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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
- --------------------------------------------------------------------------------
(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)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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>
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 10, 1999
To the Stockholders:
The 1999 Annual Meeting of Stockholders will be held at the following time and
place:
<TABLE>
<C> <S>
TIME: Monday, May 10, 1999
9:00 a.m. Mountain Standard Time
PLACE: Exabyte Corporate Headquarters
1685 38(th) Street
Boulder, Colorado 80301
PURPOSE: 1. To elect two directors;
2. To ratify the Board's selection of PricewaterhouseCoopers LLP as
Exabyte's independent accountants for fiscal 1999; and
3. To conduct any other business that has been properly brought before
the meeting.
</TABLE>
The accompanying Proxy Statement describes these items in greater detail.
You are entitled to notice of this Annual Meeting and may vote at this Annual
Meeting only if you were a stockholder of record at the close of business on
March 11, 1999. Whether or not you plan to attend the Annual Meeting, please
submit your proxy as soon as possible so that your shares can be voted at the
Annual Meeting in accordance with your instructions. This year you may vote over
the Internet, as well as by telephone or by mailing a traditional proxy card.
Please review the instructions on the enclosed proxy card and in the Proxy
Statement regarding each of these voting options.
By order of the Board of
Directors
[SIGNATURE OF STEPHEN F. SMITH]
Stephen F. Smith
CORPORATE SECRETARY
Boulder, Colorado
March 24, 1999
YOU MAY SUBMIT YOUR PROXY BY INTERNET, TELEPHONE OR MAIL. YOU MAY ALSO ATTEND
THE ANNUAL MEETING AND VOTE IN PERSON. SUBMITTING YOUR PROXY WILL NOT PREVENT
YOU FROM ATTENDING THE MEETING AND VOTING YOUR SHARES IN PERSON. IF YOUR SHARES
ARE HELD BY A BANK, BROKER, OR OTHER INTERMEDIARY, AND YOU WISH TO VOTE IN
PERSON, YOU MUST BRING A PROXY ISSUED IN YOUR NAME OR A LETTER FROM THE BANK OR
BROKER CONFIRMING YOUR BENEFICIAL OWNERSHIP.
<PAGE>
EXABYTE CORPORATION
-------------
PROXY STATEMENT
-------------
GENERAL
Exabyte Corporation's Board of Directors is soliciting the enclosed proxy to
use at the Annual Meeting of Stockholders, including any adjourned or postponed
meeting, for the purposes stated in this Proxy Statement and the accompanying
Notice of Annual Meeting. The Annual Meeting will be held on May 10, 1999 at
9:00 a.m. at Exabyte's corporate headquarters, 1685 38(th) Street, Boulder,
Colorado 80301.
We intend to mail this Proxy Statement and the enclosed proxy card on or
about March 24, 1999 to all stockholders of record as of March 11, 1999.
SOLICITATION
Exabyte will pay all costs of proxy solicitation, including the costs of
preparing, assembling, printing and mailing this Proxy Statement, the proxy card
and any additional information furnished to the stockholders. In addition to
solicitation by mail, proxies may be solicited by telephone, facsimile,
telegram, in person or otherwise, by Exabyte directors, officers or employees
without additional compensation. Exabyte may reimburse banks, brokerage houses,
fiduciaries, custodians and other intermediaries for their costs of forwarding
the proxy materials to beneficial owners.
RECORD DATE, VOTING RIGHTS AND SHARES OUTSTANDING
As of the close of business on March 11, 1999, the Record Date, 22,646,183
shares of common stock were outstanding and entitled to vote. You are entitled
to one vote for each share you hold as of the Record Date. If your shares are
registered directly in your name with Exabyte's transfer agent, EquiServe L.P.,
you are considered, with respect to those shares, a stockholder of record. If
your shares are held for you in a stock brokerage account or by a bank or other
nominee, you are considered a beneficial owner with respect to those shares.
Whether you are a stockholder of record or a beneficial owner, you may
direct your vote by granting a proxy (or, for beneficial owners, by submitting
voting instructions to your broker, bank or nominee who will grant a proxy in
accordance with your instructions). You can grant your proxy by mailing in your
completed, signed and dated proxy card. In addition, record holders and, in many
instances, beneficial owners, will be able to grant their proxies over the
Internet or by telephone, as permitted by Delaware law. If you are a beneficial
owner, to direct your vote you should follow the instructions provided on the
voting instruction card as provided by your broker, bank or nominee.
If you are a stockholder of record, to grant your proxy by Internet, you
will need access to the Internet and the World Wide Web. Go to the website
http://www.eproxyvote.com/exbt. Enter your 14-digit Control Number (found on
your proxy card) where indicated and follow the instructions provided on the
website.
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Record holders may also grant their proxies by telephone by calling the
toll-free number 1-877-PRX-VOTE (1-877-779-8683) or by calling collect on a
touch-tone phone (1-201-536-8073). Enter your 14-digit Control Number (found on
your proxy card) when prompted and follow the recorded instructions.
