<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
VISIO CORPORATION
(Name of Issuer)
Common Stock, Par Value, $0.001 Per Share
(Title of Class of Securities)
927914101
(CUSIP Number)
September 14, 1999
(Date of Event Which Requires Filing of this Statement)
Check the appropriate box to designate the rule pursuant to which this schedule
is filed:
[_] Rule 13d-1(b)
[X] Rule 13d-1(c)
[_] Rule 13d-1(d)
Robert A. Eshelman
General Counsel, Finance and Operations
One Microsoft Way
Redmond, Washington 98052-6399
(425) 882-8080
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
- -----------------------
CUSIP NO.927914101
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
Microsoft Corporation
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
91-1144442
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
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SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS*(See instructions)
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
State of Washington
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SOLE VOTING POWER
7
NUMBER OF
6,012,500*
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 4,749,370**
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EACH SOLE DISPOSITIVE POWER
9
REPORTING
6,012,500*
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0***
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
10,761,870
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
12
[_]
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
35.6%
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TYPE OF REPORTING PERSON*
14
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
___________________________
* Microsoft Corporation is a party to an Agreement and Plan of Reorganization
dated as of September 14, 1999 by and among Microsoft Corporation ("Microsoft"),
Visio Corporation ("Visio") and MovieSub, Inc., a wholly owned subsidiary of
Microsoft, providing for the merger of MovieSub, Inc. into Visio (the "Merger"),
described further in Item 4 of this Statement. 6,012,500 shares of common stock,
par value $0.001 per share
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("Visio Common Stock"), of Visio are purchasable by Microsoft upon exercise of
an option granted to Microsoft on September 14, 1999 and described in Item 4 of
this Statement (the "Option"). Prior to the exercise of the option, Microsoft is
not entitled to any rights as a shareholder of Visio with respect to the shares
of Visio Common Stock covered by the option. Microsoft disclaims any beneficial
ownership of the shares of Visio Common Stock which are purchasable by Microsoft
upon exercise of the option on the grounds that the option is not presently
exercisable and only becomes exercisable upon the occurrence of the events
referred to in Item 4 of this Statement. If the option were exercised, Microsoft
would have the sole right to vote and to dispose of the shares of Visio Common
Stock issued as a result of such exercise.
** Based on beneficial ownership of the individuals listed below, Microsoft
has the right to vote 4,749,370 shares of Visio Common Stock, representing 15.7
percent of the shares outstanding (as of September 10, 1999) in favor of the
Merger pursuant to the Voting Agreements described below. Shares obtainable upon
exercise of the option described above may not be eligible to vote on the
Merger, but would represent 16.6% of the outstanding shares if the Option were
to be exercised. The amount listed as beneficially owned is the sum of (i) the
6,012,500 shares obtainable upon exercise of the option and (ii) the 4,749,370
shares which may be voted by Microsoft in favor of the Merger. Under certain
circumstances described below, Microsoft could have the right to vote 29.2
percent of the shares of Visio Common Stock in favor of the Merger.
Certain shareholders of Visio (listed below) beneficially owning
approximately 15.7% percent of the outstanding shares of Visio Common Stock have
agreed to vote in favor of the Merger, pursuant to the terms of Voting
Agreements (the "Voting Agreements") dated as of September 14, 1999 between each
of such holders and Microsoft. Each of such holders has granted an irrevocable
proxy in favor of Microsoft to vote their shares of common stock in favor of the
Merger. Microsoft has the right under the Voting Agreements to vote up to
4,749,370 shares of Visio Common Stock owned in favor of the Merger
(representing 15.7% of the shares outstanding as of September 10, 1999). In
addition these holders have also executed affiliate letters (the "Affiliate
Letters") dated as of September 14, 1999. The Affiliate Letters that provide for
restrictions on purchases and dispositions of Visio Common Stock specifically
relating to treatment of the merger as a pooling of interests for accounting
purposes.
Each of the following persons is a party to a Voting Agreement and an
Affiliate Letter: Tom Alberg; Tom Byers; Jeremy Jaech, Theodore Johnson, John
Johnston, Doug Mackenzie, Scott Oki, Steve Gordon, Jim Horsburgh, Tom Hull, and
Evelyn Cruz Sroufe, and Microsoft Corporation.
*** Pursuant to the terms of the Voting Agreements and Affiliate Letters
described above and in Item 4 to this Statement, holders of shares of Visio
Common Stock subject to such agreements may only transfer such shares subject to
the terms of such agreement.
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SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
VISIO CORPORATION
Item 1. Security and Issuer
-------------------
This Statement on Schedule 13D (this "Statement") relates to the common
stock, $0.001 par value per share ("Visio Common Stock"), of Visio Corporation,
a Washington corporation ("Visio"). The principal executive offices of Visio are
located at 2211 Elliott Avenue, Seattle, WA 98121.
