EXHIBIT 4.5
STOCKHOLDER AGREEMENT
This Stockholder Agreement (the "AGREEMENT") is entered into as of
__________, 1999, (the "EFFECTIVE DATE") by and among VERITAS Software
Corporation, a Delaware corporation ("VERITAS"), VERITAS Holding Corporation, a
Delaware corporation ("NEWCO"), Seagate Technology, Inc., a Delaware corporation
("STI"), and Seagate Software, Inc., a Delaware corporation ("SSI", and
collectively with STI and STI's other controlled subsidiaries, "SEAGATE").
RECITALS
A. The parties have entered into an Agreement and Plan of Reorganization
(the "PLAN") whereby (i) a newly formed, wholly owned subsidiary of Newco
("NEWCO VERITAS MERGER SUB") will be merged with and into VERITAS, with VERITAS
being the surviving corporation of such merger (the "VERITAS MERGER"); (ii) all
VERITAS securities will be converted, share-for-share, into Newco securities
with identical rights, preferences and privileges (and Newco will assume all
outstanding options, warrants, convertible debentures and other rights to
purchase shares of capital stock of VERITAS); and (iii) Seagate will transfer to
Newco all assets used in connection with the business previously carried on by
Seagate's Network & Storage Management Group ("NSMG"), in consideration for
which Newco will issue Newco securities to SSI and offer to issue Newco
securities to former NSMG employees holding options to purchase SSI securities,
which Newco securities in the aggregate will represent approximately 40% of the
fully diluted equity securities of Newco (collectively, the "REORGANIZATION").
B. As an inducement for Newco to enter into the Plan, the parties desire
to enter into this Agreement, which shall become effective on the effective date
of the Reorganization and, among other things, grants Seagate certain rights and
places certain restrictions on Seagate and on the Newco securities that Seagate
now holds or hereafter acquires.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. BOARD OF DIRECTORS
1.1 APPOINTMENTS. Upon the closing of the Plan, Newco shall increase
the size of its Board of Directors (the "NEWCO BOARD") to ten persons and
appoint Xxxxxxx X. Xxxxxxxxxx and two designees of Seagate, Xxxxxxx X. Xxxxx,
and Xxxx Xxxxxxx, as members of the Newco Board.
1.2 TWO DESIGNEES. For so long as Seagate owns at least 15% of the
outstanding Common Stock of Newco, Newco and its Board of Directors shall
nominate, in connection with each stockholder solicitation relating to the
election of Newco directors, two candidates designated by Seagate who are
reasonably acceptable to Newco.
1.3 ONE DESIGNEE. For so long as Seagate owns at least 5% and not
more than 15% of the outstanding Common Stock of Newco, Newco and its Board of
Directors shall nominate, in connection with each stockholder solicitation
relating to the election of Newco directors, one candidate designated by Seagate
who is reasonably acceptable to Newco.
1.4 AFFILIATES. For purposes of this Agreement, all shares held by
an entity or person controlling, controlled by or under common control with
Seagate will be deemed to be owned by Seagate.
1.5 VOTING OF MANAGEMENT SHARES. Newco shall use its best efforts
(i) to cause the Newco Board to unanimously recommend to its stockholders that
such stockholders vote in favor of the designee(s) of Seagate under Section 1.2
or 1.3 of this Agreement (the "SEAGATE DESIGNEE(S)"); and (ii) to cause the
shares for which Newco's management holds proxies to be voted in favor of the
election of such Seagate Designee(s) nominated pursuant to this Agreement.
1.6 VACANCIES. In the event that any Seagate Designee shall cease to
serve as a member of the Board of Directors of Newco for any reason, the vacancy
resulting therefrom shall be filled by another Seagate Designee.
1.7 EQUAL TREATMENT. Newco shall provide to the Seagate Designee(s)
that are not employees of Newco the same compensation, rights and benefits and
indemnities as are provided to other non-employee members of the Newco Board.
1.8 PARTICIPATION ON BOARD COMMITTEES. At the Effective Date, Newco
will have two committees of the Board of Directors: a Compensation Committee and
an Audit Committee.
1.9 STAGGERED BOARD OF DIRECTORS. At the Effective Date, Newco's
Board of Directors shall be classified into three classes consisting of Classes
A, B and C, with each class serving for staggered three year terms. As an
initial matter, the Directors in Class A will serve for a term ending at Newco's
annual meeting of stockholders in 1999; the Directors in Class B will serve for
a term ending at Newco's annual meeting of stockholders in 2000; and the
Directors in Class C will serve for a term ending at Newco's annual meeting of
stockholders in 2001. At the Effective Date, the class A Directors shall consist
of Xxxxxxx Xxxxxxx, Xxxxxxxx Xxxxxx and Xxxx Xxxxxx; the Class B Directors shall
consist of Xxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx and Xxxxxxx X. Xxxxxxxxxx;
and the Class C Directors shall consist of Xxxxxxx Xxxxxx, Xxxx van den Bosch
and Xxxxxxx X. Xxxxx.