To vote by mail, indicate your voting preference(s) on the enclosed proxy
card, sign and date the card, and return it in the enclosed envelope, which is
postage-prepaid if mailed in the United States. For each voting method, if you
provide specific voting instructions, the proxy holders (as indicated on the
enclosed proxy card) will vote your shares as you instruct. If you do not
provide any specific voting instructions, the proxy holders will vote your
shares "FOR" all of the nominees for directors named in Proposal 1 and "FOR"
Proposal 2.
A quorum is necessary to hold a valid meeting. A quorum is reached when the
holders of at least a majority of the outstanding shares of common stock are
present in person or represented by proxy at the Annual Meeting. If you indicate
"ABSTAIN" on any proposal when granting your proxy, your shares will still count
towards a quorum, but your vote on that proposal will have the same effect as a
vote "AGAINST" the proposal. Broker non-votes will also be counted towards a
quorum, but otherwise will have no effect on the outcome of the proposal.
(Broker non-votes occur when brokers do not vote on some matters because they
have not been authorized to vote by the beneficial owners of the shares and do
not have discretionary authority to vote on those matters.)
REVOCABILITY OF PROXIES
You may revoke your proxy at any time before it is voted at the Annual
Meeting by:
- filing a written notice of revocation with the Corporate Secretary;
- filing another executed proxy, which bears a later date, with the
Corporate Secretary; or
- attending the Annual Meeting and voting in person. Please note that
simply attending the Annual Meeting will NOT revoke your proxy.
STOCKHOLDER PROPOSALS
We know of no additional business to be presented for vote at the Annual
Meeting that is not already included in this Proxy Statement. However, if
additional business is properly presented for a vote at the Annual Meeting, the
proxy holders intend to vote on that business in accordance with their best
judgment.
If you would like to present a proposal for possible inclusion in Exabyte's
proxy statement for the 2000 Annual Meeting of Stockholders, we must receive it
no later than November 25, 1999. Similarly, to present director nominations or
stockholder proposals at the meeting, you must provide us with advance written
notice as indicated in our By-laws by November 25, 1999. A copy of our By-laws
is available from the Corporate Secretary upon request.
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PROPOSAL 1
ELECTION OF DIRECTORS
GENERAL
There are currently seven directors on the Board. The Board is divided into
three classes. One class is elected at each annual meeting of stockholders for a
three-year term. Any vacancies on the Board (including a vacancy created by an
increase in the size of the Board) can be filled by either a majority vote of
the stockholders or a majority vote of the remaining directors. Any director
elected to fill a vacancy serves for the remainder of the term of the class in
which he was elected.
Directors are elected at the Annual Meeting by the holders of a plurality of
the shares present in person or represented by proxy and entitled to vote on the
matter, which means that the two nominees for director who receive the most
affirmative votes will be elected. The proxy holders will vote for the nominees
listed below, unless you otherwise direct on your proxy card. If any of the
nominees becomes unavailable for election, the proxy holders will vote for a
substitute nominee selected by management, or the Board may reduce the number of
directors to be elected at the meeting. The persons nominated for election have
agreed to serve if elected. We have no reason to believe that they will not be
able to serve.
There are two directors in the class whose term expires in 1999. The
nominees are currently directors of Exabyte who were previously elected by the
stockholders. If elected, the nominees would serve until the 2002 Annual Meeting
and until a successor is elected and qualified (or until the director's earlier
death, resignation or removal).
BOARD COMMITTEES AND MEETINGS
During fiscal 1998 (ended January 2, 1999), the Board held five regular
meetings (including telephone board meetings). The Board has three standing
committees: an Audit Committee, a Compensation Committee and a Stock Option
Committee. Each director attended at least 75% of the Board meetings and
committee meetings (of those committees on which he served) that were held
during his term in fiscal 1998.
The Audit Committee meets with Exabyte's independent auditors at least once
a year to review the results of the annual audit and discuss the financial
statements. The Audit Committee recommends to the Board the independent
accountants to be retained and considers the auditors' comments on controls,
adequacy of staff and management performance, and other audit and financial
control procedures. The Audit Committee, which is currently composed of Messrs.
Jones, Perry and Sorenson, met two times during fiscal 1998.
The Compensation Committee determines officer and director compensation
(including salaries, incentive compensation and stock options) as well as
compensation levels for other employees when necessary, and performs other
functions related to compensation that the Board assigns to it. The Compensation
Committee, currently composed of Messrs. Johnson, Jones, Perry, Pardun, and
Sorenson, met once during fiscal 1998.
The Stock Option Committee has the authority to grant options to employees
who are not officers or directors. The Stock Option Committee, currently
composed of Messrs. Behrendt, Johnson, Jones, Marriner, Pardun, Perry and
Sorenson, met four times during fiscal 1999.
Biographical information for both nominees is provided below, followed by
biographical information for each of the remaining directors.
