as Director of Marketing of
ADIC since 1995. Prior to joining ADIC, Mr. Britts served in a number of
marketing and sales positions with Raychem Corporation and its subsidiary, Elo
TouchSystems, beginning in 1988.
Barry W. Brugman. Mr. Brugman serves as Vice President, Finance and
Operations of ADIC, a position he has held since 1994. He previously has served
as the Vice President and General Manager of the Custom Hybrids Division of
Interpoint from 1993 to 1994, Vice President of Operations of Interpoint from
1992 to 1993, and Vice President of Marketing of the Custom Hybrids Division of
Interpoint from 1989 to 1992.
Nathan H. Searle. Mr. Searle has served as Vice President, Engineering of
ADIC since 1988. From 1986 to 1988, Mr. Searle served as Vice President of IQ
Technologies Inc. Mr. Searle also co-founded Output Technology Corporation and
served as its Vice President, Engineering, from 1984 to 1985.
5
<PAGE> 7
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information concerning the Company's
Chief Executive Officer (the "CEO") and each of the other five most highly
compensated executive officers (together with the CEO, the "named executive
officers") during the fiscal year ended October 31, 1996 (and where required,
for the fiscal years ended October 31, 1995 and 1994) based on services rendered
to Interpoint and ADIC.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND BONUS($) COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) (2) ($) OPTIONS(#) ($)
- ------------------------------ ---- --------- -------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Peter H. van Oppen............ 1996 $ 221,000 $96,067 120,000 $ 150(3)
President, Chairman and 1995 212,493 20,636 -- 150(3)
CEO(1) 1994 202,339 45,896 -- 150(3)
Charles H. Stonecipher........ 1996 122,442 49,165 95,000 150(3)
Senior Vice President and 1995 116,059 7,650 20,000 150(3)
Chief Operating Officer(5) 1994 25,004 2,089 30,000 33,879(4)
Michel R. Grosbost............ 1996 138,720(6) 26,300 (6) -- 41,500
President and General Manager, 1995 138,720(6) 5,487 (6) $36,809(6)(7) 32,000
ADIC Europe(8)
William C. Britts............. 1996 93,094 20,936 25,000 150(3)
Vice President, Sales and
Marketing(9)
Barry W. Brugman.............. 1996 94,074 23,338 25,000
Vice President, Operations and 1995 92,040 8,000 --
Finance(10)
Nathan H. Searle.............. 1996 96,403 22,985 25,000 150(3)
Vice President, 1995 93,875 7,308 6,000 150(3)
Engineering(11)
</TABLE>
- ---------------
(1) Salary excludes cash-out of unused sick days and vacation days in
accordance with Interpoint's flexible time-off plan, which was applicable
to all Interpoint Team Members. Such cash-out amounted to $22,645, $4,023,
and $8,420 in fiscal 1996, 1995 and 1994, respectively. Also excludes
$454,067 related to compensation for the buyout of Interpoint Stock
Options.
(2) Consists of profit bonus and Management Incentive Plan (MIP) awards for
fiscal 1996, 1995 and 1994.
(3) Consists of matching contributions to the 401(k) plan.
(4) Includes a payment in the amount of $33,729 associated with relocation
expenses. The remainder consists of matching contributions to the 401(k)
plan.
(5) Salary excludes cash-out of unused sick and vacation days in accordance
with ADIC's new policy of not recognizing vacation accruals for officers.
Such cash-out amounted to $12,451. Also excludes $177,543 related to
compensation for the buyout of Interpoint Stock Options. Mr. Stonecipher
joined Interpoint in August 1994.
(6) Assumes an exchange rate of French francs to U.S. dollars of 5:1.
(7) Includes payments by ADIC Europe to two companies, which in turn
compensated Mr. Grosbost for services rendered.
(8) Excludes $75,380 related to compensation for the buyout of Interpoint Stock
Options.
(9) Salary excludes cash-out of unused sick and vacation days in accordance
with ADIC's new policy of not recognizing vacation accruals for officers.
Such cash-out amounted to $10,417. Also excludes $56,285 related to
compensation for the buyout of Interpoint Stock Options.
6
<PAGE> 8
(10) Salary excludes cash-out of unused sick and vacation days in accordance
with ADIC's new policy of not recognizing vacation accruals for officers.
