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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as
[ ] Definitive proxy statement. permitted by Rule 14a-6(e)(2)).
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
VERITAS SOFTWARE CORPORATION
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] 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:
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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VERITAS LOGO
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear VERITAS Stockholder:
We invite you to attend the 2000 annual meeting of stockholders of VERITAS
Software Corporation. The meeting will be held at our headquarters located at
1600 Plymouth Street, Mountain View, California 94043 on Wednesday, May 10, 2000
at 8:30 a.m. Pacific Time. At the meeting, we will:
1. Elect two Class B directors to our board of directors, each to serve for
a term of three years or until his successor has been duly elected and
qualified or until his earlier resignation or removal;
2. Vote on an amendment to our Restated Certificate of Incorporation to
increase the number of shares of common stock that we are authorized to
issue from 500,000,000 to 2,000,000,000 shares;
3. Ratify our board of directors' selection of Ernst & Young LLP as our
independent accountants for our current fiscal year; and
4. Transact any other business as may properly come before the meeting or
any adjournment or postponement of the meeting.
All of these actions are more fully described in the proxy statement
accompanying this notice.
Only stockholders who owned our stock at the close of business on March 24,
2000 may vote at the meeting or at any adjournment or postponement of the
meeting. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING. You
may vote in person at the meeting, even if you have already returned a proxy
card.
We look forward to seeing you at the meeting.
Sincerely,
/s/ MARK LESLIE
Mark Leslie
Chief Executive Officer and
Chairman of the Board
Mountain View, California
April 10, 2000
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VERITAS SOFTWARE CORPORATION
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PROXY STATEMENT
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INFORMATION ABOUT SOLICITATION AND VOTING
Our board of directors is soliciting your proxy for our 2000 annual meeting
of stockholders. The meeting will be held at our headquarters located at 1600
Plymouth Street, Mountain View, California 94043 on Wednesday, May 10, 2000 at
8:30 a.m. Pacific Time. Our telephone number is (650) 335-8000.
This proxy statement contains important information for you to consider
when deciding how to vote on the matters brought before the meeting. Please read
it carefully.
All proxies will be voted in accordance with the instructions specified on
the proxy card. If no choice is specified, the proxies will be voted in favor of
the board nominees and the proposals described in the attached Notice of Annual
Meeting of Stockholders and this proxy statement. This proxy statement and the
enclosed proxy card were first mailed on or about April 10, 2000 to stockholders
entitled to vote at the meeting.
We will pay the costs of soliciting proxies from stockholders. We have
hired ChaseMellon Shareholder Services LLC to help us solicit proxies from
brokers, bank nominees and other institutional owners. We expect to pay
ChaseMellon a fee of approximately $5,000 for its services and will reimburse
ChaseMellon for its out-of-pocket expenses, which we estimate will not be more
than $2,500. We may also reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding voting
information to the beneficial owners. Our directors, officers and regular
employees may solicit proxies on our behalf, without additional compensation, in
person or by telephone.
INFORMATION ABOUT SHARE AND PER SHARE DATA
Except where otherwise indicated, we have adjusted all share and per share
data to reflect all stock splits, effected as stock dividends, through the date
of this proxy statement.
QUESTIONS AND ANSWERS
Q: Who can vote at the meeting?
A: The board of directors set March 24, 2000 as the record date for the meeting.
If you owned our stock on March 24, 2000, you may attend and vote at the
meeting. You are entitled to one vote for each share of common stock held on
all matters to be voted on. On March 24, 2000, there were approximately
shares of our common stock outstanding, including
approximately shares reserved for issuance upon the exchange
of exchangeable shares of our Canadian subsidiary.
Q: How many votes do you need to hold the meeting?
A: A majority of our outstanding shares as of the record date must be present at
the meeting in order to hold the meeting and conduct business. This is called
a quorum. Shares are counted as present at the meeting if the stockholder (1)
is present and votes in person at the meeting, or (2) has properly submitted
a proxy card.
Q: What proposals will be voted on at the meeting?
A: There are three proposals scheduled to be voted on at the meeting. The
scheduled proposals are:
- Proposal No. 1: To elect two Class B directors to our board of directors,
each to serve for a term of three years or until his successor has been
duly elected and qualified or until his earlier resignation or removal;
- Proposal No. 2: To vote on an amendment to our Restated Certificate of
Incorporation to increase the number of shares of common stock that we
are authorized to issue from 500,000,000 to 2,000,000,000 shares; and
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- Proposal No. 3: To ratify our board of directors' selection of Ernst &
Young LLP as our independent accountants for our current fiscal year.
Q: What is the vote required for proposal No. 1?
A: For the election of directors, the two individuals receiving the highest
number of "FOR" votes will be elected. You may give each candidate one vote
for each share you held on the record date. You may not vote your shares
cumulatively.
Q: What is the vote required for proposal No. 2?
A: The proposal to amend our Restated Certificate of Incorporation will be
approved if a majority of the shares of our common stock outstanding on March
24, 2000, including the shares reserved for issuance upon the exchange of
exchangeable shares of our Canadian subsidiary, are voted "FOR" the proposal.
Q: How are votes counted?
A: You may vote either "FOR" or "AGAINST" each nominee for the board of
directors. You may vote "FOR," "AGAINST" or "ABSTAIN" on the other proposals.
If you abstain from voting on the other proposals, it has the same effect as
a voting against. If you just sign your proxy card with no additional
instructions, your shares will be counted as a "FOR" vote for each director
nominee and a "FOR" vote for the other proposals. If you do not vote and you
hold your shares in a brokerage account in your broker's name, your shares
will not be counted in the tally of the number of shares cast "FOR,"
"AGAINST" or "ABSTAIN" on any proposal where your broker does not have
discretionary authority to vote. This will have the effect of reducing the
number of shares needed to approve proposal No. 1 and proposal No. 3.
However, these shares may be counted for the purpose of establishing a quorum
for the meeting. Voting results are tabulated and certified by our transfer
agent, ChaseMellon Shareholder Services LLC.
Q: How can I vote my shares in person at the meeting?
A: Shares held directly in your name as the stockholder of record may be voted
in person at the meeting. If you choose to do so, you will need to bring the
enclosed proxy card or proof of identification to the meeting in order to
vote in person. If you hold your shares in a brokerage account in your
broker's name, you must request a legal proxy from your stockbroker in order
to vote at the meeting.
Q: How can I vote my shares without attending the meeting?
A: Whether you hold shares directly as a stockholder of record or in a brokerage
account in your broker's name, you may vote without attending the meeting.
