<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[_] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
CITRIX SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transactions applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transactions 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 and 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:
- --------------------------------------------------------------------------------
<PAGE>
[CITRIX LETTERHEAD]
April 2, 1999
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders
of Citrix Systems, Inc. (the "Corporation") to be held at 10:00 a.m., on
Thursday, May 13, 1999, at the Fort Lauderdale Marriott North Hotel, 6650 N.
Andrews Avenue, Fort Lauderdale, Florida 33309.
At this Annual Meeting, you will be asked to elect three directors to
three-year terms and to approve an amendment to the Corporation's Amended and
Restated Certificate of Incorporation, as amended, increasing from 150,000,000
to 400,000,000 the number of authorized shares of Common Stock, par value $.001
per share, of the Corporation. The Board of Directors unanimously recommends
that you vote FOR these proposals.
Details regarding the matters to be acted upon at this meeting appear
in the accompanying Proxy Statement. Please give this material your careful
attention.
Whether or not you plan to attend the meeting, please complete, sign
and date the accompanying proxy card and return it in the enclosed postage
prepaid envelope. It is important that your shares be voted whether or not you
attend the meeting in person. If you attend the meeting, you may vote in person
even if you have previously returned your proxy card. Your prompt cooperation
will be greatly appreciated.
Very truly yours,
Mark B. Templeton
President and Chief
Executive Officer
<PAGE>
CITRIX SYSTEMS, INC.
6400 N.W. 6th Way
Fort Lauderdale, Florida 33309
_______________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 13, 1999
To the Stockholders of Citrix Systems, Inc.:
The Annual Meeting of Stockholders of Citrix Systems, Inc., a Delaware
corporation (the "Corporation"), will be held on Thursday, May 13, 1999 at 10:00
a.m., local time, at the Fort Lauderdale Marriott North Hotel, 6650 N. Andrews
Street, Fort Lauderdale, Florida 33309, for the following purposes:
1. To elect three (3) Class I directors to serve for a three-year term or
until their successors are elected and qualified.
2. To approve an amendment to the Corporation's Amended and Restated
Certificate of Incorporation, as amended, increasing from 150,000,000 to
400,000,000 the number of authorized shares of Common Stock, par value $.001 per
share, of the Corporation.
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on March 22, 1999 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.
By Order of the Board of Directors,
Mark B. Templeton
President and Chief Executive Officer
Fort Lauderdale, Florida
April 2, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER
TO ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF THE
PROXY CARD IS MAILED IN THE UNITED STATES.
<PAGE>
CITRIX SYSTEMS, INC.
6400 N.W. 6th Way
Fort Lauderdale, Florida 33309
________________________
PROXY STATEMENT
________________________
April 2, 1999
Proxies in the form enclosed with this proxy statement are solicited by the
Board of Directors of Citrix Systems, Inc., a Delaware corporation (the
"Corporation"), for use at the Annual Meeting of Stockholders to be held on
Thursday, May 13, 1999, at 10:00 a.m., local time, at the Fort Lauderdale
Marriott North Hotel, 6650 N. Andrews Avenue, Fort Lauderdale, Florida 33309, or
at any adjournments thereof (the "Meeting"). An Annual Report to Stockholders,
containing financial statements for the fiscal year ended December 31, 1998 is
being mailed together with this proxy statement to all stockholders entitled to
vote at the Meeting. This proxy statement and the form of proxy were first
mailed to stockholders on or about April 2, 1999.
The purpose of the Meeting is to elect three Class I directors to the
Corporation's Board of Directors and to approve an amendment to the
Corporation's Amended and Restated Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), increasing from 150,000,000 to 400,000,000 the
number of authorized shares of Common Stock, par value $.001 per share, of the
Corporation. Only stockholders of record at the close of business on March 22,
1999 (the "Record Date") will be entitled to receive notice of and to vote at
the Meeting. As of that date, ___________ shares of Common Stock of the
Corporation were issued and outstanding. The holders of Common Stock are
entitled to one vote per share on any proposal presented at the Meeting.
Stockholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a stockholder's right to attend the Meeting and vote in person.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Corporation, before the taking of the vote at the
Meeting, a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of the Corporation before the taking of the vote
at the Meeting or (iii) attending the Meeting and voting in person (although
attendance at the Meeting will not in and of itself constitute a revocation of a
proxy). Any written notice of revocation or subsequent proxy should be sent so
as to be delivered to Citrix Systems, Inc., 6400 N.W. 6th Way, Fort Lauderdale,
Florida 33309, Attention: Secretary, at or before the taking of the vote at the
Meeting.
The representation in person or by proxy of at least a majority of the
outstanding Common Stock entitled to vote at the Meeting is necessary to
constitute a quorum for the transaction of business. Votes withheld from any
nominee, abstentions and broker "non-votes" are counted as present or
represented for purposes of determining the presence or absence of a quorum for
the Meeting. A "non-vote" occurs when a nominee holding shares for a beneficial
owner votes on one proposal, but does not vote on another proposal because, in
respect of such other proposal, the nominee does not have discretionary voting
power and has not received instructions from the beneficial owner.
In the election of directors, the nominees receiving the highest number of
affirmative votes of the shares present or represented and entitled to vote at
the Meeting shall be elected as directors. Approval of the amendment to the
Certificate of Incorporation will require the affirmative vote of a majority of
the outstanding shares of Common Stock of the Corporation. On all other matters
being submitted to stockholders, an affirmative vote of a majority of the shares
present or represented and voting on each such matter is required for approval.
An automated system administered by the Corporation's transfer agent tabulates
the votes. The vote on each matter submitted to stockholders is tabulated
separately. Abstentions are included in the number of shares present or
represented and voting on each matter and, therefore, with respect to votes on
specific proposals, will have the effect of negative votes. Broker "non-votes"
are not so included.
<PAGE>
-2-
The persons named as attorneys-in-fact in the proxies, Mark B. Templeton
and James J. Felcyn, Jr., were selected by the Board of Directors and are
officers of the Corporation. All properly executed proxies returned in time to
be counted at the Meeting will be voted. Where a choice has been specified on
the proxy with respect to the foregoing matters, the shares represented by the
proxy will be voted in accordance with the specifications. If no such
specifications are indicated, such proxies will be voted FOR the nominees to the
Board of Directors and FOR the approval of the amendment to the Certificate of
Incorporation.
The Board of Directors knows of no other matters to be presented at the
Meeting. If any other matter should be presented at the Meeting upon which a
vote properly may be taken, shares represented by all proxies received by the
Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the proxies.
<PAGE>
-3-
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Corporation's Common Stock as of the Record Date: (i) by each
person who is known by the Corporation to beneficially own more than 5% of the
outstanding shares of Common Stock; (ii) by each director or nominee of the
Corporation; (iii) by each present or former executive officer of the
Corporation named in the Summary Compensation Table and (iv) by all directors,
executive officers and nominees of the Corporation as a group. On March 25,
1999, the Corporation effected a 2-for-1 stock split in the form of a 100% stock
dividend to stockholders of record of the Corporation's Common Stock on March
17, 1999. All share numbers in this table and elsewhere in this proxy statement
reflect such stock split.
