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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 Section240.14a-11(c) or
Section240.14a-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:
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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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(4) Date Filed:
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[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on April 28, 2000
Dear Exabyte Stockholder,
It is my pleasure to invite you to Exabyte's 2000 Annual Meeting of
Stockholders.
We will hold the meeting on Friday April 28, 2000 9:00 am (Mountain Standard
Time), at Exabyte's Corporate Headquarters, located at 1685 38(th) Street,
Boulder, Colorado. At our Annual Meeting we will ask you to:
1. Elect one director to hold office until the 2003 Annual Meeting;
2. Approve Exabyte's Employee Stock Purchase Plan, as amended, to increase
the number of shares authorized for issuance by 500,000 shares;
3. Ratify the Board's selection of PricewaterhouseCoopers LLP as our
independent accountants for fiscal 2000; and
4. Conduct any other business properly presented at the meeting.
The accompanying Proxy Statement describes these items in greater detail.
If you were a stockholder at the close of business on March 1, 2000 you are
entitled to notice of and you may vote at this meeting.
Whether or not you plan to attend Exabyte's Annual Meeting, we ask that you
submit your proxy as soon as possible so that your shares can be voted at this
meeting. You may vote by any of the following methods:
- By granting your proxy over the Internet;
- By granting your proxy by telephone;
- By mailing a traditional proxy card; or
- By voting in person. Submitting your proxy will NOT prevent you from
voting in person.
Please review the instructions on the enclosed proxy card and in the Proxy
Statement regarding each of the above voting options. At the meeting we will
also report on Exabyte's 1999 business results and other matters of interest to
stockholders.
By order of the Board of
Directors
[SIGNATURE]
Stephen F. Smith
CORPORATE SECRETARY
Boulder, Colorado
March 13, 2000
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EXABYTE CORPORATION
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PROXY STATEMENT
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TABLE OF CONTENTS
<TABLE>
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<S> <C> <C> <C>
GENERAL INFORMATION ABOUT THE ANNUAL MEETING AND VOTING PROCEDURES.......... 3
Why Did You Send Me This Proxy Statement?........................... 3
How Many Votes Do I Have?........................................... 3
What Vote Is Required to Hold a Valid Meeting and to Approve Each
Proposal?......................................................... 3
How Do I Vote by Granting a Proxy?.................................. 3
How Do I Direct My Vote if My Shares Are Held in a Brokerage Account
or by a Bank or Other Nominee?.................................... 4
What Is the Purpose of the Telephone and Internet Procedures?....... 4
Are There Any Additional Costs if I Grant My Proxy by Telephone or
Over the
Internet?......................................................... 4
How Will My Shares Be Voted if I Grant My Proxy?.................... 4
May I Revoke My Proxy?.............................................. 5
Can I Still Vote in Person if I Have Already Granted My Proxy?...... 5
Who Pays the Costs of Soliciting These Proxies?..................... 5
What Is the Deadline for Receipt of Stockholder Proposals and
Nominations for Directors for Next Year's Annual Meeting?......... 5
How Do I Obtain an Annual Report on Form 10-K?...................... 5
PROPOSAL 1: ELECTION OF DIRECTORS........................................... 6
General............................................................. 6
Board Committees and Meetings....................................... 6
Nominee for Election for a Three-Year Term.......................... 7
Directors Continuing in Office Until the 2001 Annual Meeting........ 7
Directors Continuing in Office Until the 2002 Annual Meeting........ 8
PROPOSAL 2: APPROVAL OF EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED............ 9
GENERAL INFORMATION ABOUT THE EMPLOYEE STOCK PURCHASE PLAN, AS
AMENDED........................................................... 10
What Is the Purpose of Exabyte's Employee Stock Purchase
Plan?..................................................... 10
Who Administers the Plan?................................... 10
How Is the Plan Implemented?................................ 10
How Long Are Offering Periods?.............................. 10
Who Is Eligible to Purchase Stock Under the Plan?........... 10
Are There Limitations on an Employee's Eligibility to
Participate in the Plan?.................................. 10
How Many Shares Are Subject to the Plan?.................... 10
How Do Employees Participate in the Plan?................... 11
How Much Can an Employee Deduct From Earnings for the
Purchase of Stock Under the Plan?......................... 11
How Is the Purchase Price Per Share Determined Under the
Plan?..................................................... 11
</TABLE>
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How Do Payroll Deductions Work?............................. 11
Can Participants Change Their Deductions During an
Offering?................................................. 11
Is There a Limit on the Number of Shares a Participant Can
Purchase Under the Plan?.................................. 11
What Happens if the Number of Shares to Be Purchased Exceeds
the Maximum Number Allowed Under the Offering?............ 11
How Does a Participant Purchase Stock?...................... 11
How Does a Participant Withdraw From an Offering?........... 12
If a Participant Withdraws From an Offering, Are His Payroll
Deductions Returned?...................................... 12
How Soon Is an Employee Eligible to Participate After
Withdrawing From an Offering?............................. 12
How Does an Employee's Termination From Exabyte Affect His
Participation and Eligibility Under the Plan?............. 12
Can an Employee Transfer His Right to Purchase Stock Under
the Plan?................................................. 12