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NOMINEES FOR ELECTION FOR A THREE-YEAR TERM (EXPIRING AT THE 2002 ANNUAL MEETING
OF STOCKHOLDERS)
RALPH Z. SORENSON
Dr. Ralph Z. Sorenson, age 65, 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 of Business and Administration.
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 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 and Whole
Foods Market Incorporated.
THOMAS E. PARDUN
Mr. Thomas E. Pardun, age 55, has served as a director of Exabyte since
April 1995. Mr. Pardun has been President of MediaOne International (previously
U.S. West International, Asia-Pacific, a subsidiary of U.S. West, Inc.), an
owner/operator of international properties in cable television, telephone
services, and wireless communications companies, since it was spun off from U.S.
West, Inc. in June of 1998. Prior, he served as President of U.S. West
International, Asia-Pacific, from May 1996 to June 1998. From April 1993 until
May 1996, Mr. Pardun was President and Chief Executive Officer of U.S. West
Multimedia Communications, Inc., a cable television and multimedia company.
Previously, 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 from August 1984 to May 1988.
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 RECOMMENDS A VOTE IN FAVOR OF EACH NOMINEE NAMED ABOVE
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL MEETING
MARK W. PERRY
Mr. Mark W. Perry, age 55, has served as a director of Exabyte since March
1994. Mr. Perry has served as a General Partner of New Enterprise Associates, a
venture capital firm focusing on information technology, since June 1996. From
May 1994 to December 1995, 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. Prior to joining Viewstar, Mr. Perry
was employed by Silicon Graphics, Inc., a manufacturer of visual computing
systems, serving as Vice Chairman from April 1992 until May 1994; Executive Vice
President responsible for worldwide sales, marketing and service, business
development and administration in 1991 and 1992; Executive Vice President
responsible for the product divisions, including research and development,
manufacturing, marketing and software applications, from 1988 through 1990; and
Vice President of Finance and Administration and Chief Financial Officer from
1985 to 1987. Prior to his association with Silicon Graphics, 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
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<PAGE>
1982. Mr. Perry is a Certified Public Accountant. Mr. Perry is also a director
of Cogit, Inc., Hyperion Solutions Corp., Siros, Inc., Silicon Spice, Inc., and
Warp Speed Communications.
WILLIAM L. MARRINER
Mr. William L. Marriner, age 46, joined Exabyte in March 1987 as Vice
President of finance and administration and Chief Financial Officer. He was
subsequently promoted to Senior Vice President in July 1991 and Executive Vice
President in December 1994 and continued to serve as Chief Financial Officer
until December 1997. Mr. Marriner was elected acting President and Chief
Executive Officer in January 1997, President, Chief Executive Officer and
director in July 1997 and Chairman of the Board in January 1998. Prior to
joining the Company, Mr. Marriner held various positions at Storage Technology
Corporation from 1978 to 1987, including Vice President of Pacific and Latin
American operations, manager of business planning and administration for
international operations and Assistant to the President.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING
PETER D. BEHRENDT
Mr. Peter D. Behrendt, age 60, joined Exabyte in July 1987 as President,
Chief Operating Officer and director. Mr. Behrendt was the Company's Chairman of
the Board from January 1992 until January 1998. He served as President until
January 1997, Chief Operating Officer until December 1994 and Chief Executive
Officer from July 1990 until January 1997. 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.
Mr. Behrendt was also responsible for product and business planning for IBM's
tape and disk offerings. Mr. Behrendt currently serves as a director of Western
Digital Corporation and Infocus Systems Corporation, as well as several private
companies.
A. LAURENCE JONES
Mr. A. Laurence Jones, age 46, has served as a director of Exabyte since May
1998. Mr. Jones is currently President of Messagemedia, Inc., a provider of
advanced messaging systems for Internet commerce, and has served as such since
March, 1999. Previously, Mr. Jones was an Operating Affiliate of McCown DeLeeuw
and Co., a private equity firm, from January 1998 to February 1999. Mr. Jones
served as President and Chief Executive Officer of Neodata Service, Inc., a
direct marketing company, from 1993 to 1998. Mr. Jones also served as President
and Chief Executive Officer of GovPX, Inc. from 1991 to 1993 and Senior Vice
President and Corporate Officer of Automatic Data Processing from 1987 to 1991.
Prior to 1987, Mr. Jones spent 10 years at Wang Laboratories, where he held
various technical and managerial positions, including that of Chief Executive
Officer of a financial information services division. Mr. Jones also serves as a
director of CCI/Triad, a private computer services company.
STEPHEN C. JOHNSON
Mr. Stephen C. Johnson, age 56, has served as a director of Exabyte since
May 1998. Mr. Johnson was a founder and has served since September 1983 as
President and Chief Executive Officer of Komag, Incorporated, a manufacturer of
media for hard disk drives. Previously, Mr. Johnson was President and Chief
Executive Officer of Boschert, Incorporated, a manufacturer of switching power
supplies. Mr. Johnson also serves as a director of Uniphase Corporation.