Your may vote by granting a proxy or, for shares held in a brokerage account,
by submitting voting instructions to your broker or nominee. Please refer to
the summary instructions included on your proxy card. For shares held in a
brokerage account, the voting instruction card will be included by your
broker or nominee.
Q: How can I change my vote after I return my proxy?
A: You may revoke your proxy and change your vote at any time before the final
vote at the meeting. You may do this by signing a new proxy card with a later
date or by attending the meeting and voting in person. Attending the meeting
will not revoke your proxy unless you specifically request it.
Q: What is VERITAS' voting recommendation?
A: Our board of directors recommends that you vote your shares "FOR" each of the
board nominees and "FOR" the other proposals described in this proxy
statement.
Q: Where can I find the voting results of the meeting?
A: The preliminary voting results will be announced at the meeting. The final
results will be published in our quarterly report on Form 10-Q for the second
quarter of our fiscal year 2000.
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PROPOSAL NO. 1
ELECTION OF DIRECTORS
Our board of directors currently consists of 10 directors and is divided
into three classes serving staggered three-year terms. Directors for each class
will be elected at the annual meeting of stockholders held in the year in which
the term for that class expires and will serve for three years. You will vote on
the two Class B director nominees listed below. Each Class B director will serve
a three-year term expiring at the 2003 annual meeting of stockholders, or until
his successor is duly elected and qualified or until his earlier resignation or
removal. The remaining six directors will continue to serve for the terms shown
in the table below. We currently have two vacancies on our board of directors,
one of which is a Class B director, the other of which could be designated to
any class by our board of directors. Each of these vacancies may be filled only
by a majority vote of the directors in office.
Our board of directors has nominated William H. Janeway and Joseph D. Rizzi
to serve as the Class B directors.
If you just sign your proxy card with no additional instructions, you
shares will be counted as a "FOR" vote for each director nominee. If any
director nominee is unable or declines to serve as a director, the proxy holders
named on the proxy card may vote for a substitute nominee at their discretion.
Each director nominee has consented to serve as a director.
DIRECTORS AND NOMINEES FOR DIRECTOR
The names of the current directors and the director nominees, their ages as
of December 31, 1999 and other information about them are shown below:
<TABLE>
<CAPTION>
NAME OF DIRECTOR
OR NOMINEE FOR DIRECTOR AGE PRINCIPAL POSITION DIRECTOR SINCE
----------------------- --- ------------------ --------------
<S> <C> <C> <C>
Nominees for Class B
directors -- term expiring at the
2003 annual meeting
William H. Janeway................. 56 Director 1997
Joseph D. Rizzi.................... 57 Director 1987
Class C directors -- term expiring
at the 2001 annual meeting
Fred van den Bosch................. 52 Executive Vice President of 1996
Engineering, Director
Steven Brooks...................... 48 Director 1996
Stephen Luczo...................... 42 Director 1999
Class A directors -- term expiring
at the 2002 annual meeting
Mark Leslie........................ 54 Chief Executive Officer and 1988
Chairman of the Board
Geoffrey Squire.................... 52 Executive Vice President and Vice- 1997
Chairman of the Board
Gregory Kerfoot.................... 40 Director 1999
</TABLE>
Each of the directors listed above were appointed to our board of directors
on May 28, 1999. The dates given for the last column include time served by each
individual both as our director and as a director of our predecessor companies.
Nominees for Class B directors
Mr. Janeway has been a director of VERITAS or our predecessors since April
1997. Mr. Janeway has been a Managing Director of E.M. Warburg Pincus & Co.,
LLC, an investment services firm, since 1988. Mr. Janeway is a director of
ECsoft Group, PLC, BEA Systems, Inc., Indus International, Inc., Inacom Corp.
and Industri-Mathematik Intl. Corp.
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Mr. Rizzi has been a director of VERITAS or our predecessors since 1987.
Since 1986, he has been a general partner of Matrix Partners, a venture capital
firm.
Directors continuing in office
Mr. Leslie is our Chief Executive Officer and Chairman of the Board. Mr.
Leslie has served as Chief Executive Officer of VERITAS or our predecessors
since 1990 and as a director since 1988. Mr. Leslie is also Chairman of the
Board of Versant Corporation, an object management solutions company, and serves
on the board of directors of Brocade Communications Systems, Inc., a supplier of
storage area network software, and on the board of directors of Keynote Systems,
Inc., a supplier of Internet performance measurement and diagnostic services.
Mr. Squire has served as Executive Vice President and Vice Chairman of the
Board of VERITAS or our predecessors since April 1997, when VERITAS merged with
OpenVision Technologies, Inc. Mr. Squire became a director of OpenVision in 1994
and was appointed Chief Executive Officer of OpenVision in July 1995. From
November 1994 to June 1995 he was President and Chief Operating Officer of
OpenVision. Mr. Squire has sat on the Council of the U.K. Computing Services and
Software Association since 1990. In 1995, Mr. Squire was elected as the founding
President of the European Information Services Association. Mr. Squire also
serves as a director of Industri-Mathematik International Corp.
Mr. van den Bosch has served as Executive Vice President, Engineering of
VERITAS or our predecessors since July 1997. Mr. van den Bosch served as our
Senior Vice President, Engineering from 1991 to July 1997 and was appointed as a
director in February 1996. From 1970 until 1990, he served in various positions
with Philips Information Systems, including Director of Technology.
Mr. Brooks has been a director of VERITAS or our predecessors since 1996.
Since February 1999, Mr. Brooks has been a general partner and a managing
director of Broadview Capital Partners, a private equity firm. From September
1997 to February 1999, Mr. Brooks was a managing director of Donaldson, Lufkin &
Jenrette Securities Corporation, an investment banking firm. From 1994 to 1997,
Mr. Brooks served as Managing Director and Head of Global Technology Investment
Banking at Union Bank of Switzerland Securities, LLC. Mr. Brooks is a director
of Paychex, Inc., a national payroll processing and business services company,
and QRS Corporation, an electronic commerce company.
Mr. Kerfoot has been a director of VERITAS since May 1999. In May 1999, Mr.
Kerfoot became President and a director of Seagate Software. From May 1996 to
May 1999, Mr. Kerfoot served as Seagate Software's Chief Strategic Officer and
as President of the Information Management Group. In 1994, he joined Seagate
Technology in connection with its acquisition of Crystal Computer Services, and
continued as Crystal's Director of Research and Development until May 1996.
