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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
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(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO .
COMMISSION FILE NUMBER 0-22712
VERITAS SOFTWARE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-2823068
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1600 PLYMOUTH STREET
MOUNTAIN VIEW, CALIFORNIA 94043
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (650) 335-8000
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON STOCK
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
As of February 28, 1999, 47,924,510 shares of registrant's common stock
were outstanding. The aggregate market value of the common stock held by
non-affiliates of the registrant as of February 28, 1999 was approximately
$2,833,634,700.
DOCUMENTS INCORPORATED BY REFERENCE
None
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TABLE OF CONTENTS
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PAGE NO.
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PART III
Item
10. Directors and Executive Officers of the Registrant.......... 3
Item
11. Executive Compensation...................................... 5
Item
12. Security Ownership of Certain Beneficial Owners and 7
Management................................................
Item
13. Certain Relationships and Related Transactions.............. 8
Signatures.......................................................... 9
</TABLE>
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
The following table sets forth information as of March 31, 1999 with
respect to persons who are members of the Board of Directors of VERITAS Software
Corporation:
<TABLE>
<CAPTION>
NAME AGE TITLE
---- --- -----
<S> <C> <C>
Mark Leslie 53 Chief Executive Officer and Chairman of the
Board
Geoffrey W. Squire 52 Executive Vice-President and Vice-Chairman of
the Board
Fred van den Bosch 52 Executive Vice President of Engineering,
Director
Steven Brooks 47 Director
William H. Janeway 55 Director
Joseph D. Rizzi 56 Director
Roel Pieper 42 Director
</TABLE>
Directors will hold office until the next annual meeting of stockholders
and until their successors have been elected and qualified or until their
earlier resignation or removal. Executive officers will be chosen by and will
serve at the discretion of the Board of Directors. There is no family
relationship between any director or executive officer of VERITAS and any other
director or executive officer of VERITAS.
Mr. Leslie has served as President and Chief Executive Officer of VERITAS
since 1990 and as a director of VERITAS since 1988. Prior to 1990, he was the
principal and owner of Leslie Consulting, a management consulting firm and
President and Chief Executive Officer of Rugged Digital Systems, Inc., a
computer manufacturer. Mr. Leslie is also Chairman of the Board of Versant
Object Technology Corporation, an object-oriented database software company.
Mr. Squire has been Co-Chairman of the Board of Directors and Executive
Vice-President of VERITAS since April 1997, when VERITAS merged with OpenVision.
Mr. Squire became a director of OpenVision in January 1994 and was appointed
Chief Executive Officer of OpenVision in July 1995. From January 1994 to
November 1994, Mr. Squire was Executive Vice President and Chief Executive
Officer of International Operations and from November 1994 to June 1995, he was
President and Chief Operating Officer of OpenVision. Prior to that time, Mr.
Squire worked at Oracle Corporation, most recently as a member of Oracle's
Executive Committee as Chief Executive, International Operations. Mr. Squire has
sat on the Council of the U.K. Computing Services and Software Association since
1990. In 1995, Mr. Squire was elected as the founding President of the European
Information Services Association. Mr. Squire also serves as a director of
Industri-Mathematik International Corp.
Mr. van den Bosch has served as Executive Vice President, Engineering of
VERITAS since July 1997. Mr. van den Bosch served as Senior Vice President,
Engineering of VERITAS from 1991 to July 1997 and was appointed as a director of
VERITAS in February 1996. From 1970 until 1990, he served in various positions
with Philips Information Systems, including Director of Technology.
Mr. Brooks has been a director of VERITAS since April 1996. Since February
1999, Mr. Brooks has been General Partner of Broadview Capital Partners, a
private equity firm.
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From September 1997 to February 1999, Mr. Brooks was a managing director of
Donaldson, Lufkin & Jenrette Securities Corporation, an investment banking firm.
From 1996 to 1997, Mr. Brooks was a private investor and a consultant to
technology companies. From 1994 to 1996, Mr. Brooks served as Managing Director
and Head of Global Technology Investment Banking at the Union Bank of
Switzerland Securities, LLC. Prior to 1994, Mr. Brooks was a private investor
and consultant to high-technology firms, and served as Managing Partner of
investment banking at Robertson, Stephens & Co., an investment bank. Mr. Brooks
is a director of Paychex, Inc. a national payroll processing and business
services company, and QRS, an electronic commerce company.