5
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PROPOSAL 2
APPROVAL OF INDEPENDENT
ACCOUNTANTS SELECTION
The Board has selected PricewaterhouseCoopers LLP (formally Price Waterhouse
LLP) as Exabyte's independent accountants for fiscal 1999 (ending January 1,
2000). The Board has directed that we submit this selection for ratification by
the stockholders at the Annual Meeting.
PricewaterhouseCoopers has audited Exabyte's financial statements since
Exabyte was first incorporated. We expect a representative of
PricewaterhouseCoopers to be present at the Annual Meeting to make a statement
if he so desires and to respond to any appropriate questions.
Stockholder approval of the selection of the accountants is not required by
our By-laws or otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers to the stockholders for approval because it believes it
is good corporate practice to do so. If the stockholders fail to approve this
proposal, the Board will consider whether to retain PricewaterhouseCoopers, but
the final decision rests entirely with the Board. Additionally, the Board may
appoint a different independent auditing firm at any time during the year if it
determines that doing so would be in the best interest of Exabyte 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 on the matter is required to
ratify the selection of PricewaterhouseCoopers.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2
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COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Exabyte's directors and executive officers, as well as persons who own more than
10% of Exabyte's common stock, to file initial reports of ownership and reports
of changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than 10% stockholders are required by SEC regulations to
furnish us with copies of all Section 16(a) forms they file.
To our knowledge, all such Section 16(a) filing requirements were complied
with during fiscal 1998. This statement is based solely on a review of reports
furnished to Exabyte and written representations that no other reports were
required during fiscal 1998.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides certain information regarding the ownership of
Exabyte's common stock as of March 3, 1999 by:
- each director;
- each executive officer named in the Summary Compensation Table;
- all of Exabyte's executive officers and directors as a group; and
- all those known to be beneficial owners of more than five percent of
Exabyte's common stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
-----------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
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<S> <C> <C>
First Pacific Advisors, Inc.(2).......................................................... 3,156,200 13.94%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
Merrill Lynch & Co., Inc.(3)............................................................. 1,579,700 6.98%
World Financial Center, North Tower
250 Vesey Street
New York, NY 10281
FMR Corp.(4)............................................................................. 1,385,000 6.12%
82 Devonshire Street
Boston, MA 02109
William L. Marriner(5)(6)................................................................ 335,765 1.47%
Peter D. Behrendt(5)(7).................................................................. 536,340 2.34%
Stephen C. Johnson(5).................................................................... 2,500 *
A. Laurence Jones(5)..................................................................... 2,500 *
Thomas E. Pardun(5)...................................................................... 19,000 *
Mark W. Perry(5)......................................................................... 27,400 *
Ralph Z. Sorenson(5)..................................................................... 28,400 *
Stephen F. Smith(5)...................................................................... 39,394 *
All executive officers and directors as a group (8 persons)(8)........................... 991,299 4.26%
</TABLE>
* Less than one percent.
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(1) This table is based upon information supplied by officers, directors and
principal stockholders and by Schedules 13D and 13G, if any, filed with the
SEC. 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 power to vote and dispose of the shares indicated as
beneficially owned. Applicable percentages are based on 22,646,183 shares
outstanding on March 3, 1999, adjusted as required by SEC rules.
(2) This information is based on a Schedule 13G, dated February 1, 1999, filed
with the SEC by First Pacific Advisors, Inc. ("First Pacific") and a
Schedule 13G, dated February 1, 1999, filed with the SEC by FPA Capital
Fund, Inc. ("FPA"), an investment fund managed by First Pacific. First
Pacific is shown to have shared voting power over 766,200 shares and shared
dispositive power over all shares. FPA is shown to have sole voting and
shared dispositive power over 1,400,000 shares, representing 6.18% of the
common stock.
(3) This information is based on a Schedule 13G, dated February 4, 1999, and
filed with the SEC by Merrill Lynch & Co., Inc. ("ML&Co."), on behalf of
Merrill Lynch Asset Management Group ("AMG"), and Merrill Lynch Variable
Series Fund, Inc./ Basic Value Focus ("Basic Value"), as a group. ML&Co., a
parent holding company, is shown to have shared dispositive and voting power
with respect to all shares, through AMG, an operating division of ML&Co.
consisting of ML&Co.'s indirectly owned asset management subsidiaries.
ML&Co. disclaims beneficial ownership of the securities reported. Basic
Value, located at 800 Scudders Mill Road, Plainsboro, NJ 08536, is an
investment company registered under the Investment Company Act of 1940 and
is shown to have shared dispositive and voting power with respect to
1,300,000 shares, representing 5.74% of the common stock.
(4) This information is based on a Schedule 13G, dated February 12, 1999, filed
with the SEC by FMR Corp. ("FMR"), Edward C. Johnson 3d and Abigail P.