<TABLE>
<CAPTION>
Shares Beneficially Percentage of Shares
Name of Beneficial Owner Owned (1) Beneficially Owned (1)
------------------------ ---------- ----------------------
<S> <C> <C>
Microsoft Corporation(2)............................... 4,878,798 5.64%
One Microsoft Way
Redmond, WA 98052
Morgan Stanley Dean Witter & Company(3)................ 4,677,960 5.41%
1585 Broadway
New York, NY 10036
Putnam Investments, Inc.(4)............................ 4,426,440 5.12%
One Post Office Square
Boston, MA 02109
FMR Corp. (5).......................................... 5,203,400 6.02%
83 Devonshire Street
Boston, MA 02109
AMVESCAP PLC(6)........................................ 5,359,900 6.20%
11 Devonshire Square
London ECZM 4YR
England
Roger W. Roberts(7).................................... 887,154 1.02%
Edward E. Iacobucci(8)................................. 909,506 1.04%
Mark B. Templeton(9)................................... 229,382 *
Michael W. Brown(10)................................... 52,312 *
Kevin R. Compton(11)................................... 135,712 *
Stephen M. Dow......................................... 46,458 *
Robert N. Goldman(12).................................. 50,002 *
Tyrone F. Pike(13)..................................... 145,902 *
Bruce C. Chittenden(14)................................ 16,410 *
Michael F. Passaro(15)................................. 284,132 *
John W. White.......................................... 400 *
All executive officers, directors 2,866,218 3.24%
and nominees as a group(16).........................
</TABLE>
________________________
* Represents less than 1% of the outstanding Common Stock
<PAGE>
-4-
(1) Applicable percentage of ownership as of the Record Date is based upon
_______shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission (the "Commission"), and includes voting and investment power
with respect to shares. Unless otherwise indicated below, to the knowledge
of the Corporation, all persons listed below have sole voting and
investment power with respect to their shares of Common Stock, except to
the extent authority is shared by spouses under applicable law. Pursuant
to the rules of the Commission, the number of shares of Common Stock deemed
outstanding includes shares issuable pursuant to options held by the
respective person or group which may be exercised within 60 days of the
Record Date ("presently exercisable stock options").
(2) With respect to the information relating to Microsoft Corporation, the
Corporation has relied on information supplied by such entity in response
to a written questionnaire distributed by the Corporation.
(3) With respect to information relating to Morgan Stanley Dean Witter &
Company, the Corporation has relied on information supplied by such entity
in its Schedule 13G filing with the Commission on February 2, 1999.
(4) With respect to information relating to Putnam Investments, Inc., the
Corporation has relied on information supplied by such entity in its
Schedule 13G filing with the Commission on February 4, 1999.
(5) With respect to information relating to FMR Corp., the Corporation has
relied on information supplied by such entity in its Schedule 13G filing
with the Commission on February 1, 1999.
(6) With respect to information relating to AMVESCAP PLC, the Corporation has
relied on information supplied by such entity in its Schedule 13G filing
with the Commission on February 11, 1999.
(7) Includes 704,680 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(8) Includes 489,682 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(9) Includes of 227,596 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(10) Consists of shares of Common Stock issuable pursuant to presently
exercisable stock options.
(11) Includes 90,000 shares of Common Stock issuable pursuant to presently
exercisable stock options.
(12) Consists of shares of Common Stock issuable pursuant to presently
exercisable stock options.
(13) Includes 59,436 shares of Common Stock issuable pursuant to presently
exercisable stock options. Also, includes 1,200 shares of Common Stock held
in trust for the benefit of Mr. Pike's children.
(14) Consists of shares of Common Stock issuable pursuant to presently
exercisable stock options.
(15) Includes 71,872 shares of Common Stock issuable pursuant to presently
exercisable stock options. Also, includes 900 shares of Common Stock held
in trust for the benefit of Mr. Passaro's children.
(16) Includes presently exercisable stock options to purchase an aggregate of
1,867,304 shares of Common Stock. See footnotes (7), (8), (9), (10), (11),
(12), (13), (14) and (15).
<PAGE>
-5-
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees
The size of the Board of Directors is currently fixed at nine members. The
Corporation's By-laws divide the Board of Directors into three classes. The
members of each class of directors serve for staggered three-year terms.
Messrs. Goldman, Pike and Roberts are Class I directors whose terms expire at
this Annual Meeting of Stockholders and are nominees for re-election as
directors of the Corporation. The Board of Directors is also composed of (i)
three Class II directors (Messrs. Iacobucci, Brown and White), whose terms
expire upon the election and qualification of directors at the Annual Meeting of
Stockholders to be held in 2000, and (ii) three Class III directors (Messrs.
Compton, Dow and Templeton), whose terms expire upon the election and
qualification of directors at the Annual Meeting of Stockholders to be held in
2001.
The Board of Directors has nominated and recommended that Messrs. Goldman,
Pike and Roberts, who are currently members of the Board of Directors, be
elected as Class I directors, to hold office until the Annual Meeting of
Stockholders to be held in the year 2002 or until their successors have been
duly elected and qualified or until their earlier resignation or removal. The
Board of Directors knows of no reason why the nominees whould be unable or
unwilling to serve, but if any nominee should for any reason be unable or
unwilling to serve, the proxies will be voted for the election of such other
person for the office of director as the Board of Directors may recommend in the
place of such nominee. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the nominees named below.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE NOMINEES LISTED BELOW.
