Quantum Corp PRE 14A, filed Jun 16, 2022

Quantum Corp /De/ (QMCO)

PRE 14A 2022-06-16 For: 2022-03-31

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Added on October 17, 2026

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						Dear Quantum Shareholders,

						Our fiscal year 2022 was a year of change. We continued our progress in building a robust recurring revenue stream by transitioning to subscription licensing models and increasing our as-a-Service offerings. We completed two acquisitions that helped us globally expand both our technology and physical footprints. We innovated new solutions, introducing a dozen new products and redesigning many others. We hired talented new leaders across the company with the experience to take us to the next level of our journey. As we exited fiscal 2022 and entered fiscal 2023, your oversubscription to our rights offering allowed us to strengthen our balance sheet, pay down debt, and continue to grow in this challenging environment.

James J. Lerner President and Chief Executive Officer Chairman of the Board						All those changes were made with one goal in mind: Delivering long-term value to you. Part of that value includes enhancing our communication with you, and listening to your feedback.

						You told us you expect improvement in the reliability and profitability of our performance through consistent execution. We are implementing new initiatives to improve earnings through sales and services expansion, cost reductions, supply chain optimization, and margin improvements throughout our organization. We believe that these programs will improve our earnings performance in fiscal 2023 and beyond.

						You said you expect us to protect the power of your investment when we capitalize the company. While we believe it's good governance to ask you to approve an increase in our authorized share base, we've proposed a modest amount, well within the approval guidelines published by independent experts. We are not currently contemplating any acquisitions, equity offerings, or other uses of these shares.

						You also told us to reflect your input in our actions. We are very pleased to nominate Chris Neumeyer to join our board of directors at our 2022 annual meeting, and recommend you vote for him. We believe Chris, as an executive at one of our largest shareholders, will amplify your voices to ensure we continue to hear your feedback, and continue to respond.

						We know that you expect us to be careful stewards of your investment. Our singular focus in fiscal 2023 is on helping the value of that investment grow.


BOARD OF DIRECTORS AND COMMITTEES	7	FISCAL 2022 COMPENSATION TABLES	47
Director Biographies	8	Fiscal 2022 Summary Compensation Table	47
Board Meetings and Independence	15	Fiscal 2022 Grants of Plan-Based Awards	48
Board Committees and Leadership Structure	16	Outstanding Equity Awards at Fiscal 2022 Year End	49
Director Candidate Evaluation	17	Fiscal 2022 Options Exercised and Stock Vested	50
		Potential Payments Upon Termination or Change of Control for Fiscal
CORPORATE GOVERNANCE	20	2022	50
Ethics and Compliance	20	Equity Compensation Plan Information	53
Environmental, Social, and Governance Oversight	21	CEO Pay Ratio	53
Board Role in Risk Oversight	23	Security Ownership of Certain Beneficial Owners and Management	53
Board Evaluation	23
Stock Ownership Guidelines	23	BOARD COMMITTEE REPORTS AND RELATED INFORMATION	56
Non-Employee Director Compensation	24	Report of the Leadership and Compensation Committee of the
		Board of Directors	56
PROPOSALS	28	Report of the Audit Committee of the Board of Directors	56
Proposal 1: Election of Directors	28	Audit and Audit-Related Fees	57
Proposal 2: Approval to Increase Authorized Shares	28	Related Party Transactions	58
Proposal 3: Advisory Say on Pay	29
Proposal 4: Ratification of Independent Auditor	29	INFORMATION CONCERNING SOLICITATION, VOTING, AND
Proposal 2 Background	30	COMMUNICATION	60
		General Information	60
COMPENSATION DISCUSSION AND ANALYSIS	31	Notice and Access	60
Fiscal 2022 Executive Compensation Highlights	31	Record Date and Outstanding Shares	60
Executive Compensation Philosophy	33	Voting Procedures	60
Competitive Positioning	34	Householding	62
Compensation Elements	35	Solicitation	62
Perquisites and Other Benefits	41	Communicating With the Company	63
Executive Compensation Process and Decision Making	42	Shareholder Proposals for Our 2023 Annual Meeting	63
Compensation Governance Best Practices	43
Change of Control Severance Policy, Employment Agreements, and Severance		APPENDIX A	64
Agreements	45
Tax and Accounting Considerations	45	PROXY CARD	65
Risks Related to Compensation Policies and Practices	45


						Mr. Lerner has served as our President and CEO since July 2018. He was appointed to the Board at that time and named Chairman in August 2018.

						Some of Quantum’s key accomplishments during Mr. Lerner’s tenure include:
						•Beginning and progressing in its transition from one-time hardware sales to a recurring software revenue model;
						•Acquiring several technology features, products, and businesses that introduced incremental performance capabilities to Quantum’s product line;
						•Launching 20 new products; and
James J. Lerner President and Chief Executive Officer Chairman of the Board						•Successfully closing an oversubscribed rights offering, raising gross proceeds of $67.5M.

						Mr. Lerner previously served in senior leadership positions at Pivot3 Inc., a smart infrastructure solutions company.
Age 52						•Vice President and Chief Operating Officer, from March 2017 to June 2018.
						•Chief Revenue Officer from November 2016 to March 2017.