Johnson. FMR, Edward C. Johnson 3d and Abigail P. Johnson are each shown to
have sole dispositive power with respect to all shares. Fidelity Management
& Research Company is a wholly owned subsidiary of FMR and is deemed the
beneficial owner with respect to all shares as a result of acting as an
investment adviser to various investment companies registered under Section
8 of the Investment Company Act of 1940. None of FMR, Edward C. Johnson 3d
or Abigail P. Johnson has the sole or shared power to vote or direct the
voting of any of the shares shown.
(5) Includes shares issuable upon the exercise of outstanding stock options that
are exercisable within 60 days of March 3, 1999, as follows: Mr. Marriner,
245,800 shares; Mr. Behrendt, 285,000 shares; Mr. Johnson, 2,500 shares; Mr.
Jones, 2,500 shares; Mr. Pardun, 18,000 shares; Mr. Perry, 23,400 shares;
Mr. Sorenson, 28,400 shares; and Mr. Smith, 34,480 shares.
(6) Includes 25,000 shares held by Mr. Marriner's spouse.
(7) Includes 4,420 shares held by Mr. Behrendt's spouse as custodian for the
benefit of his children.
(8) Includes shares described in the notes above, as applicable.
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COMPENSATION COMMITTEE REPORT(1)
COMPENSATION COMMITTEE POLICIES
The Compensation Committee is composed of Messrs. Perry, Johnson, Jones,
Pardun and Sorenson, none of whom have been officers or employees of Exabyte.
The Committee is responsible for establishing and administering the policies
that govern compensation of executive officers. Due to the increasingly
competitive demand for superior executive talent, Exabyte's executive
compensation program has been designed to attract, retain, motivate and
appropriately reward executive officers capable of leading Exabyte to meet its
business objectives and to enhance long-term stockholder value. Compensation for
Exabyte's executive officers includes the following key elements:
- base salary;
- incentive bonus awards; and
- stock option awards (long-term compensation).
Base salary is determined primarily as a function of competitive salary
levels. The Committee annually reviews the executive officers' salaries and
compares them with the salary levels of executives in similar capacities and
industries. The Committee then establishes salary levels for the executive
officers based in large part on the results of that review.
In establishing an executive officers' bonus plan opportunity, the Committee
takes into account each executive officer's position and level of
responsibility. Incentive bonus award payouts are based upon Exabyte's
performance as measured by actual achievement against the annual operating plan
approved by the Board during the previous fiscal year.
In establishing an executive officer's level of stock option grant, the
Committee takes into account the executive officer's performance during the
previous fiscal year, his potential to influence Exabyte's operations in the
future and Exabyte's performance during the previous fiscal year. In particular,
the Committee looks at criteria such as Exabyte's:
- financial performance;
- stock performance;
- long-term strategic decisions; and
- response to a rapidly changing competitive environment.
The Committee does not base its considerations on any single performance
factor nor does it specifically assign relative weights to factors, but rather
considers a mix of factors and evaluates Exabyte and individual performances
against that mix.
BASE SALARY: Executive officers' base salaries for the current year are
determined annually at the first Committee meeting of that year. To determine
the salary level for each executive officer, the Committee evaluates the Radford
Study results (described below) for each officer's position.
- ---------
(1) The material in this report is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference in any filing of
Exabyte under the Securities Act of 1993, as amended (the "Securities Act") or
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
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The Radford Study contains the results of independent surveys comparing the
compensation paid to executive officers of companies with revenues between $200
million and $500 million. One survey also includes a separate comparison of 40
companies that are in the computer/peripherals business, including some of
Exabyte's competitors. The Committee considers the companies included in the
Radford Study, particularly those listed in the smaller survey, to be similar to
Exabyte and, therefore, a relevant competitive framework for purposes of
compensation decisions. There is little correlation between the companies
included in the Radford Study and the companies included in the industry group
index that was used in the Performance Graph found on page 15.
After careful consideration of the Radford Study with respect to each
executive officer's position, in January 1998 the Committee approved an average
increase in annual base salary for each of the executive officers in the range
of five percent. These adjusted salaries are at the lower range of those
salaries reflected in the Radford Study.
INCENTIVE BONUS AWARD: The annual incentive bonus plan for the executive
officers is determined at the first Committee meeting of each year, and any
amounts due under the plan are paid to the executive officers in February of the
following year. Potential bonus levels represent a percentage of each executive
officer's base salary. The amount of bonus paid depends on the level of
attainment of pre-tax income targets established by the annual operating plan,
which is adopted by the Board at the first meeting of each year.
Under the 1998 bonus plan, executive officers were eligible to receive up to
100% of their potential bonuses to the extent that Exabyte attained pre-tax
income levels targeted in the 1998 annual operating plan. Because Exabyte did
not achieve at least 50% of these pre-tax income levels, no bonuses were paid to
executive officers under the 1998 bonus plan.
STOCK OPTION AWARDS: The third component of executive compensation is the
award of stock options. The Committee has used the grant of options under the
Incentive Stock 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 and
to motivate executive officers to focus on long-term strategic objectives.