What Happens to the Plan if There Is a Change in Exabyte's
Stock?.................................................... 12
How Is the Plan Affected by a Dissolution, Liquidation,
Specified Merger, or Any Other Capital Reorganization
Where More Than 50% of Exabyte's Stock Is Exchanged?...... 12
When Does the Plan Expire?.................................. 12
How Often Can the Board Amend the Plan?..................... 13
When Are Stockholders Required to Approve Amendments to the
Plan?..................................................... 13
Are Rights Granted Before an Amendment or Termination of the
Plan Subject to That Amendment or Termination?............ 13
What Are the Income Tax Consequences to the Participant for
Rights Granted Under the Plan?............................ 13
What Are the Income Tax Consequences of Disposition of Stock
Purchased Under the Plan?................................. 13
What Are the Income Tax Consequences to Exabyte for Rights
Granted And Exercised Under the Plan?..................... 14
PROPOSAL 3: RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS............ 15
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934........ 16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.............. 16
COMPENSATION COMMITTEE REPORT............................................... 18
COMPENSATION OF DIRECTORS................................................... 20
SUMMARY OF COMPENSATION..................................................... 20
OFFICER SEVERANCE PROGRAM................................................... 22
INCENTIVE STOCK PLAN........................................................ 22
STOCK OPTION GRANTS......................................................... 22
OPTION EXERCISES AND YEAR-END HOLDINGS...................................... 23
PERFORMANCE GRAPH........................................................... 24
OTHER MATTERS............................................................... 25
</TABLE>
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GENERAL INFORMATION ABOUT
THE ANNUAL MEETING AND
VOTING PROCEDURES
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this Proxy Statement and the enclosed proxy card because
Exabyte's Board of Directors is soliciting your proxy to vote at the 2000 Annual
Meeting of Stockholders. This Proxy Statement summarizes the information you
need to know to vote at the Annual Meeting. However, you do not need to actually
attend the Annual Meeting to vote your shares. Instead, you may simply complete,
sign and return the enclosed proxy card, or grant your proxy by Internet or
telephone.
We intend to send this Proxy Statement, the attached Notice of Annual
Meeting, the enclosed proxy card and our 1999 Annual Report on or about
March 13, 2000 to all stockholders of record at the close of business on
March 1, 2000. At the close of business on that date, there were 22,935,732
shares of Exabyte common stock outstanding and entitled to vote on each matter
to be voted upon at the meeting. Exabyte common stock is our only class of
voting stock.
HOW MANY VOTES DO I HAVE?
Each share of Exabyte common stock that you own entitles you to one vote on
each matter to be voted on at the Annual Meeting. The enclosed proxy card
indicates the number of shares of Exabyte common stock that you own.
WHAT VOTE IS REQUIRED TO HOLD A VALID MEETING AND TO APPROVE EACH PROPOSAL?
A quorum is necessary to hold a valid meeting. A quorum is reached when the
holders of at least a majority of the outstanding stock are present in person or
represented by proxy 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. 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.)
HOW DO I VOTE BY GRANTING A PROXY?
If you are a stockholder of record, you may direct your vote by granting a
proxy. You can grant your proxy by mailing in your completed, signed and dated
proxy card. In addition, you can grant your proxy over the Internet or by
telephone, as permitted by Delaware law.
Whether or not you plan to attend the Annual Meeting, we urge you to grant
your proxy by Internet or telephone, or by signing, dating and returning the
enclosed proxy card.
Voting by Internet: If you wish to grant your proxy by Internet, you will
need to visit our website at http://www.eproxyvote.com/exbt. At this site,
enter your 14-digit Control Number (found on your proxy card) where
requested, and follow the instructions provided by the website.
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Voting by telephone: To grant your proxy by telephone, call our toll-free
number 1-877-PRX-VOTE (1-877-779-8683) or call 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.
Voting by mail: To vote by mail, indicate your voting preference(s) on the
enclosed proxy card, sign and date the card, and return it in the
postage-prepaid (for the United States only) envelope.
HOW DO I DIRECT MY VOTE IF MY SHARES ARE HELD IN A BROKERAGE ACCOUNT OR BY A
BANK OR OTHER NOMINEE?
If you are the beneficial owner of shares held for you in a brokerage
account or by a bank or other nominee, you may direct your vote by submitting
voting instructions to your broker, bank or nominee, which will grant a proxy in
accordance with your instructions. To direct your vote, you should follow the
instructions provided on the voting instructions card provided by your broker,
bank or nominee.
A number of brokers and banks are participating in a program provided
through ADP Investor Communication Services that offers telephone and Internet
voting options. If your broker or bank is participating in that program, you may
be able to direct the voting of those shares by telephone, by calling the
telephone number shown on the voting form that you receive from your broker or
bank, or over the Internet at the voting website of ADP Investor Communications
(www.proxyvote.com). If your broker or bank participates in a different program
and provides different instructions for directing your vote telephonically or
over the Internet, you should follow those instructions instead.
WHAT IS THE PURPOSE OF THE TELEPHONE AND INTERNET PROCEDURES?
The telephone and Internet procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their proxy instructions
and to confirm that stockholders' instructions have been properly recorded.
ARE THERE ANY ADDITIONAL COSTS IF I GRANT MY PROXY BY TELEPHONE OR OVER THE
INTERNET?
