<PAGE>
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:
[_] Confidential, for Use of the
[_] Preliminary Proxy Statement Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
INTERTRUST TECHNOLOGIES CORPORATION
(Name of Registrant as Specified In Its Charter)
N/A
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
Notes:
<PAGE>
[LOGO OF INTERTRUST]
INTERTRUST TECHNOLOGIES CORPORATION
4750 Patrick Henry Drive
Santa Clara, California 95054
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held September 26, 2000
The Annual Meeting of Stockholders (the "Annual Meeting") of InterTrust
Technologies Corporation (the "Company") will be held at the Westin Santa
Clara, 5101 Great America Parkway, Santa Clara, California, on Tuesday,
September 26, 2000, at 8:30 a.m. for the following purposes:
1. To elect five directors of the Board of Directors to serve until the
next Annual Meeting or until their successors have been duly elected and
qualified;
2. To ratify the appointment of Ernst & Young LLP, Independent Auditors
as the Company's independent public accountants for the fiscal year ending
December 31, 2000; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only stockholders of record at the close of business on August 31, 2000 are
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournments or postponements thereof. A list of such stockholders will be
available for inspection at the Company's headquarters located at 4750 Patrick
Henry Drive, Santa Clara, California, during ordinary business hours for the
ten-day period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Victor Shear
Victor Shear
Chairman of the Board and Chief
Executive Officer
Santa Clara, California
September 1, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE MEETING.
<PAGE>
INTERTRUST TECHNOLOGIES CORPORATION
4750 Patrick Henry Drive
Santa Clara, California 95054
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
To be held September 26, 2000
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of InterTrust Technologies Corporation, a
Delaware corporation (the "Company"), for the Annual Meeting of Stockholders
(the "Annual Meeting") to be held at the Westin Santa Clara, 5101 Great
America Parkway, Santa Clara, California, on Tuesday, September 26, 2000, at
8:30 a.m., and at any adjournment or postponement of the Annual Meeting. These
proxy materials were first mailed to stockholders on or about September 1,
2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Stock is the only type of security entitled to vote at
the Annual Meeting. On August 31, 2000, the record date for determination of
stockholders entitled to vote at the Annual Meeting, there were approximately
86,180,198 shares of Common Stock outstanding. Each stockholder of record on
August 31, 2000 is entitled to one vote for each share of Common Stock held by
such stockholder on August 31, 2000. All share numbers in this Proxy Statement
(including the number of shares outstanding on the record date for the Annual
Meeting) have been adjusted to reflect the two-for-one stock split effected by
the Company on February 24, 2000 (the "2000 Stock Split"). All votes will be
tabulated by the inspector of election appointed for the meeting, who will
separately tabulate affirmative and negative votes, abstentions and broker
non-votes.
Quorum Required
The Company's bylaws provide that the holders of a majority of the Company's
Common Stock issued and outstanding and entitled to vote at the Annual
Meeting, present in person or represented by proxy, shall constitute a quorum
for the transaction of business at the Annual Meeting. Abstentions and broker
non-votes will be counted as present for the purpose of determining the
presence of a quorum.
Votes Required
Proposal 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled
to vote at the Annual Meeting. The five (5) nominees for director receiving
the highest number of affirmative votes will be elected. Abstentions and
broker non-votes will not be counted toward a nominee's total.
Proposal 2. Ratification of the appointment of Ernst & Young LLP as the
Company's independent public accountants for the fiscal year ending December
31, 2000 requires the affirmative vote of a majority of those shares present
in person, or represented by proxy, and cast either affirmatively or
negatively at the Annual Meeting. Abstentions and broker non-votes will not be
counted as having been voted on the proposal.
1
<PAGE>
Proxies
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your
proxy when properly completed. In the event no directions are specified, such
proxies will be voted FOR the Nominees of the Board of Directors (as set forth
in Proposal 1), FOR Proposal 2, and in the discretion of the proxy holders as
to other matters that may properly come before the Annual Meeting. You may
also revoke or change your proxy at any time before the Annual Meeting. To do
this, send a written notice of revocation or another signed proxy with a later
date to the Secretary of the Company at the Company's principal executive
offices before the beginning of the Annual Meeting. You may also automatically
revoke your proxy by attending the Annual Meeting and voting in person. All
shares represented by a valid proxy received prior to the Annual Meeting will
be voted.
Solicitation of Proxies
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the
proxy, and any additional soliciting material furnished to stockholders.
Copies of solicitation material will be furnished to brokerage houses,
fiduciaries, and custodians holding shares in their names that are
beneficially owned by others so that they may forward this solicitation
material to such beneficial owners. In addition, the Company may reimburse
such persons for their costs of forwarding the solicitation material to such
beneficial owners. The original solicitation of proxies by mail may be
supplemented by solicitation by telephone, telegram, or other means by
directors, officers, employees, or at the Company's request, MacKenzie
Partners, Inc., a professional proxy solicitation firm. No additional
compensation will be paid to directors, officers or employees for such
services, but MacKenzie Partners, Inc. will be paid its customary fee,
estimated to be about $5,000, if it renders solicitation services.
2
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The directors who are being nominated for reelection to the Board of
Directors (the "Nominees"), their ages as of August 31, 2000, their positions
and offices held with the Company and certain biographical information are set
forth below. The proxy holders intend to vote all proxies received by them in
the accompanying form FOR the Nominees listed below unless otherwise
instructed. In the event any Nominee is unable or declines to serve as a
director at the time of the Annual Meeting the proxies will be voted for any
nominee who may be designated by the present Board of Directors to fill the
vacancy. As of the date of this Proxy Statement, the Board of Directors is not
aware of any Nominee who is unable or will decline to serve as a director. The
five (5) nominees receiving the highest number of affirmative votes of the
shares entitled to vote at the Annual Meeting will be elected directors of the
Company to serve until the next Annual Meeting or until their successors have
been duly elected and qualified.