Item 2. Identity and Background
-----------------------
This Statement is being filed by Microsoft Corporation, a Washington
corporation ("Microsoft"). The principal business address of Microsoft is One
Microsoft Way, Redmond, Washington 98052. Microsoft develops, manufactures,
licenses and supports a range of software products, including scalable operating
systems, server applications, business/consumer productivity applications,
software development tools and Internet software and technologies.
(a)-(c); (f) The name, business address, present principal occupation
or employment, and the name and principal business of any corporation or other
organization in which such employment is conducted of each of the directors and
executive officers of Microsoft is set forth in Schedule I hereto, which is
incorporated herein by reference. With the exception of (i) Bernard P. Vergnes
and Michel Lacombe, who are a citizens of France, (ii) Joachim Kempin, who is a
citizen of Germany, and (iii) Orlando Ayala Lozano, who is a citizen of
Columbia, each person listed in Schedule I hereto is a citizen of the United
States.
(d)-(e) During the last five years, neither Microsoft nor, to the
knowledge of Microsoft, any of the persons listed on Schedule I hereto (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
As more fully described below, pursuant to the terms of the Stock
Option Agreement (as defined in the response to Item 4), Microsoft will have the
right, upon the occurrence of certain events specified therein, to purchase from
time to time up to 6,012,500 shares of Visio Common Stock (subject to adjustment
as provided in the Stock Option Agreement) at a price of $42.78 per share. If
Microsoft purchases Visio Common Stock pursuant to the Stock Option Agreement,
Microsoft anticipates that the funds to finance such purchase would come from
working capital, although no definitive determination has been made at this time
as to the source of such funds.
Item 4. Purpose of the Transaction
--------------------------
(a)-(j) On September 14, 1999, Microsoft, Visio, and MovieSub, Inc., a
Washington corporation and a wholly owned subsidiary of Microsoft ("Merger
Sub"), entered into an Agreement and Plan of Merger, dated as of September 14,
1999 (the "Reorganization Agreement"), a copy of which is
4
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incorporated by reference as Exhibit 1 and is incorporated herein by reference.
The Reorganization Agreement provides, among other things, for the merger of
Merger Sub with and into Visio (the "Merger") with Visio being the corporation
surviving the Merger (the "Surviving Corporation").
Pursuant to the Merger Agreement, at the Effective Time (as defined in the
Reorganization Agreement), Merger Sub shall be merged with and into Visio and
the separate corporate existence of Merger Sub shall cease. Visio will continue
as the Surviving Corporation in the Merger. At the Effective Time, Visio will
become a wholly owned subsidiary of Microsoft. As a result of the Merger,
Microsoft will own 100% of the Visio Common Stock.
In the merger, each share of Visio Common Stock will be converted into
Microsoft common stock using an exchange ratio. The exchange ratio provides for
Visio shareholders, other than those who have perfected dissenters' rights under
Washington law, to receive 0.45 shares of Microsoft common stock for each share
of Visio Common Stock.
Consummation of the Merger is subject to the satisfaction or waiver at or
prior to the Effective Time of certain conditions, including, but not limited
to, approval of the Merger and the Merger Agreement by the holders of shares of
Visio Common Stock, expiration or termination of the applicable waiting periods
under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended, and
various other customary conditions.
The Reorganization Agreement contains certain customary restrictions on the
conduct of the business of Visio pending the Merger, including, without
limitation, not declaring, setting aside or paying any dividend or distribution
payable in cash, stock or property in respect of any capital stock of Visio
unless in the ordinary course of business or with the prior consent of
Microsoft.
Concurrent with the execution of the Reorganization Agreement, Microsoft
and Visio entered into a Stock Option Agreement, dated as of September 14, 1999
(the "Stock Option Agreement"), a copy of which is incorporated by reference as
Exhibit 2 and is incorporated herein by reference. Pursuant to the Stock Option
Agreement, Visio granted Microsoft an unconditional, irrevocable option (the
"Option") to purchase, pursuant to the terms and conditions thereof, up to
6,012,500 (subject to adjustment as provided in the Stock Option Agreement)
fully paid and nonassessable shares of Visio Common Stock at a price of $42.78
per share (such shares, the "Option Shares" and such price, the "Option Price").
The Stock Option Agreement provides that Microsoft may exercise the Option in
whole or in part, at any time or from time to time after but only after the
occurrence of any event as a result of which Microsoft is entitled to receive
the fee specified pursuant to Section 8.3(b) of the Reorganization Agreement (a
"Triggering Event"); provided, however, that except as provided in the last
sentence of this paragraph, the Option shall terminate and be of no further
force and effect upon the earliest to occur of (A) the Effective Time and (B)
one year after the first occurrence of a Triggering Event. Notwithstanding the
termination of the Option, Microsoft shall be entitled to purchase the Option
Shares if it has exercised the Option in accordance with the terms hereof prior
to the termination of the Option and the termination of the Option shall not
affect any rights thereunder which by their terms do not terminate or expire
prior to or as of such termination.