In determining the size of an option to be granted to an executive officer,
the Committee takes into account the executive officer's position and level of
responsibility, the executive officer's existing stock options and unvested
option holdings, the potential reward to the executive officer if the stock
price appreciates in the public market, as well as the results of the Radford
Study. The Committee believes that long-term incentive compensation should
constitute a significant component of compensation for executive officers.
In addition to the factors identified above, in January 1998, the Committee
also assessed each executive officer's individual performance during 1997 and
his potential to influence the operations of Exabyte in the future. As a result
of these factors, the Committee granted to the executive officers options to
purchase common stock at levels ranging from 25,000 to 50,000 shares. The
exercise price for each grant is equal to the closing price of the stock on the
date of grant. Exabyte's option grants vest over 50 months and are only of value
to the extent vested, and only if the stock price has appreciated above the
exercise price.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. William L. Marriner's salary, bonus and stock option awards for 1998
were determined in accordance with the policies set forth above. Following a
review of the information contained in the Radford Study, the Committee
approved, in January 1998, a five percent increase in Mr. Marriner's
10
<PAGE>
annual base salary to $315,000. Additionally, the Committee awarded Mr. Marriner
an option to acquire 50,000 shares, based on a review of Mr. Marriner's current
position and responsibilities, his existing stock options, and his potential to
influence the operations of Exabyte in the future. For the reasons discussed
above, Mr. Marriner was not awarded a bonus under the 1998 bonus plan.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
imposes on Exabyte an annual corporate deduction limitation of $1 million on the
compensation of certain executive officers. Compensation in excess of $1 million
may be deducted if it is "performance-based compensation" within the meaning of
the Code. Exabyte has not adopted a policy with respect to the treatment of all
forms of compensation under Section 162(m) of the Code. However, the Committee
has determined that stock options and rights granted under the Incentive Stock
Plan with an exercise price at least equal to the fair market value of Exabyte's
common stock on the date of grant should, where practicable, be treated as
"performance-based compensation." To that end, the Incentive Stock Plan provides
that no employee may be granted stock options under the Incentive Stock Plan
during a calendar year to purchase in excess of 500,000 shares of common stock.
<TABLE>
<S> <C> <C>
COMPENSATION COMMITTEE: MARK W. PERRY, CHAIRMAN
RALPH Z. SORENSON *THOMAS G. WASHING
THOMAS E. PARDUN *BRUCE M. HOLLAND
**STEPHEN C. JOHNSON **A. LAURENCE JONES
</TABLE>
- ------------
* Resigned from the Board and the Committee May 4, 1998
** Elected to the Board and the Committee May 4, 1998
COMPENSATION OF DIRECTORS
Each director who is not an Exabyte employee receives $15,000 as an annual
retainer for his services as a director. In addition, non-employee directors
receive $1,500 for each Board meeting they attend in person and $250 for each
committee meeting they attend in person and each telephone Board meeting in
which they participate. Non-employee directors received an aggregate of $135,500
for their services rendered to Exabyte during fiscal 1998. Non-employee
directors are also reimbursed for out-of-pocket travel expenses in connection
with their attendance at Board meetings.
Non-employee directors also receive options under the Incentive Stock 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 common stock. Each newly elected non-employee
director, upon his initial election to the Board, receives an option to purchase
10,000 shares. The exercise price of these options equals the fair market value
of the stock on the date of grant. The options vest at the rate of 2% per month
beginning one month following the date of grant. During fiscal 1998, options
covering an aggregate of 50,000 shares were granted to non-employee directors as
a group with a weighted average exercise price per share of $9.20.
11
<PAGE>
SUMMARY OF COMPENSATION
The following table provides, for fiscal 1998 (ended January 2, 1999),
fiscal 1997 (ended January 3, 1998) and fiscal 1996 (ended December 28, 1996),
certain summary information concerning compensation paid to or earned by
Exabyte's Chief Executive Officer and each of the other executive officers at
the end of fiscal 1998 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
-------------
ANNUAL COMPENSATION SECURITIES
----------------------------------- UNDERLYING ALL OTHER
SALARY ($) BONUS ($) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (1)(2) (3) (#)(4) ($)(5)
- --------------------------------------------------- --------- ----------- ----------- ------------- ---------------
<S> <C> <C> <C> <C> <C>
William L. Marriner(6)............................. 1998 325,384 0 50,000 5,376
Chairman of the Board, Chief 1997 266,442 0 130,000 4,820
Executive Officer & President 1996 225,696 32,201 30,000 4,570
Mark W. Canright(7)................................ 1998 236,766 90,695(8) 25,000 5,914
Senior Vice President of 1997 197,359 87,719(8) 20,000 5,914
Sales and Customer Support 1996 189,195 167,264(8) 20,000 5,664
Stephen F. Smith(9)................................ 1998 198,923 0 40,000 5,081
Vice President, Chief Financial 1997 147,182 0 5,000 5,081
Officer, General Counsel & Secretary
</TABLE>
- ------------
(1) Includes amounts earned but deferred at the election of the Named Executive
Officers under the 401(k) plan.