<TABLE>
<CAPTION>
Nominees Age Positions and Offices Held with the Company
-------- --- -------------------------------------------
<C> <C> <S>
Chairman of the Board and Chief Executive
Victor Shear............. 52 Officer
David C. Chance.......... 42 Executive Vice Chairman of the Board
Director, Executive Vice President, and Chief
Edmund J. Fish........... 38 Business Officer
Bruce Fredrickson(1)(2).. 57 Director
Satish K. Gupta(1)(2).... 55 Director
</TABLE>
--------
(1) Member of Compensation Committee
(2) Member of Audit Committee
Victor Shear has served as chairman of the board and chief executive officer
of InterTrust since our inception in January 1990. Before founding InterTrust,
Mr. Shear co-founded Personal Library Software, Inc., a text and document
database company, in June 1986. Mr. Shear served as chairman, president and
chief executive officer of Data Scientific Corporation, a software developer
of scientific workstations, from May 1982 to February 1985. Mr. Shear received
a B.A. in sociology from Brandeis University.
David C. Chance joined InterTrust as an officer and board member with the
title executive vice chairman in October 1999. Before joining InterTrust, from
January 1994 to January 1998, Mr. Chance was deputy managing director of BskyB
Group Ltd., a leading United Kingdom pay-television and media company, and
continued to serve as a consultant and non-executive director until August
1999. In addition, Mr. Chance is a non-executive director of Modern Times
Group, the primary pay-television operator in Scandinavia, and Sunderland
football club. Mr. Chance also serves on the board of the New Millenium
Experience Company, responsible for the Millenium Dome project in London. Mr.
Chance received a B.S. in psychology, a B.A. in industrial relations, and an
M.B.A. from the University of North Carolina at Chapel Hill.
Edmund J. Fish has served as a director, executive vice president, and chief
business officer of InterTrust since January 2000. From June 1999 to January
2000, Mr. Fish served as senior operating officer and executive vice
president, corporate development of InterTrust. From September 1995 to June
1999, Mr. Fish served as general counsel and vice president, corporate
development of InterTrust. Before joining InterTrust, Mr. Fish practiced law
in the Silicon Valley, Washington D.C. and New York offices of Weil, Gotshal &
Manges, an international law firm, from August 1989 to August 1995. Mr. Fish
received a B.S. in biomedical engineering from Marquette University and a J.D.
from Wayne State University.
Bruce Fredrickson has served as a director of InterTrust since February
1993. Mr. Fredrickson has also served as president of Tactical Marketing
Ventures LLC, a marketing firm for computer hardware, software, and Internet
service companies, since September 1991. Before his position with Tactical
Marketing Ventures, Mr. Fredrickson served as vice president of marketing for
Ingram Micro, a computer products distributor, from February 1986 to August
1991. Mr. Fredrickson received a B.S. in liberal arts from St. Olaf College
and an M.S. in communications and media from the University of Colorado.
3
<PAGE>
Satish K. Gupta has served as a director of InterTrust since February 1993.
Mr. Gupta has been the president and chief executive officer of Cradle
Technologies, a semiconductor company, since July 1998. From May 1994 to June
1998, Mr. Gupta was vice president of corporate marketing and business
development of Cirrus Logic, a semiconductor company, and from June 1991 to
May 1994, he was vice president of strategic marketing and advanced
development of Media Vision, a multi-media peripherals company. Mr. Gupta
received a B.E. in electrical engineering in India from Birla Institute of
Technology and Science, an S.M. in electrical engineering from Massachusetts
Institute of Technology, and an M.S. in engineering and economic systems from
Stanford University.
Current director David M. Van Wie has decided not to run for re-election to
the Board of Directors. In addition, the Company intends to add an independent
member to its Board of Directors to comply with a recent Nasdaq National
Market requirement that the Audit Committee of the Board of Directors be
comprised of three independent persons.
Board of Directors Meetings and Committees
During the fiscal year ended December 31, 1999, the Board of Directors held
eight (8) meetings and acted by written consent in lieu of a meeting on six
(6) occasions. For the fiscal year, each of the directors during the term of
their tenure attended or participated in at least 75% of the aggregate of (i)
the total number of meetings or actions by written consent of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board of Directors on which each such director served. The Board of Directors
has (2) standing committees: the Audit Committee and the Compensation
Committee.
The Audit Committee was created on July 22, 1999 and became effective on the
effective date of the Company's initial public offering of its securities,
October 26, 1999. The Audit Committee reviews, acts on and reports to the
Board of Directors with respect to various auditing and accounting matters,
including the selection of the Company's accountants, the scope of the annual
audits, fees to be paid to the Company's accountants, the performance of the
Company's accountants and the accounting practices of the Company. The members
of the Audit Committee are Messrs. Fredrickson and Gupta. During the fiscal
year ended December 31, 1999, the Audit Committee of the Board of Directors
held no meetings.
The Compensation Committee was created on July 22, 1999 and became effective
on the effective date of the Company's initial public offering of its
securities, October 26, 1999. The Compensation Committee reviews the
performance of the executive officers of the Company, establishes compensation
programs for the officers, and reviews the compensation programs for other key
employees, including salary and cash bonus levels and option grants under the
1995 Stock Plan, 1999 Equity Incentive Plan and 1999 Employee Stock Purchase
Plan. The members of the Compensation Committee are Messrs. Fredrickson and
Gupta. During the fiscal year ended December 31, 1999, the Compensation
Committee of the Board of Directors held one meeting.
