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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:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
EXABYTE CORPORATION
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(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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[LOGO OF EXABYTE CORPORATION APPEARS HERE]
1685 38TH STREET
BOULDER, COLORADO 80301
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1996
TO THE STOCKHOLDERS OF EXABYTE CORPORATION:
NOTICE IS HEREBY given that the Annual Meeting of Stockholders of Exabyte
Corporation, a Delaware corporation (the "Company"), will be held on Tuesday,
April 30, 1996 at 9:30 a.m. at the Company's principal executive offices, 1685
38th Street, Boulder, Colorado, for the following purposes:
1. To elect two directors to hold office until the 1999 Annual Meeting of
Stockholders.
2. To approve the Company's Employee Stock Purchase Plan, as amended, to,
among other things, increase the number of shares authorized for issuance
thereunder by 500,000 shares, to increase to 15% the maximum percentage of
earnings which each employee may apply to the purchase of shares under the
Purchase Plan and to extend the termination date of the Purchase Plan to
January 25, 2006.
3. To ratify the selection of Price Waterhouse LLP as independent
accountants of the Company for its fiscal year ending December 28, 1996.
4. To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 11, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at this Annual Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
[SIGNATURE OF STEPHEN F. SMITH
APPEARS HERE]
Stephen F. Smith
Corporate Secretary
Boulder, Colorado
March 28, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE
YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN
IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
BRING TO THE MEETING A LETTER FROM THE BROKER, BANK OR OTHER NOMINEE
CONFIRMING YOUR BENEFICIAL OWNERSHIP OF THE SHARES. ADDITIONALLY, IN ORDER
TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY
ISSUED IN YOUR NAME.
<PAGE>
EXABYTE CORPORATION
1685 38TH STREET
BOULDER, COLORADO 80301
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 30, 1996
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Exabyte Corporation, a Delaware corporation (the "Company" or "Exabyte"), for
use at the Annual Meeting of Stockholders to be held on April 30, 1996, at 9:30
a.m. (the "Annual Meeting"), or at any adjournment or postponement thereof, for
the purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Annual Meeting will be held at the Company's principal executive offices,
1685 38th Street, Boulder, Colorado.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, facsimile,
telegram or personal solicitation by directors, officers or other regular
employees of the Company. No additional compensation will be paid to directors,
officers or other regular employees for such services.
The Company knows of no business which will be presented for consideration at
the Annual Meeting other than that stated in the Notice of Annual Meeting.
However, if any other business shall properly come before the meeting, it is
the intention of the persons named in the accompanying proxy to vote in respect
of such other business in accordance with their best judgment.
The Company intends to mail this proxy statement and accompanying proxy card
on or about March 28, 1996 to all stockholders entitled to vote at the Annual
Meeting.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on March 11,
1996 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on March 11, 1996, the Company had outstanding and entitled
to vote 21,837,911 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted toward the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted toward a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
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REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive offices, 1685
38th Street, Boulder, Colorado 80301, a written notice of revocation or a duly
executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the Company's
1997 Annual Meeting of Stockholders must be received by the Company not later
than November 27, 1996 in order to be included in the proxy statement and proxy
relating to that Annual Meeting. Stockholders are also advised to review the
Company's By-laws, which contain additional requirements with respect to
advance notice of director nominations and stockholder proposals.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and By-laws provide that
the Board of Directors shall be divided into three classes, each class
consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the Board may
be filled by a majority of the stockholders or by a majority of the remaining
directors. A director elected to fill a vacancy (including a vacancy created by
an increase in the Board of Directors) shall serve for the remainder of the
full term of the class of directors in which the vacancy occurred and until
such director's successor is elected and qualified.
The Board is presently composed of seven members. There are two directors in
the class whose terms of office expire in 1996. The nominees for election to
this class are currently directors of the Company. Ralph Z. Sorenson was
previously elected by the stockholders and Thomas E. Pardun was elected by the
Board of Directors in April 1995 to fill the unexpired term of Juan Rodriguez,
who resigned from the Board in August 1993. If elected at the Annual Meeting,
each of the nominees would serve until the 1999 Annual Meeting and until
successors are elected and have qualified, or until such director's earlier
death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the two nominees named below. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such
shares will be voted for the election of such substitute nominee as management
may propose. Each person nominated for election has agreed to serve, if
elected, and management has no reason to believe that any nominee will be
unable to serve.
Set forth below is biographical information for each person nominated and
each person whose term of office as a director will continue after the Annual
Meeting.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 1999 ANNUAL MEETING
Ralph Z. Sorenson
Dr. Sorenson, age 62, has served as a director of Exabyte since January 1993.
Dr. Sorenson is currently a Professor Emeritus at the College of Business and
Administration at the University of Colorado at Boulder. From July 1992 to June
1993 he was Dean of the College. Dr. Sorenson served as Adjunct Professor of
Management at the Harvard Business School from 1989 to 1992, teaching
management policy and practice. From 1981 to 1989, Dr. Sorenson was Chairman,
President and Chief Executive Officer of Barry Wright
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Corporation, a diversified industrial company engaged in the design and
manufacture of industrial products for improving productivity and integrating
filing systems for the office. Prior to 1981 he was president of Babson College
in Wellesley, Massachusetts. Dr. Sorenson also serves as a director of Eaton
Vance Corporation, Houghton Mifflin Company, Polaroid Corporation, Sweetwater,
Inc., Whole Foods Market Incorporated and Xenometrix, Inc.
Thomas E. Pardun
Mr. Thomas E. Pardun, age 52, has served as a director of Exabyte since April
1995. Mr. Pardun is President and Chief Executive Officer of U.S. WEST
Multimedia Communications, Inc., a subsidiary of U.S. WEST, Inc., since April
1993. U.S. WEST Multimedia Communications, Inc. is responsible for U.S. WEST's
entry into domestic cable networks outside the 14 states served by U.S. WEST
Communications and for alliances and partnerships to develop multimedia
products and applications. Formerly, Mr. Pardun was Vice President and General
Manager of Business and Government Services at U.S. WEST Communications from
January 1990 to April 1993. He served as Vice President of Marketing and
Planning for U.S. WEST Communications from June 1988 through December 1989. Mr.