If you grant your proxy over the Internet, you should understand that there
may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies, that you must bear.
HOW WILL MY SHARES BE VOTED IF I GRANT MY PROXY?
If you properly fill in your proxy card and send it to us in time to vote,
the proxy holders named on your proxy card will vote your shares as you have
directed. If you sign the proxy card but do not make specific choices, the proxy
holders will vote your shares as recommended by the Board as follows:
- "FOR" the election of the nominee for director named in Proposal 1;
- "FOR" approval of the Employee Stock Purchase Plan, as amended.
- "FOR" approval of independent accountant selection for fiscal 2000, and
At the time of mailing, we knew of no matters to be presented for
consideration at the Annual Meeting, other than those discussed in this Proxy
Statement. If any other matter is properly presented, the proxy holders will
vote in accordance with their best judgment.
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MAY I REVOKE MY PROXY?
If you grant your proxy, you may revoke it at any time before it is
exercised at the Annual Meeting by any one of the following three ways:
- filing a written notice of revocation with the Corporate Secretary;
- filing another executed proxy, which bears a later date, with the
Corporate Secretary; or
- by attending the Annual Meeting and voting in person. Please note that
simply attending the Annual Meeting will NOT revoke your proxy.
CAN I STILL VOTE IN PERSON IF I HAVE ALREADY GRANTED MY PROXY?
If you plan to attend the Annual Meeting and vote in person, we will give
you a ballot. However, if your shares are held in the name of your broker, bank
or other nominee, you must bring a proxy issued in your name from the broker,
bank or nominee indicating that you were the beneficial owner of the shares on
March 1, 2000, the record date for voting. Granting your proxy will not affect
your right to attend the Annual Meeting and vote in person.
WHO PAYS THE COSTS OF SOLICITING THESE PROXIES?
Exabyte will pay all costs of soliciting these proxies, including preparing,
assembling, printing and mailing the enclosed materials. Our directors and
employees may also solicit proxies in person, by telephone or by other
electronic means of communication. We will ask banks, brokers and other
institutions, nominees and fiduciaries to forward the proxy material to their
principals. We may reimburse them for expenses.
WHAT IS THE DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS AND NOMINATIONS FOR
DIRECTORS FOR NEXT YEAR'S ANNUAL MEETING?
If you would like to present a proposal for possible inclusion in our proxy
statement for the 2001 Annual Meeting of Stockholders, we must receive it no
later than NOVEMBER 13, 2000. 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 13, 2000. A copy of our By-laws
is available from the Corporate Secretary upon request.
HOW DO I OBTAIN AN ANNUAL REPORT ON FORM 10-K?
IF YOU WOULD LIKE A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR FISCAL 1999,
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, PLEASE WRITE TO:
EXABYTE CORPORATION
INVESTOR RELATIONS
1685 38(TH) STREET
BOULDER, COLORADO 80301
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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 nominee for director who receives the most
affirmative votes will be elected. The proxy holders will vote for the nominee
listed below, unless you otherwise direct on your proxy card. If the nominee
becomes unavailable for election, the proxy holders will vote for a substitute
nominee selected by management. The person nominated for election has agreed to
serve if elected. We have no reason to believe that he will not be able to
serve.
There are two directors in the class whose term expires in 2000. One of
these directors, Mr. Mark Perry, has decided to retire from the Board at the end
of his term. We would like to express our appreciation for his many years of
dedicated service to the Board. The other director, Mr. William Marriner, is
being nominated for re-election. If elected, the nominee would serve until the
2003 Annual Meeting and until a successor is elected and qualified (or until the
director's earlier death, resignation or removal). We are submitting nominations
to fill only one of the two positions available in this class, as the Board
intends to reduce the number of directors in this class from two to one. You may
not vote for more than one nominee.
BOARD COMMITTEES AND MEETINGS
During fiscal 1999 (ended January 1, 2000), the Board held eight 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 1999.
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 three times during fiscal 1999.
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 twice during fiscal 1999.
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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 five times during fiscal 1999.
Biographical information for the nominee is provided below, followed by
biographical information for each of the remaining directors.
NOMINEE FOR ELECTION FOR A THREE-YEAR TERM (EXPIRING AT THE 2003 ANNUAL MEETING
OF STOCKHOLDERS)
WILLIAM L. MARRINER
Mr. William L. Marriner, age 47, 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 Exabyte, 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.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE NOMINEE NAMED ABOVE
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING
PETER D. BEHRENDT
Mr. Peter D. Behrendt, age 61, 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 47, has served as a director of Exabyte since
May 1998. Mr. Jones has served as President of Messagemedia, Inc., a provider of
advanced messaging systems for Internet commerce, 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.
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STEPHEN C. JOHNSON
Mr. Stephen C. Johnson, age 57, has served as a director of Exabyte since
May 1998. He has served as Managing Partner of Slingshot Ventures, a venture
investment firm, since August 1999. Prior to that, Mr. Johnson was a founder of
Komag, Incorporated, a manufacturer of media for hard disk drives, and served as
its President and Chief Executive Officer from September 1983 until
August 1999. 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 Arroyo Optics, Inc. and
Smartbasket.com.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING
RALPH Z. SORENSON
Dr. Ralph Z. Sorenson, age 66, 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 56, 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.