<PAGE>
-6-
The following table sets forth the nominees to be elected at the
Meeting and, for each director whose term of office will extend beyond the
Meeting, the year such nominee or director was first elected a director, the
positions currently held by the nominees and each director with the Corporation,
the year each nominee's or director's term will expire and class of director of
each nominee and each director:
<TABLE>
<CAPTION>
Nominee's or Director's
Name and Year Nominee or Director Position(s) with Year Term Class of
First Became a Director the Corporation Will Expire Director
----------------------- --------------- ----------- --------
<S> <C> <C> <C>
Nominees:
Robert N. Goldman Director 1999 I
1995
Tyrone F. Pike Director 1999 I
1993
Roger W. Roberts Director 1999 I
1990
Continuing Directors:
Edward E. Iacobucci Chairman, Vice President 2000 II
1989 Strategy & Technology and
Chief Technology Officer
Michael W. Brown Director 2000 II
1997
John W. White Director 2000 II
1998
Mark B. Templeton President, Chief Executive 2001 III
1998 Officer and Director
Kevin R. Compton Director 2001 III
1991
Stephen M. Dow Director 2001 III
1989
</TABLE>
<PAGE>
-7-
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the director nominees to be elected at the
Meeting, the directors and the executive officers of the Corporation, their
ages, and the positions currently held by each such person with the Corporation.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- ---------
<S> <C> <C>
Mark B. Templeton 46 President, Chief Executive Officer and Director
Edward E. Iacobucci 45 Chairman of the Board, Vice President - Strategy & Technology,
and Chief Technical Officer
James J. Felcyn, Jr. 56 Chief Financial Officer, Treasurer, Vice President - Finance and
Administration, and Assistant Secretary
Bruce C. Chittenden 51 Vice President - Engineering
Steve L. Adams 43 Vice President - Marketing
David A.G. Jones 44 Vice President - International
William Burley 34 Vice President - Sales, North America
James P. Tarlton 50 Vice President - Worldwide Services
Marc-Andre Boisseau 34 Corporate Controller and Principal Accounting Officer
Kevin R. Compton (1)(2) 40 Director
Stephen M. Dow (1) 43 Director
Robert N. Goldman (2) 49 Director
Michael W. Brown 52 Director
John W. White 60 Director
Tyrone F. Pike 44 Director
Roger W. Roberts 54 Director
</TABLE>
____________________
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
Mark B. Templeton has served as President of the Corporation since January
1998 and as its Chief Executive Officer since January 1999. He was elected to
the Board of Directors in May 1998. Prior to January 1998, he served as Vice
President - Marketing since joining the Corporation in June 1995. From April
1994 to June 1995, Mr. Templeton served as Group Director, Corporate Marketing
for UB Networks, Inc. (formerly Ungermann-Bass, Inc.), a computer network
hardware manufacturer. From November 1993 to April 1994, he served as Executive
Vice President for Softblox, Inc., a software company. From July 1991 to
November 1993, Mr. Templeton served as Vice President, Marketing for Keyfile
Corporation, a group collaboration software company. Mr. Templeton also serves
on the Board of Directors of Active Word Systems, Inc.
Edward E. Iacobucci, co-founder of the Corporation, has served as a
director since the Corporation's inception in 1989 and as Chairman of the Board
since September 1991. From the Corporation's inception, Mr. Iacobucci served as
Chief Technical Officer and Vice President - Strategy & Technology. Mr.
Iacobucci is author of the well-known OS/2 Programmer's Guide. Prior to forming
the Corporation in 1989, Mr. Iacobucci was employed for eleven years by IBM,
where he was most recently responsible for the design and architecture of IBM PC
operating systems and led the joint IBM/Microsoft design team that conceived the
original OS/2 product. Earlier at IBM, Mr. Iacobucci had overall responsibility
for the design and architecture of the IBM network management product, NetView.
James J. Felcyn, Jr. joined the Corporation as its Chief Financial Officer,
Vice President - Finance and Administration and Treasurer in July 1994. Prior
to joining the Corporation, beginning in April 1994, Mr. Felcyn served as Chief
Financial Officer of NDL Products, Inc. ("NDL"), a manufacturer of sporting
goods. Mr. Felcyn accepted the position of Chief Financial Officer at the
request of the secured lender of NDL, and as a condition to debtor-in-possession
financing for NDL, which filed a Chapter 11 bankruptcy proceeding in the United
States Bankruptcy Court for the Southern District of Florida. Mr. Felcyn served
as Vice President - Finance of Boca
<PAGE>
-8-
Research, Inc., a manufacturer of computer peripheral products, from April 1992
to December 1993. From January 1992 to April 1992, Mr. Felcyn served as
Controller of Boca Research, Inc. From April 1991 to January 1992, Mr. Felcyn
was employed by World Omni Financial Corp., an automobile finance and leasing
company, where he served as Director of Operations Accounting. Mr. Felcyn is a
Certified Public Accountant and serves on the Board of Directors of Equinox
Systems Inc. and Smith Gardner & Associates, Inc.
Bruce C. Chittenden joined the Corporation in 1993 as Vice President -
Engineering. Prior to joining the Corporation, he served as Vice President,
Engineering and Manufacturing of Uniquest, Inc., a network software
manufacturer, from March to November 1993. From July 1991 to March 1993, Mr.
Chittenden served as Executive Vice President of Computone Corporation, a
computer peripherals manufacturer, and from April 1984 to July 1991 he served as
Vice President, Engineering of The Santa Cruz Operation, Inc., a systems
software manufacturer.
Steve L. Adams joined the Corporation in 1998 as Vice President - Marketing.
Prior to joining the Corporation, he served as Senior Vice President of
Marketing & Business Development for Mosaix, Inc., a customer management
software company, from 1996 to 1998. From 1994 to 1996, Mr. Adams served as
Vice President of Marketing, Groupware Division for Novell, Inc., a network
software company.
David A.G. Jones joined the Corporation in October 1998 as Vice President -
International. Prior to joining the Corporation, he served as President of The
Vision Factory, Inc., a developer of e-commerce software tools, from 1997 to
1998. From 1996 to 1997, he served as Vice President - International of
mFactory Inc., a developer of multimedia development software. From 1993 to
1996, Mr. Jones served as Senior Director for Apple Computer, Inc., a computer
company.
William Burley has served as Vice President - Sales, North America since
December 1998. From 1995 to 1998 he served as Director of North American Sales
for the Corporation. From 1993 to 1995 he served as Manager of North American
Sales for the Corporation.
James P. Tarlton has served as Vice-President - Worldwide Services since
joining the Corporation in August 1996. From October 1991 to August 1996, Mr.
Tarlton served as Vice President - Worldwide Services for Teleos Communications
(now Madge Networks), a telecommunications company, where he was responsible for
the development of support services worldwide.
Marc-Andre Boisseau joined the Corporation in 1995 as its Corporate
Controller. Since March 1997, Mr. Boisseau has also served as the Principal
Accounting Officer of the Corporation. Prior to joining the Corporation, from
November 1992 to September 1995, Mr. Boisseau served as Controller of Portfolio
and Investment Accounting of MIG Realty Advisors, Inc., an institutional real
estate advisor.
Kevin R. Compton has served as a director of the Corporation since March 1991.
Since 1990, Mr. Compton has served as a general partner of Kleiner Perkins
Caufield & Byers, a venture capital investment firm. From May 1985 to December
1990, Mr. Compton was the vice president and general manager of the network
systems team at Businessland, Inc., a computer retailer, and at AmeriSource
Corporation prior to its acquisition by Businessland. Mr. Compton serves on the
Board of Directors of OneWorld Systems, Digital Generations Systems, Corsair
Communications and VeriSign and is also a director of several privately-held
companies.
Stephen M. Dow has served as a director of the Corporation since 1989. Since
1983, Mr. Dow has served as a general partner of Sevin Rosen Funds, a venture
capital investment firm. Mr. Dow serves on the Board of Directors of ArQule,
Inc. and Corsair Communications and is also a director of several privately-held
companies.
Robert N. Goldman has served as a director of the Corporation since June 1995.