Certain holders (listed below) beneficially owning approximately 15.7
percent of the outstanding shares of Visio Common Stock have agreed to vote in
favor of the Merger, pursuant to the terms of Voting Agreements (the "Voting
Agreements") dated as of September 14, 1999 between each such holder and
Microsoft. Each such holder has granted an irrevocable proxy in favor of
Microsoft to vote their shares of such Visio Common Stock in favor of the
Merger. Microsoft has the right under the Voting
5
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Agreements to vote all of the shares owned by Tom Alberg; Tom Byers; Jeremy
Jaech, Theodore Johnson, John Johnston, Doug Mackenzie, Scott Oki, Steve Gordon,
Jim Horsburgh, Tom Hull, and Evelyn Cruz Sroufe. In addition these holders have
also agreed pursuant to the terms of affiliate letters agreements (the
"Affiliate Letter") dated as of September 14, 1999 between each of such holders
and Microsoft, not to transfer their shares (except as allowed in the Affiliate
Letters) during the thirty day period prior to the Effective Time and until
after such time as results covering at least 30 days of combined operations of
Visio and Microsoft have been published by Microsoft, in the form of a quarterly
earnings report, an effective registration statement filed with the Commission,
a report to the Commission on Form 10-K, 10-Q or 8-K, or any other public filing
or announcement which includes the combined results of operations.
Each of the following persons is a party to a Voting Agreement and the
Affiliate Letter: Tom Alberg; Tom Byers; Jeremy Jaech, Theodore Johnson, John
Johnston, Doug Mackenzie, Scott Oki, Steve Gordon, Jim Horsburgh, Tom Hull, and
Evelyn Cruz Sroufe and Microsoft Corporation.
The foregoing summaries of the Reorganization Agreement, the Stock
Option Agreement, the Voting Agreements and the Affiliate Letter do not purport
to be complete and are qualified in their entirety by reference to the text of
such agreements included as Exhibits 1, 2, 3 and 4 respectively.
Except as set forth in this Statement, the Reorganization Agreement,
the Stock Option Agreement, the Voting Agreements and the Affiliate Letters
neither Microsoft nor, to the best of Microsoft's knowledge, any of the
individuals named in Schedule I hereto has any plans or proposals which relate
to or which would result in or relate to any of the actions specified in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
------------------------------------
(a) - (b) By reason of its execution of the Stock Option Agreement,
Microsoft may be deemed to have beneficial ownership of, and sole voting and
dispositive power with respect to, the 6,012,500 shares of Visio Common Stock
subject to the Option and, accordingly, might be deemed to beneficially own such
shares of Visio Common Stock. Based on the number of shares of Visio Common
Stock subject to the Option, Microsoft may be deemed to beneficially own
approximately 16.6% of the outstanding Visio Common Stock (based upon (i) the
30,213,572 shares of Visio Common Stock outstanding on September 10, 1999, as
represented to Microsoft by Visio in the Reorganization Agreement, and (ii) an
additional 6,012,500 shares that Visio will issue to Microsoft in the event that
the Option is exercised) following the exercise in whole of the Option for
6,012,500 shares of Visio Common Stock. However, Microsoft expressly disclaims
any beneficial ownership of the shares of Visio Common Stock which are
purchasable by Microsoft upon exercise of the Option, on the grounds that the
Option is not presently exercisable and only becomes exercisable upon the
occurrence of the events referred to in Item 4 above. If the Option were
exercised, Microsoft would have the sole right to vote and to dispose of the
shares of Visio issued as a result of such exercise.
In addition, pursuant to the terms of the Voting Agreements and the
Letter Agreements, Microsoft may be deemed to be the beneficial owner of shares
of Visio Common Stock subject to such agreements.
Microsoft has the right to vote 4,749,370 shares of Visio Common Stock,
representing 15.7 percent of the shares outstanding (as of September 10, 1999)
in favor of the Merger pursuant to the Voting Agreements described below. Shares
obtainable upon exercise of the option described above are
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not eligible to vote on the Merger, but would represent 16.6% of the outstanding
shares if the Option were to be exercised. The amount listed on item 11 of
Schedule 13D as beneficially owned is the sum of (i) the 6,012,500 shares
obtainable upon exercise of the option and (ii) the 4,749,370 shares which may
be voted by Microsoft in favor of the Merger. Under certain circumstances,
Microsoft will have the right to vote 29.2 percent of the shares of Visio Common
Stock in favor of the Merger./1/
(c) Except as described herein, neither Microsoft nor, to the best of
Microsoft's knowledge, any of the individuals named in Schedule I hereto, has
effected any transaction in Visio Stock during the past 60 days.