Pardun was President of U.S. Sprint's Central Group, Sprint's West Division,
and Senior Vice President of Business Development for Sprint in Kansas City.
Prior to his association with Sprint, Mr. Pardun held a variety of management
positions with IBM Corporation. Mr. Pardun also serves as a director of Western
Digital Corporation and the Denver Center for the Performing Arts.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE
DIRECTORS CONTINUING IN OFFICE UNTIL THE 1997 ANNUAL MEETING
James M. McCoy
Mr. James M. McCoy, age 49, has served as a director of Exabyte since March
1986. Mr. McCoy is Chairman of the Board and Chief Executive Officer of
TeraStor Corporation, a storage technology development company, since November
1995. Until February 1994, Mr. McCoy served as Chairman of the Board of Maxtor
Corporation, a disk drive manufacturer, which he co-founded in 1982. Mr. McCoy
also served as Chief Executive Officer of Maxtor from 1982 to 1987. Prior to
his association with Maxtor, Mr. McCoy was a co-founder and Vice President of
Marketing for Quantum Corporation, a disk drive manufacturer. Mr. McCoy
previously held marketing and manufacturing management positions at Shugart
Associates, Verbatim Corporation, Information Magnetics Corporation,
AVCO/Cartridge Television and IBM.
Mark W. Perry
Mr. Mark W. Perry, age 52, has served as director of Exabyte Corporation
since March 1994. Mr. Perry has been associated with the venture capital firm
of New Enterprise Associates since January 1996. Prior thereto, Mr. Perry
served as President and Chief Executive Officer and then as Chairman of
Viewstar Corporation, a provider of business process automation, client/server
software, from May 1994 to December 1995. Previously, Mr. Perry was employed by
Silicon Graphics, Inc., a manufacturer of visual computing systems, serving as
Vice Chairman of the Board of Directors from April 1992 until May 1994, as
Executive Vice President responsible for worldwide sales, marketing and
service, business development and administration in 1991 and 1992, as Executive
Vice President responsible for the product divisions, including research and
development, manufacturing, marketing and software applications from 1988
through 1990, and as Vice President of Finance and Administration and Chief
Financial Officer from 1985 to 1988. Prior to his association with Silicon
Graphics, Inc., Mr. Perry was Executive Vice President and Chief Operating
Officer of Sonoma Vineyards, Windsor, California from 1982 to 1985 and a
partner at Arthur Young & Company, San Francisco, California, from 1977 to
1982. Mr. Perry is a Certified Public Accountant. Mr. Perry is also a director
of Arbor Software Corporation.
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DIRECTORS CONTINUING IN OFFICE UNTIL THE 1998 ANNUAL MEETING
Peter D. Behrendt
Mr. Behrendt, age 57, joined the Company as President, Chief Operating
Officer and director in July 1987 and has served as the Company's Chief
Executive Officer since July 1990 and as the Company's Chairman of the Board
since January 1992. Prior to joining the Company, Mr. Behrendt held various
executive positions during 26 years with IBM, including Director of Quality and
Product Assurance for the Information Systems and Communications Group and
Product Manager of the electronic typewriter business, and was responsible for
product and business planning for IBM's disk offerings. Mr. Behrendt is also a
director of Western Digital Corporation and Infocus Systems Corporation.
Bruce M. Holland
Mr. Holland, age 44, has served as a director of Exabyte since January 1989.
Mr. Holland has served as President, Chief Executive Officer and a director of
SpectraLink Corporation, a telecommunications equipment manufacturer, since its
inception in April 1990. Prior thereto, Mr. Holland founded Cadnetix, a CAD/CAM
manufacturer, in 1982 and served as its President and a member of its Board of
Directors from its inception until the merger with Daisy Systems in 1988, at
which time he became President, Chief Operating Officer and a director of
Daisy/Cadnetix, Inc. Mr. Holland resigned as President and Chief Operating
Officer of Daisy/Cadnetix, Inc. in September 1989 and resigned his position as
a director in December 1989.
Thomas G. Washing
Mr. Washing, age 54, has served as a director of Exabyte since January 1986.
Since April 1994, Mr. Washing has been President of Sanitas Capital Management,
a Boulder, Colorado-based firm providing strategic and financial assistance to
emerging growth companies. Mr. Washing was a General Partner in the venture
capital firm of Hill, Carman & Washing from 1985 to 1994. He previously co-
founded Horsley Keogh & Associates, a venture capital investment firm, in 1983.
Prior to entering the venture capital industry, Mr. Washing was a partner in
the law firm of Nixon, Hargrave, Devans & Doyle, where he specialized in
corporate and securities law.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 30, 1995, the Board of Directors held
six meetings. The Board has an Audit Committee and a Compensation Committee but
does not have a Nominating Committee or any committee performing a similar
function.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained;
and receives and considers the auditors' comments as to controls, adequacy of
staff and management performance, and procedures in connection with audit and
financial controls. The Audit Committee, which is currently composed of Messrs.
Washing, Perry and Sorenson, met four times during the year ended December 30,
1995.
The Compensation Committee makes recommendations concerning salaries,
incentive compensation and stock options to officers and directors, and
otherwise determines compensation levels and performs such other functions
regarding compensation as the Board may delegate. The Compensation Committee is
currently composed of Messrs. Holland, McCoy, Pardun, Perry, Sorenson and
Washing. The Compensation Committee met one time during the year ended December
30, 1995. Under the terms of the Company's Incentive Stock Plan, the Board of
Directors delegated the authority to grant options to employees who are not
officers or directors to a Stock Option Committee, composed of Messrs.
Behrendt, Holland, Pardun and Washing, which met four times during fiscal 1995.
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During the fiscal year ended December 30, 1995, each Board member attended at
least 75% of the aggregate of the meetings of the Board and of the committees
on which he served, during the period for which he was a director or committee
member, respectively.