In November 1995, Mr. Goldman was named President and Chief Executive Officer of
Object Design, Inc., a developer of object data management software. From 1986
to August 1995, Mr. Goldman served as Chairman of the Board of Trinzic, Inc. and
its predecessor, software companies that were engaged in the development and
marketing of client/server middleware software products. Trinzic was formed by
the merger of AICorp and AION Corporation in 1992. Mr. Goldman served as AICorp
President and Chief Executive Officer from 1986 to 1992. From 1983 to 1986, Mr.
Goldman served as President and Chief Operating Officer of Cullinet Software,
Inc., a software developer. Mr. Goldman is Chairman of the Board of Directors of
SystemSoft Corporation, a developer and marketer of
<PAGE>
-9-
PCMCIA software and other system level software products, and serves on the
Board of Directors of Parametric Technology Corporation, SystemSoft Corp. and
several privately-held companies.
Michael W. Brown has served as a director of the Corporation since July 1997.
Mr. Brown served in various positions at Microsoft Corporation from 1989 through
January 1998, including as Chief Financial Officer until July 30, 1997. Mr.
Brown is a member of the Board of Governors of the National Association of
Security Dealers and Chairman of the Board of Directors of The Nasdaq National
Market. Mr. Brown also serves on the Board of Directors of Wang Laboratories
Inc. and Adminstaff, Inc.
John W. White has served as a director of the Corporation since 1998. From
March 1994 to August 1998, Mr. White served as Vice President and Chief
Information Officer at Compaq Computer Corporation, a computer company and
supplier of computer systems. Prior to joining Compaq, Mr. White spent more
than 28 years at Texas Instruments, a diversified electronics company, most
recently as President of the Information Technology Group. Prior to his tenure
at Texas Instruments, Mr. White worked at Electronic Data Systems Corporation, a
technology based professional services firm. Mr. White serves on the Board of
Directors of Metasolv and Fast Software.
Tyrone F. Pike has served as a director of the Corporation since 1993. Mr.
Pike is CEO, President and Chairman of SwitchSoft Systems, Inc., a network
management software company, which he founded in August 1996. From January 1994
to August 1996, Mr. Pike served in various positions at UB Networks, Inc., a
computer network hardware manufacturer, including Senior Vice President and
Chief Technical Officer from April 1995 to August 1996, Senior Vice President
and General Manager Network Products Division from August 1994 to April 1995,
and Senior Vice President and General Manager Network Services Division from
January to August 1994. Prior to joining UB Networks, Mr. Pike served as a
partner of Pike Associates, a consulting firm, from September 1992 to January
1994. From March to September 1992, Mr. Pike served as President and CEO of
Global Village Communications, Inc., a Macintosh software and hardware supplier.
From May 1991 to June 1992, he served as Manager, Strategic Planning & Business
Development of Intel Corporation, a manufacturer of computer chips. From April
1983 to May 1991, Mr. Pike served as Founder, Chairman and President of
LANSystems, Inc., a local area network company and a network management software
provider, of which he served as a director until February 1994. Mr. Pike serves
on the Board of Directors for Kaspia Systems, Inc. and Puma Technology.
Roger W. Roberts has served as a director since joining the Corporation in
June 1990. He also served as Chief Executive Officer of the Corporation from
June 1990 until December 1998 and served as President of the Corporation from
June 1990 until January 1998. Prior to joining the Corporation, Mr. Roberts was
employed for over twenty years by Texas Instruments, a diversified electronics
company, where he held technical, marketing and general management positions.
Most recently at Texas Instruments, Mr. Roberts was Director of Marketing for
the Peripheral Products Division, responsible for the MicroLaser printers and
TravelMate notebooks.
Executive officers of the Corporation are elected by the Board of Directors on
an annual basis and serve until their successors have been duly elected and
qualified.
<PAGE>
-10-
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met thirteen times and took action by unanimous written
consent one time during the fiscal year ended December 31, 1998. Except for Mr.
Pike (who did not attend five out of thirteen meetings of the Board of
Directors), each of the directors attended at least 75% of the total number of
meetings of the Board of Directors and the committees on which he served during
fiscal 1998. The Audit Committee of the Board of Directors, of which Messrs.
Compton and Goldman are currently members, reviews with the independent
accountants and management the annual financial statements and independent
auditors' opinion, reviews the results of the audit of the Corporation's
financial statements by the independent auditors, recommends the retention of
the independent auditors to the Board of Directors and periodically reviews the
Corporation's accounting policies and internal accounting and financial
controls. The Audit Committee met one time during the fiscal year ended
December 31, 1998. The Compensation Committee, whose members currently are
Messrs. Compton and Dow, is responsible for administering the Corporation's
stock ownership plans and for reviewing and approving compensation matters
concerning the executive officers of the Corporation. The Compensation
Committee met three times during the fiscal year ended December 31, 1998. The
Board of Directors does not currently have a standing nominating committee.
<PAGE>
-11-
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND OFFICERS
Executive Compensation Summary
The following table sets forth summary information concerning the compensation
paid or earned for services rendered to the Corporation in all capacities during
the fiscal years ended December 31, 1998, 1997 and 1996 to (i) the Corporation's
Chief Executive Officer during 1998 and (ii) each of the other four most highly
compensated executive officers of the Corporation who received total annual
salary and bonus in excess of $100,000 in fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Awards (3)
Annual Compensation -----------
------------------------------------------- Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary ($) Bonus ($)(1) Compensation ($)(2) Options (#) Compensation ($)
-------- ---- ---------- ------------ ------------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Mark B. Templeton (4).......... 1998 205,000 137,128 -- 300,000 --
President, Chief Executive 1997 160,000 90,000 -- 112,500 --
Officer and Director 1996 140,000 69,000 -- 150,000 --
Edward E. Iacobucci............ 1998 200,000 101,000 -- 150,000 66,259 (5)
Chairman of the Board, 1997 175,000 85,000 -- 225,000 --
Vice President-- 1996 150,000 75,000 -- 300,000 --
Strategy & Technology
and Chief Technical
Officer
Michael F. Passaro............. 1998 175,000 66,950 120,000 -- --
Vice President-- 1997 150,000 75,000 100,000 75,000 --
Worldwide Sales 1996 130,000 12,000 150,000 75,000 --
Bruce C. Chittenden............ 1998 170,000 94,770 -- 80,000 --
Vice President-- 1997 150,000 75,000 -- 112,500 --
Engineering 1996 130,000 64,500 -- 150,000 --
Roger W. Roberts (6)........... 1998 230,000 154,590 -- -- --
Former Chief Executive 1997 200,000 125,000 -- 225,000 --
Officer and Director 1996 165,000 105,000 -- 300,000 --
</TABLE>
____________________
(1) Bonuses are reported in the year earned, even if actually paid in a
subsequent year.
(2) Consists of amounts accrued pursuant to commissions.
(3) The Corporation did not grant any restricted stock awards or stock
appreciation rights or make any long term incentive plan payouts during the
fiscal years ended December 31, 1998, December 31, 1997 and December 31,
1996.
(4) Mr. Templeton was appointed Chief Executive Officer of the Corporation in
January 1999 and President of the Corporation in January 1998.
