Quantum Corporation (NYSE:QTM) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement

On March 2, 2017, Quantum Corporation (the Company) entered into
an agreement (the Settlement Agreement) with VIEX Capital
Advisors, LLC, and certain of its affiliates (collectively,
VIEX), which beneficially owns approximately 10.9% of the
outstanding common stock of the Company (Common Stock).

to the Settlement Agreement, the Companys board of directors (the
Board) agreed to decrease the size of the Board from nine to
seven following the Annual Meeting of Stockholders to be held on
March 31, 2017 (the Annual Meeting). The Company and VIEX have
agreed that the Company shall nominate the following individuals
for election as directors at the Annual Meeting: Paul R. Auvil
III, Gregg J. Powers, Clifford Press, Raghu Rau, Jon W. Gacek,
David E. Roberson and John Mutch. The parties have agreed that
Mr. Auvil will serve as Chairman of the Board. The Company has
also agreed that, until the Annual Meeting, Messrs. Rau and Mutch
may attend meetings of the Board in a board observer capacity,
subject to certain limitations. The Settlement Agreement further
provides that VIEX will vote ratably all of the shares of Common
Stock that it beneficially owns for the election of each of the
foregoing director nominees at the Annual Meeting.

As part of the settlement, the Company has agreed to form a
Search Committee consisting of Messrs. Powers and Press. The
Search Committee will engage Korn/Ferry International to assist
the Company in recruiting and appointing three highly qualified
new, independent directors to replace Messrs. Mutch, Gacek and
Roberson following their election at the Annual Meeting. The
Search Committee will consult with Mr. Auvil throughout the
process. The Company and VIEX have agreed that the new
independent directors shall (i) not have, and have not had in the
past three (3) years, a professional or other material
relationship with the Company, VIEX or any of their respective
affiliates and their affiliates respective directors, officers or
managing members, (B) qualify as an independent director under
applicable rules and regulations (with at least one new director
who is qualified to serve as chair of the audit committee of the
Board (the Audit Committee) and one who is qualified to serve as
a member of the Leadership and Compensation Committee (the LCC)),
and (C) have data storage expertise, with at least one new
director having expertise in the cloud/software space. The
Company has granted VIEX a right to approve or reject all
candidates recommended by the Search Committee prior to such
candidates being presented to the full Board (and VIEX has agreed
not to unreasonably withhold its consent to the nomination of
candidates recommended by the Search Committee). The Company has
agreed to appoint two of the new independent directors within 60
days of the date of the Settlement Agreement and the third new
independent director within 90 days of the date of the Settlement
Agreement.

In accordance with the foregoing, each of Messrs. Mutch, Gacek
and Roberson have executed letters of resignation from the Board
that will become effective upon the appointment of the new
directors, with Mr. Mutchs resignation to become effective upon
the appointment of the first new director, Mr. Gaceks resignation
to become effective upon the appointment of the second new
director and Mr. Robersons resignation to become effective upon
the appointment of the third new director. Mr. Gacek will
continue as the Companys Chief Executive Officer following his
resignation from the Board of Directors and Mr. Gacek has agreed
to waive any claim under the Quantum Corporation Amended and
Restated Change of Control Agreement dated as of December 3, 2015
(the CoC Agreement) solely with respect to any claim or potential
claim arising from, or that may be deemed to arise as a result
of, Mr. Gaceks resignation from the Board. In connection with the
resignation of Mr. Roberson, the Board will appoint a qualified
new director to fill the vacancies on the Audit Committee and the
LCC.

In addition, if any of the VIEX nominees is unable to serve as a
director, resigns as a director or is removed as a director prior
to the Next Annual Meeting (defined below), other than as a
result of the resignations described above, VIEX will have the
ability to identify a replacement.

to the Settlement Agreement, the Company has agreed to nominate
Messrs. Auvil, Powers, Press and Rau (including any replacement
directors) and the three new, independent directors who will
replace Messrs. Mutch, Gacek and Roberson for election at the
next Annual Meeting of Stockholders to be held no later than
August 31, 2017 (the Next Annual Meeting), unless (i) (A) the
standstill period (described below) has terminated, and (B) VIEX
is soliciting proxies with respect to the election of directors
in opposition to the Company at the Next Annual Meeting or taking
any action to support a solicitation of proxies with respect to
the election of directors in opposition to the Company at the
Next Annual Meeting, or (ii) the Termination Date (defined below)
has occurred. If the standstill period remains in effect, VIEX
has agreed that it will vote ratably all of the shares of Common
Stock that it beneficially owns for the election of each of the
Companys director nominees at the Next Annual Meeting.

The right of VIEX under the Settlement Agreement to participate
in the recommendation of replacement directors, should one of
their nominees be unable to serve, and in the selection of new
directors (each as described above) shall automatically terminate
on the date that VIEX sells or transfers beneficial ownership of
shares of Common Stock such that VIEXs aggregate beneficial
ownership of Common Stock decreases to less than one percent (1%)
of the Companys then outstanding Common Stock (the Termination
Date).