(d) So long as Microsoft has not exercised the Option (and prior to the
consummation of the Merger), Microsoft does not have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
any shares of Visio Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
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to Securities of the Issuer
- ---------------------------
Except as provided in the Reorganization Agreement, the Voting
Agreements and the Affiliate Letters or as set forth in this Statement, neither
Microsoft or, to the best of Microsoft's knowledge, any of the individuals named
in Schedule I hereto has any contracts, arrangements, understandings or
relationships (legal or otherwise) with any person with respect to any
securities of Visio, including, but not limited to, transfer or voting of any of
the securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits
--------------------------------
Exhibit 1 Agreement and Plan of Reorganization, dated as of September
14, 1999, among Microsoft, MovieSub, Inc. and Visio
Corporation, Incorporated by reference to Exhibit 2.1 of
the Visio Corporation current report on Form 8-K, dated
September 15, 1999.
Exhibit 2 Stock Option Agreement, dated as of September 14, 1999,
between Microsoft and Visio (Visio as Issuer), Incorporated
by reference to Exhibit 2.2 of the Visio Corporation
current report on Form 8-K, dated September 15, 1999.
Exhibit 3* Form of Voting Agreement.
Exhibit 4** Form of Affiliate Letter.
_____________________________
/1/ This percentage is derived by adding the number of shares exercisable by
Microsoft pursuant to the Stock Option Agreement with the number of shares
beneficially owned by those who have executed a Voting Agreement in favor of
Microsoft, divided by the sum of (i) the number of shares of Visio Common Stock
as of September 10, 1999, (ii) the number of shares exercisable by Microsoft
pursuant to the Stock Option Agreement, and (iii) the number of presently
exercisable options owned by those who have executed a Voting Agreement in favor
of Microsoft.
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* Microsoft Corporation has entered into a Voting Agreement in substantially the
form attached hereto as Exhibit 3 with Tom Alberg; Tom Byers; Jeremy Jaech,
Theodore Johnson, John Johnston, Doug Mackenzie, Scott Oki, Steve Gordon, Jim
Horsburgh, Tom Hull, and Evelyn Cruz Sroufe.
** Microsoft has received letters in substantially the form attached hereto as
Exhibit 4 from Tom Alberg, Tom Byers, Jeremy Jaech, Theodore Johnson, John
Johnston, Doug Mackenzie, Scott Oki, Steve Gordon, Jim Horsburgh, Tom Hull, and
Evelyn Cruz Sroufe.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 24, 1999
MICROSOFT CORPORATION
By /s/ Robert A. Eshelman
----------------------
Robert A. Eshelman, General Counsel,
Finance and Operations; Assistant Secretary
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
MICROSOFT CORPORATION
The name, present principal occupation or employment, and the name of any
corporation or other organization in which such employment is conducted, of each
of the directors and executive officers of Microsoft Corporation ("Microsoft")
is set forth below. With the exception of (i) Bernard P. Vergnes and Michel
Lacombe, who are a citizens of France, (ii) Joachim Kempin, who is a citizen of
Germany, and (iii) Orlando Ayala Lozano, who is a citizen of Columbia, each
person listed in Schedule I hereto is a citizen of the United States. The
business address of each executive officer and director is Microsoft
Corporation, One Microsoft Way, Redmond, Washington 98052.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Directors Title\Occupation
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<S> <C>
William H. Gates Chairman of the Board; Chief Executive Officer, Microsoft Corporation
- -------------------------------------------------------------------------------------------------------------
Paul G. Allen Founder, Asymetrix Corp.; Owner, Interval Research Corp., Vulcan
Ventures Inc.
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Jill E. Barad President and Chief Executive Officer, Mattel, Inc.
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Richard A. Hackborn Executive Vice President, Hewlett-Packard Company (retired)
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David F. Marquardt General Partner, Technology Venture Investors and August Capital
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Wm. G. Reed, Jr. Chairman, Simpson Investment Company (retired)
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Jon A. Shirley President and Chief Operating Officer, Microsoft Corporation (retired)
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Executive Officer Title
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William H. Gates Chairman of the Board; Chief Executive Officer
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Steven A. Ballmer President
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Robert J. Herbold Executive Vice President; Chief Operating Officer
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Frank M. (Pete) Higgins Group Vice President, Interactive Media
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Paul A. Maritz Group Vice President, Platforms and Applications
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Nathan P. Myhrvold Group Vice President; Chief Technology Officer
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Jeffrey S. Raikes Group Vice President, Sales and Support
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James E. Allchin Senior Vice President, Personal and Business Systems Division
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Orlando Ayala Lozano Senior Vice President, South Pacific and Americas Region
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Joachim Kempin Senior Vice President, OEM, Internet Customer Unit, Embedded Systems
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Michel Lacombe Senior Vice President, Europe, Middle East, and Africa Region;
President, Microsoft Europe
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Robert L. Muglia Senior Vice President, Applications and Tools Division
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Craig Mundie Senior Vice President, Consumer Platforms Division
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William H. Neukom Senior Vice President, Law and Corporate Affairs; Secretary
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Bernard P. Vergnes Senior Vice President, Microsoft; Chairman, Microsoft Europe
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Gregory B. Maffei Vice President, Finance; Chief Financial Officer
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</TABLE>
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Exhibit 3
VISIO
VOTING AGREEMENT
This Voting Agreement (this "Agreement") is made and entered into as of
September 14, 1999, between Microsoft Corporation, a Washington corporation
("Parent"), and the undersigned Shareholder ("Shareholder") of Visio
Corporation, a Washington corporation ("Company").