Mr. Janeway has been a director of VERITAS since April 1997. Mr. Janeway
has been a Managing Director of E.M. Warburg Pincus & Co., LLC since 1988. Prior
to 1988, he served in a management capacity at F. Eberstadt & Co., Inc. Mr.
Janeway is a director of ECsoft Group, PLC, Vanstar Corporation, Maxis, Inc.,
Zilog, Inc., and Industri-Mathematik Intl. Corp.
Mr. Rizzi has been a director of VERITAS since 1987. Prior to that date, he
served as a general partner of Matrix Partners, a venture capital firm, and as
Chief Executive Officer of Elxsi, a computer company.
Mr. Pieper has been a director of VERITAS since 1992. Mr. Pieper has served
as Executive Vice President of Philips Electronics, The Netherlands, since
January 1998. From 1996 to January 1999, Mr. Pieper was President and Chief
Executive Officer of Tandem Computers Incorporated, a manufacturer of
fault-tolerant computer systems. From 1993 to 1996 he served as President and
Chief Executive Officer of Ungermann-Bass, Inc., a global data network
integrator and product supplier, and Senior Vice President of Tandem Computers
Incorporated, the parent company of Ungermann-Bass, Inc. From 1991 to 1993, he
served in various executive capacities for UNIX System Laboratories. Mr. Pieper
also serves as a director of General Magic, Inc., Computer Associates, and
Lincoln National Corporation.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In accordance with Section 16(a) of the Securities Exchange Act of 1934, as
amended, and the regulations of the Securities and Exchange Commission, VERITAS'
directors, certain officers, and greater than 10% stockholders are required to
file reports of ownership and changes in ownership with the SEC and the Nasdaq
National Market and to furnish VERITAS with copies of all such reports they
file.
Based solely on its review of the copies of such forms furnished to VERITAS
and written representations from certain reporting persons, VERITAS is unaware
of any failures during 1998 to file Forms 3, 4 or 5 or any failures to file such
forms in a timely basis.
EXECUTIVE OFFICERS
Information with respect to executive officers may be found in Item 1.
Business.
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ITEM 11. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth all compensation awarded to, earned by or
paid for services rendered to VERITAS Software Corporation in all capacities
during 1996, 1997 and 1998 by VERITAS' chief executive officer and VERITAS' four
other most highly compensated executive officers. This information includes the
dollar value of base salaries, commissions and bonus awards, the number of
shares subject to stock options granted and certain other compensation, whether
paid or deferred. VERITAS does not grant stock appreciation rights and has no
long-term compensation benefits other than stock options.
SUMMARY COMPENSATION TABLE
<TABLE>
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LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
--------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)
- --------------------------- ---- ----------- ------------- ----------------- ------------
<S> <C> <C> <C> <C> <C>
Mark Leslie................. 1998 $ 300,000 $398,765 $ 1,200 123,750
President, Chief 1997 250,000 326,400 1,200 191,248
Executive Officer 1996 230,000 170,800 0 168,750
Geoffrey W. Squire.......... 1998 240,213 236,867 0 41,250
Executive Vice President 1997 169,689 208,875 18,444 0
1996 0 0 0 0
Fred van den Bosch.......... 1998 220,000 219,321 1,200 82,500
Executive Vice 1997 160,000 140,598 1,200 112,498
President of Engineering 1996 145,000 78,082 0 50,625
Paul A. Sallaberry.......... 1998 300,350 99,691 1,200 37,500
Senior Vice President, 1997 284,170 58,485 1,200 78,748
Worldwide Sales 1996 0 0 0 0
Kenneth E. Lonchar.......... 1998 191,200 179,444 0 22,500
Chief Financial Officer 1997 114,667 133,680 0 22,498
Sr. Vice President,
Finance 1996 0 0 0 0
</TABLE>
Portions of bonuses for services rendered in fiscal year 1996, 1997 and
1998 were each paid in the following year. Share data has been restated to give
retroactive effect to a 3-for-2 stock split in the form of a stock dividend
effected on May 20, 1998. Mr. Sallaberry and Mr. Squire joined VERITAS in April
1997 when VERITAS merged with OpenVision Technologies, Inc. The compensation
amounts include sales commissions paid to Mr. Sallaberry by VERITAS in the
amount of $118,965 in 1996 and $170,837 in 1997.