(2) As permitted by SEC rules, we have not shown amounts for certain perquisites
where the amounts do not exceed the lesser of 10% of bonus plus salary or
$50,000.
(3) Bonus amounts shown are paid to Named Executive Officers in February of the
following year.
(4) We have not granted any SARs or restricted stock awards.
(5) Includes matching payments by Exabyte under the 40l(k) plan for 1998 as
follows: Mr. Marriner, $4,000; Mr. Canright, $4,000; and Mr. Smith, $3,679.
Also includes the dollar value of executive life insurance premiums paid by
Exabyte in 1998 for the benefit of the Named Executive Officers as follows:
Mr. Marriner, $1,376; Mr. Canright, $1,914; and Mr. Smith, $1,402.
(6) Mr. Marriner was elected President and Chief Executive Officer in January
1997. During 1996, Mr. Marriner served as Executive Vice President and Chief
Financial Officer.
(7) Mr. Canright resigned on January 4, 1999.
(8) Includes $90,695 in commissions paid to Mr. Canright for 1998; $87,719 in
commissions paid to Mr. Canright for 1997 and $140,276 in commissions paid
to Mr. Canright for 1996.
(9) Mr. Smith has served as Vice President and Chief Financial Officer since
December 1, 1997. Prior to that date, Mr. Smith did not serve as an
executive officer of Exabyte.
OFFICER SEVERANCE PROGRAM
Exabyte has a severance program under which officers and other specified
employees are eligible to receive severance payments in the event their
employment at Exabyte is terminated within one year after certain changes in
control of Exabyte. The amounts payable under the severance program vary
depending upon the position of the terminated officer or employee. The severance
program limits the amount payable to up to 12 months of compensation and further
provides for the accelerated vesting of outstanding stock options held by the
terminated officer or employee.
12
<PAGE>
INCENTIVE STOCK PLAN
The Board adopted the Incentive Stock Plan in January 1987. As a result of a
series of amendments, as of March 3, 1999 there were 9,500,000 shares of common
stock authorized for issuance under the Incentive Stock Plan. The Incentive
Stock Plan provides for the grant of both incentive stock options (which
generally have a favorable tax treatment) and non-statutory stock options to
employees, directors and consultants. These grants are made at the discretion of
the Board. The Incentive Stock Plan also provides for the non-discretionary
grant of non-statutory stock options to our non-employee directors.
As of March 3, 1999, options to purchase 3,114,515 shares were outstanding
under the Incentive Stock Plan and 2,652,963 shares were available for future
grant.
STOCK OPTION GRANTS
The following table contains information for fiscal 1998 concerning the
grant of stock options under the Incentive Stock Plan to the Named Executive
Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO FOR
OPTIONS EMPLOYEES EXERCISE OPTION TERM(3)
GRANTED IN FISCAL PRICE EXPIRATION --------------------
NAME (#)(1) YEAR(2) ($/SH) DATE 5% ($) 10% ($)
- ---------------------------------------- ----------- ------------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
William L. Marriner..................... 50,000 3.92 6.875 1/26/08 216,182 547,848
Mark W. Canright(4)..................... 25,000 1.96 6.875 1/26/08 108,091 273,924
Stephen F. Smith........................ 40,000 3.13 6.875 1/26/08 172,946 438,279
</TABLE>
- ------------
(1) Exabyte does not have a plan that provides for the issuance of SARs. Options
under the Incentive Stock Plan 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 non-statutory or incentive stock options.
The exercise price of options granted under the Incentive Stock Plan must be
at least equal to the fair market value of the common stock on the date of
grant. Options granted to executive officers and certain members of
management are subject to an agreement with Exabyte which provides that,
upon a change of control, options will fully vest unless the Board directs
otherwise. The Board may not reprice options granted under the Incentive
Stock Plan.
(2) Based on options granted to employees during fiscal 1998 to purchase
1,276,150 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 SEC rules, and do not reflect our estimate or projection of
future stock price performance. Actual gains, if any, are dependent on the
actual future performance of Exabyte's common stock. The amounts reflected
in this table may never be achieved.
(4) As a result of Mr. Canright's resignation from Exabyte in January 1999, his
option will expire on April 4, 1999.
13
<PAGE>
OPTION EXERCISES AND HOLDINGS
The following table provides information concerning the exercise of options
during fiscal 1998 and unexercised options held as of the end of fiscal 1998 for
the Named Executive Officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FY-END IN-THE-MONEY OPTIONS
(#)(2) AT FY-END ($)(3)
SHARES ACQUIRED ON VALUE REALIZED ----------------------- -----------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ------------------------------ ------------------- --------------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
William L. Marriner........... 0 0 223,600/126,600 0/0
Mark W. Canright.............. 300 $ 1,500 116,100/37,900 0/0
Stephen F. Smith.............. 0 0 28,240/36,060 0/0
</TABLE>
- ------------
(1) Value realized is based on the fair market value of Exabyte's common stock
on the date of exercise (based on the closing sales price reported on the
Nasdaq National Market) less the exercise price. The optionee may not have
actually sold the shares to realize any gain.