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PROPOSAL 2
APPROVAL OF EMPLOYEE
STOCK PURCHASE PLAN,
AS AMENDED
Exabyte adopted the Employee Stock Purchase Plan in November 1989. The Plan
originally provided for the issuance of up to 500,000 shares of common stock to
our employees. In 1996, the Plan was amended to increase the number of shares
authorized for issuance under the Plan by an additional 500,000 shares. As of
March 1, 2000, 990,883 shares have been issued under the Plan, and only 9,117
shares remain available for future issuance. As a result, on January 17, 2000,
the Board approved an amendment to increase the number of shares authorized for
issuance to employees by 500,000. This amendment increases the number of shares
authorized for issuance under the Plan from an aggregate of 1,000,000 shares to
an aggregate of 1,500,000 shares.
During the last fiscal year, three executive officers participated in the
Plan. Messrs. William L. Marriner, Stephen F. Smith and Michael P. Koclanes each
purchased 2,000 shares under the Plan at a weighted average price per share of
$3.349.
The affirmative vote of the holders of a majority of the shares present in
person at the Annual Meeting or represented by proxy and entitled to vote at the
meeting is required to approve the Employee Stock Purchase Plan, as amended.
Abstentions are counted toward the tabulation of votes cast for this proposal
and will have the same effect as votes against this proposal. 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.
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GENERAL INFORMATION ABOUT THE EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
WHAT IS THE PURPOSE OF EXABYTE'S EMPLOYEE STOCK PURCHASE PLAN?
The Employee Stock Purchase Plan is intended to provide employees of Exabyte
(including any parent company or subsidiary designated by the Board) an
opportunity to purchase Exabyte stock at a discounted price. The Plan is
designed to retain new employees and provide incentives for current employees to
make Exabyte successful.
WHO ADMINISTERS THE PLAN?
Exabyte's Board administers and has the power to interpret the Plan and
rights granted under the Plan. This authority includes the power to determine
when and how rights to purchase common stock will be granted, to establish the
length of offering periods and the term of offerings, as well as to define
eligible employees. The Board may change these terms at any time or delegate its
authority to a committee composed of two or more Board members.
HOW IS THE PLAN IMPLEMENTED?
The Plan is implemented through offerings of rights to eligible employees
from time to time. The rights granted under these offerings allow eligible
employees to purchase stock through the Plan during offering periods.
HOW LONG ARE OFFERING PERIODS?
The Board can vary the length of offerings, but no offering period can
exceed 27 months. The length of offerings do not need to be identical. Under
current offerings, offering periods are six months long.
WHO IS ELIGIBLE TO PURCHASE STOCK UNDER THE PLAN?
Any employee who is employed by Exabyte, or any parent or subsidiary
designated by the Board, for at least 20 hours per week and five months per
year. The Board may change the eligibility requirements at any time, but may not
require that an employee be continuously employed for more than two years prior
to the first day of an offering before he becomes eligible to participate in the
Plan. Additionally, the Board may provide that an employee who becomes eligible
after the beginning of an offering may be eligible to purchase stock under that
offering.
ARE THERE LIMITATIONS ON AN EMPLOYEE'S ELIGIBILITY TO PARTICIPATE IN THE PLAN?
Yes. An employee who, after the grant of rights under the Plan, would own
more than 5% of the total voting power or value of common stock of Exabyte or
its parent or subsidiaries may not participate in the Plan.
HOW MANY SHARES ARE SUBJECT TO THE PLAN?
The Plan, as currently amended, provides for the issuance of up to 1,500,000
shares.
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HOW DO EMPLOYEES PARTICIPATE IN THE PLAN?
Employees must complete and submit an enrollment form authorizing payroll
deductions from their base earnings. Following receipt of the form, Exabyte will
deduct that amount from the employee's paycheck for the duration of the
offering.
HOW MUCH CAN AN EMPLOYEE DEDUCT FROM EARNINGS FOR THE PURCHASE OF STOCK UNDER
THE PLAN?
Employees can authorize Exabyte to deduct up to 15% of their base
compensation.
HOW IS THE PURCHASE PRICE PER SHARE DETERMINED UNDER THE PLAN?
The purchase price per share for shares purchased in an offering under the
Plan is the lesser of:
- 85% of the fair market value of Exabyte stock on the first day of the
offering, or
- 85% of the fair market value of Exabyte stock on the date of purchase.
On March 1, 2000, the closing price of Exabyte common stock reported on the
Nasdaq National Market was $7.9375 per share.
HOW DO PAYROLL DEDUCTIONS WORK?
Exabyte accumulates the participant's payroll deductions until the end of
the offering or until the employee terminates his deduction. All payroll
deductions made for a participant are credited to his or her account under the
Plan and deposited with Exabyte's general funds.
CAN PARTICIPANTS CHANGE THEIR DEDUCTIONS DURING AN OFFERING?
The Board has the authority to allow participants to increase or reduce
their deductions, although under current offerings, changes to deductions are
not allowed.
IS THERE A LIMIT ON THE NUMBER OF SHARES A PARTICIPANT CAN PURCHASE UNDER THE
PLAN?