(5) Consists on non-reimbursed business expenses.
(6) Mr. Roberts served as President of the Corporation until January 1998 and
as Chief Executive Officer of the Corporation until December 31, 1998.
<PAGE>
-12-
Option Grants in Last Fiscal Year
The following table sets forth each grant of stock options made during the
year ended December 31, 1998 pursuant to the Corporation's 1995 Stock Plan to
each of the executive officers named in the Summary Compensation Table (the
"Named Executive Officers"). The Corporation did not grant any stock options
pursuant to the Corporation's 1989 Stock Option Plan or any stock appreciation
rights to the Named Executive Officers during the fiscal year ended December 31,
1998.
<TABLE>
<CAPTION>
Individual Grants
-------------------------------------------------- Potential Realizable
% of Total Value at Assumed
Number of Options Annual Rates of
Securities Granted to Stock Price Appreciation
Underlying Employees Exercise for Option Term (2)
Options in Fiscal Price(1) Expiration --------------------------
Name Granted(#) Year ($/Share) Date 5%($) 10%($)
- ----- ---------- ---------- -------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Mark B. Templeton................... 300,000 3.55 29.00 4/24/08 5,471,383 13,865,559
Edward E. Iacobucci................. 150,000 1.77 29.00 4/24/08 2,735,692 6,932,780
Michael F. Passaro.................. -- -- -- -- -- --
Bruce C. Chittenden................. 80,000 0.95 30.69 8/3/08 1,543,936 3,912,638
Roger W. Roberts.................... -- -- -- -- -- --
</TABLE>
________________
(1) The exercise price per share of each option was determined by the
Compensation Committee to be equal to the fair market value per share of
Common Stock on the date of grant.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the
Corporation's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Corporation's estimate of future stock
price growth. Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the timing of such exercises and the future
performance of the Corporation's Common Stock. There can be no assurance
that the rates of appreciation assumed in this table can be achieved or that
the amounts reflected will be received by the individuals.
<PAGE>
-13-
Aggregate Option Exercises and Year-End Values
The following table sets forth, for each of the Named Executive Officers,
information with respect to the exercise of stock options during the year ended
December 31, 1998 and the year-end value of unexercised options.
<TABLE>
<CAPTION>
Shares Numbers of Unexercised Value of Unexercised
Acquired Options at December In-the-Money Options at
on Value 31, 1998 December 31, 1998
Name Exercise (#) Realized($)(1) Vested/Unvested Vested/Unvested($)(2)
---- ------------ ----------------- ----------------------- -------------------------
<S> <C> <C> <C> <C>
Mark B. Templeton................... 116,000 3,744,878 105,720 / 487,042 3,927,896 / 13,042,083
Edward E. Iacobucci................. -- -- 408,434 / 414,068 16,384,264 / 12,053,500
Michael F. Passaro.................. 180,004 5,552,458 166,872 / -- 7,118,675 / --
Bruce C. Chittenden................. 171,668 3,807,954 25,130 / 212,038 849,363 / 5,989,549
Roger W. Roberts.................... 305,004 8,834,315 770,932 / 264,068 33,933,521 / 9,123,812
</TABLE>
_____________
(1) Amounts disclosed in this column were calculated based on the difference
between the fair market value of the Corporation's Common Stock on the date
of exercise and the exercise price of the options in accordance with
regulations promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and do not reflect amounts actually received
by the named officers.
(2) Value is based on the difference between the option exercise price and the
fair market value at December 31, 1998, the fiscal year-end ($48.53 per
share), multiplied by the number of shares underlying the option.
Stock Plans
The Corporation currently has three employee stock ownership plans:
the 1989 Stock Option Plan, the 1995 Stock Plan and the 1995 Employee Stock
Purchase Plan. The 1989 Stock Option Plan, the 1995 Stock Plan and the 1995
Employee Stock Purchase Plan are all administered by the Compensation Committee
of the Board of Directors. The 1989 Stock Option Plan provides for the grant of
incentive stock options and non-statutory stock options to employees, directors
and consultants of the Corporation to purchase up to 12,628,272 shares of Common
Stock. The terms of such options, including the persons to whom options will be
granted, the type of option to be granted (incentive or non-statutory), the
number of shares to be covered by each option and the terms and conditions upon
which an option may be granted, are generally determined by the Compensation
Committee. As of the Record Date, options to purchase an aggregate of
________shares of Common Stock were issued and outstanding under the 1989 Stock
Option Plan, all of which were then exercisable. The Corporation does not
intend to grant any additional options under the 1989 Stock Option Plan.
Under the terms of the Corporation's 1995 Stock Plan, the Corporation
is authorized to make stock awards, provide eligible individuals with the
opportunity to purchase stock, grant incentive stock options and grant non-
statutory stock options (collectively, the "Stock Rights") to employees,
consultants, directors and officers of the Corporation. The 1995 Stock Plan
provides for the issuance of up to 18,000,000 shares, plus, effective on January
1, 1996, on January 1 of each year, a number of shares of Common Stock equal to
five percent (5%) of the total number of shares of Common Stock issued and
outstanding as of December 31 of the preceding year. Notwithstanding the
foregoing, no more than 30,000,000 shares of Common Stock may be issued pursuant
to the exercise of incentive stock options granted under the 1995 Stock Plan.
The terms of such Stock Rights, including number of shares subject to each Stock
Right, when the Stock Right become exercisable, the exercise or purchase price
of the Stock Right, the duration of the Stock Right and the time, manner and
form of payment upon exercise of a Stock Right, are generally determined by the
Compensation Committee. As of the Record Date, options to purchase an aggregate
of ________shares of Common Stock were issued and outstanding under the 1995
Stock Plan, of which options for approximately ________shares were then
exercisable.
The 1995 Employee Stock Purchase Plan provides for the issuance of a
maximum of 4,500,000 shares of Common Stock pursuant to the exercise of
nontransferable options granted to participating employees. Under the 1995
Employee Stock Purchase Plan, eligible employees of the Corporation may
participate in semi-annual plan offerings in which payroll deductions may be
used to purchase shares of Common Stock. The purchase price of such shares is
the lower of 85% of the fair market value of the Common Stock on the day the
offering commences
<PAGE>
-14-
or 85% of the fair market value of the Common Stock on the day the offering
terminates. As of the Record Date, 100,284 shares of Common Stock had been
purchased under the 1995 Employee Stock Purchase Plan.
Report of Compensation Committee of the Board of Directors about Executive
Compensation
This report is submitted by the Compensation Committee of the Board of
Directors, which administered the Corporation's executive compensation program
during the fiscal year ended December 31, 1998. The Compensation Committee of
the Board of Directors is currently comprised of Messrs. Compton and Dow, two
non-employee directors of the Corporation. Pursuant to authority delegated by
the Board of Directors, the Compensation Committee is responsible for reviewing
and administering the Corporation's stock ownership plans and reviewing and
approving compensation matters concerning the executive officers of the
Corporation.