Compensation of Directors
Except for grants of stock options, directors of the Company generally do
not receive compensation for services provided as a director. The Company also
does not pay compensation for committee participation or special assignments
of the Board of Directors. Non-employee directors are eligible to receive
options under the Company's 1999 Non-Employee Directors Option Plan
("Directors Plan"). Each individual who first joins the Company's Board of
Directors as a non-employee director after the effective date of the Company's
initial public offering will receive at that time a fully vested option for
30,000 shares of the Company's common stock. In addition, at each of the
Company's annual stockholders' meetings, beginning in 2000, each non-employee
director who will continue to be a director after that meeting will
automatically be granted at that meeting a fully vested option for 10,000
shares of the Company's common stock. However, any non-employee director who
receives an option for 30,000 shares under this Directors Plan will first
become eligible to receive the annual option for 10,000 shares at the annual
meeting that occurs during the calendar year following the year in which he
received the option for 30,000 shares.
4
<PAGE>
Messrs. Fredrickson and Gupta, the Company's non-employee directors, have
each received an option for 160,000 shares of common stock at an exercise
price of $0.3125 per share and an option for 30,000 shares of common stock at
an exercise price per share of $7.00. In March 2000, the Company granted an
option to purchase 40,000 shares of common stock at an exercise price of
$82.50 per share to each of Messrs. Fredrickson and Gupta and in April 2000,
the Company granted an option to purchase 20,000 shares of common stock at an
exercise price of $29.13 per share to each of Messrs. Fredrickson and Gupta.
Non-employee directors are also eligible to receive options and be issued
shares of common stock under the Company's 1999 Equity Incentive Plan.
Directors who are also employees of the Company are eligible to receive
options and be issued shares of common stock under the Company's 1999 Equity
Incentive Plan and are also eligible to participate in the Company's 1999
Employee Stock Purchase Plan.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
Other Executive Officers
The following are additional executive officers of the Company. All
executive officers serve at the discretion of the Board of Directors.
David Ludvigson has served as president of InterTrust since August 2000.
Before joining InterTrust, Mr. Ludvigson served as chief operating officer of
Matrix Pharmaceutical, Inc., a drug company, from November 1999 to August 2000
and as senior vice president and chief financial officer from September 1998
to November 1999. From February 1996 to June 1998, Mr. Ludvigson served as
president and chief operating officer and as a member of the board of
directors of NeTpower Inc., a computer workstation company. From October 1993
to February 1996 he was vice president and chief financial officer of IDEC
Pharmaceuticals Corporation, a biotechnology company. Mr. Ludvigson received
B.S. and M.A.S. degrees in accounting from the University of Illinois.
David P. Maher has served as chief technology officer of InterTrust since
June 1999. Before joining InterTrust, Mr. Maher served in various positions at
AT&T from June 1981 to June 1999, including as an AT&T fellow, a Bell Labs
fellow and head of the secure systems research department. At AT&T, Mr. Maher
developed secure wideband transmission systems, cryptographic key management
systems and secure communications devices. In addition, Mr. Maher was chief
architect for AT&T's STU-III secure device, data, and video products for
secure government communications. Mr. Maher has been a consultant for the
National Science Foundation, the National Security Agency, the National
Institute of Standards and Technology, and the Congressional Office of
Technology Assessment, and has taught electrical engineering, mathematics and
computer science at several institutions. Mr. Maher received B.A., M.S. and
Ph.D. degrees in mathematics from Lehigh University.
Patrick P. Nguyen is senior vice president, corporate development, and has
also served as vice president, global alliances, since joining InterTrust in
July 1998. Before joining InterTrust, from February 1993 to June 1998, Mr.
Nguyen worked at the Silicon Valley Office of Weil, Gotshal & Manges, where he
was made a partner in January 1998 and headed the corporate and technology
transaction group. Mr. Nguyen received a B.S. in computer science from the
University of California at Irvine and a J.D. from the University of
California at Los Angeles.
Talal Shamoon has served as senior vice president, media of InterTrust since
February 2000. From June 1999 to February 2000, Dr. Shamoon served as our vice
president, corporate development and technology initiatives. From June 1997 to
June 1999, Dr. Shamoon served as a member of the research staff of STARLab.
Before joining InterTrust, from October 1994 to June 1997, Dr. Shamoon worked
for NEC Research Institute, an advanced research facility of NEC focused on
computer science and physics, where he focused on multimedia security, signal
processing and data compression. Dr. Shamoon received B.S., M. Eng and Ph.D
degrees in electrical engineering from Cornell University.
5
<PAGE>
David M. Lund has served as vice president, finance and controller of
InterTrust since April 2000 and as controller since October 1996. Before
joining InterTrust, Mr. Lund was a senior manager with Murdock & Associates,
Inc., an accounting consulting firm, from January 1996 to October 1996. Before
joining Murdock, Mr. Lund worked with the international accounting firm of
Ernst & Young LLP from December 1987 to January 1996, most recently as an
audit senior manager. Mr. Lund received a B.S. in accounting from San Jose
State University and a B.S. in marketing from the California State University
at Chico.
Ron Hankison has served as senior vice president and general manager of
development and technical operations of InterTrust since April 2000. Before
joining InterTrust, Mr. Hankison served as a vice president of quality and
customer satisfaction at Compaq Computer Corporation, a supplier of computing
systems, from March 1998 to April 2000, and as a vice president of product
development and marketing at Commercial Data Servers, Inc., also a computer
systems company, from February 1997 to March 1998. From April 1995 to February
1997, Mr. Hankison served as a senior director of product engineering and as
chief information officer of Taligent, Inc., a former subsidiary of IBM. Prior
to joining Taligent, Mr. Hankison held a variety of high-end software
development executive positions at IBM, including director of IBM System 390
Software Strategy, director, Kingston NY Programming Center, and director,
ImagePlus Development.