PROPOSAL 2
APPROVAL OF EMPLOYEE STOCK
PURCHASE PLAN, AS AMENDED
The Company's Board of Directors adopted the Employee Stock Purchase Plan
(the "Purchase Plan") in November 1989, which provided for the issuance of up
to 500,000 shares of the Company's Common Stock to employees of the Company. As
of January 1, 1996, 383,268 shares had been issued under the Purchase Plan and
only 116,732 shares (plus any shares that might in the future be returned to
the Plan as a result of cancellation or expiration of rights) remained
available under the Purchase Plan. As a result, in January 1996, subject to
stockholder approval, the Board approved the Purchase Plan, as amended, to
increase the number of shares authorized for issuance under the Purchase Plan,
as amended, from 500,000 shares to an aggregate of 1,000,000 shares.
The Purchase Plan was also amended to, among other things, authorize the
Board of Directors, in any offering adopted by the Board under the Plan, to
permit Plan participants to apply up to 15% of earnings to the purchase of
shares of Company Common Stock under the Purchase Plan. Prior to such
amendment, participants could apply up to 10% of earnings to the purchase of
shares under the Purchase Plan. In addition, the Purchase Plan was amended to
permit participants to designate a beneficiary to receive such participants'
shares and cash in the event of death. In connection with these amendments to
the Purchase Plan, the term of the Purchase Plan was extended to January 25,
2006. These amendments were adopted to afford greater flexibility to the Board
in providing employees with stock incentives and to ensure that the Company can
continue to provide such incentives at levels determined by the Board.
During the last fiscal year, shares were purchased under the Purchase Plan by
executive officers as follows: Mr. Behrendt, 1,301 shares; Mr. Riegel, 946
shares; Mr. Marriner, 1,301 shares; all executive officers as a group, 3,548
shares at a weighted average price of $11.67 per share and all employees
(excluding executive officers) as a group, 81,014 shares at a weighted average
price of $11.66 per share.
Stockholders are requested in this proposal to approve the Purchase Plan, as
amended. The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and entitled to vote at the meeting
will be required to approve the Purchase Plan, as amended. Abstentions will be
counted toward the tabulation of votes cast on the proposal and will have the
same effect as negative votes. Broker non-votes are counted toward a quorum,
but are not counted for any purpose in determining whether this matter has been
approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
The essential features of the Purchase Plan, as amended, are outlined below.
GENERAL TERMS OF THE EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
PURPOSE
The purpose of the Purchase Plan is to provide a means by which employees of
the Company and any parent or subsidiary of the Company designated by the Board
can be given the opportunity to acquire
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Common Stock of the Company through payroll deductions, to assist the Company
in retaining the services of employees, to secure and retain the services of
new employees and to provide incentives for employees to exert maximum effort
for the success of the Company.
The rights to purchase Common Stock granted under the Purchase Plan are
intended to qualify as options issued under an "employee stock purchase plan"
as that term is defined in Section 423(b) of the Internal Revenue Code of 1986,
as amended (the "Code").
ADMINISTRATION
The Purchase Plan is administered by the Board of Directors, which has the
final power to construe and interpret the Purchase Plan and the rights granted
under it. The Board has the final power, subject to the provisions of the
Purchase Plan, to determine when and how rights to purchase Common Stock of the
Company will be granted, the terms of each offering of such rights (which need
not be identical), whether the employees of any parent or subsidiary of the
Company will be eligible to participate in such Plan, and to establish, amend
and revoke the rules and regulations of the Plan's administration. The Board
has the authority in the Purchase Plan, as amended, to delegate administration
of the Plan to a committee composed of at least two members of the Board.
OFFERINGS
The Purchase Plan is implemented by offerings of rights to all eligible
employees from time to time by the Board. The provision of separate offerings
need not be identical but each offering can be no more than 27 months.
Currently, the Board has authorized a series of separate offerings under the
Purchase Plan to commence twice a year unless no shares are available for
issuance under the Purchase Plan. Each separate offering of the series
currently authorized by the Board is of six months' duration. The provisions of
these offerings may be changed by the Board of Directors in the future.
ELIGIBILITY
Unless the Board of Directors otherwise determines as set forth in the terms
of the applicable offering, any person who is customarily employed at least 20
hours per week and at least five months per calendar year by the Company, or by
any parent or subsidiary of the Company designated from time to time by the
Board, on the first day of an offering period, is eligible to participate in
that offering under the Purchase Plan. To be eligible under the Plan, an
employee must have been continuously employed by the Company for such period,
not to equal or exceed two years, as is determined by the Board. The Board has
determined that in order to be eligible under the current series of offerings,
an employee must be employed by the Company (or a designated parent or
subsidiary) on the business day preceding the first day of an offering period.
The Board may provide that employees who become eligible after an offering has
commenced may receive rights under that offering. Of the Company's 1,278
employees, 1,003 are eligible to participate in the current series of offerings
under the Purchase Plan.
Notwithstanding the foregoing, no employee is eligible for the grant of any
rights under the Purchase Plan if, immediately after such grant, the employee
would own, directly or indirectly, stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of an
affiliate of the Company (including any stock which such employee may purchase
under all outstanding rights and options), nor will any employee be granted
rights that would permit him to buy more than $25,000 worth of stock (based
upon the fair market value of the shares at the time such rights are granted)
under all employee stock purchase plans of the Company and its affiliates in
any calendar year.
STOCK SUBJECT TO THE PURCHASE PLAN
Up to 1,000,000 shares of the Company's Common Stock are authorized for
issuance under the Purchase Plan, as amended. If rights granted under the
Purchase Plan terminate without being exercised, the Common Stock not purchased
under such rights again becomes available for issuance under the Purchase Plan.
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PARTICIPATION IN THE PLAN
Eligible employees become participants in the Purchase Plan, as amended, by
delivering to the Company, within the time specified in each offering, an
agreement authorizing payroll deductions of up to 15% (or such lower percentage
as the Board may designate for a particular offering) of such employees'
earnings, as such term is defined in the Plan, during the offering period.