Overview and Philosophy. The Corporation uses its compensation
program to achieve the following objectives:
. To provide compensation that attracts, motivates and retains the
best talent and highest caliber people to serve the
Corporation's customers and achieve its strategic objectives.
. To align management's interest with the success of the
Corporation.
. To align management's interest with stockholders by including
long-term equity incentives.
. To increase profitability of the Corporation and, accordingly,
increase stockholder value.
Compensation under the executive compensation program is
comprised of cash compensation in the form of base salary and, in the case of
certain executive officers, annual incentive bonuses, and long-term incentive
awards in the form of stock option grants. In addition, the compensation program
is comprised of various benefits, including medical and insurance plans, the
Corporation's 401(k) Plan, the 1995 Stock Plan and the 1995 Employee Stock
Purchase Plan, which plans are generally available to all employees of the
Corporation.
Base Salary. Compensation levels for each of the Corporation's
executive officers, including the Chief Executive Officer, are generally set
within the range of salaries that the Compensation Committee believes are paid
to executive officers with comparable qualifications, experience and
responsibilities at similar companies. In setting compensation levels, the
Compensation Committee takes into account such factors as (i) the Corporation's
past financial performance and future expectations, (ii) individual performance
and experience and (iii) past salary levels. The Compensation Committee does not
assign relative weights or rankings to these factors, but instead makes a
determination based upon the consideration of all of these factors as well as
the progress made with respect to the Corporation's long-term goals and
strategies. Generally, salary decisions for the Corporation's executive officers
are made near the beginning of each calendar year.
Fiscal 1998 base salaries were determined by the Compensation
Committee after considering the base salary level of the executive officers in
prior years, and taking into account for each executive officer the amount of
base salary as a component of total compensation. Base salary, while reviewed
annually, is only adjusted as deemed necessary by the Compensation Committee in
determining total compensation to each executive officer. Base salary levels for
each of the Corporation's executive officers, other than the Chief Executive
Officer, were also based upon evaluations and recommendations made by the Chief
Executive Officer.
Incentive Compensation. The Compensation Committee determined
the amount of incentive compensation paid to each of the executive officers in
fiscal 1998 based upon a consideration of a number of factors which it deemed
relevant to the executive officer's performance. These factors in 1998 included
the Corporation's sales growth in 1998, the increase in the Corporation's
profitability during 1998, the successful development and shipment of the
Corporation's MetaFrame product line and the executive officer's individual
performance.
Stock Options. The Compensation Committee believes that long-
term incentive compensation, in the form of stock options, helps to align the
interests of management and stockholders and enables executives to develop a
long-term stock ownership in the Corporation. In addition to an executive's past
performance, the Corporation's desire to retain an individual is of paramount
importance in the determination of stock option grants.
<PAGE>
-15-
When establishing stock option grant levels for executive officers,
the Compensation Committee considered the existing levels of stock ownership,
previous grants of stock options, vesting schedules of previously granted
options and the current stock price. Options granted in fiscal 1998 were
granted at an exercise price per share equal to the fair market value of the
Common Stock, as determined by the Compensation Committee. The Compensation
Committee reviews option grants to executive officers on an annual basis and
considers the level of outstanding options as a factor in its determinations
with respect to overall compensation for each of the executive officers. For
additional information regarding the grant of options, see the table under the
heading "Option Grants in Last Fiscal Year."
Other Benefits. The Corporation also has various broad-based employee
benefit plans. Executive officers participate in these plans on the same terms
as eligible, non-executive employees, subject to any legal limits on the amounts
that may be contributed or paid to executive officers under these plans. The
Corporation offers a stock purchase plan, under which employees may purchase
Common Stock at a discount, and a 401(k) plan, which allows employees to invest
in a wide array of funds on a pre-tax basis. The Corporation also maintains
insurance and other benefit plans for its employees.
Chief Executive Officer's Compensation. In 1998, the Corporation's
then Chief Executive Officer, Roger W. Roberts, received salary compensation of
$230,000. The increase of Mr. Roberts salary from $200,000 to $230,000 was
based on an assessment of salaries believed by the Board of Directors to be paid
to chief executive officers at similar companies, as well as an assessment of
Mr. Roberts' qualifications, performance and expected contributions to the
Corporation's planned growth during the year. Mr. Roberts also received a cash
bonus of $154,590 based on an assessment of the factors set forth in "Incentive
Compensation," above.
Tax Deductibility of Executive Compensation. In general, under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
the Corporation cannot deduct, for federal income tax purposes, compensation in
excess of $1,000,000 paid to certain executive officers. This deduction
limitation does not apply, however, to compensation that constitutes "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and the regulations promulgated thereunder. The Corporation has considered the
limitations on deductions imposed by Section 162(m) of the Code, and it is the
Corporation's present intention that, for so long as it is consistent with its
overall compensation objective, substantially all tax deductions attributable to
executive compensation will not be subject to the deduction limitations of
Section 162(m) of the Code.
Respectfully submitted by
the Compensation Committee
Kevin R. Compton
Stephen M. Dow
Compensation Committee Interlocks and Insider Participation
The members of the Committee are Messrs. Compton and Dow. No member
of the Committee was at any time during the past year an officer or employee of
the Corporation or any of its subsidiaries, was formerly an officer of the
Corporation or any of its subsidiaries, or had any relationship with the
Corporation requiring disclosure herein.
During the last year, no executive officer of the Corporation served
as (i) a member of the compensation committee (or other committee of the Board
of Directors performing equivalent functions or, in the absence of any such
committee, the entire Board of Directors) of another entity, one of whose
executive officers served on the Compensation Committee of the Corporation; (ii)
a director of another entity, one of whose executive officers served on the
Compensation Committee of the Corporation; or (iii) a member of the compensation
committee (or other committee of the Board of Directors performing equivalent
functions or, in the absence of any such committee, the entire Board of
Directors) of another entity, one of whose executive officers served as a
director of the Corporation.
<PAGE>
-16-
Compensation of Directors
Employee Directors do not receive cash compensation for their service
as members of the Board of Directors. Non-employee Directors receive a fee of
$1,500 for each meeting of the Board of Directors that they attend, $200 for
each meeting of the Board of Directors that they participate in via telephone,
and $500 for each committee meeting that they attend. Non-employee Directors
will be reimbursed for their reasonable out-of-pocket expenses incurred in
attending such meetings.
Non-employee directors are also eligible for participation in the 1995
Non-Employee Director Stock Option Plan. The 1995 Non-Employee Director Stock
Option Plan provides for the grant of options to purchase a maximum of 1,800,000
shares of Common Stock to non-employee directors of the Corporation. The 1995
Non-Employee Director Stock Option Plan authorizes the grant to each director
who is not an employee of the Corporation and who is first elected as a director
after the date of the Corporation's initial public offering, an option to
purchase 90,000 shares of Common Stock. Each non-employee director will also
receive, on each three-year anniversary of such director's first election to the
Board of Directors, an option to purchase 90,000 shares of Common Stock,
provided that such director has continuously served on the Board of Directors
during such three-year period. The exercise price per share for all options
granted under the 1995 Non-Employee Director Stock Option Plan will be equal to
100% of the fair market value per share of the Common Stock as of the date of
grant. As of the Record Date, 540,000 options had been granted under the 1995
Non-Employee Director Stock Option Plan, of which options for approximately
187,690 shares were then exercisable.