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OPTION GRANTS IN 1998
The following table sets forth further information regarding the individual
grants of stock options pursuant to VERITAS' stock option plans during fiscal
1998 to each of the VERITAS named officers. The table illustrates the
hypothetical gains or "option spreads" that would exist for the options at the
end of the ten-year term of the option based on assumed annualized rates of
compound stock price appreciation of 5% and 10% from the dates the options were
granted to the end of the term. The 5% and 10% assumed rates of annual compound
stock price appreciation are mandated by rules of the Securities and Exchange
Commission and do not represent VERITAS' estimate or projection of future common
stock prices. Actual gains, if any, on option exercises will depend on the
future performance of VERITAS' common stock and overall market conditions. The
potential realizable values shown in this table may never be achieved.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF
SECURITIES TOTAL OPTIONS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO FOR OPTION TERM
OPTIONS EMPLOYEES IN EXERCISE PRICE EXPIRATION -------------------------
NAME GRANTED FISCAL YEAR ($/SHR) DATE 5% 10%
---- ---------- ------------- -------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark Leslie............ 123,750 5.4 $39.17 4/14/08 3,048,176 7,724,677
Geoffrey W. Squire..... 41,250 1.8 $39.17 4/14/08 1,016,059 2,574,892
Fred van den Bosch..... 82,500 3.6 $39.17 4/14/08 2,032,117 5,149,785
Paul A. Sallaberry..... 37,500 1.6 $39.17 4/14/08 923,690 2,340,811
Kenneth E. Lonchar..... 22,500 1.0 $39.17 4/14/08 554,214 1,404,487
</TABLE>
The exercise price of all stock options was equal to the fair market value
of VERITAS' common stock on the date of grant. Stock options vest over four
years at the rate of 1/48 per month, such vesting to accelerate in the event of
an acquisition or merger of VERITAS. The options were granted for a term of ten
years, subject to earlier termination upon termination of employment. Share and
per share data has been restated to give retroactive effect to a 3-for-2 stock
split in the form of a stock dividend in May 1998.
AGGREGATE OPTION EXERCISES IN 1998 AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the exercise
of stock options during 1998 by each of the VERITAS named officers, including
the aggregate amount of gains on the date of exercise. In addition, the table
includes the number of shares covered by both vested and unvested stock options
held on December 31, 1998 by each of the VERITAS named officers. Also reported
are values for "in the money" stock options that represent the positive spread
between the respective exercise prices of outstanding stock options and the fair
market value of the VERITAS common stock as of
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December 31, 1998. The fair market value is determined by the closing price of
VERITAS' common stock on December 31, 1998, which was $59.94 per share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING
SHARES VALUE UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON REALIZED OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
NAME EXERCISE(#) ($) YEAR-END FISCAL YEAR-END($)
---- ----------- ---------- -------------------- -------------------------
VESTED UNVESTED VESTED UNVESTED
-------- ------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark Leslie.......... 29,999 $ 940,623 378,751 337,499 $19,043,997 $12,459,417
Geoffrey W. Squire... 86,400 $1,948,165 106,895 159,355 $ 5,094,057 $ 6,791,675
Fred van den Bosch... 0 $ 0 290,801 181,312 $15,290,591 $ 6,194,667
Paul A. Sallaberry... 44,999 $1,710,374 83,617 138,661 $ 3,634,233 $ 5,306,142
Kenneth E. Lonchar... 13,706 $ 667,551 11,895 41,537 $ 413,934 $ 1,330,341
</TABLE>
Share data has been restated to give retroactive effect to a 3-for-2 stock
split in the form of a stock dividend effected in May 1998. The value realized
for option exercises is the aggregate fair market value of VERITAS common stock
on the date of exercise less the exercise price. The valuations shown above for
unexercised in-the-money options are based on the difference between the option
exercise price and the fair market value of the stock on December 31, 1998.
These values have not been, and may never be, realized.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 31, 1999, or as
otherwise specified, with respect to the beneficial ownership of VERITAS common
stock by:
- each stockholder known by VERITAS to be the beneficial owner of more
than 5% of the outstanding shares of VERITAS common stock;
- each director of VERITAS;
- the Chief Executive Officer and each of the four most highly compensated
executive officers of VERITAS named for 1998; and
- all executive officers and directors of VERITAS as a group.