Mr. Luczo has been a director of VERITAS since May 1999. Since July 1997,
Mr. Luczo has served as Chairman of the Board of Directors of Seagate Software,
Inc. and as Chief Executive Officer, President and Director of Seagate
Technology, Inc. From March 1995 to July 1997, Mr. Luczo served as Seagate
Software's Chief Operating Officer. Mr. Luczo joined Seagate Technology in 1993
as Senior Vice President, Corporate Development, and was promoted to Executive
Vice President, Corporate Development in March 1995, where he served until
September 1997. He was promoted to President and Chief Operating Officer of
Seagate Technology in September 1997, and served in the latter capacity until
August 1998. In July 1998, Mr. Luczo was promoted to Chief Executive Officer and
appointed to the Board of Directors of Seagate Technology. Mr. Luczo also serves
on the boards of directors of Gadzoox Microsystems, Inc. and Dragon Systems,
Inc.
BOARD MEETINGS AND COMMITTEES
Our board of directors held five meetings and acted twice by unanimous
written consent in 1999. Each director attended at least 75% of the board of
directors and committee meetings during which he was a director during 1999. Our
board of directors has an audit committee and a compensation committee.
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Audit committee
Mr. Brooks and Mr. Kerfoot are the current members of the audit committee.
Mr. Kerfoot was appointed to the audit committee in October 1999, taking the
place of Mr. Rizzi on the audit committee. Each of them is independent as
defined under the listing standards that apply to us. The audit committee met
twice in 1999.
The audit committee reviews with our independent public accountants and
with our internal accounting staff the scope and results of the independent
accountants' audit work, our annual financial statements, and the adequacy of
our internal accounting and control systems. The audit committee also recommends
to our board of directors the firm of independent public accountants to be
selected to audit our accounts, and makes further inquiries as it deems
necessary or desirable to inform itself as to the conduct of our affairs.
Compensation committee
Mr. Janeway and Mr. Rizzi are the current members of the compensation
committee. Mr. Janeway was appointed to the compensation committee in October
1999, taking the place of Mr. Brooks on the compensation committee. Each of them
is independent and a non-employee director as defined under the standards that
apply to us. The compensation committee met twice in 1999.
The compensation committee reviews and makes recommendations to the board
of directors regarding the compensation for officers and compensation guidelines
for our employees. The compensation committee also administers our employee
stock and option plans and makes decisions regarding the grant of all forms of
stock compensation awarded to officers.
Our board of directors does not have a nominating committee or a committee
performing similar functions.
Compensation committee interlocks and insider participation
Except as described below, none of the persons who served on our
compensation committee during any part of 1999 had any interlocking
relationships as defined by the SEC.
Mr. Brooks was a managing director of Donaldson, Lufkin & Jenrette
Securities Corporation, or DLJ, at the time our board of directors approved the
NSMG combination. In the NSMG combination, which occurred in May 1999, VERITAS
Operating Corporation, formerly known as VERITAS Software Corporation, merged to
become our wholly-owned subsidiary, and Seagate Software, Inc. contributed its
Network & Storage Management Group business to us. DLJ served as the financial
advisor to VERITAS Operating Corporation in the NSMG combination, for which
VERITAS Operating Corporation paid them $7.5 million. Mr. Brooks was not a
member of the DLJ team responsible for obtaining the internal approval of, or
presenting to the board of directors of VERITAS Operating Corporation, DLJ's
fairness opinion. Mr. Brooks participated as a member of the board of directors
of VERITAS Operating Corporation in approving all aspects of the NSMG
combination, other than the retention of DLJ as financial advisor.
COMPENSATION OF DIRECTORS
How board members are compensated
Our non-employee directors receive a specified number of stock options
under our directors' plan each year. Our board members do not receive any fees
for attending board or board committee meetings, but are reimbursed for actual
expenses they incur to attend meetings.
Amendments to the directors' plan
In April 1999, our board of directors approved an amendment to the
directors' plan to provide that, if the number of outstanding shares of common
stock is changed as a result of a stock dividend, stock split, reverse stock
split, combination or other similar capital change, the board of directors will
have discretion to determine whether the number of shares available for issuance
under the directors' plan, the maximum
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number of shares that can be granted to a director, the number of shares subject
to outstanding options or the other terms of such outstanding options, will be
adjusted to reflect the capital change.
In October 1999, our board of directors approved an amendment to the
directors' plan to provide for the decrease in the number of shares subject to
each initial grant made on or after January 1, 1999 from 121,500 to 25,000, the
decrease in the number of shares subject to each succeeding grant made on or
after January 1, 1999 from 30,375 to 6,500, and the change in vesting of those
option grants to a vesting rate of 1/48th of the shares subject to these option
grants per month, with no board meeting attendance requirements. Our board of
directors did not adjust the 25,000 and 6,500 grant amounts for our 2-for-1
stock split in the form of a stock dividend effected in July 1999, our 3-for-2
stock split in the form of a stock dividend effected in November 1999, or our
3-for-2 stock split in the form of a stock dividend effected in March 2000. The
board of directors may, at its discretion, increase the number of shares subject
to each initial grant to 121,500, and increase the number of shares subject to
each succeeding grant to 30,375, without stockholder approval.
Grant of options to directors
Following the October 1999 amendment, our directors' plan provides that
each non-employee director will receive an initial option grant to purchase
25,000 shares of our common stock on the later to occur of (1) the date he or
she is first elected to the board, or (2) the date his or her most recent prior
option grant becomes fully vested as to all shares.
In addition, following the October 1999 amendment, each non-employee
director will receive a succeeding option grant to purchase 6,500 shares of our
common stock each year on the anniversary date of the most recent prior option
granted to him or her, provided the individual is still a member of the board. A
non-employee director cannot receive a succeeding grant earlier than the first
anniversary of his or her initial grant.
Exercisability of options
Options granted under the directors' plan are immediately exercisable. Once
exercised, we will have a right to repurchase unvested shares. This repurchase
right lapses as the shares vest. Vesting is as follows:
- Initial grants made prior to January 1, 1999 vest as to 15,187 shares,
and succeeding grants made prior to January 1, 1999 vest as to 3,798
shares, on the last day of each calendar quarter, provided that the
non-employee director attends at least one board meeting during the
quarter.
- Initial grants and succeeding grants made on or after January 1, 1999
vest as to 1/48th of the shares subject to the options on a monthly basis
with no requirement that the non-employee director attend board meetings.
Terms of options
Director options have a 10-year term and will fully vest as to any shares
that remain unvested on the day immediately preceding the 10th anniversary of
the date the option is granted. Options cease to vest, but remain exercisable as
to vested shares if the non-employee director ceases to be a member of the
board, so long as he or she continues to provide services to us as a consultant.
Effect of mergers, consolidations, dissolutions or liquidations
In the event of a merger, consolidation, dissolution or liquidation of
VERITAS, the sale of substantially all of our assets or any other similar
corporate transaction, the vesting of all options granted under the directors'
plan will accelerate and the options will become exercisable in full.