PROPOSAL 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the stockholders to ratify the appointment of Ernst &
Young LLP, Independent Auditors as the Company's independent public
accountants for the fiscal year ending December 31, 2000. The affirmative vote
of the holders of a majority of shares present or represented by proxy and
voting at the Annual Meeting will be required to ratify the appointment of
Ernst & Young LLP.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
stockholders' best interests.
Ernst & Young LLP has audited the Company's financial statements since 1994.
Its representatives are expected to be present at the Annual Meeting, will
have the opportunity to make a statement if they desire to do so, and will be
available to respond to appropriate questions.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL 2.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July 31, 2000, certain information
with respect to shares beneficially owned by (i) each person who is known by
the Company to be the beneficial owner of more than five percent of the
Company's outstanding shares of common stock, (ii) each of the Company's
directors and the executive officers named in the Summary Compensation Table
and (iii) all current directors and executive officers as a group. Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange
Act. Under this rule, certain shares may be deemed to be beneficially owned by
more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be
beneficially owned by a person if the person has the right to acquire shares
(for example, upon exercise of an option or warrant) within sixty (60) days of
the date as of which the information is provided. In computing the percentage
ownership of any person, the amount of shares is deemed to include the amount
of shares beneficially owned by such person (and only such person) by reason
of such acquisition rights. As a result, the percentage of outstanding shares
of any person as shown in the following table does not necessarily reflect the
person's actual voting power at any particular date.
<TABLE>
<CAPTION>
Shares Beneficially Owned(1)(2)
-----------------------------------
Number of Percentage of
Name of Beneficial Owner Shares Total
------------------------ ------------------ ----------------
<S> <C> <C>
Victor Shear.............................. 15,103,096 17.7%
Kistler Associates........................ 4,849,843 5.7%
955 5th Avenue, Apt. 6B
New York, NY 10021
Erwin N. Lenowitz(3)...................... 718,010 *
Duncan M. Davidson(4)..................... 676,535 *
Edmund J. Fish(5)......................... 604,306 *
Joseph W. Jennings(6)..................... 379,999 *
Satish K. Gupta(7)........................ 315,000 *
Bruce Fredrickson(8)...................... 273,600 *
David C. Chance(9)........................ 284,453 *
All current directors and executive
officers as a group (10 persons)(10)..... 17,263,108 20.0%
</TABLE>
--------
* Less than 1%
(1) Percentage ownership is based on 85,330,281 shares of common stock
outstanding on July 31, 2000.
(2) Shares of common stock subject to options currently exercisable or
exercisable within 60 days of July 31, 2000 are deemed outstanding for
purposes of computing the percentage ownership of the person holding such
options but are not deemed outstanding for computing the percentage
ownership of any other person. Except pursuant to applicable community
property laws or as indicated in the footnotes to this table, each
stockholder identified in the table possesses sole voting and investment
power with respect to all shares of common stock shown as beneficially
owned by such stockholder. Unless otherwise indicated, the address of
each of the individuals listed in the table is c/o InterTrust
Technologies Corporation, 4750 Patrick Henry Drive, Santa Clara, CA
95054.
(3) Includes 30,010 shares held in trust for Jeremy Lenowitz. Mr. Lenowitz is
no longer employed by the Company.
(4) Includes 33,333 shares subject to options that are exercisable within 60
days of July 31, 2000. Also includes 420,002 shares held by the Davidson
Family Revocable Trust of which 80,000 shares are subject to a right of
repurchase by us as of July 31, 2000. Mr. Davidson, a former executive
officer of the Company, is the trustee of the Davidson Family Revocable
Trust and exercises voting and investment power over these shares.
(5) Includes 121,668 shares subject to options that are exercisable within 60
days of July 31, 2000.
(6) Includes 93,332 shares subject to options that are exercisable within 60
days of July 31, 2000. Mr. Jennings is no longer employed by the Company.
(7) Includes 160,000 shares subject to options that are exercisable within 60
days of July 31, 2000.
7
<PAGE>
(8) Includes 50,000 shares held of record by Tactical Marketing Ventures,
LLC. Mr. Fredrickson is the chief executive officer of Tactical Marketing
Ventures, LLC and disclaims beneficial ownership of these shares, except
to the extent of his pecuniary interest arising from his interest in
Tactical Marketing Ventures, LLC.
(9) Includes 183,333 shares subject to options that are exercisable within 60
days of July 31, 2000.
(10) Includes 397,871 shares subject to options that are exercisable within 60
days of July 31, 2000 and the shares described in Notes 3 through 9.
8
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding common stock
("Section 16 Insider") are subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, as amended, which require them
to file reports with respect to their ownership of the Company's common stock
and their transactions in such common stock. Based upon (i) the copies of
Section 16(a) reports that the Company received from such persons for their
1999 fiscal year transactions in the common stock and their common stock
holdings and (ii) the written representations received from one or more of
such persons that no annual Form 5 reports were required to be filed by them
for the 1999 fiscal year, the Company believes that all reporting requirements
under Section 16(a) for such fiscal year were met in a timely manner by its
executive officers, Board members and greater than ten-percent stockholders,
except that the delivery service that was hired by the Company to file the
Form 3s, through an administrative error, filed each Form 3 for each Section
16 Insider one day late; the Form 3s for Ann Cowan and Nicholas Garnett were
filed late; and one Form 4 for Duncan Davidson reporting Mr. Davidson's
purchase of directed shares in the Company's initial public offering was filed
late.