						Prior to Pivot3, from March 2014 to August 2015, he served as President of Cloud Systems and Solutions at Seagate Technology Public Limited Company, a data storage company.

						Before working at Seagate, Mr. Lerner served in various executive roles at Cisco Systems, Inc., a publicly-traded networking hardware and software manufacturing company, including most recently as Senior Vice President and General Manager of the Cloud & Systems Management Technology Group.

						Prior to beginning his career as a technology company executive, he was a Senior Consultant at Andersen Consulting, a financial advisory and consulting firm.

						Since 2011, Mr. Lerner has served on the Board of Trustees of Astia, a global not-for-profit organization built on a community of men and women dedicated to the success of women-led, high-growth ventures. Currently, he serves as the Chair of the Board of Trustees.

						Mr. Lerner earned a Bachelor of Arts in Quantitative Economics and Decision Sciences from the University of California, San Diego.

						We believe Mr. Lerner’s extensive history in our industry, combined with his executive-level experience at large, well-established companies contributes significantly to our Board. He does not sit on any Board committees.


Mr. Rau joined our Board in March 2017 and has announced his decision not to stand for election to the Board at our Annual Meeting. He does not have any disagreements with the Board or Quantum management team on any matter relating to the Company’s operations, policies, or practices.

Mr. Rau served as Quantum’s Chairman of the Board between August and September 2017 and between November 2017 and August 2018. He held the position of Executive Chairman between September and November 2017.

Mr. Rau has served in a number of board and executive leadership positions, including:
•Since June 2020, as a member of the board of directors of Xperi Holding Corporation, a public company which invents, develops, and delivers technologies. He is currently a member of its Corporate Governance and Nominating Committee.						Raghavendra Rau Lead Independent Director Chair, Leadership and Audit Committee
•From May 2015 until June 2020, when it merged with Xperi Holding Corporation, as a member of the board of directors and Vice Chairman of TiVo Corporation, which provides on-demand streaming services. Mr. Rau also served as Interim President and CEO of TiVo Corporation from July 2018 to May 2019.						Age 73
•From November 2011 until October 2014, as the Chief Executive Officer of SeaChange International Inc., a publicly-traded provider of digital video systems, software and related services to cable, telecommunications, and broadcast television companies worldwide, where he also served as a director from July 2010 until October 2014.
•From November 2010 until December 2014, as a director of Aviat Networks, Inc., a public global supplier of microwave networking solutions, where he also served as a member of the Audit Committee.
•As a director of Microtune, Inc., a global leader in RF integrated circuits and subsystem modules, from May 2010 until its acquisition by Zoran Corporation, a multinational digital technology company, in December 2010, where he also served as a member of the Audit Committee.
•Several positions at Motorola, Inc., a multinational telecommunications company, including as the Senior Vice President of its Mobile TV Solutions Business from May 2007 until January 2008, and as Senior Vice President of Strategy and Business Development, Networks & Enterprise from March 2006 to May 2007. Mr. Rau served as Corporate Vice President of Global Marketing and Strategy from 2005 to 2006, as Corporate Vice President, Marketing and Professional Services, from 2001 to 2005, and in various other positions from October 1992 to 2001.

Mr. Rau is a former Chairman of the QuEST Forum, a collaboration of service providers and suppliers dedicated to telecom supply chain quality and performance, and was a director of the Center for Telecom Management at the University of Southern California. Mr. Rau also served on the Marketing Advisory Board of Cleversafe Inc., an object storage software and systems developer company acquired by IBM.

Mr. Rau holds a bachelor’s degree in Engineering from the National Institute of Technology (India) and an MBA from the Indian Institute of Management.


						Mr. Rothman has served as a member of our Board since May 2017.

						Mr. Rothman has been Senior Vice President and Chief Financial Officer at BMC Software (BMC) since October 2020. BMC develops, delivers, and services IT operations management software that enable businesses in their ongoing evolution to an Autonomous Digital Enterprise.

						Before joining BMC, Mr. Rothman served as Executive Vice President and Chief Financial Officer of Verifone Systems, Inc., a multinational company providing technology for electronic payment transactions from 2013 to July 2020.

Marc E. Rothman Chair, Audit Committee						Prior to Verifone, Mr. Rothman served as Senior Vice President and Chief Financial Officer of Motorola Mobility, Inc., a consumer electronics and telecommunications company, from 2010 to 2012.
						•Led Motorola Mobility, Inc.'s spin off from its former parent company, Motorola, Inc., and its subsequent sale to Google in 2012.
Age 57						•Served in several executive finance positions at Motorola throughout his tenure, beginning in January 2000, including Chief Financial Officer of its Broadband Communications, Public Safety, Networks, and Enterprise and Mobile Devices global business segments, as well as Motorola's Senior Vice President, Corporate Controller and Chief Accounting Officer.

						From 1995 to 2000, Mr. Rothman served in multiple leadership finance roles at General Instrument, which developed integrated and interactive broadband access solutions, including as its Vice President and Corporate Controller.