Number of shares reserved for issuance under the directors' plan
We have reserved 2,531,250 shares of our common stock for issuance under
the directors' plan. In the event that any outstanding option under the
directors' plan expires or terminates for any reason, the shares of
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common stock allocable to the unexercised portion of the option will be
available again for future grant under the directors' plan. On March 24, 2000,
options to purchase shares were outstanding, options had been
exercised and shares were eligible for future grant of options.
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION
OF EACH OF THE NOMINATED DIRECTORS
PROPOSAL NO. 2
AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION
Our Restated Certificate of Incorporation, as currently in effect,
authorizes us to issue up to 500,000,000 shares of common stock, $0.001 par
value per share, 10,000,000 shares of preferred stock, $0.001 par value per
share, and one share of special voting stock, $1.00 par value. On January 27,
2000, our board of directors approved an amendment to Section 4.1 of our
Restated Certificate of Incorporation to increase the number of shares of common
stock authorized for issuance by 1,500,000,000 to a total of 2,000,000,000
shares. The text of Section 4.1, as it is proposed to be amended, is as follows:
"Classes of Stock. The total number of shares of all classes of stock
which the Corporation has authority to issue is two billion ten million and
one (2,010,000,001) shares, consisting of three classes: two billion
(2,000,000,000) shares of Common Stock, $0.001 par value per share, ten
million (10,000,000) shares of Preferred Stock, $0.001 par value per share,
and one (1) share of Special Voting Stock, $1.00 par value."
If the amendment is approved by our stockholders, it will become effective
upon the filing of the amendment with the Delaware Secretary of State.
CURRENT USE OF SHARES
On March 24, 2000, there were approximately shares of our common
stock outstanding, including approximately shares reserved for issuance
upon the exchange of exchangeable shares of our Canadian subsidiary. On that
date, there were also approximately shares reserved for issuance upon
conversion of our outstanding convertible notes and approximately shares
reserved for issuance under our stock plans. Of the shares reserved for issuance
under our stock plans, approximately are covered by outstanding options
and approximately are available for future grant or purchase. Thus,
of the 500,000,000 authorized shares have been issued or reserved for
future issuance.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENT
The proposed amendment will authorize additional shares of common stock to
provide us with the flexibility to issue common stock from time to time for any
proper purpose approved by our board of directors, including issuances in
connection with future stock dividends and issuances to raise capital or effect
acquisitions, without the need to delay these activities pending in order to
obtain stockholder approval, except when stockholder approval is required by our
charter documents, applicable law or the rules of any stock exchange on which
our common stock may then be listed. We do not currently have any arrangement,
agreement or understanding for the issuance or use of these additional shares of
authorized common stock, other than issuances permitted or required by our stock
plans.
The additional shares of common stock would have rights identical to the
currently outstanding common stock. The issuance of the additional shares of
common stock would not affect your rights as a stockholder, except for effects
that are incidental to increasing the number of shares of common stock
outstanding, such as dilution of earnings per share and voting power. Our
stockholders do not have preemptive rights to purchase additional securities
that may be issued by us, which means that our current stockholders do not have
a prior right to purchase any securities that we may issue in order to maintain
their proportionate ownership of our common stock.
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In addition to the purposes discussed above, the proposed amendment could
have an anti-takeover effect, although that is not our intention. For example,
it may be possible for our board of directors to delay or impede a takeover or
transfer of control of VERITAS by causing additional authorized shares to be
issued to holders who might side with our board of directors in opposing a
takeover bid. The amendment, therefore, may have the effect of discouraging
unsolicited takeover attempts. By potentially discouraging the initiation of
takeover attempts, the proposed amendment may limit the opportunity of our
stockholders to dispose of their shares at the higher price generally available
in takeover attempts or that may be available under a merger proposal. However,
our board of directors is not aware of any attempt or proposal to takeover or
transfer of control of VERITAS, and we are not proposing this amendment with the
intent that it be used as a type of anti-takeover device.
We adopted a stockholder rights agreement in June 1999, which is designed
to protect stockholders from proposed takeovers and other takeover tactics by
providing our stockholders with specified rights to acquire shares of our
capital stock upon the occurrence of certain events. Although the rights
agreement provides for the issuance of preferred stock in the event the rights
become exercisable under the terms of the rights agreement, we may, under some
circumstances, be required to issue a substantial number of shares of common
stock. A failure to have a sufficient number of shares available could result in
a delay or failure of implementation of the rights agreement. An increase in the
authorized number of shares of common stock could therefore make a change of
control of VERITAS more difficult by facilitating the operation of the rights
agreement.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO OUR RESTATED
CERTIFICATE OF INCORPORATION
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Our board of directors has selected Ernst & Young LLP as our independent
public accountants to perform the audit of our financial statements for the year
ending December 31, 2000. You are being asked to ratify this selection. One or
more representatives of Ernst & Young LLP will be present at the meeting, will
be able to make a statement, if they wish to do so, and are expected to be
available to respond to appropriate questions.
THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF SELECTION OF
ERNST & YOUNG LLP AS INDEPENDENT PUBLIC ACCOUNTANTS
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows how much of our common stock was beneficially
owned as of March 1, 2000 by each director, each executive officer named in the
summary compensation table, all directors and executive officers as a group, and
by each holder of 5% or more of our common stock. To our knowledge, the persons
named in the table have sole voting and investment power with respect to all
shares shown as beneficially owned by them, subject to community property laws
where applicable, unless we indicate otherwise below.
We have included in each person's beneficial ownership that person's
options to purchase common stock that are exercisable within 60 days after March
1, 2000. However, we have not included any other person's options for the
purpose of computing percentage ownership. Percentage ownership is based on
393,706,421 shares outstanding on March 1, 2000.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
PERCENT OF
BENEFICIAL OWNER SHARES OPTIONS TOTAL CLASS
---------------- ----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Gregory Kerfoot............................ 128,809,967 112,500 128,922,467 32.7%
Stephen Luczo.............................. 128,809,967 106,500 128,916,467 32.7
Seagate Software, Inc. .................... 128,809,967 0 128,809,967 32.7
Seagate Technology, Inc. .................. 128,809,967 0 128,809,967 32.7
Putnam Investments, Inc. .................. 24,222,090 0 24,222,090 6.2
Mark Leslie................................ 1,132,723 2,284,969 3,417,692 *
Fred van den Bosch......................... 15,129 1,441,540 1,456,669 *
Joseph Rizzi............................... 168,373 479,437 647,810 *
Peter Levine............................... 325,270 129,621 454,891 *
Paul Sallaberry............................ 120,232 319,042 439,274 *
William H. Janeway......................... 318,562 112,500 431,062 *
Steven Brooks.............................. 2,025 258,750 260,775 *
Kenneth Lonchar............................ 123,349 136,085 259,434 *
All executive officers and directors as a
group (14 persons)....................... 131,438,890 6,628,466 138,067,356 34.5%
</TABLE>
- ---------------
* Less than one percent
Unless we indicate otherwise below, each holder's address is c/o VERITAS
Software Corporation, 1600 Plymouth Street, Mountain View, CA 94043.