Under the series of offerings currently authorized by the Board, participants
may authorize up to 10% of such employees' earnings during the offering period.
PURCHASE PRICE
The purchase price per share at which shares are sold in an offering under
the Purchase Plan cannot be less than the lower of (1) 85% of the fair market
value of a share of Common Stock on the date of commencement of the offering,
or (2) 85% of the fair market value of a share of Common Stock on the date of
purchase. At March 11, 1996, the closing share price of the Company's Common
Stock reported on The Nasdaq National Market was $13.625.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions over
the offering period. The Plan provides that a participant may terminate his or
her payroll deductions at any time prior to the end of the applicable offering
period, subject to the term of an offering. The Board has determined that, with
respect to the current series of offerings, withdrawal from an offering may be
elected at any time prior to the 10-day period immediately preceding the last
day of the applicable offering period. The Purchase Plan provides that the
Board shall determine if a participant may reduce, increase or begin such
payroll deductions after the beginning of an offering period and whether
additional payments may be made by the participant. The Board has determined
that, for the current series of offerings, a participant may not increase,
begin or reduce (except upon withdrawal) such payroll deductions after the
beginning of the offering period, and that a participant may not make any
additional payments into his or her account under the Purchase Plan. All
payroll deductions made for the participant are credited to his or her account
under the Purchase Plan and deposited with the general funds of the Company.
PURCHASE OF STOCK
By executing an agreement to participate in the Purchase Plan, the employee
is entitled to purchase shares under such Plan. In connection with each
offering made under the Purchase Plan, the Board specifies a maximum number of
shares any employee may be granted the right to purchase and the maximum
aggregate number of shares which may be purchased pursuant to such offering by
all participants. The current series of offerings provides that (i) no employee
may purchase in any given offering more than 1,000 shares of Common Stock of
the Company, and (ii) the maximum number of shares available to be purchased
under an offering (by all participants), is the number of shares equal to the
lesser of (a) the number of shares remaining available under the Purchase Plan
or (b) 100,000 shares plus the number of shares available but not purchased
under the preceding offering. If the aggregate number of shares to be purchased
upon exercise of rights granted in the offering would exceed the maximum
aggregate number, the Board would make a pro rata allocation of shares
available in a uniform and equitable manner.
Unless the employee's participation is discontinued (see "Withdrawal" below),
his or her right to purchase shares is exercised automatically at the
applicable price on each date specified in the offering (an "Exercise Date").
The balance in each such employee's account (without any increase for interest)
will be applied to the purchase of whole shares of Common Stock of the Company
up to the maximum number of shares permitted pursuant to the terms of the
Purchase Plan and the applicable offering, at the purchase price specified in
the offering. Under the series of offerings currently authorized by the Board,
the Exercise Date is the last day of an offering period. The provisions of
future offerings may be changed by the Board of Directors.
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WITHDRAWAL
While each participant in the Purchase Plan is required to sign an agreement
authorizing payroll deductions, the participant may withdraw from a given
offering by terminating his or her payroll deductions and by delivering to the
Company a notice of withdrawal from the Purchase Plan. Under the current series
of offerings, such withdrawal may be elected at any time prior to the 10-day
period immediately preceding the last day of the applicable offering period.
Upon any withdrawal from an offering by the employee, the Company will
distribute to the employee his or her net accumulated payroll deductions,
without interest, and such employee's interest in the offering will be
automatically terminated. The employee is not entitled to again participate in
such offering. An employee's withdrawal from an offering will not have any
effect upon such employee's eligibility to participate in subsequent offerings
under the Purchase Plan.
TERMINATION OF EMPLOYMENT
Rights granted under any offering under the Purchase Plan terminate
immediately upon cessation of an employee's employment for any reason, and the
Company will distribute to such employee all of his or her net accumulated
payroll deductions without interest.
RESTRICTIONS ON TRANSFER
Rights granted under the Purchase Plan, as amended, are not transferable and
may be exercised only by the person to whom such rights are granted.
ADJUSTMENT PROVISIONS
If any change is made to the stock subject to the Purchase Plan or subject to
any rights granted under the Purchase Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Board shall make
appropriate adjustments in the classes and maximum number of shares subject to
the Purchase Plan and the classes, number of shares, and price per share of
stock subject to outstanding rights.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a dissolution, liquidation, specified type of merger of the
Company, or any other capital reorganization in which more than 50% of the
shares of the Company entitled to vote are exchanged, then, as determined by
the Board in its sole discretion, a participant's accumulated payroll
deductions will be used to purchase stock in the Company immediately prior to
such an event and the participant's rights under the ongoing offering
terminated, or any surviving corporation may assume any outstanding rights
under the Purchase Plan or substitute similar rights for those outstanding
rights, or such rights may continue in full force and effect.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Purchase Plan at any time. Unless
terminated earlier, such Plan will terminate on January 25, 2006.
The Board may amend the Purchase Plan at any time. Any amendment of the
Purchase Plan must be approved by the stockholders within 12 months before or
after its adoption by the Board if the amendment would (i) modify the
requirements as to eligibility for participation (to the extent such
modification would require stockholder approval in order for the Purchase Plan
to obtain employee stock purchase plan treatment
8
<PAGE>
under Section 423 of the Code); (ii) increase the number of shares reserved for
issuance under the Purchase Plan; or (iii) change any other provision of the
Purchase Plan in any other way if such modification would require stockholder
approval in order for the Plan to obtain employee stock purchase plan treatment
under Section 423 of the Code or to comply with the requirements of Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Rights granted before amendment or termination of the Purchase Plan will not
be altered or impaired by any amendment or termination of such Plan without the
consent of the person to whom such rights were granted.
FEDERAL INCOME TAX INFORMATION
Rights granted under the Purchase Plan are intended to qualify for favorable
federal income tax treatment associated with rights granted under an employee
stock purchase plan that qualifies under Section 423 of the Code. Under these
provisions, a participant will be taxed on amounts withheld for the purchase of
shares under the Plan as if such amounts were actually received. Other than
this, no income will be taxable to a participant until disposition of the
shares acquired, and the method of taxation will depend upon the holding period
of the purchased shares.