9
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
Compensation of Executive Officers
The following table presents information about compensation paid by the
Company in 1999 for services by the Company's chief executive officer and the
Company's four other highest-paid executive officers whose total salary and
bonus for the fiscal year exceeded $100,000:
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
------------
Annual Compensation Number of
---------------------------------- Securities
Name and Principal Other Annual Underlying
Position Year Salary($) Bonus($) Compensation($) Options(#)
------------------ ---- --------- -------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Victor Shear.............. 1999 $175,000 -- $38,528(1) --
Chairman of the Board and 1998 $175,000 -- -- --
Chief Executive Officer
Edmund J. Fish............ 1999 $180,000 $200,000 -- --
Director, Executive Vice 1998 $169,751 -- -- 80,000
President and Chief
Business Officer
Duncan M. Davidson(2)..... 1999 $220,000 -- -- --
Senior Vice President, 1998 $220,000 -- -- --
Business Development
Joseph W. Jennings(3)..... 1999 $200,000 -- -- --
Senior Vice President, 1998 $167,340 -- -- 640,000
Marketing
Erwin N. Lenowitz(3)...... 1999 $205,000 -- -- --
Vice Chairman of the
Board, 1998 $175,000 -- -- --
Chief Financial Officer
and Secretary
</TABLE>
--------
(1) Represents $24,568 in rental payments and $13,960 in leased car payments.
(2) Individual no longer serves an as executive officer of the Company.
(3) Individual no longer employed by the Company.
During 1999, no options or stock appreciation rights were granted to the
Company's chief executive officer and the Company's four other highest-paid
executive officers.
The table below presents for the Company's chief executive officer and the
Company's four other highest-paid executive officers any options exercised
during 1999 and the value realized from that exercise. It also presents the
number and value of shares underlying unexercised options that were held by
these executive officers as of December 31, 1999. No stock appreciation rights
were exercised by these executive officers in 1999, and no stock appreciation
rights were outstanding at the end of that year.
Upon the completion of six months of service, 12.5% of the option shares
listed in the table below became vested. Upon the completion of each of the
next 42 months of service, an additional 1/48th of the option shares become
vested. The Company's Board of Directors may provide for the options to become
immediately exercisable; in that case, any unvested shares that are purchased
by a holder of an option may be repurchased by the Company at the original
exercise price paid per share if the option holder ceases service with the
Company before vesting in these shares.
10
<PAGE>
The figures in the value of unexercised in-the-money options at fiscal year-
end column are based on the fair market value of the Company's common stock at
the end of 1999, less the exercise price payable for these shares. The fair
market value for the Company's common stock at the end of 1999 was $58.81 per
share.
Aggregate Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares December 31, 1999 December 31, 1999
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Victor Shear............ -- -- -- -- -- --
Edmund J. Fish.......... 345,334 $247,908 53,334 116,668 $ 3,090,705 $ 6,725,302
Duncan M. Davidson(1)... 386,668 426,672 13,333 126,667 $ 774,147 $ 7,354,603
Joseph W. Jennings(2)... -- -- 293,332 346,668 $16,884,923 $19,995,077
Erwin N. Lenowitz(2).... 720,000 410,400 -- -- -- --
</TABLE>
--------
(1) Individual no longer serves an as executive officer of the Company.
(2) Individual no longer employed by the Company.
Employment Agreements, Change of Control Arrangements and Severance Agreements
None of the Company's executive officers have employment agreements with the
Company, and their employment may be terminated at any time at the discretion
of the Board of Directors.
Joseph W. Jennings, the Company's former senior vice president, marketing,
received option grants for 640,000 shares that provided that upon a change in
control transaction, the vesting of the option would accelerate and 50% of the
then unvested option shares would become vested. In August 2000, Mr. Jennings'
employment with the Company terminated and as a result of this termination,
this change in control provision is no longer effective. Duncan M. Davidson,
the Company's senior vice president, business development, has received option
grants for 640,000 shares that provide that upon a change in control
transaction, the vesting of the option will accelerate and 100% of the then
unvested option shares will become vested. Edmund J. Fish, the Company's
executive vice president and chief business officer, has received option
grants for 86,667 shares that provide that upon a change in control
transaction, the vesting of the option will accelerate and 100% of the then
unvested option shares will become vested. In addition, two of the Company's
other executive officers who are not among the Company's four highest-paid
executive officers during 1999 were also granted options that provide that
upon a change in control transaction, the vesting of the options will
accelerate and 50% and 100%, respectively, of the then unvested option shares
will become vested.
If a change in control of the Company occurs, an option or other award under
the 1999 Equity Incentive Plan will become fully exercisable and fully vested
if the option or award is not assumed by the surviving corporation or its
parent or if the surviving corporation or its parent does not substitute
comparable awards for the awards granted under the 1999 Equity Incentive Plan.
Under the Company's 1995 Stock Plan, upon a merger or asset sale, if the
options or stock purchase rights are not assumed by the surviving corporation
or its parent or subsidiary or if the surviving corporation or its parent or
subsidiary does not substitute comparable awards for the options or stock
purchase rights, then the options and stock purchase rights will terminate.
Erwin N. Lenowitz, the Company's vice chairman of the board and chief
financial officer, separated from the Company as of May 30, 2000. In
connection with Mr. Lenowitz's separation, the Company entered into an
agreement with Mr. Lenowitz, dated March 8, 2000, pursuant to which he was
given certain benefits. These
11
<PAGE>
benefits included: permitting Mr. Lenowitz to sell up to 150,000 of his shares
of the Company's common stock and each of Mr. Lenowitz's children to sell up
to 30,000 shares of the Company's common stock in the Company's secondary
public offering; and releasing all shares of the Company's common stock held
by Mr. Lenowitz and up to 30,000 shares held by each of his children from the
market stand-off provision with the consent of the underwriters of the
Company's secondary public offering. In consideration for these benefits, Mr.
Lenowitz agreed to remain with the Company until the earlier of the finding of
a suitable replacement or May 30, 2000.