Employment Agreement
The Corporation and Roger W. Roberts, a member of the Board of
Directors and the former President and Chief Executive Officer of the
Corporation, have entered into an employment agreement effective as of January
1, 1999 pursuant to which Mr. Roberts is employed as Employee Advisor. Under
the terms of the employment agreement, Mr. Roberts receives a base salary of
$120,000 and an annual performance bonus of up to $80,000, payable at the
discretion of the Chief Executive Officer of the Corporation. Mr. Roberts is
entitled to participate in the benefit plans that may be provided from time to
time to the Corporation's employees. In the event that Mr. Roberts is
terminated without cause, he will receive an amount equivalent to the base
salary and bonus he would have received during the 90 days post-termination of
his employment, plus Mr. Roberts shall receive the normal post-termination
benefits in accordance with the Corporation's retirement, insurance and other
benefit plans or arrangements; provided, however, that the Corporation shall
continue to provide Mr. Roberts with coverage under its health benefit plans
until the 91st day following the date that notice of termination is given. If
Mr. Roberts is terminated with cause, he will not be entitled to receive any
payments or benefits after the termination, except for such amounts as are
required to be paid under applicable law and the normal post-termination
benefits under the Corporation's benefit plans. The employment agreement
terminates on December 31, 1999, except that it may be extended for one or more
terms by the Chief Executive Officer of the Corporation.
<PAGE>
-17-
Stock Performance Graph
The Stock Price Performance Graph set forth below compares the yearly
change in the cumulative total stockholder return on the Corporation's Common
Stock during the period from the Corporation's initial public offering on
December 8, 1995 through December 31, 1998, with the cumulative total return on
the Center for Research in Securities Prices Index for the Nasdaq Stock Market
National Market Index ("Nasdaq National Market Index") and the Prepackaged
Software (SIC Code 7372) Index ("Prepackaged Software Index"). The comparison
assumes $100 was invested on December 8, 1995 in the Corporation's Common Stock,
in the Nasdaq National Market Index and the Prepackaged Software Index and
assumes reinvestment of dividends, if any.
Comparison of Five Year/1/ Cumulative Total Return Among
Citrix Systems, Inc., Nasdaq National Market Index
and Prepackaged Software Index
[STOCK PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
December 8, 1995 December 31, December 31, 1997 December 31, 1998
1996
<S> <C> <C> <C> <C>
Citrix Systems, Inc. 100.00 260.42 506.67 970.14
Prepackaged Software 100.00 129.27 164.54 276.49
Nasdaq 100.00 123.81 151.45 213.61
</TABLE>
_____________
(1) Prior to December 8, 1995 the Corporation's Common Stock was not publicly
traded. Comparative data is provided only for the period since that date.
The stock price performance shown on the graph above is not necessarily
indicative of future price performance. Information used in the graph was
obtained from Media General Financial Services, Inc., a source believed to
be reliable, but the Corporation is not responsible for any errors or
omissions in such information.
<PAGE>
-18-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On May 9, 1997, the Corporation and Microsoft Corporation ("Microsoft")
entered into a License, Development and Marketing Agreement, as amended (the
"Development Agreement"), which provides for the licensing to Microsoft of
certain of the Corporation's multi-user software enhancements to Microsoft's
Windows NT Server and for the cooperation between the parties for the
development of certain future multi-user versions of Microsoft Windows NT
Server, Terminal Server Edition ("NT Terminal Server"). The Development
Agreement also provides for each party to develop its own enhancements to the
jointly developed products which may provide access to the NT Terminal Server
base platform from a wide variety of computing devices. In June 1998, the
Corporation released its MetaFrame product, a Corporation-developed enhancement
that implements the Independent Computing Architecture (ICA) on NT Terminal
Server, which provides NT Terminal Server with capabilities similar to those
currently offered in the WinFrame product line. Pursuant to the terms of the
Development Agreement, in May 1997, the Corporation received an aggregate of $75
million as a non-refundable royalty payment and for engineering and support
services to be rendered by the Corporation. Under the terms of the Development
Agreement, the Corporation is entitled to receive payments of an additional $100
million, in quarterly payments, a portion of which has already been received.
In addition, Microsoft and the Corporation have agreed to engage in certain
joint marketing efforts to promote use of Windows NT Server-based multi-user
software and the Corporation's ICA protocol. Additionally, subject to the terms
of the Development Agreement, Microsoft has agreed to endorse only the
Corporation's ICA protocol as the preferred way to provide multi-user Windows
access for devices other than Windows client devices until at least November
1999 and the Corporation shall be entitled to license its WinFrame technology
based on Windows NT 3.51 until at least September 30, 2001.
In connection with the Development Agreement, the Corporation has
recognized $8.5 million of royalty expense in cost of revenues during 1998 and
had accrued royalties and other accounts payable of $2.9 million at December 31,
1998.
The Corporation has adopted a policy that all transactions between the
Corporation and its officers, directors, principal shareholders and their
affiliates shall be on terms no less favorable to the Corporation than could be
obtained by the Corporation from unrelated third parties, and shall be approved
by a majority of the outside independent and disinterested directors.
<PAGE>
-19-
PROPOSAL 2
AMENDMENT OF THE CORPORATION'S
CERTIFICATE OF INCORPORATION
By a Board of Directors vote dated March 1, 1999, the Board of Directors
recommended to the stockholders that the Corporation amend the Corporation's
Amended and Restated Certificate of Incorporation, as amended (the "Certificate
of Incorporation"), to increase the number of authorized shares of Common Stock,
par value $.001 per share, from 150,000,000 to 400,000,000 shares. Shares of
the Corporation's Common Stock, including the additional shares proposed for
authorization, do not have preemptive or similar rights.
As of the Record Date, there were approximately __________shares issued and
outstanding and approximately ____________shares reserved for future issuance
pursuant to outstanding options granted under the Corporation's stock plans. If
the amendment to the Certificate of Incorporation is approved, the Board of
Directors will have the authority to issue approximately ___________additional
shares of Common Stock without further stockholder approval. The Board of
Directors believes the authorized number of shares of Common Stock should be
increased to provide sufficient shares for such corporate purposes as may be
determined by the Board of Directors to be necessary or desirable. These
purposes may include, without limitation: acquiring other businesses in
exchange for shares of the Corporation's Common Stock; entering into
collaborative research and development arrangements with other companies in
which Common Stock or the right to acquire Common Stock are part of the
consideration; facilitating broader ownership of the Corporation's Common Stock
by effecting a stock split or issuing a stock dividend; raising capital through
the sale of Common Stock or securities convertible into Common Stock; and
attracting and retaining valuable employees by the issuance of additional stock
options, including additional shares reserved for future option grants under the
Corporation's existing stock plan. The Board of Directors considers the
authorization of additional shares of Common Stock advisable to ensure prompt
availability of shares for issuance should the occasion arise.