						From 1987 through 1995, he was with Deloitte & Touche LLP, a professional services company.

						Mr. Rothman graduated with a bachelor’s degree in Business from Stockton University (formerly Richard Stockton College) with Distinction and is a Certified Public Accountant in California (inactive).

						We believe that Mr. Rothman possesses specific attributes that qualify him to serve as a member of the Board, including his executive leadership experience and deep financial expertise in:
						•Corporate finance, accounting, and treasury;
						•Restructuring, mergers, and acquisitions; and
						•Capital markets.


Ms. Jacoby joined our Board in December 2019.

Ms. Jacoby was Senior Vice President, Operations of Cisco Systems, Inc., a publicly-traded leader in IT networking, from July 2015 until her retirement in January 2018.
•Responsible for driving profitable growth and enabling operational excellence.
•Oversaw supply chain, global business services, security and trust, and IT organizations.

In her former role as Cisco’s Chief Information Officer from 2006 to July 2015, she made the Cisco IT organization a strategic business partner, producing significant business value in the form of:
•Financial performance;						Rebecca J. Jacoby Chair, Corporate Governance and Nominating Committee
•Customer satisfaction and loyalty;
•Market share; and
•Productivity.
						Age 60
Since joining Cisco in 1995, Ms. Jacoby held a variety of leadership roles in operations, manufacturing and IT. Prior to joining Cisco, Ms. Jacoby held a range of planning and operations positions with other companies in Silicon Valley.

Ms. Jacoby has served on several boards of directors, including:

•Apptio, Inc., which provides cloud-based technology business management solutions to enterprises, from 2018 until its acquisition by Vista Equity Partners in January of 2019.
•S&P Global Inc., a public financial information and analytics company, including the Finance Committee and the Nominating and Corporate Governance Committee, since 2014.
•Cloudleaf, Inc., a supply chain software business, as an advisory board member since November 2019.

Ms. Jacoby earned a Bachelor of Science degree in Economics from University of the Pacific and a Master of Business Administration from the Leavey School of Business, Santa Clara University.

We believe Ms. Jacoby's senior management experience, particularly in operations, supply chain management, and global services, brings a valuable perspective to our Board and to the oversight of these critical functions within Quantum.


						Ms. White was elected to Quantum’s Board in September 2021.

						Ms. White has served as Vice President of Enterprise Data and Analytics at NIKE, Inc., a public company that manufactures and sells athletic apparel, since April 2020.

						Prior to NIKE, from February 2017 to April 2020, Ms. White served as Vice President of Enterprise Data Engineering at Synchrony Financial, a publicly-traded consumer financial services company.

Emily White Independent Director						Ms. White previously held multiple positions at General Electric entities, including:
						•From November 2013 to June 2015, as Data Science Director and Global Commercial IT Director at General Electric Healthcare, a company that manufactures and distributes medical imaging modalities.
Age 50						•From May 2007 to October 2013, as Global Enterprise Resource Director and Senior Global Business Intelligence Program Manager for General Electric Transportation, a company that manufactures equipment for energy generation industries.

						Ms. White’s education includes a:
						•Bachelor of Science degree in Accounting and Finance from Shengyang Polytechnic University;
						•Master of Business Administration degree from Huron University;
						•Master of Applied Mathematics degree in Computer Science at the University of Central Oklahoma; and
						•Certificate in Health Economics & Outcomes Research from the University of Washington.

						We believe Ms. White’s extensive senior management experience, particularly in data science and analytics, brings valuable perspective to our Board and to the oversight of these functions within Quantum.


Quantum is very pleased to nominate Mr. Neumeyer for election to our Board at our Annual Meeting. He has served as a non-voting Board observer since 2016.

Mr. Neumeyer is an executive vice president and portfolio manager at Pacific Investment Management Company, LLC (PIMCO), a global investment management firm that provides investment solutions to companies, educational institutions, foundations, and endowments across the world. Since joining PIMCO in January 2010, Mr. Neumeyer has held multiple roles and is currently responsible for identifying, originating, and structuring corporate investments across the capital structure in a variety of industries for various PIMCO-managed investment funds.

Mr. Neumeyer’s previous experience includes:						Christopher D. Neumeyer Director Nominee
•Various positions at The Blackstone Group, a leading global investment business from April 2004 to May 2009.
•Work in the investment banking division of Credit Suisse First Boston, a global investment bank, from July 2002 to April 2004.						Age 42

Mr. Neumeyer earned a Bachelor of Science degree in business from Indiana University and is a CFA® charterholder.

We believe Mr. Neumeyer is qualified to serve on the Board due to his financial expertise. In addition, we expect his experience conveying shareholder interests to boards and management teams will bring valuable shareholder perspectives to our Board oversight and decision-making processes.



Mr. Rau also served on the Audit Committee in Fiscal 2022, until the appointment of Ms. White in September 2021.	Mr. Fichthorn and Ms. Jacoby also served on the Leadership and Compensation Committee during Fiscal 2022, until the appointment of Ms. White in September 2021.	Mr. Fichthorn also served on the Corporate Governance and Nominating Committee in Fiscal 2022 until the last annual meeting in September 2021.