COMPENSATION REPORT
The Compensation Committee of the Company's Board of Directors (the
"Compensation Committee" or the "Committee") was formed on July 22, 1999. The
charter for the Committee provides that it has the exclusive authority to
establish the level of base salary payable to the chief executive officer
("CEO") and certain other executive officers of the Company and to administer
the Company's 1999 Equity Incentive Plan and 1999 Employee Stock Purchase
Plan. In addition, the Committee has the responsibility for approving the
individual bonus programs to be in effect for the CEO and certain other
executive officers and other key employees each fiscal year. However, during
fiscal 1999, the Board made the decisions regarding executive compensation,
including option grants to its executive officers, because the Committee did
not become effective until October 26, 1999.
For the 1999 fiscal year, the process utilized by the Board in determining
executive officer compensation levels was based on the subjective judgment of
the Board. Among the factors considered by the Board were the recommendations
of the CEO with respect to the compensation of the Company's key executive
officers. However, the Board made the final compensation decisions concerning
such officers.
General Compensation Policy. The Board's fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based upon
overall Company performance, their individual contribution to the financial
success of the Company and their personal performance. It is the Board's
objective to have a substantial portion of each officer's compensation
contingent upon the Company's performance, as well as upon his or her own
level of performance. Accordingly, each executive officer's compensation
package consists of: (i) base salary, (ii) discretionary cash bonus and (iii)
long-term stock-based incentive awards.
Base Salary. The base salary for each executive officer is set on the basis
of general market levels and personal performance. Each individual's base pay
is positioned relative to the total compensation package, including cash
incentives and long-term incentives.
Annual Cash Bonuses. Each executive officer is eligible for a cash bonus at
the discretion of the Board. The Board considers performance targets
established at the start of the fiscal year and personal objectives
established for each executive. Actual bonuses paid reflect an individual's
accomplishment of both corporate and functional objectives.
Long-Term Incentive Compensation. During fiscal 1999, the Board, in its
discretion, did not make option grants to any of its executive officers other
than the initial option grant made to Mr. David C. Chance in connection with
the commencement of his employment. Generally, a significant grant is made in
the year that an officer commences employment and no grant is made in the
second year. Thereafter, option grants may be made at varying times and in
varying amounts in the discretion of the Board. Generally, the size of each
grant is set at a level that the Board deems appropriate to create a
meaningful opportunity for stock ownership based upon the individual's
position with the Board, the individual's potential for future responsibility
and promotion, the individual's performance in the recent period and the
number of unvested options held by the individual at the time of the new
grant. The relative weight given to each of these factors will vary from
individual to individual at the Board's discretion.
12
<PAGE>
Each grant allows the officer to acquire shares of the Company's common
stock at a fixed price per share (the market price on the grant date) over a
specified period of time. The option vests in periodic installments over a two
to four year period, contingent upon the executive officer's continued
employment with the Company. The vesting schedule and the number of shares
granted are established to ensure a meaningful incentive in each year
following the year of grant. Accordingly, the option will provide a return to
the executive officer only if he or she remains in the Company's employ, and
then only if the market price of the Company's common stock appreciates over
the option term.
CEO Compensation. The annual base salary for Mr. Shear, the Company's Chief
Executive Officer, was not increased by the Board during fiscal 1999, and Mr.
Shear has not been granted any options or given any bonus during fiscal 1999.
Tax Limitation. Under the Federal tax laws, a publicly held company such as
the Company will not be allowed a federal income tax deduction for
compensation paid to certain executive officers to the extent that
compensation exceeds $1 million per officer in any year. To qualify for an
exemption from the $1 million deduction limitation, the stockholders were
asked to approve a limitation under the Company's 1999 Equity Incentive Plan
on the maximum number of shares of common stock for which any one participant
may be granted stock options per fiscal year. Because this limitation was
adopted, any compensation deemed paid to an executive officer when he
exercises an outstanding option under the 1999 Equity Incentive Plan with an
exercise price equal to the fair market value of the option shares on the
grant date will qualify as performance-based compensation that will not be
subject to the $1 million limitation. Since it is not expected that the cash
compensation to be paid to the Company's executive officers for the 1999
fiscal year will exceed the $1 million limit per officer, the Board will defer
any decision on whether to limit the dollar amount of all other compensation
payable to the Company's executive officers to the $1 million cap.
Board of Directors
Victor Shear
David C. Chance
Edmund J. Fish
Bruce Fredrickson
Satish K. Gupta
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board of Directors was created
on July 22, 1999 and became effective on the effective date of the Company's
initial public offering of its securities, October 26, 1999. The members of
the Compensation Committee are Messrs. Frederickson and Gupta. Neither of
these individuals was at any time during 1999, or at any other time, an
officer or employee of the Company. No executive officer of the Company serves
as a member of the board of directors or compensation committee of any entity
that has one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.
13
<PAGE>
STOCK PERFORMANCE GRAPH
The graph set forth below compares the cumulative total stockholder return
on the Company's common stock between October 27, 1999 (the date the Company's
common stock commenced public trading) and December 31, 1999 with the
cumulative total return of (i) the CRSP Total Return Index for the Nasdaq
Stock Market (U.S. Companies) (the "Nasdaq Stock Market-U.S. Index") and (ii)
the Hambrecht & Quist Internet Index (the "H&Q Internet Index") over the same
period. This graph assumes the investment of $100.00 on October 27, 1999, in
the Company's common stock, the Nasdaq Stock Market-U.S. Index and the H&Q
Internet Index and assumes the reinvestment of dividends, if any.
The comparisons shown in the graph below are based upon historical data. The
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance
of the Company's common stock.