Yes. Individual participants may purchase up to $25,000 worth of stock per
calendar year (based on the fair market value of Exabyte's stock at the
beginning of each offering). The Board has the authority to provide for
additional limitations on the number of shares a participant may purchase during
offerings.
WHAT HAPPENS IF THE NUMBER OF SHARES TO BE PURCHASED EXCEEDS THE MAXIMUM NUMBER
ALLOWED UNDER THE OFFERING?
The Board will make a pro rata allocation of the shares available in a
uniform and equitable manner.
HOW DOES A PARTICIPANT PURCHASE STOCK?
Unless a participant terminates his participation, the purchase of stock
under the Plan occurs automatically on the purchase date at the purchase price,
determined as described above.
11
<PAGE>
HOW DOES A PARTICIPANT WITHDRAW FROM AN OFFERING?
The participant must complete and submit a withdrawal form authorizing
Exabyte to terminate his payroll deductions.
IF A PARTICIPANT WITHDRAWS FROM AN OFFERING, ARE HIS PAYROLL DEDUCTIONS
RETURNED?
Yes. When a participant withdraws from an offering, Exabyte returns his
accumulated payroll deductions without interest, less any accumulated deductions
previously applied to the purchase of shares on behalf of the employee in the
offering. By withdrawing, an employee is no longer eligible to purchase stock in
that offering.
HOW SOON IS AN EMPLOYEE ELIGIBLE TO PARTICIPATE AFTER WITHDRAWING FROM AN
OFFERING?
Although an employee cannot participate in an offering from which he
withdrew, he is eligible to participate in future offerings provided that he
remains an eligible employee.
HOW DOES AN EMPLOYEE'S TERMINATION FROM EXABYTE AFFECT HIS PARTICIPATION AND
ELIGIBILITY UNDER THE PLAN?
When an employee's employment is terminated, he immediately becomes
ineligible to participate in the Plan. Further, if the employee is enrolled in
an offering at the time of his termination, he is immediately and automatically
withdrawn from the offering. Any accumulated payroll deductions are returned to
the employee without interest.
CAN AN EMPLOYEE TRANSFER HIS RIGHT TO PURCHASE STOCK UNDER THE PLAN?
No.
WHAT HAPPENS TO THE PLAN IF THERE IS A CHANGE IN EXABYTE'S STOCK?
If there are changes to Exabyte's stock due to a 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 will make
appropriate adjustments in the classes and number of shares subject to the Plan,
as well as the classes, number of shares and price per share of any stock
subject to an offering.
HOW IS THE PLAN AFFECTED BY A DISSOLUTION, LIQUIDATION, SPECIFIED MERGER, OR ANY
OTHER CAPITAL REORGANIZATION WHERE MORE THAN 50% OF EXABYTE'S STOCK IS
EXCHANGED?
The Board may, in its sole discretion, determine that (1) any surviving
corporation may assume outstanding rights or substitute similar rights for those
under the Plan, (2) such rights may continue in full force and effect, or
(3) participants' accumulated payroll deductions may be used to purchase stock
immediately prior to the transaction and the participants' rights under the
ongoing offering terminated.
WHEN DOES THE PLAN EXPIRE?
Although the Board may terminate the Plan at any time, the Plan expires on
January 17, 2010.
12
<PAGE>
HOW OFTEN CAN THE BOARD AMEND THE PLAN?
The Board may amend the Plan at any time.
WHEN ARE STOCKHOLDERS REQUIRED TO APPROVE AMENDMENTS TO THE PLAN?
Stockholders must approve, within 12 months after adoption by the Board, any
amendment to the Plan which:
- modifies the eligibility requirements;
- increases the number of shares authorized for issuance; or
- requires stockholder approval under Section 423 of the Internal Revenue
Code or Rule 16b-3 under the Securities Exchange Act of 1934.
ARE RIGHTS GRANTED BEFORE AN AMENDMENT OR TERMINATION OF THE PLAN SUBJECT TO
THAT AMENDMENT OR TERMINATION?
No. Any rights granted under the Plan before an amendment or termination
will not be altered or impaired without the prior consent of the person to whom
such rights were granted.
WHAT ARE THE INCOME TAX CONSEQUENCES TO THE PARTICIPANT FOR RIGHTS GRANTED UNDER
THE PLAN?
Rights granted under the 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 Internal Revenue Code of
1986. 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.
It is possible that the Internal Revenue Service will, in the future,
release guidance to employers requiring employers to treat the discount on stock
purchases under employee stock purchase plans as "wages" for purposes of FICA
tax. The Internal Revenue Service is currently engaged in audit activity and
related litigation in certain areas of the country in which it has advanced this
position. If such guidance is issued, Exabyte will be required to withhold
amounts from participants' compensation to satisfy its FICA tax withholding
obligation.
WHAT ARE THE INCOME TAX CONSEQUENCES OF DISPOSITION OF STOCK PURCHASED UNDER THE
PLAN?
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 (1) the excess of the fair market value of the
stock at the time of such disposition over the exercise price or (2) 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 the disposition. As with the FICA tax withholding
described above, the Internal Revenue Service has taken the position in certain
audits and related litigation that, following a disqualifying disposition, the
excess of the fair market value of stock
13
<PAGE>
purchased under an employee stock purchase plan on the exercise date over the
exercise price is "wages." If the Internal Revenue Service releases guidance to
employers indicating that such amounts are to be treated as wages, and
accordingly, that income tax withholding is required with respect to such
amounts, Exabyte will be required to withhold amounts from participants'
compensation to satisfy this withholding obligation
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 the 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.