RECITALS
--------
A. Concurrently with the execution of this Agreement, Company Parent and
a wholly owned subsidiary of parent ("Sub") have entered into an Agreement and
Plan of Reorganization (the "Reorganization Agreement"), which provides for the
merger (the "Merger") of Sub with and into Company. Pursuant to the Merger, all
outstanding capital stock of Company will be converted into Parent Common Stock
(as defined in the Reorganization Agreement).
B. The Shareholder is the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
such number of shares of the outstanding Common Stock of Company as indicated on
the final page of this Agreement (the "Shares").
C. In consideration of the execution of the Reorganization Agreement by
Parent, Shareholder agrees not to transfer or otherwise dispose of any of the
Shares, or any other shares of capital stock of Company acquired by Shareholder
hereafter and prior to the Expiration Date (as defined in Section 1.1 below),
and agrees to vote the Shares and any other such shares of capital stock of
Company so as to facilitate consummation of the Merger.
NOW, THEREFORE, the parties agree as follows:
1. Agreement to Retain Shares.
--------------------------
1.1 Transfer and Encumbrance. Until the Expiration Date (as defined
------------------------
below), Shareholder agrees not to sell, exchange, transfer, pledge or otherwise
dispose of or encumber the Shares or any New Shares (as defined in Section 1.2
below) unless each person to whom Shares are sold, exchanged, transferred,
pledged or otherwise disposed of or encumbered agrees in writing to hold such
Shares subject to the terms and conditions of this Agreement. As used herein,
the term "Expiration Date" shall mean the earlier to occur of (i) such date and
time as the Merger shall become effective in accordance with the terms and
provisions of the Reorganization Agreement and (ii) such date and time as the
Reorganization Agreement shall be terminated in accordance with the terms
therein.
1.2 New Shares. Shareholder agrees that any shares of capital stock
----------
of Company that Shareholder purchases or with respect to which Shareholder
otherwise acquires
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beneficial ownership after the date of this Agreement and prior to the
Expiration Date ("New Shares") shall be subject to the terms and conditions of
this Agreement to the same extent as if they constituted Shares.
2. Agreement to Vote Shares. Until the Expiration Date, at every
------------------------
meeting of the shareholders of Company called with respect to any of the
following, and at every adjournment thereof, and on every action or approval by
written consent of the shareholders of Company with respect to any of the
following, Shareholder shall vote the Shares and any New Shares: (i) in favor of
approval of the Reorganization Agreement and the Merger and any matter that
could reasonably be expected to facilitate the Merger, and (ii) against approval
of any proposal made in opposition to or in competition with consummation of the
Merger and the Reorganization Agreement, against any merger, consolidation, sale
of assets, reorganization or recapitalization with any party other than Parent
or its affiliates and against any liquidation or winding up of Company (each of
the foregoing is hereinafter referred to as an "Opposing Proposal"). Shareholder
agrees not, directly or indirectly, to solicit or knowingly encourage any offer
from any party concerning the possible disposition of all or any substantial
portion of Company's business, assets or capital stock. This Agreement is
intended to bind Shareholder as a shareholder of Company only with respect to
the specific matters set forth herein and shall not prohibit Shareholder from
acting in accordance with his or her fiduciary duties, if applicable, as an
officer or director of Company.
3. Irrevocable Proxy. Concurrently with the execution of this Agreement,
-----------------
Shareholder agrees to deliver to Parent a proxy in the form attached hereto as
Exhibit A (the "Proxy"), which shall be irrevocable to the extent provided in
- ---------
Section 23B.07.220 of the Washington Business Corporation Act, covering the
total number of Shares and New Shares of capital stock of Company beneficially
owned (as such term is defined in Rule 13d-3 under the Exchange Act) by
Shareholder set forth therein.
4. Representations, Warranties and Covenants of Shareholder. Shareholder
--------------------------------------------------------
hereby represents, warrants and covenants to Company as follows:
4.1 Ownership of Shares. Shareholder: (i) is the beneficial owner
-------------------
of the Shares, which at the date of this Agreement are free and clear of any
liens, claims, options, charges or other encumbrances that would adversely
affect the ability of Shareholder to carry out the terms of this Agreement; (ii)
does not beneficially own any shares of capital stock of Company other than the
Shares (excluding shares as to which Shareholder currently disclaims beneficial
ownership in accordance with applicable law); and (iii) has full power and
authority to make, enter into and carry out the terms of this Agreement and the
Proxy.