Such cash-out amounted to $7,723. Also excludes $89,968 related to
compensation for the buyout of Interpoint Stock Options.
(11) Salary excludes cash-out of unused sick and vacation days in accordance
with ADIC's new policy of not recognizing vacation accruals for officers.
Such cash-out amounted to $4,870. Also excludes $117,853 related to
compensation for the buyout of Interpoint Stock Options.
STOCK OPTION GRANTS
The following table sets forth certain information regarding options
granted during the fiscal year ended October 31, 1996 to the named executive
officers under the ADIC 1996 Stock Option Plan and the Interpoint Corporation
Amended 1995 Stock Option Plan. In connection with the spin-off of ADIC from
Interpoint, all options to purchase Interpoint Common Stock held by Team Members
were converted into a combination of cash and options to purchase an equivalent
number of shares of ADIC Common Stock.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------------- VALUE
PERCENT OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE
SHARES GRANTED TO APPRECIATION
UNDERLYING TEAM FOR OPTION TERM(3)
OPTIONS MEMBERS IN EXERCISE PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR ($/SHARE) DATE 5% 10%
- --------------------------- ---------- ------------- -------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Peter H. van Oppen......... 20,000 4.45% $ 5.2328(1) 5/21/01 $ 28,915 $ 63,894
100,000 22.23% 13.2500(2) 10/16/01 366,073 808,926
Charles H. Stonecipher..... 20,000 4.45% 5.2328(1) 5/21/01 28,915 63,894
75,000 16.68% 13.2500(2) 10/16/01 274,555 606,694
Michel R. Grosbost......... 4,000 .89% 5.2328(1) 5/21/01 5,783 12,779
37,500 8.34% 13.2500(2) 10/16/01 137,277 303,347
William C. Britts.......... 25,000 5.56% 13.2500(2) 10/16/01 91,518 202,231
Barry W. Brugman........... 25,000 5.56% 13.2500(2) 10/16/01 91,518 202,231
Nathan H. Searle........... 25,000 5.56% 13.2500(2) 10/16/01 91,518 202,231
</TABLE>
- ---------------
(1) On May 21, 1996, options were granted to purchase Interpoint Common Stock at
a price of $7.4375. In connection with the spin-off, these options were
converted to cash payments of $37,906 each for Messrs. van Oppen and
Stonecipher and $7,581 for Mr. Grosbost, representing the value attributable
to the merged microelectronics business, and options to purchase ADIC Common
Stock at the stated price.
(2) These options vest in four equal annual installment beginning one year after
the date of grant. The per share exercise price represents the fair market
value of the ADIC Common Stock on the date of grant. The options expire five
years from the date of grant.
(3) Future value of current year grants assuming appreciation of 5% and 10% per
year over the five-year option period. The actual value realized may be
greater than or less than the potential realizable values set forth in the
table.
7
<PAGE> 9
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUE TABLE
The following table sets forth certain information regarding options
exercised and options held as of October 31, 1996 and for the fiscal year then
ended by each of the named executive officers.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
SHARES OCTOBER 31, 1996 OCTOBER 31, 1996(2)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Peter H. van Oppen......... 97,518 $ 1,004,111 127,482 120,000 $ 1,213,235 $ 125,344
Charles H. Stonecipher..... -- -- 23,000 122,000 191,680 353,526
Michel R. Grosbost......... 7,000 71,563 4,000 62,500 30,522 199,686
William C. Britts.......... -- -- 5,000 40,000 42,242 126,725
Barry W. Brugman........... -- -- 26,900 25,000 261,117 --
Nathan H. Searle........... -- -- 26,800 31,700 279,533 59,441
</TABLE>
- ---------------
(1) Value realized is determined by subtracting the exercise price from the fair
market value on the date that the options were exercised and multiplying the
resulting number by the number of underlying shares of Common Stock.
(2) Value is calculated based on the difference between the option exercise
price and the fair market value of the ADIC Common Stock as of October 31,
1996, times the number of shares.