If the stock is disposed of at least two years after the beginning of the
offering period and at least one year after the stock is transferred to the
participant, then the lesser of (i) the excess of the fair market value of the
stock at the time of such disposition over the exercise price or (ii) the
excess of the fair market value of the stock as of the beginning of the
offering period over the exercise price (determined as of the beginning of the
offering period) will be treated as ordinary income. Any further gain or any
loss will be taxed as a long-term capital gain or loss. Capital gains currently
are generally subject to lower tax rates than ordinary income.
If the stock is sold or disposed of before the expiration of either of the
holding periods described above, then the excess of the fair market value of
the stock on the exercise date over the exercise price will be treated as
ordinary income at the time of such disposition, and the Company may, in the
future, be required to withhold income taxes relating to such ordinary income
from other payments made to the participant. The balance of any gain will be
treated as capital gain. Even if the stock is later disposed of for less than
its fair market value on the exercise date, the same amount of ordinary income
is attributed to the participant, and a capital loss is recognized equal to the
difference between the sales price and the fair market value of the stock on
such exercise date. Any capital gain or loss will be long-term or short-term
depending on whether the stock has been held for more than one year.
There are no federal income tax consequences to the Company by reason of the
grant or exercise of rights under the Purchase Plan. The Company is entitled to
a deduction to the extent amounts are taxed as ordinary income to a participant
(subject to the requirement of reasonableness, the provisions of Section 162(m)
of the Code and the satisfaction of a tax reporting obligation).
PROPOSAL 3
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP as the Company's
independent accountants for the fiscal year ending December 28, 1996 and has
further directed that management submit the selection of independent
accountants for ratification by the stockholders at the Annual Meeting. Price
Waterhouse LLP has audited the Company's financial statements since inception.
A representative of Price Waterhouse LLP is expected to be present at the
Annual Meeting, will have an opportunity to make a statement if he so desires
and will be available to respond to appropriate questions.
9
<PAGE>
Stockholder ratification of the selection of Price Waterhouse LLP as the
Company's independent accountants is not required by the Company's By-laws or
otherwise. However, the Board is submitting the selection of Price Waterhouse
LLP to the stockholders for ratification as a matter of good corporate
practice. If the stockholders fail to ratify the selection, the Board will
reconsider whether or not to retain that firm. Even if the selection is
ratified, the Board in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board determines
that such a change would be in the best interests of the Company and its
stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of Price Waterhouse LLP. Abstentions will
be counted toward the tabulation of votes cast on this proposal and will have
the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether this matter
has been approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of March 11, 1996 by: (i) each director; (ii)
each executive officer named in the Summary Compensation Table who was
employed by the Company in that capacity as of March 11, 1996; (iii) all
executive officers and directors of the Company as a group; and (iv) all those
known by the Company to be beneficial owners of more than five percent of its
Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP(1)
--------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
- ---------------- --------- ----------
<S> <C> <C>
State of Wisconsin Investment Board. 1,942,500 8.90%
P.O. Box 7842
Madison, WI 53707(2)
American Express Company ............ 1,562,500 7.15%
American Express Tower
World Financial Center
New York, NY 55440(3)
FMR Corp............................ 1,288,200 5.90%
82 Devonshire Street
Boston, MA 02109-3614(4)
Peter D. Behrendt(5)(6)............. 426,752 1.95%
Bruce M. Holland(5)................. 8,800 *
James M. McCoy(5)................... 18,400 *
Thomas E. Pardun(5)................. 3,700 *
Mark W. Perry(5).................... 6,800 *
Ralph Z. Sorenson(5)................ 12,300 *
Thomas G. Washing(5)(7)............. 52,096 *
Mark W. Canright(5)................. 53,292 *
William L. Marriner(5)(8)........... 157,054 *
David L. Riegel(5)(9)............... 102,572 *
All executive officers and directors
as a group (10 persons)(10)......... 841,766 3.85%
</TABLE>
- --------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G, if any, filed with the
Securities and Exchange Commission (the "Commission"). Unless otherwise
indicated in the footnotes to this table and subject to community property
laws where applicable, each of the stockholders named in this table has
sole voting and investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based on 21,837,911 shares
outstanding on March 11, 1996, adjusted as required by rules promulgated
by the Commission.
(2) State of Wisconsin Investment Board ("SWIB") is an independent agency of
the State of Wisconsin created by Wisconsin law and serves as investment
manager of the trust funds for the Wisconsin Retirement System. SWIB has
sole voting and dispositive power for all of such shares.
(3) American Express Company is sole owner of 1,438,900 shares and has sole
voting and dispositive power with respect to such shares. It shares voting
power with American Express Financial Corporation, a wholly-owned
subsidiary of American Express Company, with respect to 123,600 shares.
(4) Fidelity Management & Research Company ("FM&RC"), a wholly-owned
subsidiary of FMR Corp. and a registered investment advisor, beneficially
owns 2,682,300 of such shares as the result of acting as an investment
advisor to several registered investment companies ("Funds"). FMR Corp.,
through its control of FM&RC, has sole investment power with respect to
these shares. Voting power over these shares resides with each respective
Fund's Board of Trustees. Fidelity Management Trust Company ("FMTC"), a
wholly-owned subsidiary of FMR Corp. and a bank, beneficially owns 56,100
of such shares as a result of its serving as investment manager of several
institutional accounts. Edward C. Johnson III and FMR Corp., through its
control of FMTC, has sole investment and voting power over these shares.
(5) Includes shares issuable upon the exercise of stock options that are
exercisable within 60 days of March 11, 1996, pursuant to outstanding
options as follows: Mr. Behrendt, 316,300 shares; Mr. Holland, 8,400
shares; Mr. McCoy, 8,400 shares; Mr. Pardun, 2,700 shares; Mr. Perry,
6,800 shares; Mr. Sorenson, 12,300 shares; Mr. Washing, 8,400 shares; Mr.