4.2 No Proxy Solicitations. Shareholder will not, and will not
----------------------
permit any entity under Shareholder's control, to: (i) solicit proxies or become
a "participant" in a "solicitation" as such terms are defined in Regulation 14A
under the Exchange Act) with respect to an Opposing Proposal or otherwise
knowingly encourage or assist any party in taking or planning any action that
would compete with, or materially restrain, serve to interfere with or inhibit
the timely consummation of the Merger in accordance with the terms of the Merger
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Agreements; (ii) initiate a shareholders' vote or action by written consent of
Company Shareholders with respect to an Opposing Proposal; or (iii) become a
member of a "group" (as such term is used in Section 13(d) of the Exchange Act)
with respect to any voting securities of Company with respect to an Opposing
Proposal.
5. Additional Documents. Shareholder and Company hereby covenant and
--------------------
agree to execute and deliver any additional documents necessary or desirable, in
the reasonable opinion of Parent, to carry out the purpose and intent of this
Agreement.
6. No Ownership Interest Nothing contained in this Agreement shall be
---------------------
deemed to vest in Parent any direct or indirect ownership or incidence of
ownership of or with respect to any Shares. All rights, ownership and economic
benefits of and relating to the Shares shall remain and belong to Shareholder.
Except as otherwise provided in the Reorganization Agreement, Parent shall have
no authority to manage, direct, superintend, restrict, regulate, govern, or
administer any of the policies or operations of Company, or exercise any power
or authority to direct Shareholder in the voting of any of the Shares (except as
otherwise provided herein and in Exhibit A) or the performance of the
Shareholder's duties or responsibilities as a shareholder of Company.
7. Termination. This Agreement and the Proxy delivered in connection
-----------
herewith shall terminate and shall have no further force or effect as of the
Expiration Date.
8. Miscellaneous.
-------------
8.1 Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, then the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
8.2 Binding Effect and Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interest or obligations of the parties hereto may be assigned by either
of the parties without the prior written consent of the other.
8.3 Amendments and Modification. This Agreement may not be
---------------------------
modified, amended, altered or supplemented except by the execution and delivery
of a written agreement executed by the parties hereto.
8.4 Specific Performance: Injunctive Relief. The parties hereto
---------------------------------------
acknowledge that Parent will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or agreements of
Shareholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Parent upon any such violation, Parent
shall have the right to enforce such covenants and agreements by
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<PAGE>
specific performance, injunctive relief or by any other means available to
Parent at law or in equity.
8.5 Notices. All notices and other communications pursuant to this
-------
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopies, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to Parent: Microsoft Corporation
One Microsoft Way
Redmond, Washington 98052
Attn.: Robert A. Eshelman
General Counsel, Finance and Administration
Facsimile No. (206) 869-1327
With a copy to: Preston Gates & Ellis LLP
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7078
Attention: Robert S. Jaffe
Facsimile: (206) 623-7022
If to Shareholder: To the address for notice set forth on the last
page hereof.
With a copy to: Shearman & Sterling
1550 El Camino Real
Menlo Park, CA 94025-4100
Attention: Christopher D. Dillon
Facsimile No.: (650) 330-2299
Perkins Coie LLP
1201 Third Avenue, Suite 4800
Seattle, Washington 98101-3099
Attention: Linda A. Schoemaker
Facsimile No.: 206 583-8500
8.6 Governing Law. This Agreement shall be governed by, construed
-------------
and enforced in accordance with the internal laws of the State of Washington
8.7 Entire Agreement. This Agreement and the Proxy contain the
----------------
entire understanding of the parties in respect of the subject matter hereof, and
supersedes all prior negotiations and understandings between the parties with
respect to such subject matter.