Seagate Software, Inc. is a majority-owned subsidiary of Seagate
Technology, Inc. Mr. Luczo, one of our directors, is President, Chief Executive
Officer and a member of the board of directors of Seagate Technology and
Chairman of the board of directors of Seagate Software. Mr. Kerfoot, one of our
directors, is the President and a director of Seagate Software. As such, Mr.
Luczo and Mr. Kerfoot each may be deemed to have an indirect pecuniary interest
in an indeterminate portion of the shares beneficially owned by Seagate
Software. Mr. Luczo and Mr. Kerfoot each disclaim beneficial ownership of these
shares for the purposes of Section 16 of the Securities Exchange Act of 1934 or
otherwise. The business address of Mr. Kerfoot and Seagate Software is 915 Disc
Drive, Scotts Valley, CA 95066. The business address of Mr. Luczo and Seagate
Technology is 920 Disc Drive, Scotts Valley, CA 95067.
The address of Putnam Investments, Inc. is One Post Office Square, Boston,
MA 02109. The number of shares beneficially owned by Putnam Investments is based
on a Schedule 13G filed by them in February 2000.
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by or
paid for services rendered to VERITAS in all capacities during 1999, 1998 and
1997 by our chief executive officer and four other most highly compensated
executive officers. This information includes the dollar value of base salaries,
commissions and bonus awards, the number of shares subject to stock options
granted and certain other compensation, whether paid or deferred. We do not
grant stock appreciation rights and provide no long-term compensation benefits
other than stock options.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------------
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------------
OTHER ANNUAL SECURITIES
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION UNDERLYING OPTIONS
--------------------------- ---- -------- ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C>
Mark Leslie................................ 1999 $400,000 $875,000 $2,500 719,999
Chief Executive Officer 1998 300,000 398,765 1,200 556,874
1997 250,000 326,400 1,200 860,616
Paul A. Sallaberry......................... 1999 225,000 500,000 2,500 337,499
Executive Vice President, Worldwide Sales 1998 295,603 99,691 1,200 168,749
1997 336,042 58,485 1,200 354,365
Fred van den Bosch......................... 1999 250,000 437,500 2,500 449,999
Executive Vice President of Engineering 1998 220,000 219,321 1,200 371,249
1997 160,000 140,598 1,200 506,241
Peter J. Levine............................ 1999 200,000 375,000 2,500 337,499
Executive Vice President, Strategic
Operations 1998 150,000 179,691 1,200 168,749
1997 145,000 149,270 1,200 354,370
Kenneth Lonchar............................ 1999 215,000 275,000 0 112,499
Chief Financial Officer 1998 191,200 179,444 0 101,250
1997 114,667 133,680 0 101,241
</TABLE>
Portions of bonuses for services rendered in 1999, 1998 and 1997 were each
paid in the following fiscal year. Messrs. Sallaberry and Lonchar joined us in
April 1997 when we merged with OpenVision Technologies, Inc. The compensation
amounts include sales commissions paid to Mr. Sallaberry in the amount of
$166,090 for 1998 and $170,837 for 1997. We have restated Mr. Sallaberry's
compensation amounts in 1998 and 1997 to reflect sales commissions earned rather
than paid in the years shown. The other annual compensation amounts represent
our matching contributions to our 401(k) plan.
OPTION GRANTS IN 1999
The following table sets forth further information regarding the individual
grants of stock options pursuant to our stock option plans during 1999 to each
of the above named officers. The table illustrates the hypothetical gains or
"option spreads" that would exist for the options at the end of the 10-year term
of the options based on assumed annualized rates of compound stock price
appreciation of 5% and 10% from the dates the options were granted to the end of
the term. The 5% and 10% assumed rates of annual compound stock price
appreciation are mandated by SEC rules and do not represent our estimate or
projection of future common stock prices. Actual gains, if any, on option
exercises will depend on the future performance of our
10
<PAGE> 13
common stock and overall market conditions. The potential realizable values
shown in this table may never be achieved.
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------ --------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Mark Leslie.......... 719,999 4.1% $17.55 5/25/09 $7,949,192 $20,144,813
Paul A. Sallaberry... 337,499 1.9 17.55 5/25/09 3,726,178 9,442,866
Fred van den Bosch... 449,999 2.5 17.55 5/25/09 4,968,241 12,590,498
Peter J. Levine...... 337,499 1.9 17.55 5/25/09 3,726,178 9,442,866
Kenneth Lonchar...... 112,499 0.6 17.55 5/25/09 1,242,052 3,147,603
</TABLE>
The exercise price of all stock options was equal to the fair market value
of our common stock on the date of grant. Stock options vest over four years at
the rate of 1/48th of the shares subject to the options per month, and the
vesting will accelerate in the event of an acquisition or merger. The options
were granted for a term of 10 years, subject to earlier termination upon
termination of employment.
AGGREGATE OPTION EXERCISES IN 1999 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the exercise of stock
options during 1999 by each of the above named officers, including the aggregate
amount of gains on the date of exercise. In addition, the table includes the
number of shares covered by both vested and unvested stock options held on
December 31, 1999 by each of those officers. Also reported are values for "in
the money" stock options that represent the positive spread between the
respective exercise prices of outstanding stock options and the fair market
value of the our common stock as of December 31, 1999. The fair market value is
determined by the closing price of our common stock on December 31, 1999, which
was $95.42 per share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END($)
UPON VALUE ----------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) VESTED UNVESTED VESTED UNVESTED
---- ----------- ----------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Mark Leslie.......... 324,562 $ 8,321,498 2,127,937 1,490,624 $195,086,560 $126,214,010
Paul A. Sallaberry... 378,727 11,602,969 308,479 650,542 27,289,846 55,022,599
Fred van den Bosch... 269,999 12,419,916 1,431,931 872,575 131,978,577 73,302,499
Peter J. Levine...... 508,779 11,266,014 97,885 578,599 8,193,901 48,370,784
Kenneth Lonchar...... 23,356 411,420 131,560 198,026 11,629,224 16,442,184
</TABLE>
The value realized for option exercises is the aggregate fair market value
of our common stock on the date of exercise less the exercise price. The values
for unexercised in-the-money options are based on the difference between the
option exercise price and the fair market value of the stock on December 31,
1999. These values have not been, and may never be, realized.
EMPLOYMENT AGREEMENTS
All of our executive officers entered into employment agreements with us
effective May 28, 1999.