Comparison of Cumulative Total Return Among InterTrust Technologies
Corporation, the Nasdaq Stock Market-U.S. Index and the H&Q Internet Index
[PERFORMANCE GRAPH APPEARS HERE]
Date InterTrust H&Q Internet NASDAQ
27-Oct-99 100 100 100
28-Oct-99 105.2874 98.5154 102.5941
29-Oct-99 100.2299 102.3444 105.8487
1-Nov-99 104.5977 106.4653 105.8922
2-Nov-99 140 107.6334 106.391
3-Nov-99 124.1379 106.9738 108.0638
4-Nov-99 142.5287 109.7143 109.0429
5-Nov-99 166.4368 112.4732 110.6965
8-Nov-99 158.3908 116.394 112.1837
9-Nov-99 163.908 120.5783 111.5082
10-Nov-99 173.2184 118.3238 112.6115
11-Nov-99 161.8391 118.622 114.0863
12-Nov-99 155.1724 116.6207 114.9376
15-Nov-99 175.6322 122.453 114.8802
16-Nov-99 181.1494 123.4945 117.5032
17-Nov-99 207.8161 128.271 116.6589
18-Nov-99 212.1839 126.8088 119.4322
19-Nov-99 238.9655 131.9386 120.2222
22-Nov-99 231.4943 131.3362 121.0539
23-Nov-99 213.7931 137.5748 119.2809
24-Nov-99 211.0345 138.2895 122.0509
25-Nov-99 211.0345 138.2895 122.0509
26-Nov-99 220.1149 142.0327 123.0253
29-Nov-99 226.2069 144.861 122.0819
30-Nov-99 236.4368 141.9388 119.0414
1-Dec-99 251.2644 134.1808 119.6677
2-Dec-99 253.7931 135.6695 123.2027
3-Dec-99 275.2874 142.8251 125.6237
6-Dec-99 313.2758 147.5341 126.5293
7-Dec-99 316.5517 153.009 127.9891
8-Dec-99 333.5632 160.0319 127.9591
9-Dec-99 312.8736 164.355 128.2478
10-Dec-99 288.5057 166.7586 129.178
13-Dec-99 312.2989 169.1213 130.5314
14-Dec-99 285.1724 173.14 127.4446
15-Dec-99 223.7931 166.2052 129.239
16-Dec-99 223.3333 164.0221 132.5614
17-Dec-99 231.7241 170.612 133.9173
20-Dec-99 240.46 172.4029 135.0167
21-Dec-99 237.2414 172.1334 139.5583
22-Dec-99 217.931 183.1996 140.4914
23-Dec-99 228.3908 183.5222 141.6382
24-Dec-99 228.3908 183.5222 141.6382
27-Dec-99 246.4368 180.8389 141.85
28-Dec-99 220.6897 180.1936 141.7335
29-Dec-99 209.6552 180.2304 144.2081
30-Dec-99 203.908 187.8903 144.0443
31-Dec-99 216.3219 186.0504 145.2018
The Company effected its initial public offering of common stock on October
26, 1999 at a price of $9.00 per share. The graph above, however, commences
with the closing price of $27.19 per share on October 27, 1999--the date the
Company's common stock commenced public trading.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate this
Proxy Statement or future filings made by the Company under those statutes,
the Compensation Committee Report and Stock Performance Graph shall not be
deemed filed with the Securities and Exchange Commission and shall not be
deemed incorporated by reference into any of those prior filings or into any
future filings made by the Company under those statutes.
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 1999, there has not been, nor is there currently proposed,
any transaction or series of similar transactions to which the Company or any
of its subsidiaries was or is to be a party in which the amount involved
exceeded or will exceed $60,000 and in which any director, executive officer,
holder of more than 5% of the common stock of the Company or any member of the
immediate family of any of the foregoing persons had or will have a direct or
indirect material interest other than (i) compensation agreements and other
arrangements, which are described where required in Employment Contracts and
Change in Control Arrangements and (ii) the transactions described below.
Series C Preferred Stock Financing. In March 1999, we issued and sold 59,290
shares of series C preferred stock to Kistler Associates, one of our 5%
stockholders, at a per share purchase price of $2.945.
Series D Preferred Stock Financing. In April 1999, we issued and sold
470,588 shares of series D preferred stock to Kistler Associates , one of our
5% stockholders, at a per share purchase price of $4.25.
In April 1999, we issued and sold 958,824 shares of series D preferred stock
to SLF Partners IV, L.P. at a per share purchase price of $4.25. One of our
executive officers, Patrick P. Nguyen, is a limited partner of SLF Partners
IV, L.P.
In April 1999, we issued and sold 50,000 shares of series D preferred stock
to Tactical Marketing Ventures, LLC at a per share purchase price of $4.25.
Bruce Fredrickson, a director of InterTrust, is the president of Tactical
Marketing Ventures, LLC.
In June 1999, we issued and sold 398,824 shares of series D preferred stock
to Ecomm Ventures II, LLC at a per share purchase price of $4.25. One of our
executive officers, Patrick P. Nguyen, is a director of Ecomm Ventures II,
LLC.
Series E Preferred Stock Financing. In July 1999, we issued and sold 466,666
shares of series E preferred stock to Kistler Associates, one of our 5%
stockholders, at a per share purchase price of $6.00.
In July 1999, we issued and sold 100,002 shares of series E preferred stock
to Duncan M. Davidson, one of our executive officers, at a per share purchase
price of $6.00.
Options to Purchase Common Stock. In October 1999, we granted an option to
purchase 600,000 shares of our common stock at an exercise price of $7.65 to
David C. Chance, one of our executive officers and a director. In March 2000,
we granted options to purchase 40,000 shares of our common stock to each of
Bruce Fredrickson and Satish Gupta. Messrs. Fredrickson and Gupta are members
of our board of directors. In April 2000, we granted an option to purchase
200,000 shares of our common stock at an exercise price of $25.88 to Ron
Hankison, one of our executive officers, and an option to purchase 20,000
shares of our common stock at an exercise price of $29.13 to each of Messrs.