WHAT ARE THE INCOME TAX CONSEQUENCES TO EXABYTE FOR RIGHTS GRANTED AND EXERCISED
UNDER THE PLAN?
None. There are no federal income tax consequences to Exabyte by reason of
the grant or exercise of rights under the Plan. Exabyte 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).
14
<PAGE>
PROPOSAL 3
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
The Board has selected PricewaterhouseCoopers LLP as Exabyte's independent
accountants for fiscal 2000 (ending December 30, 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 Audit Committee and the Board.
Additionally, even if the selection is ratified, 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 interests 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 3
15
<PAGE>
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 1999. This statement is based solely on a review of reports
furnished to Exabyte and written representations that no other reports were
required during fiscal 1999.
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 1, 2000 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
- ---------------- ----------- ----------
<S> <C> <C>
First Pacific Advisors, Inc.(2)............................. 3,534,000 15.4%
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
State of Wisconsin Investment Board(3)...................... 1,628,600 7.1%
P.O. Box 7842
Madison, WI 53707
Dimensional Fund Advisors Inc.(4)........................... 1,391,300 6.1%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Heartland Advisors, Inc.(5)................................. 1,221,300 5.3%
789 North Water Street
Milwaukee, WI 53202
William L. Marriner(6)(7)................................... 419,965 1.81%
Peter D. Behrendt(6)(8)..................................... 540,640 2.33%
Stephen C. Johnson(6)....................................... 7,000 *
A. Laurence Jones(6)........................................ 7,000 *
Thomas E. Pardun(6)......................................... 25,000 *
Mark W. Perry(6)............................................ 33,000 *
Ralph Z. Sorenson(6)........................................ 34,000 *
Stephen F. Smith(6)......................................... 69,314 *
Farouk Al-Nasser(6)......................................... 66,100 *
Manfred Benecken(6)......................................... 51,900 *
Michael P. Koclanes(6)...................................... 90,203 *
All executive officers and directors as a group (11
persons)(9)............................................... 1,344,122 5.63%
</TABLE>
* Less than one percent.
16
<PAGE>
(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 22,935,732 shares
outstanding on March 1, 2000, adjusted as required by SEC rules.
(2) This information is based on a Schedule 13G, dated February 11, 2000, filed
with the SEC by First Pacific Advisors, Inc. ("First Pacific") and a
Schedule 13G, dated February 11, 2000, 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 1,254,400 shares, sole
voting power over no shares and shared dispositive power over all shares.
FPA is shown to have sole voting and shared dispositive power over 1,176,600
shares, representing 5.2% of the common stock. First Pacific has advised
Exabyte that First Pacific does not have an economic or pecuniary interest
in any of the shares reported.
(3) This information is based on a Schedule 13G, dated February 10, 2000, and
filed with the SEC by State of Wisconsin Investment Board ("Wisconsin"), a
government agency which manages public pension funds. Wisconsin is shown to
have sole voting and shared dispositive power over all shares.
(4) This information is based on a Schedule 13G, dated February 4, 2000, and
filed with the SEC by Dimensional Fund Advisors Inc. ("Dimensional"), an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940. Dimensional is shown to have sole voting and dispositive power
over all shares. Dimensional disclaims beneficial ownership of all shares
reported.
(5) This information is based on a Schedule 13G, dated January 12, 2000, filed
with the SEC by Heartland Advisors, Inc. ("Heartland"), an investment
advisor registered under Section 203 of the Investment Advisors Act of 1940.
Heartland is shown to have sole voting power over 467,000 shares and sole
dispositive power over all shares.
(6) Includes shares issuable upon the exercise of outstanding stock options that
are exercisable within 60 days of March 1, 2000, as follows: Mr. Marriner,
313,000 shares; Mr. Behrendt, 289,300 shares; Mr. Johnson, 7,000 shares;
Mr. Jones, 7,000 shares; Mr. Pardun, 24,000 shares; Mr. Perry, 29,000
shares; Mr. Sorenson, 34,000 shares; Mr. Smith, 56,400 shares;
Dr. Al-Nasser, 64,100; Mr. Benecken, 48,100; and Mr. Koclanes, 81,700.
(7) Includes 25,000 shares held by Mr. Marriner's spouse.
(8) Includes 4,420 shares held by Mr. Behrendt's spouse as custodian for the
benefit of his children.
(9) Includes shares described in the notes above, as applicable. Excludes shares
held by Mr. Huibregtse, a former executive officer of Exabyte.
17
<PAGE>
COMPENSATION COMMITTEE REPORT(1)
COMPENSATION COMMITTEE POLICIES
The Compensation Committee (the "Committee") is composed of Exabyte's five
non-employee directors. 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 officer's 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 of Directors 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 the operations of Exabyte in
the future and the performance of Exabyte 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 both Exabyte's and the individual's
performance 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 that
officer's position and the Radford Study results (described below).
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 used in the Performance Graph.