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<PAGE>
8.8 Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
8.9 Effect of Headings. The section headings herein are for
------------------
convenience only and shall not affect the construction or interpretation of this
Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
MICROSOFT CORPORATION SHAREHOLDER
By: ___________________________
_____________________________
Title: ________________________
Its (as applicable)
-----------------------------
Address
-----------------------------
_____________________________
_____________________________
Shares beneficially owned:
_______ shares of Company Common Stock
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<PAGE>
EXHIBIT A
IRREVOCABLE PROXY
to Vote
Visio Corporation Stock
The undersigned Shareholder of Visio Corporation, a Washington corporation
("Company"), hereby irrevocably (to the full extent permitted by Section
23B.07.220 of the Washington Business Corporation Act) appoints the directors on
the Board of Directors of Microsoft Corporation, a Washington corporation
("Parent"), and each of them, as the sole and exclusive attorneys and proxies of
the undersigned, with full power of substitution and resubstitution, to vote and
exercise all voting and related rights (to the full extent that the undersigned
is entitled to do so) with respect to all of the shares of capital stock of
Company that now are or hereafter may be beneficially owned by the undersigned
and any and all other shares or securities of Company issued or issuable in
respect thereof on or after the date hereof (collectively, the "Shares") in
accordance with the terms of this Proxy. The Shares beneficially owned by the
undersigned Shareholder of Company as of the date of this Proxy are listed on
the final page of this Proxy. Upon the undersigned's execution of this Proxy,
any and all prior proxies given by the undersigned with respect to any Shares
that are inconsistent with this Proxy are hereby revoked and the undersigned
agrees not to grant any subsequent proxies with respect to the Shares that are
inconsistent with this Proxy until after the Expiration Date (as defined below).
This proxy is irrevocable (to the extent provided in Section 23B.07.220 of
the Washington Business Corporation Act), is granted pursuant to that certain
Shareholder Agreement dated as of September 14, 1999 by and among Parent and the
undersigned Shareholder (the "Shareholder Agreement"), and is granted in
consideration of Parent entering into that certain Agreement and Plan of
Reorganization dated as of September 14, 1999 (the "Reorganization Agreement"),
among Company, Parent, and a wholly-owned subsidiary of Parent ("Sub"). The
Reorganization Agreement provides for the merger of Sub with and into Company in
accordance with its terms (the "Merger"). As used herein the term "Expiration
Date" shall mean the earlier to occur of (i) such date and time as the Merger
shall become effective in accordance with the terms and provisions of the
Reorganization Agreement or (ii) such date and time as the Reorganization
Agreement shall be terminated in accordance with the terms therein. This proxy
is intended to bind Shareholder as a shareholder of Company only with respect to
the specific matters set forth herein and shall not prohibit Shareholder from
acting in accordance with his or her fiduciary duties, if applicable, as an
officer or director of Company.
The attorneys and proxies named above, and each of then, are hereby
authorized and empowered by the undersigned, at any time prior to the Expiration
Date, to act as the undersigned's attorney and proxy to vote the Shares, and to
exercise all voting and other rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written
consents pursuant to Section 23B.07.040 of the Washington Business Corporation
Act), at every annual, special or adjourned meeting of the shareholders of
Company
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<PAGE>
and in every written consent in lieu of such meeting: (a) in favor of approval
of the Merger and the Reorganization Agreement and in favor of any matter that
could reasonably be expected to facilitate the Merger, and (b) against approval
of any proposal made in opposition to or in competition with the consummation of
the Merger and the Reorganization Agreement and against any liquidation or
winding up of Company. The attorneys and proxies named above may not exercise
this Irrevocable Proxy on any other matter except as provided in clauses (a) and
(b) above. The undersigned Shareholder may vote the Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
This proxy is irrevocable (to the extent provided in Section 23B.07.220 of
the Washington Business Corporation Act).
Dated: September 14, 1999 SHAREHOLDER
By _____________________________
By _____________________________
Shares beneficially owned:
_______ shares of Company Common Stock
8
<PAGE>
Exhibit 4
AFFILIATE'S LETTER
Microsoft Corporation
One Microsoft Way
Redmond, Washington 98052
Ladies and Gentlemen:
The undersigned officer and/or director of Visio Corporation (the "Company") has
been advised that the undersigned may be deemed to be an "affiliate" of the
Company, as that term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act of 1933, as amended (the "Securities Act") (such rule, as amended
or replaced by any successor rule, referred to herein as "Rule 145"). Pursuant
to the terms of the Agreement and Plan of Reorganization dated on or about the
date hereof (the "Merger Agreement"), among Microsoft Corporation ("Parent"),
MovieSub, Inc. ("Merger Subsidiary"), and the Company, Merger Subsidiary will be
merged with and into the Company (the "Merger"). As a result of the Merger,
outstanding shares of common stock, $.001 par value per share, of the Company
("Company Common Stock") will be converted into the right to receive shares of
common stock, $.0000125 par value per share, of Parent ("Parent Common Stock"),
as determined pursuant to the Merger Agreement.