Canright, 52,820 shares; Mr. Marriner, 88,200 shares; and Mr. Riegel,
100,000 shares.
(6) Includes 21,960 shares held by Mr. Behrendt's spouse as custodian for the
benefit of three children of Mr. Behrendt.
(7) Includes 3,500 shares held by Mr. Washing's spouse as to which he
disclaims beneficial ownership.
(8) Includes 15,000 shares held by Mr. Marriner's spouse.
(9) Includes 1,626 shares held in trust for the benefit of Mr. Riegel and his
spouse.
(10) Includes shares described in the notes above, as applicable.
11
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than 10% of a registered class of
the Company's equity securities, to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than 10%
stockholders are required by Commission regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during fiscal 1995, all Section 16(a) filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT(1)
The Compensation Committee of the Board of Directors of the Company (the
"Committee") is composed entirely of outside directors and is responsible for
establishing and administering the policies which govern the compensation of
executive officers.
Compensation Philosophy. The Company's executive compensation programs are
designed to attract and retain executives capable of leading the Company to
meet its business objectives and to motivate them to enhance long-term
stockholder values. The elements of the Company's compensation program include
base salary compensation, annual incentive compensation and long-term
compensation.
Base Compensation. To determine base salary, the Committee, as in previous
years, reviewed the report submitted by the Human Resources department of the
Company, which reviews independent surveys that compare compensation paid to
executives in high technology companies with revenues between $150 million and
$500 million. One of the surveys reviewed also includes a separate comparison
for a group of 15 companies of comparable size in the systems and peripherals
business (the "Industry Survey"). Both total compensation and the proportion
reported as incentive pay were examined.
In determining base salary for 1995 for the Company's Chief Executive
Officer, Peter Behrendt, the Committee targeted base salary to be approximately
at the midrange for chief executive officers of the companies included in the
Industry Survey. In addition to the Industry Survey results, the Committee
reviewed Mr. Behrendt's performance of job responsibilities in 1994, as well as
other factors. The Committee noted that, in 1994, the Company completed the
acquisition of a division of Grundig AG to support the development of an
announced 8mm helical scan product and continued to aggressively pursue the
development of new products to strengthen the Company's place in the market.
The Committee did not assign relative weights to these factors. As a result of
these considerations, the Committee granted Mr. Behrendt an increase in his
base salary of 5.5%, which placed Mr. Behrendt's salary at approximately the
midrange of the Industry Survey.
Annual Incentive Compensation. Incentive compensation for executive officers
is reflected in the annual bonus plan which is established at the first Board
Meeting of each year and is based upon attainment of pre-tax income goals
established by the Board in the adoption of the annual Operating Plan. In 1995,
the bonus for Mr. Behrendt was established as a percentage of his 1995 base
salary, payable if the Company satisfied pre-tax income goals established by
the annual Operating Plan. The target level of operating profit was not
achieved by the end of fiscal 1995 and, as a result, there were no executive
bonuses for fiscal 1995.
12
<PAGE>
Long-Term Compensation. The third component of compensation is long-term
compensation, reflected in the stock option program. The Company has used the
grant of options under the Incentive Stock Plan (the "Incentive Plan") to
underscore the common interests of stockholders and management. Options
granted to executive officers are intended to provide a continuing financial
incentive to maximize long-term value to stockholders. In determining the size
of an option to be granted to an executive officer, the Committee takes into
account an officer's position and level of responsibility within the Company,
the officer's existing stock and unvested option holdings, and the potential
reward to the officer if the stock price appreciates in the public market. The
Committee concluded that long-term incentive compensation should continue to
constitute a significant component of compensation for executives in 1995. As
a result, in 1995 the Committee granted options to executive officers to
purchase Common Stock at levels ranging from 20,000 to 65,000 shares. Applying
the factors described above, the Committee granted Mr. Behrendt a stock option
to acquire 65,000 shares. Mr. Behrendt's grant of options, as well as those
granted to other executive officers, are in the midrange of equity incentives
granted to executive officers at other companies in the Industry Survey. The
exercise price for each grant represents the closing price of the stock on the
date of grant. The Company's option grants are on a 50-month vesting schedule
and are only of value at the time of vesting, and only if the stock price has
appreciated.
The Company has not adopted a policy with respect to Section 162(m) of the
Code. However, the Compensation Committee has determined that stock options
and rights granted under the Incentive Plan with an exercise price at least
equal to the fair market value of the Company's Common Stock on the date of
grant should, where practicable, be treated as "performance-based
compensation." The Company's stockholders have approved an amendment to the
Incentive Plan which would allow any compensation recognized by a Named
Executive Officer as a result of the grant of such a stock option to be
deductible by the Company. This amendment provides that no employee may be
granted stock options under the Incentive Plan during a calendar year to
purchase in excess of 500,000 shares of Common Stock.
COMPENSATION COMMITTEE
James M. McCoy Mark W. Perry Ralph Z. Sorenson
Bruce M. Holland Thomas E. Pardun Thomas G. Washing
- --------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the Commission and is not to be incorporated by reference in
any filing of the Company under the Securities Act of 1933, as amended
(the "Securities Act") or the Exchange Act, whether made before or after
the date hereof and irrespective of any general incorporation language in
any such filing.
COMPENSATION OF DIRECTORS
Effective February 3, 1995, each director of the Company who is not a full-
time employee of the Company received $15,000 as an annual retainer for his
service as a director. In addition, such directors receive $1,500 for
attendance at every Board meeting and $250 for attendance at every meeting of
a committee of the Board of which they are members or every telephone Board
meeting. Non-employee directors received an aggregate of $75,500 for services
rendered to the Company as directors during fiscal 1995. The Company also
reimburses non-employee directors for out-of-pocket travel expenses in
connection with their attendance at meetings of the Board. Pursuant to the
Company's Incentive Plan, on January 27th of each fiscal year, each non-
employee director who has been a non-employee director for at least three
months is automatically granted an option to purchase 5,000 shares of the
Company's Common Stock. Each newly-elected non-employee director, upon initial
election to the Board, is to receive an option to purchase 10,000 shares of
the Company's Common Stock. The exercise price of such options equals the fair
market value of the Company's Common Stock on the date of grant and vests at
the rate of 2% per month commencing on the date of grant. During fiscal 1995,
options covering an aggregate of 35,000 shares were granted to the Company's
non-employee directors as a group with a weighted average exercise price per
share of $16.375.