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEE ON ANNUAL COMPENSATION
The policy of the Compensation and Stock Option Committee (the "Committee")
with respect to executive officer compensation is that such compensation should
(i) assist ADIC in attracting and retaining key executives critical to the
Company's success, (ii) align the interests of the executives with the interests
of the Shareholders, (iii) reflect ADIC's performance and (iv) reward executives
for their individual performance. Executive compensation includes base salary,
bonuses based on Company performance and stock option grants. These programs are
designed to provide incentives for both short and long-term performance.
Base Salary. The base salary of the Chief Executive Officer ("CEO") is set
at an amount the Committee believes is competitive or somewhat below salaries
paid to executives of companies of comparable size in similar industries and
located within the Company's local area. In evaluating salaries, the Committee
relies upon an American Electronics Association survey which provides data by
industry and size of company as well as knowledge of local pay practices as
reported in financial periodicals or otherwise accessible to the Committee.
Additionally, a review of the CEO's performance and a general review of the
Company's financial and stock price performance are considered.
The base salary for executive officers and all other salaried Team Members
is reviewed annually. During 1996, the review date was moved from August 1 to
June 1 for all salaried Team Members except executive officers. The CEO's base
salary was increased from $220,000 to $228,800 on August 1, 1996, and this
adjustment provided an increase of 4.0 percent which is approximately equal to
the average adjustment granted to other executive officers and salaried Team
Members at ADIC and Interpoint. Effective October 16, which was the date of the
ADIC spin-off, the CEO began full-time responsibilities at ADIC and his base
salary was reduced to $200,000 per year. This salary change was based on the
recommendation of the CEO and is intended to shift the mix of total compensation
toward performance incentives and stock options which is consistent with the
industry in which ADIC operates.
Bonuses. Bonuses for 1996 were paid under the Interpoint Profit Sharing
and Management Incentive Plans. The Profit Sharing Plan is a noncontributory
plan that covered all domestic ADIC Team Members except certain commissioned
sales personnel. The plan, which has been in place at Interpoint in
substantially
8
<PAGE> 10
the same form since 1973, provided for up to fifteen percent of the Company's
pretax profits to be contributed to the Plan which were then allocated among the
Team Members, including the CEO, based upon his or her monthly wage and length
of service. The plan was capped at a payout equal to one month's pay, which was
paid in 1996, including $19,067 paid to the CEO. Effective November 1, 1996, the
Interpoint Profit Sharing plan was replaced by the ADIC Bonus Plan described
below.
The Interpoint Management Incentive Plan ("MIP") was also noncontributory
and covered approximately 26 ADIC Team Members. The Board of Directors set aside
a portion of pretax profits for payment under the MIP based upon achievement of
certain corporate performance goals which were established at the beginning of
the year. These goals were primarily tied to operating profit and provided for
significant growth in sales and profitability during 1996. Upon achievement of
these goals, MIP payment targets were set as a percentage of base compensation
depending upon the Team Member's level of responsibility. In 1996, ADIC
participants were paid a total of approximately $265,000 under this plan,
including $77,000 to the CEO. Effective November 1, 1996, the Interpoint
Management Incentive Plan was replaced by the ADIC Bonus Plan described below.
ADIC Bonus Plan. Effective November 1, the ADIC Bonus Plan ("ABP") was
adopted to replace all other cash incentive plans for fiscal 1997. Participants
in the ABP include the President of ADIC Europe and all domestic ADIC Team
Members except certain commissioned sales personnel. Payout amounts will be
based on job grade, vesting, individual performance and corporate performance.
Aggregate total payouts are expected to be less than ten percent of the
Company's pre-tax income at an operating income equal to 125 percent of budgeted
levels. At that profit level, individual amounts are targeted to range between
eight percent and 50 percent of base salary. Team Members become eligible for
the bonus plan on a pro rata basis beginning the third month of employment and
become fully eligible at the end of one year of employment, including prior
service at Interpoint. Payouts will be made on an annual, single payment basis.