The Settlement Agreement also provides that VIEX will be subject
to certain standstill provisions. Such provisions generally
remain in effect until the completion of the Next Annual Meeting,
subject to earlier termination under certain circumstances. These
provisions restrict VIEXs ability to engage in certain proxy
solicitations, make certain stockholder proposals, call meetings
of stockholders or solicit consents from stockholders, obtain
additional representation on the Board or seek to remove any of
the Companys directors. The Company has agreed that it will
accept stockholder nominations for director and proposals of
business for the Next Annual Meeting until June 30, 2017.

The Company has also agreed to reimburse VIEX for its
out-of-pocket fees and expenses (including legal expenses)
incurred in connection with the nomination of candidates for
director by VIEX, the preparation of proxy materials and other
communications, the negotiation and execution of the Settlement
Agreement and all other activities related thereto, up to a
maximum of $350,000. Each of the parties to the Settlement
Agreement has also agreed to mutual non-disparagement
obligations.

The foregoing description of the terms and conditions of the
Settlement Agreement does not purport to be complete and is
qualified in its entirety by reference to the full text of the
Settlement Agreement, which is attached as Exhibit 10.1 hereto
and incorporated herein by reference.

On March 2, 2017, the Company issued a press release announcing
the signing of the Settlement Agreement. A copy of the press
release is attached as Exhibit 99.1 hereto.

Item 5.02 Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

As described under Item 1.01 above, in accordance with the
foregoing, each of Messrs. Mutch, Gacek and Roberson have
executed letters of resignation from the Board that will become
effective upon the appointment of the new directors, with Mr.
Mutchs resignation to become effective upon the appointment of
the first new director, Mr. Gaceks resignation to become
effective upon the appointment of the second new director and Mr.
Robersons resignation to become effective upon the appointment of
the third new director. Mr. Gacek will continue as the Companys
Chief Executive Officer following his resignation from the Board
and Mr. Gacek has agreed to waive any claim under the CoC
Agreement solely with respect to any claim or potential claim
arising from, or that may be deemed to arise as a result of, Mr.
Gaceks resignation from the Board. Such waiver does not
constitute a waiver of any other claim or right of Mr. Gacek that
may arise following the occurrence of the Change of Control (as
defined in the CoC Agreement) that will result from the
transactions contemplated by the Settlement Agreement.

A copy of Mr. Gaceks Director Resignation and CEO Waiver Letter,
dated as of March 2, 2017, is attached as Exhibit 10.2 hereto.

Item 8.01. Other Events.

The Company has agreed that each of the non-employee directors
currently serving on the Board, other than Robert Andersen, will
be granted 30,000 restricted stock units of the Companys Common
Stock for their continuing service on the Board, which restricted
stock units shall vest in full upon the election of directors at
the Annual Meeting, unless a director has resigned or has been
removed from the Board for any reason prior to the Annual
Meeting. In addition, the Company has agreed to cause Mr.
Andersens previously granted 32,383 restricted stock units that
otherwise would have vested on June 1, 2017 to vest in full upon
the election of directors at the Annual Meeting, unless Mr.
Andersen has resigned or has been removed from the Board for any
reason prior to the Annual Meeting. The Company has also agreed
that non-employee directors elected at the Annual Meeting will be
granted 50,000 restricted stock units of the Companys Common
Stock, which restricted stock units shall vest in full upon the
election of directors at the Next Annual Meeting. Notwithstanding
the foregoing, upon the resignations by Messrs. Mutch and
Roberson in accordance with the Settlement Agreement, such
resigning directors restricted stock units shall vest in full
immediately upon such resignation. However, if Messrs. Mutch or
Roberson resign for any other reason, or any other director
resigns for any reason or any director is removed from the Board,
in each case prior to the Next Annual Meeting, such director
shall forfeit the entirety of the grant.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

About Quantum Corporation (NYSE:QTM)

Quantum Corporation focuses on scale-out storage, archive and data protection, providing solutions for capturing, sharing, managing and preserving digital assets over the entire data lifecycle. The Company’s end-to-end tiered storage solutions enable users to maximize the value of their data by making it accessible whenever and wherever needed, retaining it indefinitely and reducing total cost and complexity. It works with a network of distributors, value-added resellers (VARs), direct marketing resellers (DMRs), original equipment manufacturers (OEMs) and other suppliers to meet customers’ evolving needs. Its scale-out storage portfolio includes StorNext software, appliances and full systems called StorNext Pro Solutions, as well as Xcellis workflow storage, QXS disk storage, Lattus extended online storage and Q-Cloud Archive and Vault services. Its StorNext offerings enable customers to manage large unstructured data sets in an information workflow.

Quantum Corporation (NYSE:QTM) Recent Trading Information

Quantum Corporation (NYSE:QTM) closed its last trading session 00.000 at 0.901 with 1,096,830 shares trading hands.