TERMS OF THE AGREEMENTS
Under the employment agreements, these officers will be paid a base salary
and will be entitled to receive a performance bonus as determined by the board
of directors or the compensation committee. All these employment agreements
provide for a term of one year, except for Mark Leslie, which provides for a
term of two years. In addition, each employment agreement provides that at the
end of its term, the employee will continue on a month-to-month basis on the
terms and conditions in the employment agreement.
11
<PAGE> 14
SEVERANCE PROVISIONS
Generally, if there is an involuntary termination under one of these
employment agreements as described below, then the employee will be entitled to
six months of base compensation, plus any unpaid quarterly bonuses, and 50% of
the employee's target bonus for the fiscal year. In addition, the employee will
be entitled to continued vesting of all stock options and restricted stock held
by the employee through a nine-month consulting period, and the continued
exercisability of all stock options for three months following the end of the
consulting period. The employee will also be entitled to continue to receive
health, dental and life insurance coverage and will be retained as our
consultant for a period of time as set forth in the applicable agreement.
The employee will not be entitled to receive severance benefits if the
employee's employment terminates by reason of the employee's voluntary
resignation, if we terminate the employee's employment after the last day of the
initial employment term or if the termination is for cause, except those under
our severance and benefits plans.
"Involuntary termination" means:
- the reduction of employee's duties, authority or responsibilities, or the
assignment to employee of reduced duties, authority or responsibilities,
without employee's consent;
- a reduction in the employee's base salary;
- a reduction in the employee's target bonus opportunity with the result
that employee's overall cash compensation package is significantly
reduced;
- the relocation of employee to a facility or a location more than 30 miles
away from the employee's then current location, without employee's
consent;
- any termination of employee without cause; and
- any act or set of acts that would, under California case law or statute,
constitute a constructive termination of employee.
Noncompetition provisions
The employment agreements provide that, until the end of the consulting
period, the employee will not be an owner, consultant, director or employee of
any business that has products that compete directly with our products, without
our authorization. In addition, until one year after the employee's termination
for any reason, the employee may not solicit any of our employees to leave their
employment or cause an employee to leave.
12
<PAGE> 15
REPORT ON EXECUTIVE COMPENSATION
We, the compensation committee, make all decisions involving the cash and
stock compensation of our executive officers. William H. Janeway and Joseph D.
Rizzi are the members of the compensation committee. Mr. Janeway was appointed
to the compensation committee in October 1999, taking the place of Steven Brooks
on the compensation committee.
General compensation policy. The compensation committee acts on behalf of
our board of directors to establish our general compensation policy for all of
our employees. We typically review and set target bonuses for our chief
executive officer and all other executive officers and review compensation
guidelines for our employees at or about the beginning of each year. We
administer all of our stock plans.
Our philosophy in compensating executive officers, including our chief
executive officer, is to relate compensation to corporate financial performance
and individual performance. Thus, our compensation policy, which applies to
executives and some of our other managers, relates a portion of each
individual's total compensation to our financial objectives set forth at the
beginning of our fiscal year and quarterly performance goals set forth at the
beginning of each quarter. Long-term equity incentives for executive officers
are effected through the granting of stock options under our 1993 equity
incentive plan. Stock options generally have value for the executive only if the
price of our common stock increases above the fair market value on the grant
date and the executive remains employed for the period required for the shares
to vest.
The base salaries of the executive officers are determined in part by the
compensation committee reviewing executive compensation surveys and other
independent information sources as they are available, such as the Radford
Associates executive compensation report. This survey is nationally known for
its database of high technology company compensation practices. In addition, the
members of our compensation committee have knowledge of the prevailing
competitive salaries in the computer software industry. We also reviewed and
compared the practices of other companies with respect to their stock option
grants. We attempted to target total cash compensation at or above the 50th
percentile of the survey companies.
In preparing the performance graph for this proxy statement, we used the
Hambrecht & Quist Technology Index as our published line of business index, as
we believe that the Hambrecht & Quist Technology Index is a good indication of
stock price performance with respect to our industry. We believe that the data
contained in the compensation surveys described in the previous paragraph, which
includes certain companies on the Hambrecht & Quist Technology Index, is a good
benchmark with respect to executive compensation practices in our industry.
Base compensation. The information discussed above was presented to us in
December 1998. The compensation committee reviewed the recommendations and
performance and market data outlined above and established a base salary level
to be effective January 1, 1999 for each executive officer, including our chief
executive officer. The base salaries were targeted at or above the 50th
percentile for similar sized companies in the high technology industry for all
the executive officers, including our chief executive officer.
Incentive compensation. Under our executive incentive plan, cash bonuses
were awarded to an executive officer in the form of a profit bonus. The profit
bonus paid to executives depends on the net income specified in our operating
plan as follows:
- A net income achievement below 90% of the operating plan would not
produce any profit bonus for the executive officer while a net income
achievement of 90% would entitle the executive officer to 50% of his
bonus. Achievement of 100% of the net income would entitle the executive
officer to 100% of the profit bonus, with any intermediate achievement
between 90% and 100% earning a proportional amount of the profit bonus.
- At a net income of 110% of the plan, 150% of the profit bonus would be
earned by the executive officer, with any intermediate achievement
between 100% and 110% resulting in a proportional amount of the profit
bonus. At a net income of 120% of the plan, 250% of the profit bonus
would be earned by the executive officer.
- The maximum profit bonus an executive can earn is 250% of their profit
bonus.
13
<PAGE> 16
If we were to approve a mid-year update of our operating plan, then the
annual net income objective would be the sum of the first two quarters as
specified in the original operating plan, and the second two quarters as
specified in the mid-year update. The profit bonuses described in the plan are
subject to our review, and we have the authority to modify these bonuses at our
discretion.
Stock options. In 1999, stock options were granted to executive officers to
continue to incentivize them and aid in their retention, and to align their
interest with those of the stockholders. Stock options typically have been
granted to executive officers when the executive first joins us, in connection
with a significant change in responsibilities and, occasionally, to achieve
equity with peers. Stock option positions of executives are reviewed annually
relative to their retention value and additional options may be granted to
executives by the compensation committee. We may, however, grant additional
stock options to executives for other reasons. The number of shares subject to
each stock option grant is based on anticipated future contribution and ability
to impact corporate and/or business unit results, past performance or
consistency within the executive's peer group. In 1999, we considered these
factors, as well as the number of options that remained unvested as of the date
of grant. In our discretion, executive officers may also be granted stock
options under our 1993 equity incentive plan to provide greater incentives to
continue their employment with us and to strive to increase the value of our
common stock. The stock options generally vest over a four-year period and are
granted with an exercise price equal to the fair market value of our common
stock on the date of grant.