- ---------
(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 1933, as amended, or the Exchange Act,
whether made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
18
<PAGE>
After careful consideration of the Radford Study and each executive
officer's position in January 1999, the Committee approved an average increase
in base salary for each of the executive officers in the range of 5%. These
adjusted salaries are at the lower range of those salaries reflected in the
Radford Study. In July 1999 the Committee looked at compensation levels of the
four officers elected for the first time in May 1999 and determined that no
change in compensation was necessary.
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. 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 1999 bonus plan, executive officers were eligible to receive up to
100% of their potential bonus to the extent that Exabyte attained pre-tax income
levels targeted in the 1999 annual operating plan. Because Exabyte did not
achieve at least 50% of the pre-tax income levels targeted in the 1999 annual
operating plan, no bonuses were paid to executive officers under the 1999 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 within Exabyte, 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 listed above, in January 1999, the Committee also
assessed each executive officer's individual performance during 1998 and his
potential to influence the operations of Exabyte in the future. As a result of
these factors, the Committee granted options at levels ranging from 25,000 to
50,000 shares to executive officers to purchase common stock. In July 1999 the
Committee assessed the option positions of the newly elected officers and
determined that no additional grants would be made. 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 typically 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 1999
follow the policies and methodologies set forth above. Following a review of the
information contained in the Radford Study, the Committee approved in
January 1999 a 5% increase in Mr. Marriner's base salary to $335,000.
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 in the Incentive
Bonus Award section above, Mr. Marriner was not awarded a bonus under the 1999
bonus plan.
19
<PAGE>
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986 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 Compensation 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 E. PARDUN
STEPHEN C. JOHNSON A. LAURENCE JONES
</TABLE>
COMPENSATION OF DIRECTORS
Each director who is not an employee of Exabyte 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, as well as for each telephone
Board meeting in which they participate. Non-employee directors received an
aggregate of $148,500 for their services rendered to Exabyte during fiscal 1999.
Non-employee directors are also reimbursed for out-of-pocket travel expenses in
connection with their attendance at Board meetings. These fees have remained
unchanged from the previous year.
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 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. Directors are also eligible to
receive discretionary grants of options under the Incentive Stock Plan. During
fiscal 1999, options covering an aggregate of 40,000 shares were granted to
non-employee directors as a group with a weighted average exercise price per
share of $5.992. Of the options granted to directors, grants covering an
aggregate of 10,000 shares were discretionary grants.
SUMMARY OF COMPENSATION
The following table provides, for fiscal 1999 (ended January 1, 2000),
fiscal 1998 (ended January 2, 1999) and fiscal 1997 (ended January 3, 1998),
certain summary information concerning compensation paid to or earned by
Exabyte's Chief Executive Officer and each of the other executive officers at
the
20
<PAGE>
end of fiscal 1999, and one former executive officer who ceased employment with
Exabyte during fiscal 1999 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL ------------
COMPENSATION SECURITIES
---------------------- UNDERLYING ALL OTHER
SALARY ($) BONUS ($) OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (1) (2)(3) (#)(4) ($)(5)
- --------------------------- -------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
William L. Marriner............................. 1999 333,461 0 50,000 5,325
Chairman of the Board, 1998 325,384 0 50,000 5,376
Chief Executive Officer 1997 266,442 0 130,000 4,820
& President
Stephen F. Smith................................ 1999 199,230 0 30,000 6,142
Vice President, Chief 1998 198,923 0 40,000 5,081
Financial Officer, General 1997 147,182 0 5,000 5,081
Counsel & Secretary
Farouk Al-Nasser(6)............................. 1999 238,844 0 40,000 8,392
Vice President, General
Manager Data Storage
Products
Manfred Benecken(6)............................. 1999 197,115 0 30,000 2,268
Vice President, General
Manager Quality and
Support Services
Michael P. Koclanes(6)(7)....................... 1999 213,461 0 40,000 4,810
President, Chief Executive
Officer CreekPath
Systems, Inc.
Bruce Huibregtse(8)............................. 1999 178,186 0 35,000 151,250
Former Senior Vice
President Marketing
</TABLE>
- ------------
(1) Includes amounts earned but deferred at the election of the Named Executive
Officers under the 401(k) plan.
(2) Bonus amounts shown are paid to Named Executive Officers in February of the
following year.
(3) 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.
(4) We have not granted any SARs or restricted stock awards.
(5) Includes matching payments by Exabyte under the 401(k) plan for 1999 as
follows: Mr. Marriner, $4,000; Mr. Smith, $4,000; Dr. Al-Nasser, $4,000;
Mr. Benecken, $0; Mr. Koclanes, $4,000; and Mr. Huibregtse, $4,000. Also
includes the dollar value of executive life insurance premiums paid by
Exabyte in 1999 for the benefit of the Named Executive Officers as follows:
Mr. Marriner, $1,325; Mr. Smith, $2,142; Dr. Al-Nasser, $4,392;
Mr. Benecken, $2,268; Mr. Koclanes, $810; and Mr. Huibregtse, $800. Also
includes $136,450 in termination benefits paid to Mr. Huibregtse in 1999.
(6) Messrs. Al-Nasser, Benecken and Koclanes were elected as executive officers
on May 10, 1999. Prior to that date, they did not serve as executive
officers.