Stock Option Grants. The Company provides its executive officers with
long-term incentives through the 1996 Transition Plan, which includes options
replacing previously granted Interpoint stock options, and the 1996 Stock Option
Plan. The objective of these plans is to provide incentives to maximize
shareholder value. The Committee relies upon surveys and general familiarity
with the proportion of shares available for stock options in similar
technology-based companies to determine appropriate grant levels. There were no
option grants made to the CEO during 1994 or 1995. On May 21, 1996, the CEO was
granted options to purchase 10,000 Interpoint shares at a price of $14.875 per
share. Subsequent to the 2:1 stock split and conversion to ADIC Replacement
Options per the terms of the Merger Agreement and the Transition Plan, this
grant now represents options to purchase 20,000 shares of ADIC common stock at
an exercise price of $5.2328 per share. On October 16, the CEO was granted
options to purchase 100,000 ADIC shares at an exercise price of $13.25 per
share. Both 1996 stock option grants are subject to a four-year vesting
schedule.
COMPENSATION AND STOCK OPTION COMMITTEE
John W. Stanton, Chairman
Christopher T. Bayley
Walter F. Walker
9
<PAGE> 11
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE RETURN(1)
AMONG ADVANCED DIGITAL INFORMATION CORPORATION,
NASDAQ COMPUTER MANUFACTURER INDEX AND S&P 500 INDEX
<TABLE>
<CAPTION>
NASDAQ COMPUTER
MEASUREMENT PERIOD STANDARD & POOR'S MANUFACTURER IN-
(FISCAL YEAR COVERED) INDEX DEX ADIC STOCK
<S> <C> <C> <C>
10/17/96 100 100 100
10/31/96 100 97 85
</TABLE>
- ---------------
(1) Assumes $100 invested in ADIC Common Stock at the close of the first day of
trading on October 17, 1996. Similarly, assumes $100 invested in the Nasdaq
Computer Manufacturer Index and the S&P 500 Index on October 17, 1996.
SECTION 16 REPORTING
Section 16(a) of the Exchange Act requires ADIC's officers and directors,
and persons who own more than 10% of a registered class of ADIC's equity
securities, to file reports of ownership and changes in ownership with the
Commission. Officers, directors and greater than 10% shareholders are required
by Commission regulation to furnish ADIC with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Form 5s were
required for those persons, ADIC believes that during fiscal 1996 all filing
requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with, except that 4,000 shares of Common Stock
held by the spouse of Christopher Bayley, a director of the Company, received in
the spin-off of ADIC from Interpoint, were not included in a Form 4 filed by him
for the month of October 1996.
10
<PAGE> 12
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of January 3, 1997, with
respect to all Shareholders known by ADIC to be the beneficial owners of more
than 5% of the outstanding shares of ADIC Common Stock. Except as noted, ADIC
believes that the beneficial owners of the shares of ADIC Common Stock listed
below, based on information furnished by such owners, have sole voting and
investment power with respect to such shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED
----------------------
NAME AND ADDRESS NUMBER PERCENT
--------------------------------------------------------------- ------- -------
<S> <C> <C>
John W. Stanton................................................ 481,464(1) 6.0%
10201 Willows Road
Redmond, Washington 98052
</TABLE>
- ---------------
(1) Includes 13,000 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of January 3, 1997, with
respect to the beneficial ownership of shares of ADIC Common Stock of each
director of ADIC, each of ADIC's executive officers for whom compensation is
reported in this Proxy Statement, and all directors and executive officers of
ADIC as a group. Except as noted, ADIC believes that the beneficial owners
listed below, based on information furnished by such owner, have sole voting and
investment power with respect to such shares.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
-----------------------------
NAME NUMBER PERCENT
--------------------------------------------------------- --------- -------
<S> <C> <C>
John W. Stanton.......................................... 481,484(1) 6.0%
Walter P. Kistler........................................ 328,900(1)(2) 4.1%
Peter H. van Oppen....................................... 291,956 3.6%
Nathan H. Searle......................................... 76,300(4) *
Christopher T. Bayley.................................... 58,000(1)(11) *
Charles H. Stonecipher................................... 9,000(5) *
Barry W. Brugman......................................... 39,050(6) *
Michel R. Grosbost....................................... 20,000(7) *
Walter F. Walker......................................... 18,750(10) *
Russell F. McNeill....................................... 8,800(8) *
William C. Britts........................................ 10,000(9) *
All directors and executive officers as a group (11
persons)............................................... 1,342,220 16.7%
</TABLE>
- ---------------
* Represents holdings of less than 1%.