In order to induce Parent and the Company to enter into the Merger Agreement,
the undersigned (referred to herein as "Affiliate") represents, warrants and
agrees as follows:
1. Affiliate will not, during the 30 days prior to the effective time of the
Merger (the "Effective Time"), sell, transfer or otherwise dispose of or
reduce Affiliate's risk (as contemplated by SEC Accounting Series Release
No. 135) with respect to the shares of Company Common Stock or shares of
the capital stock of Parent that Affiliate may hold and, furthermore,
Affiliate will not sell, transfer or otherwise dispose of or reduce
Affiliate's risk (as contemplated by SEC Accounting Series Release No. 135)
with respect to the shares of Parent Common Stock received by Affiliate in
the Merger or any other shares of the capital stock of Parent until after
such time as results covering at least 30 days of combined operations of
the Company and Parent have been published by Parent, in the form of a
quarterly earnings report, an effective registration statement filed with
the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K, or
any other public filing or announcement which includes the combined results
of operations (the "Pooling Period"). Parent shall notify Affiliate of the
--------------
publication of such results. Notwithstanding the foregoing, during the
Pooling Period, subject to providing written notice to Parent, Affiliate
will not be prohibited from selling up to 10% of the shares of Parent
Common Stock (the "10% Shares") received by Affiliate or the shares of
----------
Company Common Stock owned by Affiliate or making charitable contributions
or bona fide gifts of the shares of Parent Common Stock received by
Affiliate or the shares of Company Common Stock owned by Affiliate, subject
to the same restrictions. The 10% Shares shall be calculated in accordance
with SEC Accounting Series Release No. 135 as amended by Staff Accounting
Bulletin No. 76.
2. Affiliate has been advised that the issuance of the Parent Common Stock, if
any, to Affiliate pursuant to the Merger is being registered with the SEC
under the Securities Act and the rules
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<PAGE>
and regulations promulgated thereunder on a Registration Statement on Form
S-4. However, Affiliate has also been advised that, because Affiliate may
be deemed to be an "affiliate" of the Company (as that term is used in
paragraphs (c) and (d) of Rule 145), any sale, transfer or other
disposition by Affiliate of any Parent Common Stock issued pursuant to the
Merger will, under current law, require either (a) further registration
under the Securities Act of the Parent Common Stock to be sold,
transferred, or otherwise disposed of, or (b) compliance with Rule 145, or
(c) the availability of another exemption from such registration.
3. Affiliate will not offer to sell, sell, or otherwise dispose of any Parent
Common Stock issued pursuant to the Merger except pursuant to an effective
registration statement or in compliance with Rule 145 or another exemption
from the registration requirements of the Securities Act (the compliance
with Rule 145 or the availability of such other exemption to be established
by Affiliate to the satisfaction of Parent's counsel).
4. Affiliate consents to the placement of a stop transfer order with the
Company's and Parent's stock transfer agent and registrar, and to the
placement of the following legend on certificates representing the Company
Common Stock and Parent Common Stock issued or to be issued to Affiliate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD
OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH AN
AFFILIATE'S LETTER FROM THE UNDERSIGNED TO MICROSOFT
CORPORATION, AND IN COMPLIANCE WITH RULE 145 OF THE
SECURITIES ACT OF 1933."
5. Affiliate has carefully read this letter and has discussed with counsel for
Affiliate or counsel for the Company, to the extent Affiliate felt
necessary, the requirements of this letter and other applicable limitations
on the ability of Affiliate to sell, transfer, or otherwise dispose of
Company Common Stock and Parent Common Stock.
6. Execution of this letter should not be considered an admission on
Affiliate's part that Affiliate is an "affiliate" of the Company, nor as a
waiver of any rights Affiliate may have to object to any claim that
Affiliate is such an affiliate on or after the date of this letter.
7. By Parent's acceptance of this letter, Parent hereby agrees with Affiliate
as follows:
(i) For so long as and to the extent necessary to permit Affiliate to sell
shares of Parent Common Stock pursuant to Rule 145 and, to the extent
applicable, Rule 144 under the Act, Parent shall (a) use its
reasonable efforts to file, on a timely basis, all reports and data
required to be filed with the Commission by it pursuant to Section 13
of the Securities Exchange Act of 1934, as amended (the "1934 Act"),
--------
and (b) otherwise use its reasonable efforts to permit such sales
pursuant to Rule 145 and Rule 144. Parent hereby represents to
Affiliate that it has filed all reports required to be filed with the
Commission under Section 13 of the 1934 Act during the preceding 12
months.
(ii) It is understood and agreed that certificates with the legends set
forth in paragraph 4 above will be substituted by delivery of
certificates without such legends if (i) one year shall have elapsed
from the date the undersigned acquired the shares of Parent Common
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<PAGE>
Stock received in the Merger and the provisions of Rule 145(d)(2) are
then available to the undersigned, (ii) two years shall have elapsed
from the date the undersigned acquired the Parent Shares received in
the Merger and the provisions of Rule 145(d)(3) are then applicable to
the Affiliate, or (iii) Parent has received either an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to
Parent, or a "no action" letter obtained by the undersigned from the
staff of the Commission, to the effect that the restrictions imposed
by Rule 145 under the Act no longer apply to the Affiliate.
Very truly yours,
September 14, 1999 _______________________________________
(Signature)
_______________________________________
(Name) (Please Print)
MICROSOFT CORPORATION
By:____________________________________
Its:__________________________________
3