For 2000, we will be considering whether or not to grant future options
under our 1993 equity incentive plan to executive officers based on the factors
described above, with particular attention to our financial objectives and the
executive officers' success in obtaining financial and operational objectives
established for 1999 and to the number of options currently held by each
executive officer that remain unvested. Our objectives, which we consider to be
our confidential business information, do not necessarily have an immediate or
direct effect on the trading price of our common stock.
Chief executive officer compensation. For 1999, after review of our profit
performance, which was 132% of the operating plan as measured against our
objectives, the compensation committee determined that Mr. Leslie should be
awarded a profit bonus of 219% of base salary, or 250% of the target award, in
the amount of $875,000. Mr. Leslie was granted a stock option to purchase
719,999 shares of our common stock on May 25, 1999. This stock option grant
began vesting June 19, 1999, and vests monthly over a four-year period. In
granting the stock options to Mr. Leslie, the compensation committee reviewed
Mr. Leslie's prior outstanding option grants and the number of options that
remained unvested. The compensation committee believed that these grants were
appropriate to provide Mr. Leslie with proper incentives for 1999 and 2000 and
take into account his prior stock holdings.
Compliance with Section 162(m) of the Internal Revenue Code of 1986. We
intend to comply with the requirements of Section 162(m) for 1999. Our 1993
equity incentive plan is currently in compliance with Section 162(m) by virtue
of the inclusion of a limitation on the number of shares that an executive
officer may receive under the plan. We do not expect cash compensation for 2000
to be affected by the requirements of Section 162(m).
Summary. We, the members of the compensation committee, believe that our
compensation programs are successful in attracting and retaining qualified
employees and in tying compensation directly to performance for stockholders and
service to customers. We will continue to monitor closely the effectiveness and
appropriateness of each of the components of compensation to reflect changes in
our business environment.
Compensation Committee
Joseph D. Rizzi
Steven Brooks, for period from January 1, 1999 to October 14, 1999
William H. Janeway, for period from October 14, 1999 to December 31, 1999
14
<PAGE> 17
STOCK PRICE PERFORMANCE
The stock price performance graph below is required by the SEC and shall
not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that we specifically incorporate this information by reference, and
shall not otherwise be deemed soliciting material or filed under such acts.
The graph below compares the cumulative total stockholder return on our
common stock from December 31, 1994 to December 31, 1999 with the cumulative
total return of the S&P 500 Index and the Hambrecht & Quist Technology Index
over the same period. These returns assume the investment of $100 in our common
stock and in each of the other indices on the date of our initial public
offering, and reinvestment of all dividends.
The comparisons in the graph below are based on historical data and are not
intended to forecast the possible future performance of our common stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG VERITAS SOFTWARE CORPORATION, THE S&P 500 INDEX
AND THE HAMBRECHT & QUIST TECHNOLOGY INDEX
[STOCK PRICE PERFORMANCE]
15
<PAGE> 18
RELATED PARTY TRANSACTIONS
From January 1, 1999 to the date of this proxy statement, there have not
been any and there are currently no proposed transactions in which the amount
involved exceeded $60,000 to which we or any of our subsidiaries were or are to
be a party and in which any executive officer, director, 5% beneficial owner of
our common stock or member of the immediate family of them had or will have a
direct or indirect material interest and there are no business relationships
between us and any entity, of which a director of VERITAS is an executive
officer or of which a director of VERITAS owns equity interest in excess of 10%,
involving payments for property or services in excess of five percent of our
consolidated gross revenues for 1999, except as described above under proposal
No. 1 -- "Board meetings and committees," under "Executive Compensation" and as
described below.
We acquired the Network & Storage Management Group business of Seagate
Software, Inc. on May 28, 1999. As a result of this transaction, Seagate
Software owns approximately 33% of our outstanding common stock. Stephen J.
Luczo, who is Chairman of the board of directors of Seagate Software, and
President, Chief Executive Officer and a member of the board of directors of
Seagate Technology, Inc., and Gregory B. Kerfoot, who is President and a
director of Seagate Software, joined our board of directors. As part of the
transaction, we entered into the agreements described below with Seagate
Software and its parent, Seagate Technology.
We entered into a stockholder agreement with Seagate Software on May 28,
1999. This agreement gives Seagate Software the right (1) to nominate up to two
members of our board, (2) to sell up to 27,000,000 shares of our common stock
during the first year after May 28, 1999 in a firm commitment underwritten
public offering, (3) in any quarter in which that public offering does not take
place, to sell up to 9,000,000 shares of our common stock in each of the first
three full quarters after May 28, 1999 and up to 13,500,000 shares of our common
stock in the fourth full quarter after May 28, 1999, and (4) for five years to
maintain its ownership percentage if we issue stock to third parties in certain
transactions. Pursuant to the board nomination rights of Seagate Software, Mr.
Kerfoot and Mr. Luczo are members of our board of directors.
VERITAS and Seagate Software entered into a registration rights agreement
on May 28, 1999. This agreement gave Seagate Software the right to require, once
in any nine-month period, that we register for public resale the shares of our
stock owned by Seagate Software.
We entered into a three-year cross-license and OEM agreement on October 5,
1998 with Seagate Software Information Management Group, Inc., a subsidiary of
Seagate Software, and amended the agreement on April 16, 1999. We entered into a
10-year development and license agreement with Seagate Technology on October 5,
1998. These agreements provide for the development and/or licensing of certain
products among the parties and restrictions on the parties' ability to compete
with each other or to enter into relationships with competitors of the other
party. The royalty fees under these agreements, if any, are to be determined at
a later date.
We, Seagate Technology and Seagate Software entered into a transition
services and facilities use agreement on May 28, 1999. This agreement sets forth
the terms by which VERITAS, Seagate Technology and Seagate Software continued to
share certain facilities and services. The term and payment for the services
that we are receiving are as follows: (1) $56,500 per month for the cost of
transitional warehousing, distribution, billing and collection services from
Seagate Technology Netherlands, the Netherlands division of Seagate Technology
International, a Cayman Islands corporation and wholly owned subsidiary of
Seagate Technology, which we stopped using in December 1999; and (2) for various
shared facilities, between $775 to $1,375 per employee per month for shared
facilities in Singapore, Australia and Hong Kong, which we vacated in September
1999, and $15,500 per month for a shared facility in France, which we expect to
vacate no later than May 2000. The term and payment for the services that we are
providing are as follows: $32,100 per month for shared facilities in Florida and
California, which facilities we expect to be vacated by Seagate Software no
later than June 2000.