Fredrickson and Gupta. In May 2000, we granted an option to purchase 125,000
shares of our common stock at an exercise price of $17.75 to Edmund J. Fish,
one of our executive officers. In May 2000, we granted an option to purchase
40,000 shares of our common stock at an exercise price of $17.75 to Patrick P.
Nguyen, one of our executive officers. In August 2000, we granted an option to
purchase 1,000,000 shares of our common stock at an exercise price of $15.00
to David Ludvigson, one of our executive officers.
Bonus to Executive Officer. In May 1999, our Compensation Committee approved
a bonus in the amount of $200,000 to Edmund J. Fish, one of our executive
officers, which was paid in June 1999.
Assumption of Loan of Executive Officer. In August 2000, our Compensation
Committee agreed to assume a $70,000 loan of David Ludvigson, one of our
executive officers. The loan will be forgiven as follows: $12,000 on January
1, 2001; $29,000 on January 1, 2002; and $29,000 on January 1, 2003.
15
<PAGE>
All of our shares of preferred stock converted to common stock upon the
occurrence of our initial public offering in 1999.
The Company's Certificate of Incorporation limits the liability of its
directors for monetary damages arising from a breach of their fiduciary duty
as directors, except to the extent otherwise required by the Delaware General
Corporation Law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.
The Company's Bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by Delaware law, including in
circumstances in which indemnification is otherwise discretionary under
Delaware law. The Company has also entered into indemnification agreements
with its officers and directors containing provisions that may require the
Company, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers and to advance their expenses incurred as a result of
any proceeding against them as to which they could be indemnified.
STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Shareholders of the Company must be received by the Company at its
offices at 4750 Patrick Henry Drive, Santa Clara, California 95054, Attn:
General Counsel, not later than May 1, 2000 and satisfy the conditions
established by the Securities and Exchange Commission for stockholder
proposals to be included in the Company's proxy statement for that meeting.
Pursuant to new amendments to Rule 14a-4(c) of the Securities Exchange Act of
1934, as amended, a stockholder proposal intended to be presented at the 2001
Annual Meeting of Shareholders of the Company must be received by the Company
at its offices at 4750 Patrick Henry Drive, Santa Clara, California 95054,
Attn: General Counsel, not later than July 14, 2001 in order for proxy holders
to be allowed to use their discretionary voting authority to vote on such
proposal when the proposal is raised at the 2000 Annual Meeting of
Stockholders, even through there is no discussion of such proposal in the
Company's proxy statement for that meeting.
16
<PAGE>
OTHER MATTERS
The Board knows of no other matters to be presented for stockholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in
accordance with their best judgment.
The Company will mail without charge, upon written request, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999. Requests should be sent to InterTrust Technologies Corporation, 4750
Patrick Henry Drive, Santa Clara, California 95054, Attn: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Victor Shear
Victor Shear
Chairman of the Board and Chief
Executive Officer
Santa Clara, California
September 1, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE
ANNUAL MEETING. IF YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO
CHANGE YOUR PROXY VOTE, YOU MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT
THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
17
<PAGE>
1915-PS-00
<PAGE>
PROXY INTERTRUST TECHNOLOGIES CORPORATION PROXY
4750 Patrick Henry Drive
Santa Clara, California 95054
This Proxy is Solicited on Behalf of the Board of Directors of InterTrust
Technologies Corporation for the Annual Meeting of
Stockholders to be held September 26, 2000
The undersigned holder of Common Stock, par value $.001, of InterTrust
Technologies Corporation (the "Company") hereby appoints Victor Shear and Edmund
J. Fish, or either of them, proxies for the undersigned, each with full power of
substitution, to represent and to vote as specified in this Proxy all Common
Stock of the Company that the undersigned stockholder would be entitled to vote
if personally present at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on Tuesday, September 26, 2000, 8:30 a.m. local time, at
the Westin Santa Clara, 5101 Great America Parkway, Santa Clara, California, and
at any adjournments or postponements of the Annual Meeting. The undersigned
stockholder hereby revokes any proxy or proxies heretofore executed for such
matters.
This proxy, when properly executed, will be voted in the manner as directed
herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTORS, AND FOR PROPOSAL 2, AND IN THE
DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE
THE MEETING. The undersigned stockholder may revoke this proxy at any time
before it is voted by delivering to the Corporate Secretary of the Company
either a written revocation of the proxy or a duly executed proxy bearing a
later date, or by appearing at the Annual Meeting and voting in person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE DIRECTORS
AND "FOR" PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE. If you receive more than one proxy card, please sign and return
ALL cards in the enclosed envelope.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
(Reverse)
INTERTRUST TECHNOLOGIES CORPORATION
Please mark votes
as in this example
<TABLE>
<S> <C> <C>
1. To elect the following directors 2. To ratify the appointment of Ernst FOR AGAINST ABSTAIN
to serve for a term ending upon the 2001 & Young, LLP as the Company's
Annual Meeting of Stockholders or until independent accountants for the fiscal [_] [_] [_]
their successors are elected and qualified: year ending December 31, 2000.
Nominees: Victor Shear, David C. Chance,
Edmund J. Fish, Bruce Fredrickson and
Satish K. Gupta.
FOR WITHHELD For all nominees, except for
nominees written below.
[_] [_] [_]
_______________________
Nominee exception(s).
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting.
The undersigned acknowledges receipt of the
accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement.
Signature:___________________________
Signature (if held
jointly):___________________________
Date:__________________ , 2000
Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the Proxy applies. When shares are held as joint-
tenants, both should sign. When signing as an executor, administrator, trustee,
guardian, attorney-in fact or other fiduciary, please give full title as such.
When signing as a corporation, please sign in full corporate name by President
or other authorized officer. When signing as a partnership, please sign in
partnership name by an authorized person.