13
<PAGE>
EXECUTIVE OFFICER SEVERANCE PROGRAM
Effective January 26, 1996, the Compensation Committee approved and the
Board of Directors adopted a severance compensation program ("Severance
Program") under which officers and other specified employees of the Company
would receive certain severance payments in the event their employment with
the Company were terminated within one year after certain changes in control
of the Company. The Severance Program provides for a severance payment in
varying amounts, not to exceed 18 months of compensation, depending upon the
time of any such change in control as well as the position level of such
terminated officer or employee. The Severance Program further provides, under
certain circumstances, for the acceleration of the vesting of outstanding and
unexercised stock options held by the affected officer or employee.
SUMMARY OF COMPENSATION
The following table provides, for the years ended December 30, 1995,
December 31, 1994 and January 1, 1994, certain summary information concerning
compensation paid to or earned by the Company's Chief Executive Officer and
each of the other most highly-compensated executive officers of the Company at
December 30, 1995 whose aggregate base salary and bonus for fiscal 1995
exceeded $100,000 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
------------------------------------------ ------------
SECURITIES ALL OTHER
OTHER ANNUAL UNDERLYING COMPEN-
NAME AND PRINCIPAL COMPEN- OPTIONS SATION
POSITION YEAR SALARY($)(1) BONUS($) SATION($)(2) (#)(3) ($)(4)
- ------------------ ---- ------------ -------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Behrendt....... 1995 406,680 0 0 65,000 7,826
Chief Executive 1994 385,582 253,176 0 70,000 8,670
Officer 1993 367,029 55,388 0 25,000 8,547
David L. Riegel......... 1995 230,371 0 0 30,000 7,101
Exec. Vice President 1994 208,846 109,704 0 60,000 6,636
of Operations 1993 200,000 26,250 0 0 3,150
William L. Marriner..... 1995 224,932 0 0 30,000 4,489
Exec. Vice President 1994 203,867 100,399 0 50,000 5,314
Chief Financial 1993 194,002 25,617 0 20,000 5,191
Officer
Mark W. Canright........ 1995 189,980 149,209(5) 0 20,000 5,326
Sr. Vice President 1994 176,539 284,955(5) 0 38,000 5,538
Sales & Customer 1993 148,269 221,900(5) 0 20,000 4,668
Support(5)
</TABLE>
- --------
(1) Includes amounts earned but deferred at the election of the Named
Executive Officers under the Company's 401(k) Plan.
(2) As permitted by Commission rules, no amounts are shown for certain
perquisites, where such amounts do not exceed the lesser of 10% of bonus
plus salary or $50,000.
(3) The Company has not granted any SARs or restricted stock awards.
(4) Includes the Company's matching payments under its 40l(k) plan for 1995 as
follows: Mr. Behrendt, $3,750; Mr. Riegel, $3,750; Mr. Marriner, $3,750;
and Mr. Canright, $3,750. Also includes the dollar value of executive life
insurance premiums paid by the Company in 1995 for the benefit of the
Named Executive Officers as follows: Mr. Behrendt, $4,076; Mr. Riegel,
$3,351; Mr. Marriner, $739; and Mr. Canright, $1,576.
(5) Includes $149,209 in commissions paid to Mr. Canright for 1995; $189,187
in commissions paid to Mr. Canright for 1994; and $173,872 in commissions
paid to Mr. Canright for 1993.
14
<PAGE>
INCENTIVE STOCK PLAN
The Company's Board of Directors adopted the Incentive Plan in January 1987.
As a result of a series of amendments, at March 11, 1996, there were 8,000,000
shares of Common Stock authorized for issuance under the Incentive Plan. The
Incentive Plan provides for the grant of both incentive and nonstatutory
options to employees and consultants to the Company and its affiliates. The
Incentive Plan also provides for the non-discretionary grant of nonstatutory
stock options to non-employee directors of the Company or any of its
affiliates.
As of March 11, 1996, options to purchase 3,378,657 shares were outstanding
under the Incentive Plan and options to purchase 1,408,401 shares remained
available for future grant thereunder.
STOCK OPTION GRANTS
The following table contains information for the year ended December 30,
1995 concerning the grant of stock options under the Company's Incentive Plan
to the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
AT ASSUMED ANNUAL
RATES OF STOCK
PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM(3)
-------------------------------------------- -----------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES
GRANTED IN FISCAL EXERCISE EXPIRATION
NAME (#)(1) YEAR(2) PRICE($/SH) DATE 5%($) 10%($)
---- ---------- ---------- ----------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Peter D. Behrendt....... 65,000 7.72 17.625 02/03/05 720,477 1,825,831
David L. Riegel ........ 30,000 3.56 17.625 02/03/05 332,538 842,691
William L. Marriner .... 30,000 3.56 17.625 02/03/05 332,538 842,691
Mark W. Canright ....... 20,000 2.37 17.625 02/03/05 221,685 561,794
</TABLE>
- --------
(1) The Company has no plan that provides for the issuance of SARs. Options
generally vest at the rate of 2% of the total grant per month beginning
one month from the date of grant for a period of 50 months. Options may be
either nonstatutory or incentive stock options under the Code. The
exercise price of options granted under the Incentive Plan must be equal
to the fair market value of the Common Stock subject to the option on the
date of grant. Options will fully vest upon a change of control unless the
Board directs otherwise. The Board may not reprice options granted under
the Incentive Plan.
(2) Based on options granted to employees for the year ending December 30,
1995 to purchase 842,340 shares.
