<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Citrix Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Citrix Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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April 7, 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.
If you are a stockholder of record, please vote in one of the following
three ways whether or not you plan to attend the meeting: (1) by completing,
signing and dating the accompanying proxy card and returning it in the
enclosed postage-prepaid envelope, (2) by using the toll-free telephone number
listed on the proxy card, or (3) by voting on the Internet at the address
listed on the proxy card. 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 or voted by
phone or on the Internet. 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 vote
in one of the following three ways whether or not you plan to attend the
meeting: (1) by completing, signing and dating the accompanying proxy card and
returning it in the postage-prepaid envelope enclosed for that purpose, (2) by
using the toll-free number listed on the proxy card, or (3) by voting on the
Internet at the address listed on the proxy card. If you attend the meeting,
you may vote in person even if you have previously returned your proxy card or
voted by telephone or on the Internet.
By Order of the Board of Directors,
Mark B. Templeton
President and Chief
Executive Officer
Fort Lauderdale, Florida
April 7, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE VOTE USING THE
TOLL-FREE TELEPHONE NUMBER LISTED IN THE ENCLOSED PROXY CARD, VOTE ON THE
INTERNET AT THE ADDRESS LISTED ON THE PROXY CARD, OR 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 7, 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 7, 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, 86,822,930 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 one of the following three ways whether
or not you plan to attend the meeting: (1) by completing, signing and dating
the accompanying proxy card and returning it in the postage-prepaid envelope
enclosed for that purpose, (2) by using the toll-free telephone number listed
on the proxy card, or (3) by voting on the Internet at the address listed on
the proxy card. If you attend the meeting, you may vote in person even if you
have previously returned your proxy card or voted by phone or on the Internet.
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 or the vote by telephone or on the
Internet 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>
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.
2
<PAGE>
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 5.62%
One Microsoft Way
Redmond, WA 98052
Morgan Stanley Dean Witter &
Company(3)......................... 4,677,960 5.39%
1585 Broadway
New York, NY 10036
Putnam Investments, Inc.(4)......... 4,426,440 5.10%
One Post Office Square
Boston, MA 02109
FMR Corp.(5)........................ 5,203,400 6.00%
83 Devonshire Street
Boston, MA 02109
AMVESCAP PLC(6)..................... 5,359,900 6.17%
11 Devonshire Square
United Kingdom ECZM 4YR
Roger W. Roberts(7)................. 887,154 1.01%
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
and nominees as a group(16)........ 2,870,906 3.25%
</TABLE>
- --------
* Represents less than 1% of the outstanding Common Stock
(1) Applicable percentage of ownership as of the Record Date is based upon
86,822,930 shares of Common Stock outstanding. Beneficial ownership is
determined in accordance with the rules of the Securities and
3
<PAGE>
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 226,718 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
1,609,028 shares of Common Stock. See footnotes (7), (8), (9), (10), (11),
(12), (13), (14) and (15).
4
<PAGE>
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 would 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.
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 Year Term Class of
First Became a Director Position(s) with 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-Strategy & 2000 II
1989 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 Officer and 2001 III
1998 Director
Kevin R. Compton........ Director 2001 III
1991
Stephen M. Dow.......... Director 2001 III
1989
</TABLE>
5
<PAGE>
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>
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(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 the 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
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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
7
<PAGE>
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 serves on the Board of Directors of SystemSoft
Corporation, a developer and marketer of 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.
8
<PAGE>
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 the only 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, of which
Messrs. Compton and Dow are curently the only members, 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.
9
<PAGE>
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 $100,000 in fiscal 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards (3)
------------------------------------------- ------------
Securities
Name and Principal Other Annual Underlying All Other
Position Year Salary ($) 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--
Strategy 1996 150,000 75,000 -- 300,000 --
& 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.
10
<PAGE>
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.
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>
Value of Unexercised
Shares Numbers of Unexercised In-the-Money Options at
Acquired on Value Options at December 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.
11
<PAGE>
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 728,366 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 15,349,820 shares of Common Stock were
issued and outstanding under the 1995 Stock Plan, of which options for
approximately 2,067,142 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 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.
12
<PAGE>
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.
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
section 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
13
<PAGE>
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
14
<PAGE>
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.
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
are 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 192,078 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.
15
<PAGE>
Stock Performance Graph
The Stock 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, December 31, December 31, December 31,
1995 1996 1997 1998
----------- ------------ ------------ ------------
<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.
16
<PAGE>
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.
17
<PAGE>
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 86,822,930 shares issued and
outstanding and approximately 16,601,093 shares reserved for future issuance
pursuant to outstanding options granted under the Corporation's stock plans.
Prior to the amendment to the Certificate of Incorporation, the Board of
Directors has authority to issue approximately 47,000,000 additional shares of
Common Stock without further stockholder approval. If the amendment to the
Certificate of Incorporation is approved, the Board of Directors will have the
authority to issue approximately 297,000,000 additional shares of Common Stock
without further stockholder approval. Although the Corporation has not entered
into any agreements or understandings to issue any of the shares resulting
from the amendment of the Certificate of Incorporation, 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
18
<PAGE>
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.
19
<PAGE>
PROXY
CITRIX SYSTEMS, INC.
Proxy for Annual Meeting of Stockholders
May 13, 1999
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Citrix Systems, Inc. a Delaware corporation
(the "Corporation"), hereby acknowledges receipt of the Notice of Annual Meeting
of Stockholders an Proxy Statement, dated April 7, 1999 and hereby appoints Mark
B. Templeton and James J. Felcyn, Jr. and each of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of the Corporation to be held at the Fort Lauderdale Marriott North
Hotel, 8850 N. Andrews Avenue, Fort Lauderdale, Florida 33309 on May 13, 1999 at
10:00 a.m., local time, and at any adjournment or adjournments thereof, and to
vote all shares of Common Stock which the undersigned would be entitled to vote
if then and there personally present, on the matters set forth on the reverse
side.
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
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<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 and Proxy Card. Statement 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!
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Do not return your Proxy Card if you are voting by Telephone or Internet
DETACH HERE
<PAGE>
[1464-CITRIX SYSTEMS, INC.] [FILE: CITO9A.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.
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1. To elect three members to the Board of Directors 2. To approve an amendment to the Corporation's Amended
to serve for three year terms as Class I Directors: and Restated Certifcate of Incorporation as amended,
Nominee: (01) Robert N. Goldman, (02) Tyrone F. Pike increasing from 150,000,000 to 400,000,00 the
and (03) Roger W. Roberts number of authorized shares of Common Stock, par
value $.001 per share, of the Corporation.
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<S> <C> <C> <C> <C> <C>
[_] FOR [_] WITHHOLD MARK HERE [_] FOR AGAINST ABSTAIN
ALL FROM ALL IF YOU [_] [_] [_]
NOMINEES NOMINEES PLAN TO
ATTEND THE
MEETING
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MARK HERE [_]
FOR
ADDRESS
CHANGE AND
NOTE BELOW
[_] ___________________________________
For all nominees except as noted
above
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3. To transact such other business as
may properly come before the meeting
or any adjournment or adjourments
thereof.
FOR AGAINST ABSTAIN
[_] [_] [_]
(This proxy should be market, 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.)
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Signature:____________________________ Date: __________ Signature:_____________________________________________ Date: __________
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