16
<PAGE> 19
Terence Cunningham resigned as President, Chief Operating Officer and as a
director of VERITAS, effective as of August 30, 1999. In connection with his
resignation we agreed, in addition to the terms and conditions of our May 1999
employment agreement with Mr. Cunningham, to transfer to Mr. Cunningham rights
and title to an automobile and specified items of his office equipment. As a
result of his resignation, Mr. Cunningham received an aggregate severance
payment of approximately $250,000 and is entitled to the continued vesting of
his options to purchase our common stock, equal to 592,597 shares, through May
2001.
In August 1999, Seagate Software sold a total of 18,523,500 shares of our
common stock pursuant to a registration statement at a price of $22.14 per
share. In that same offering, Warburg, Pincus Investors, L.P. sold 2,446,500
shares of our common stock at a price of $22.14. The general partner of Warburg,
Pincus Investors, L.P. is Warburg, Pincus & Co. William H. Janeway, one of our
directors, is a general partner of Warburg, Pincus & Co. In November 1999,
Seagate Software sold a total of 9,000,000 shares of our common stock upon
reliance on Rule 145 promulgated under the Securities Exchange Act of 1934 at
then prevailing market prices.
STOCKHOLDER PROPOSALS
If you want us to consider including a proposal in our proxy statement for
our 2001 annual meeting of stockholders, you must deliver a copy of your
proposal to our Secretary at our principal executive offices at 1600 Plymouth
Street, Mountain View, California 94043 no later than December 11, 2000.
If you intend to present a proposal at our 2001 annual meeting of
stockholders, but you do not intend to have it included in our 2000 proxy
statement, you must deliver a copy of your proposal to our Secretary at our
principal executive offices listed above no later than March 11, 2001 and no
earlier than February 9, 2001. If, however, the date of our 2001 annual meeting
is more than 30 days before or more than 60 days after the first anniversary of
our 2000 annual meeting, your notice of a proposal will be timely if we receive
it by the close of business not earlier than the 90th day prior to our 2001
annual meeting and by the later of the 60th day prior to that meeting or the
10th day following the day we publicly announce the date of the 2001 annual
meeting. If we do not receive your proposal with this time frame, our management
will use its discretionary authority to vote the shares it represents by proxy
as our board of directors may recommend.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In accordance with Section 16(a) of the Securities Exchange Act of 1934 and
the regulations of the SEC, our directors, executive officers and holders of
more than 10% of our common stock are required to file reports of ownership and
changes in ownership with the SEC and the Nasdaq National Market and to furnish
us with copies of all of the reports they file.
Based solely on our review of the copies of the forms furnished to us and
written representations from the reporting persons, we are unaware of any
failures during 1999 to file Forms 3, 4 or 5 and any failures to file such forms
in a timely basis, except that Mark Leslie failed to report three transactions
on a timely basis and Kenneth Lonchar failed to report one transaction on a
timely basis.
ADDITIONAL INFORMATION
Our annual report to stockholders is being mailed to you with this proxy
statement.
17
<PAGE> 20
OTHER MATTERS
Our board of directors does not presently intend to bring any other
business before the meeting, and so far as is known to the board of directors,
no matters are to be acted upon at the meeting other than the matters described
above. However, if any other matter should properly come before the meeting, the
proxy holders named on the enclosed proxy card will vote the shares for which
they hold proxies in their discretion.
By order of the board of directors,
/s/ MARK LESLIE
Mark Leslie
Chief Executive Officer and
Chairman of the Board
Mountain View, California
April 10, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
18
<PAGE> 21
PROXY
VERITAS SOFTWARE CORPORATION
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
April 10, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VERITAS SOFTWARE
CORPORATION.
The undersigned hereby appoints Mark Leslie and Kenneth E. Lonchar, or either of
them, each with full power of substitution, to represent the undersigned at the
annual meeting of stockholders of VERITAS Software Corporation. The meeting will
be held at 8:30 a.m. Pacific Time on Wednesday, May 10, 2000 at our headquarters
located at 1600 Plymouth Street, Mountain View, California, 94043 and at any
adjournments or postponements of the meeting, and to vote the number of shares
the undersigned would be entitled to vote if personally present at the meeting
on the following matters:
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE
TWO NOMINEES, FOR PROPOSAL NO. 2 AND FOR PROPOSAL NO. 3.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- --------------------------------------------------------------------------------
-FOLD AND DETACH HERE-
<PAGE> 22
Please mark exactly as indicated this example: [X]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FOR WITHHOLDING
AUTHORITY
1. ELECTION OF DIRECTORS. [ ] [ ]
(Instruction: To withhold authority to vote for
any individual nominee, enter that nominee's name
in the space provided here:-----------------------)
Nominees: William H. Janeway and Joseph D. Rizzi
FOR AGAINST ABSTAIN
2. TO APPROVE THE AMENDMENT TO OUR RESTATED [ ] [ ] [ ]
CERTIFICATE OF INCORPORATION.
FOR AGAINST ABSTAIN
3. TO RATIFY THE SELECTION OF ERNST & YOUNG LLP [ ] [ ] [ ]
AS OUR INDEPENDENT ACCOUNTANTS FOR THE CURRENT
FISCAL YEAR.
FOR AGAINST ABSTAIN
4. THE TRANSACTION OF SUCH BUSINESS [ ] [ ] [ ]
AS MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT OR POSTPONEMENT
OF THE MEETING.
</TABLE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. WHEN NO CHOICE IS
INDICATED, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE TWO NOMINEES LISTED
IN PROPOSAL NO. 1, FOR PROPOSAL NO. 2 AND FOR PROPOSAL NO. 3. In their
discretion, the proxy holders are authorized to vote upon such other business as
may properly come before the meeting or any adjournments or postponements of the
meeting to the extent authorized by Rule 14a-4(c) promulgated under the
Securities Exchange Act of 1934.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, WE URGE YOU TO
COMPLETE, DATE, SIGN AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING.
Signature(s): Dated: , 2000
--------------------------- --------------------
Please sign exactly as your name(s) appears on your stock certificate. If
shares of stock stand of record in the names of two or more persons or in the
name of husband and wife, whether as joint tenants or otherwise, both or all of
such persons should sign the proxy. If shares of stock are held of record by a
corporation, the proxy should be executed by the president or vice president and
the secretary or assistant secretary, Executors, administrators or other
fiduciaries who execute the above proxy for a deceased stockholder should give
their full title. Please date the proxy.
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-FOLD AND DETACH HERE-