(3) The potential realizable value is based on the term of the option at the
date of grant (10 years in each case). It is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual
rate, compounded annually for the entire term, and that the option is
exercised and sold on the last day of the option term for the appreciated
stock price. These amounts represent certain assumed rates of appreciation
only, in accordance with the rules of the Commission, and do not reflect
the Company's estimate or projection of future stock price performance.
Actual gains, if any, are dependent on the actual future performance of
the Common Stock. There can be no assurance that the amounts reflected in
this table will be achieved.
15
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information, with respect to the Named Executive
Officers, concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year:
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 OPTIONS AT FY-END (#)(2) AT FY-END ($)(3)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Peter D. Behrendt ...... 12,400 152,210 296,800/106,500 2,112,120/6,563
David L. Riegel ........ 0 0 82,400/ 87,600 0/ 0
William L. Marriner .... 0 0 76,600/ 63,600 12,250/5,250
Mark W. Canright ....... 0 0 44,340/ 44,960 16,038/5,250
</TABLE>
- --------
(1) Value realized is based on the fair market value of the Company's Common
Stock on the date of exercise (based on the closing sales price reported
on the Nasdaq National Market) less the exercise price and does not
necessarily indicate that the shares were sold by the optionee.
(2) Includes both "in-the-money" and "out-of-the-money" options. "In-the-
money" options are options with exercise prices below the market price of
the Company's Common Stock at December 30, 1995.
(3) Fair market value of the Company's Common Stock at December 30, 1995
($14.625, based on the closing sales price reported on the Nasdaq National
Market) less the exercise price of the option.
16
<PAGE>
PERFORMANCE GRAPH(1)
COMPARISON OF CUMULATIVE TOTAL RETURN
OF EXABYTE CORPORATION,
INDUSTRY INDEX AND BROAD MARKET
[GRAPH APPEARS HERE]
---------------------------FISCAL YEAR ENDING---------------------------------
COMPANY 1990 1991 1992 1993 1994 1995
EXABYTE CORPORATION 100 221.70 137.74 133.02 161.32 110.38
INDUSTRY INDEX 100 102.70 91.85 106.03 128.60 176.37
BROAD MARKET 100 128.38 129.64 155.50 163.26 211.77
ASSUMES $100 INVESTED ON DECEMBER 29, 1990
ASSUMES DIVIDEND REINVESTMENT
FISCAL YEAR ENDED DECEMBER 30, 1995
- --------
(1) The material in this chart is not "soliciting material," is not deemed
"filed" with the Commission and is not to be incorporated by reference in
any filing of the Company under the Securities Act or the Exchange Act,
whether made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
CERTAIN TRANSACTIONS
The Company's By-laws provide that the Company will indemnify its directors
and executive officers and may indemnify its other officers, employees and
other agents to the extent permitted by Delaware law. Under the Company's By-
laws, indemnified parties are entitled to indemnification for negligence,
gross negligence and otherwise to the fullest extent permitted by law. The By-
laws also require the Company to advance litigation expenses in the case of
stockholder derivative actions or other actions, against an undertaking by the
indemnified party to repay such advances if it is ultimately determined that
the indemnified party is not entitled to indemnification. The Company has
entered into indemnification agreements with each of its directors and
executive officers. These agreements contain provisions which are in some
respects broader than the specific indemnification provisions contained in
Delaware law, and
17
<PAGE>
authorize the Company's Board of Directors to obtain an irrevocable standby
letter of credit in the amount of $300,000 per director or executive officer
that may be extended by the Company to secure the Company's indemnification
obligations.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
[SIGNATURE OF STEPHEN F. SMITH
APPEARS HERE]
Stephen F. Smith
Corporate Secretary
- --------
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995 IS AVAILABLE WITHOUT
CHARGE UPON WRITTEN REQUEST TO: VIKI MCKINNEY, EXABYTE CORPORATION, 1685 38TH
STREET, BOULDER, COLORADO 80301.
18
<PAGE>
DETACH HERE EXA 1
EXABYTE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
P TO BE HELD ON APRIL 30, 1996
R
O The undersigned hereby appoints Peter D. Behrendt and William L.
X Marriner, and each of them, as attorneys and proxies of the undersigned,
Y with full power of substitution, to vote all of the shares of stock of
Exabyte Corporation (the "Company") which the undersigned may be entitled
to vote at the Annual Meeting of Stockholders of the Company to be held at
the Company's principal executive offices, 1885 38th Street, Boulder,
Colorado 80301 on Tuesday, April 30, 1996 at 9:30 a.m., and at any and all
continuations, postponements and adjournments thereof, with all powers that
the undersigned would possess if personally present, upon and in respect of
the following matters and in accordance with the following instructions,
with discretionary authority as to any and all other matters that may
properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS
ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
(Continued and to be signed on reverse side) SEE REVERSE
SIDE
<PAGE>
DETACH HERE EXA 4
Please mark
[X] votes as in
this example.
Please vote, date and promptly return this proxy in the enclosed return
envelope which is postage prepaid if mailed in the United States.
1. To elect two directors to hold FOR AGAINST ABSTAIN
office until the 1999 Annual 2. To approve the [_] [_] [_]
Meeting of Stockholders. Company's
Nominees: Thomas E. Pardun and Employee Stock
Ralph Z. Sorenson Purchase Plan,
as amended.
FOR WITHHELD
[_] [_]
MARK HERE
[_] __________________________________ FOR ADDRESS [_]
For all nominees except as noted above CHANGE AND
NOTE BELOW
3. To ratify the FOR AGAINST ABSTAIN
selection of [_] [_] [_]
Price Waterhouse
LLP as independent
accountants of the
Company for the
fiscal year ending
December 28, 1996.
Please sign exactly as your name
appears hereon. If the stock is
registered in the names of two or
more persons, each should sign.
Executors, administrators, trustees,
guardians and attorneys-in-fact
should add their titles. If signer
is a corporation, please give full
corporate name and have a duly
authorized officer sign, stating
title. If signer is a partnership,
please sign in partnership name by
authorized person.
Signature: ___________ Date: ___________ Signature: ___________ Date: _________