(7) On January 17, 2000, Mr. Koclanes was appointed President, CEO of CreekPath
Systems, Inc., a wholly-owned subsidiary of Exabyte formed on December 6,
1999. Prior to that date, Mr. Koclanes served as Vice President, General
Manager of Exabyte's Storage Solutions division.
(8) Mr. Huibregtse was elected as an executive officer on May 10, 1999. As a
result of Exabyte's 1999 restructuring efforts, his position was eliminated
in August 1999.
21
<PAGE>
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 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.
INCENTIVE STOCK PLAN
The Board adopted the Incentive Stock Plan in January 1987. As a result of a
series of amendments, as of March 1, 2000 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 1, 2000, options to purchase 3,073,130 shares were outstanding
under the Incentive Stock Plan and 2,688,320 shares were available for future
grant.
STOCK OPTION GRANTS
The following table contains information for fiscal 1999 concerning the
grant of stock options under the Incentive Stock Plan to the Named Executive
Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------ POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION 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 3.52 5.50 1/29/09 172,946 438,279
Stephen F. Smith............... 30,000 2.10 5.50 1/29/09 103,767 262,967
Farouk Al-Nasser............... 30,000 2.10 5.50 1/29/09 103,767 262,967
10,000 0.70 5.50 1/29/09 34,589 87,655
Manfred Benecken............... 30,000 2.10 5.50 1/29/09 103,767 262,967
Michael P. Koclanes............ 30,000 2.10 5.50 1/29/09 103,767 262,967
10,000 0.70 5.50 1/29/09 34,589 87,655
Bruce Huibregtse(4)............ 30,000 2.10 5.50 11/4/99 6,269 12,469
5,000 0.35 5.50 11/4/99 1,044 2,078
</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 1999 to purchase
1,422,250 shares.
22
<PAGE>
(3) The potential realizable value is based on the term of the option at the
date of grant (10 years in each case, with the exception of
Mr. Huibregtse's options). 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. Huibregtse's termination on August 6, 1999, his options
expired on November 4, 1999.
OPTION EXERCISES AND YEAR-END HOLDINGS
The following table provides information concerning the exercise of options
during fiscal 1999 and unexercised options held as of the end of fiscal 1999 for
the Named Executive Officers:
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
OPTIONS AT FY-END (#)(1) AT FY-END ($)(2)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
William L. Marriner....... 0 0 287,400/112,800 36,375/94,875
Stephen F. Smith.......... 0 0 47,400/46,900 24,700/60,300
Farouk Al-Nasser.......... 0 0 51,300/63,700 25,506/71,681
Manfred Benecken.......... 0 0 38,600/46,400 21,106/56,081
Michael P. Koclanes....... 0 0 73,200/54,300 25,506/71,681
Bruce Huibregtse(3)....... 0 0 0/0 0/0
</TABLE>
- ------------
(1) 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 1, 2000.
(2) Fair market value of Exabyte's common stock on January 1, 2000 ($7.50, based
on the closing sales price reported on the Nasdaq National Market) less the
exercise price of the option.
(3) As a result of Mr. Huibregtse's termination on August 6, 1999, his options
expired on November 4, 1999.
23
<PAGE>
PERFORMANCE GRAPH(1)
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT
AMONG EXABYTE CORPORATION,
NASDAQ MARKET INDEX AND THE
NASDAQ COMPUTER MANUFACTURER STOCKS INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
Exabyte Corp 100.00 68.42 63.16 32.75 25.73 35.09
NASDAQ Computer Manufacturer Stock Index 100.00 157.45 217.56 264.04 553.26 1167.01
NASDAQ Market Index 100.00 129.71 161.18 197.16 278.08 490.46
</TABLE>
ASSUMES $100 INVESTED ON DECEMBER 31, 1994
ASSUMES DIVIDEND REINVESTMENT
FISCAL YEAR ENDED JANUARY 1, 2000
- ---------
(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.
24
<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]
Stephen F. Smith
CORPORATE SECRETARY
A COPY OF EXABYTE'S 1999 ANNUAL REPORT TO THE SEC ON FORM 10-K IS AVAILABLE
WITHOUT CHARGE UPON WRITTEN REQUEST TO: KAREN CRYDERMAN, INVESTOR RELATIONS,
EXABYTE CORPORATION, 1685 38TH STREET, BOULDER, COLORADO 80301.
25
<PAGE>
DETACH HERE
PROXY
EXABYTE CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 2000
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 Friday, April
28, 2000 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
Call Toll-Free on a Touch-Tone Phone is 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
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
MANAGEMENT RECOMMENDS A VOTE FOR THE NAMED NOMINEE AND FOR PROPOSALS 2 AND 3.
Unless a contrary direction is indicated, this proxy will be voted FOR the
nominee listed in proposal 1 and FOR proposals 2 and 3 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 elect one director to hold office until the 2003 Annual Meeting of
Stockholders.
NOMINEE: William L. Mariner
WITHHELD
FOR / / / / FROM
NOMINEE NOMINEE
2. To approve amendments to the Company's Employee Stock Purchase Plan,
including an increase in the number of authorized shares by 500,000.
FOR AGAINST ABSTAIN
/ / / / / /
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Company for the fiscal year ending December 30, 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:
--------------- ------ ---------------- ------