(1) Includes 13,000 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(2) Includes 250,000 shares owned by Foundation for the Future, in which Mr.
Kistler is a trustee.
(3) Does not include 10,300 shares that are held in trust for Mr. van Oppen's
minor children or 6,000 shares that are held in a trust (as to which Mr.
van Oppen serves as trustee) for the benefit of certain minor relatives of
Mr. van Oppen, as to which he disclaims beneficial ownership. Includes
127,482 shares subject to issuance upon exercise of ADIC options that are
exercisable within 60 days.
(4) Includes 28,300 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(5) Includes 7,000 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
11
<PAGE> 13
(6) Includes 26,900 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(7) Includes 6,000 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(8) Includes 8,800 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(9) Includes 10,000 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(10) Includes 3,750 shares subject to issuance upon exercise of ADIC options
that are exercisable within 60 days.
(11) Includes 4,000 shares owned by Mr. Bayley's spouse.
CERTAIN TRANSACTIONS
The Company leases its facility located in Redmond, Washington, from K-M
Properties, a general partnership of which Walter P. Kistler, a director, is a
partner. Rent payments for fiscal 1996 were $300,862.
The Company reimburses Michel R. Grosbost, President and General Manager,
ADIC Europe, for use of office space and equipment located in his residence in
connection with the Company's sales operations in Europe. Rent payments for use
of this office space and equipment in fiscal 1996 were $24,000.
INDEPENDENT AUDITORS
Price Waterhouse LLP was ADIC's independent auditor in 1996. A
representative of Price Waterhouse LLP will be present at the Annual Meeting to
respond to appropriate questions and will have the opportunity to make a
statement, if desired.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals for Shareholder action that eligible Shareholders wish to have
included in the Company's Annual Meeting to be held in February 1998 must be
received by the Company at its principal executive offices on or before
September 24, 1997.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters that may
come before the Annual Meeting. If any other matters should properly come before
the Annual Meeting or any adjournment, the persons named in the proxy intend to
vote the proxy in accordance with their best judgment.
By Order of the Board of Directors
/s/ Charles H. Stonecipher
----------------------------------
CHARLES H. STONECIPHER
Secretary
Redmond, Washington
January 22, 1997
12
<PAGE> 14
PROXY
ADVANCED DIGITAL INFORMATION CORPORATION
10201 Willows Road
P.O. Box 97057
Redmond, WA 98073-9757
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS FEBRUARY 19, 1997
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned appoints Peter H. van Oppen and Charles H. Stonecipher, and
either of them, with full powers of substitution, attorneys and proxies to vote
all shares of stock of the undersigned entitled to vote at the Annual Meeting
of Shareholders of ADIC Corporation ("ADIC") to be held at the Hyatt Regency
Bellevue at Bellevue Place, 900 Bellevue Way N.E., Bellevue, Washington on
February 19, 1997 at 10 a.m. and any adjournment or postponements thereof with
all powers the undersigned would possess if personally present:
- FOLD AND DETACH HERE -
<PAGE> 15
Please mark
your votes as
indicated in
this example. /x/
The Board of Directors recommends a vote "FOR":
FOR WITHHOLD
all nominees AUTHORITY
(except as instructed to vote for
to the contrary below) all nominees
1. ELECTION OF DIRECTORS
NOMINEES: Christopher T. Bayley
Russell F. McNeill
INSTRUCTION: To withhold authority to vote for
any individual nominee write that nominee's name in
the space provided below.
---------------------------------------------------
2. Such other matters as may properly come before the Meeting. The Board of
Directors at present knows of no other matters to be brought before the
Meeting.
The proxy will be voted in accordance with the instructions
given. Unless revoked or otherwise instructed, the shares
represented by this proxy will be voted for proposal 1 and
will be voted in accordance with the discretion of the proxies
upon all other matters which may come before the Meeting
or any adjournment or postponement thereof.
Signature of Shareholder(s) Dated ,1977
----------------------------- ----------
PLEASE SIGN AS YOUR NAME APPEARS. Trustees, Guardians, Personal and other
Representatives, please indicate full titles.
PLEASE DATE AND MAIL IN ENCLOSED POSTAGE-PAID ENVELOPE.
- FOLD AND DETACH HERE -