(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 Exabyte's
common stock on January 2, 1999.
(3) Fair market value of Exabyte's common stock on January 2, 1999 ($5.50, based
on the closing sales price reported on Nasdaq) less the exercise price of
the option.
14
<PAGE>
PERFORMANCE GRAPH(1)
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT
AMONG EXABYTE CORPORATION,
NASDAQ COMPOSITE INDEX AND THE
NASDAQ COMPUTER MANUFACTURER STOCKS INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EXABYTE CORP PEER GROUP INDEX NASDAQ MARKET INDEX
<S> <C> <C> <C>
1993 $100.00 $100.00 $100.00
1994 $121.28 $109.85 $104.99
1995 $82.98 $172.95 $136.18
1996 $76.60 $231.88 $169.23
1998 $39.72 $280.50 $207.00
1999 $31.21 $610.15 $291.96
</TABLE>
ASSUMES $100 INVESTED ON JANUARY 1, 1994
ASSUMES DIVIDEND REINVESTMENT
FISCAL YEAR ENDED JANUARY 2, 1999
- ---------
(1) The material in this chart is not "soliciting material," is not deemed
"filed" with the SEC and is not to be incorporated by reference in any
filing of Exabyte 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.
15
<PAGE>
OTHER MATTERS
The Board knows of no other proposals that will be presented for
consideration at the Annual Meeting. If any other proposals are properly brought
before the Annual Meeting, the proxy holders intend to vote on such proposals in
accordance with their best judgment.
By Order of the Board of
Directors
[SIGNATURE OF STEPHEN F. SMITH]
Stephen F. Smith
CORPORATE SECRETARY
A COPY OF EXABYTE'S ANNUAL REPORT TO THE SEC ON FORM 10-K FOR THE FISCAL YEAR
ENDED JANUARY 2, 1999 IS AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO:
VIRGINIA YOUTSEY, INVESTOR RELATIONS, EXABYTE CORPORATION, 1685 38TH STREET,
BOULDER, COLORADO 80301.
16
<PAGE>
PROXY
EXABYTE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 10, 1999
The undersigned hereby appoints William L. Marriner and Stephen F. Smith,
and each of them, as attorneys and proxies of the undersigned, with full
power of substitution, to vote all of the shares of stock of 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, 1685 38th Street, Boulder, Colorado 80301 on
Monday, May 10, 1999 at 9 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.
ON THE REVERSE SIDE OF THIS CARD ARE INSTRUCTIONS ON HOW TO GRANT YOUR
PROXY BY TELEPHONE OR OVER THE INTERNET, AS PERMITTED BY DELAWARE LAW. THE
NAMED PROXIES ARE AUTHORIZED TO VOTE YOUR SHARES AS IF YOU MAILED IN YOUR
COMPLETED PROXY CARD.
SEE REVERSE CONTINUED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
<PAGE>
EXABYTE CORPORATION
c/o EquiServe
P.O. Box 8040
Boston, MA 02266-8040
VOTE BY TELEPHONE VOTE BY INTERNET
It's fast, convenient, and immediate! It's fast, convenient, and your vote is
Call Toll-Free on a Touch-Tone Phone immediately confirmed and posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and Proxy Card. Statement and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). http://www.eproxyvote.com/exbt.
For shareholders residing outside
the United States call collect on 3. Enter your 14-digit Control Number
a touch-tone phone 1-201-536-8073. located on your Proxy Card above your
name.
3. Enter your 14-digit Control Number
located on your Proxy Card above 4. Follow the instructions provided.
your name.
4. Follow the Recorded Instructions.
YOUR VOTE IS IMPORTANT! YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/exbt
anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
DETACH HERE
- -------------------------------------------------------------------------------
Please mark
/X/ votes as in
this example.
MANAGEMENT RECOMMENDS A VOTE FOR EACH NAMED NOMINEE AND FOR PROPOSAL 2.
Unless a contrary direction is indicated, this proxy will be voted FOR the
nominees listed in proposal 1 and FOR proposal 2 as more specifically
described in the accompanying Proxy Statement. If specific instructions are
indicated, this proxy will be voted in accordance with those instructions.
1. To select two directors to hold office until the 2002 Annual Meeting of
Stockholders.
Nominees: (01) Ralph Z. Sorenson and (02) Thomas E. Pardun
FOR WITHHELD
ALL / / / / FROM ALL
NOMINEES NOMINEES
/ /
---------------------------------------
For both nominees except as noted above
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Company for the fiscal year ending January 1, 2000.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please sign exactly as your name appears on this card. 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:
--------------- ------- --------------- -------