The table reflects beneficial ownership as of March 31, 1999. We have
determined beneficial ownership in accordance with the rules of the Securities
and Exchange Commission. To our knowledge, the persons named in the table have
sole voting and investment power with respect to all shares shown as
beneficially owned by them subject to community property laws where applicable
unless we indicate otherwise below. However, we have not included any other
person's options for the purpose of computing percentage ownership.
On March 31, 1999, there were 48,092,431 shares of VERITAS common stock
outstanding.
Pilgrim Baxter and Associates, an institutional investment manager that
holds shares on behalf of various client accounts, shares voting power and holds
dispositive power with respect to its shares.
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<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
--------------------------------- PERCENT OF
BENEFICIAL OWNER SHARES OPTIONS TOTAL CLASS
---------------- --------- --------- --------- ----------
<S> <C> <C> <C> <C>
William H. Janeway................... 6,675,650 -- 6,675,650 13.88%
E.M. Warburg, Pincus & Co., LLC...... 6,674,150 -- 6,674,150 13.88
Warburg, Pincus & Company............ 6,664,531 -- 6,664,531 13.86
Warburg, Pincus Investors, L.P....... 6,660,650 -- 6,660,650 13.85
Janus Capital Corporation............ 5,347,915 -- 5,347,915 11.12
100 Fillmore Street, Suite 300
Denver, CO 80206
Pilgrim Baxter and Associates........ 2,703,288 -- 2,703,288 5.62
1255 Drummers Lane, Suite 300
Wayne, PA 19087
Mark Leslie.......................... 671,958 439,687 1,111,645 2.29
Geoffrey W. Squire................... 380,000 143,629 523,629 1.09
Fred van den Bosch................... 83,174 322,012 405,186 *
Paul A. Sallaberry................... 29,026 109,382 138,358 *
Joseph D. Rizzi...................... 55,083 64,968 120,051 *
Kenneth E. Lonchar................... 51,522 16,583 68,105 *
Roel Pieper.......................... -- 64,121 64,121 *
Steven Brooks........................ 4,500 43,877 48,377 *
All current VERITAS executive
officers and directors as a group
(12 persons)....................... 8,034,025 1,346,510 9,380,535 18.97%
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From January 1, 1998 to the present, there have not been any and there are
currently no proposed transactions in which the amount involved exceeded $60,000
to which VERITAS or any of its subsidiaries was or is to be a party and in which
any executive officer, director, 5% beneficial owner of VERITAS common stock or
member of the immediate family of them had or will have a direct or indirect
material interest. There are no business relationships between VERITAS and any
entity, of which a director of VERITAS is an executive officer or of which a
director of VERITAS owns equity interest in excess of 10%, involving payments
for property or services in excess of five percent of VERITAS consolidated gross
revenues for VERITAS for 1998 except as previously reported or as set forth in
Item 11 above.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mountain View, State of
California, on the 29th day of April, 1999.
VERITAS Software Corporation
Registrant
/s/ KENNETH E. LONCHAR
----------------------------------
Kenneth E. Lonchar
Senior Vice President, Finance
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
PRINCIPAL EXECUTIVE OFFICER AND DIRECTOR:
/s/ MARK LESLIE President, Chief April 29, 1999
- ----------------------------------------------------- Executive Officer and
Mark Leslie Co-Chairman of the
Board
PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING
OFFICER:
/s/ KENNETH E. LONCHAR Senior Vice April 29, 1999
- ----------------------------------------------------- President, Finance
Kenneth E. Lonchar and Chief Financial
Officer
ADDITIONAL DIRECTORS:
/s/ GEOFFREY W. SQUIRE Co-Chairman of the April 29, 1999
- ----------------------------------------------------- Board
Geoffrey W. Squire
/s/ FRED VAN DEN BOSCH Director April 29, 1999
- -----------------------------------------------------
Fred van den Bosch
/s/ STEVEN BROOKS Director April 29, 1999
- -----------------------------------------------------
Steven Brooks
/s/ WILLIAM JANEWAY Director April 29, 1999
- -----------------------------------------------------
William Janeway
Director April , 1999
- -----------------------------------------------------
Roel Pieper
/s/ JOSEPH RIZZI Director April 29, 1999
- -----------------------------------------------------
Joseph Rizzi
</TABLE>
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