The issuance of additional shares of Common Stock could have the effect of
diluting earnings per share and book value per share, which could adversely
affect the Corporation's existing stockholders. In addition, the Corporation's
authorized but unissued shares of Common Stock could be used to make a change in
control of the Corporation more difficult or costly. Issuing additional shares
of Common Stock could have the effect of diluting stock ownership of the persons
seeking to obtain control of the Corporation. The Corporation is not aware,
however, of any pending or threatened efforts to obtain control of the
Corporation, and the Board of Directors has no current intention to use the
additional shares of Common Stock in order to impede a takeover attempt.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" THE APPROVAL OF THE AMENDMENT
TO THE CORPORATION'S CERTIFICATE OF INCORPORATION
<PAGE>
-20-
SECTION 16 REPORTING
Section 16(a) of the Exchange Act, requires the Corporation's directors,
executive officers and holders of more than 10% of the Corporation's Common
Stock (collectively, "Reporting Persons") to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Stock of the
Corporation. Such persons are required by regulations of the Commission to
furnish the Corporation with copies of all such filings. Based on its review of
the copies of such filings received by it with respect to the fiscal year ended
December 31, 1998 and written representations from certain Reporting Persons,
the Corporation believes that all Section 16(a) filing requirements were
complied with during the fiscal year ended December 31, 1998, except for the
following: Roger W. Roberts, the Corporation's Chief Executive Officer during
1998 and a current director, filed a Form 4 on November 12, 1998 which reported
transactions that took place in October 1998; Mark B. Templeton, President and
current Chief Executive Officer, filed a Form 4 on December 17, 1998 which
reported transactions that took place in October 1998; Bruce C. Chittenden, Vice
President Engineering, filed a Form 4 on November 12, 1998 which reported
transactions that took place in October 1998; Barry J. Dockswell, former Vice
President Business Development, filed a Form 4 on November 12, 1998 which
reported transactions that took place in October 1998 and Marc-Andre Boisseau,
Corporate Controller and Principal Accounting Officer, filed a Form 4 on
November 12, 1998 which reported transactions that took place in October 1998.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the proxy statement to
be furnished to all Stockholders entitled to vote at the 2000 Annual Meeting of
Stockholders of the Corporation or otherwise intended to be brought up at such
Annual Meeting must be received at the Corporation's principal executive offices
between November 4, 1999 and December 4, 1999. In order to curtail controversy
as to the date on which a proposal was received by the Corporation, it is
suggested that proponents submit their proposals by Certified Mail, Return
Receipt Requested to Citrix Systems, Inc., 6400 N.W. 6th Way, Fort Lauderdale,
FL 33309, Attention: Secretary.
INDEPENDENT AUDITORS
The Board of Directors has retained the firm of Ernst & Young LLP ("Ernst &
Young"), independent certified public accountants, to serve as auditors for the
fiscal year ending December 31, 1999. Ernst & Young has served as the
Corporation's accountants since 1989. It is expected that a member of Ernst &
Young will be present at the meeting with the opportunity to make a statement if
so desired and will be available to respond to appropriate questions.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Corporation and,
in addition to soliciting stockholders by mail through its regular employees,
the Corporation may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Corporation
registered in the names of a nominee and, if so, will reimburse such banks,
brokers and other custodians, nominees and fiduciaries for their reasonable out-
of-pocket costs. Solicitation by officers and employees of the Corporation may
also be made of some stockholders in person or by mail, telephone or telegraph
following the original solicitation. The Corporation may retain a proxy
solicitation firm to assist in the solicitation of proxies. The Corporation
will bear all reasonable solicitation fees and expenses if such a proxy
solicitation firm is retained.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Vote by Telephone Vote by Internet
- ------------------------------------------- ---------------------------------------------------
It's fast, convenient, and immediate! It's fast, convenient, and your vote is immediately
Call Toll-Free on a Touch-Tone Phone confirmed as posted.
1-877-PRX-VOTE (1-877-779-8683).
Follow these four easy steps: Follow these four easy steps:
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement/Prospectus and Proxy Card. Statement/Prospectus and Proxy Card.
2. Call the toll-free number 2. Go to the Website
1-877-PRX-VOTE (1-877-779-8683). For http://www.eproxyvote.com/ctxs
shareholders residing outside the
United States call collect
on a touch-tone phone 3. Enter your 14-digit Voter Control Number
1-201-536-8073. located on your Proxy Card above your name.
3. Enter your 14-digit Control Number located on 4. Follow the instructions provided.
your Proxy Card above your name.
4. Follow the recorded instructions.
Your vote is important! Your vote is important!
Call 1-877-PRX-VOTE anytime! Go to http://www.eproxyvote.com/ctxs anytime!
</TABLE>
Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE
<PAGE>
[1464-CITRIX SYSTEMS, INC.] [FILE: CIT09A.ELX] [VERSION - 2]
[3/16/99]
[X] Please mark
votes as in
this example.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR IF
NO DIRECTION IS GIVEN, WILL BE VOTED "FOR" THE ELECTION OF THE
DIRECTORS AND "FOR" THE PROPOSAL IN ITEM 2 AND 3.
<TABLE>
<S> <C>
1. To elect three members to the Board of Directors 2. To approve an amendment to the Corporation's
to serve for three year terms as Class I Directors: Amended and Restated Certificate of
Nominees: (01) Robert N. Goldman, (02) Tyrone F. Pike Incorporation as amended, increasing from
and (03) Roger W. Roberts 150,000,000 to 400,000,000 the number of
authorized shares of Common Stock, par
value $.001 per share, of the Corporation.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
[_] FOR [_] WITHHELD MARK HERE [_] FOR AGAINST ABSTAIN
ALL FROM ALL IF YOU [_] [_] [_]
NOMINEES NOMINEES PLAN TO
ATTEND THE
MEETING
</TABLE>
<TABLE>
<S> <C>
MARK HERE [_]
FOR
ADDRESS
CHANGE AND
NOTE BELOW
[_] ________________________________
For all nominees except as noted
above
</TABLE>
<TABLE>
<S> <C>
3. To transact such other business as
may properly come before the meeting
or any adjournment or adjournments
thereof.
FOR AGAINST ABSTAIN
[_] [_] [_]
(This proxy should be marked, dated
and signed by the stockholder(s)
exactly as his or her name(s) appears
hereon, and returned promptly in the
enclosed envelope. Persons signing in
a fiduciary capacity should so
indicate. If shares are held by joint
tenants or as community property, both
should sign.)
</TABLE>
<TABLE>
<S> <C> <C> <C>
Signature:_________________________________ Date:__________ Signature:_________________________________ Date:__________
</TABLE>