1.10 TERMINATION. All rights and obligations under this Section 1
shall terminate and have no further force or effect immediately upon Seagate
ceasing to hold at least 5% of the outstanding Common Stock of Newco.
2. RESTRICTIONS UPON TRANSFER OF SHARES
2.1 PERMITTED SALES OF NEWCO STOCK. For so long as Seagate owns (of
record or beneficially) at least 5% of the outstanding Common Stock of Newco,
Seagate shall not sell,
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transfer, assign, pledge, hypothecate or otherwise dispose of any interest in
any Newco securities, directly or indirectly, for a period of one year following
the consummation of the Plan, except as provided in Section 2.2 below, and
thereafter shall not so dispose of any Newco securities except (i) to Newco or
to a person or persons that Newco has previously approved in writing; (ii)
pursuant to a Bona Fide Public Offering (as defined below); (iii) pursuant to
Rule 144 under the Securities Act of 1933, as amended (the "SECURITIES ACT");
(iv) in other private transactions so long as such private transactions do not
result, to the knowledge of Seagate, in any single person or group owning 5% or
more of the total outstanding voting stock of Newco; (v) in response to a tender
offer not opposed by the Newco Board; (vi) in a merger or consolidation approved
by the Newco Board in which Newco is acquired; or (vii) pursuant to a plan of
liquidation that is authorized by the Newco Board. As used in this Agreement,
"BONA FIDE PUBLIC OFFERING" means a firm commitment underwritten public offering
of Newco equity or convertible debt securities registered under the Securities
Act in which Newco securities are offered to a broad range of investors and
which registration has been declared effective by the Securities and Exchange
Commission.
2.2 PERMITTED SALES DURING FIRST YEAR. Seagate may sell up to a
maximum of 3,000,000 shares of Newco Common Stock in any quarter during the one
year period following the Closing (as defined in the Plan).
3. VOTING PROVISIONS.
3.1 PROPORTIONAL VOTING. For so long as Seagate owns (of record or
beneficially) at least 5% of the outstanding Common Stock of Newco in connection
with all matters to be voted on by the stockholders of Newco, Seagate shall vote
all shares of Newco Common Stock then owned, directly or indirectly, by it in
the same proportion as the votes cast by all other holders of Newco's Common
Stock, except that Seagate may vote its shares as it determines in its sole
discretion as to the following specific matters: (i) a change in the Fundamental
Rights (as defined below) of Newco Common Stock; and (ii) a recapitalization in
which Newco Common Stock is converted or exchanged for a security having
substantially different Fundamental Rights than Newco Common Stock (but in all
events excluding any recapitalization or reorganization accomplished in
connection with a Corporate Event). A "CORPORATE EVENT" shall include any
merger, acquisition, consolidation or reorganization, any transaction of a type
contemplated by Section 351 of the Internal Revenue Code of 1986, as amended
(the "CODE") or any other similar transaction whereby (a) Newco is acquired by a
third party, (b) where there has been a "change of control" such that the
stockholders of Newco prior to a transaction own, in the aggregate, less than a
majority of the outstanding stock of Newco or the acquiring entity after the
transaction, (c) Newco acquires another entity, or (d) Newco acquires all or
substantially all of the assets of another entity. "FUNDAMENTAL RIGHTS" shall
mean the right to vote Newco's shares and to participate pro rata with other
holders of Newco Common Stock in any distribution to the holders of Newco Common
Stock.
3.2 NO DISSENT. For so long as Seagate owns (of record or
beneficially) at least 5% of the outstanding Newco Common Stock, Seagate agrees
that it will not exercise dissenter's or appraisal rights or otherwise dissent
or seek appraisal rights with respect to any Corporate Event involving Newco
that has been approved by the Newco Board.
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4. STANDSTILL PROVISIONS.
4.1 STANDSTILL. Seagate hereby agrees that, until the fifth
anniversary of the Effective Date, Seagate will not, without Newco's prior
written consent:
(i) acquire, or enter into discussions, negotiations, arrangements
or understandings with any third party to acquire, beneficial ownership (as
defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")) of any Newco securities entitled to vote with
respect to the election of any directors of Newco ("VOTING STOCK"), any
securities convertible into, exchangeable for or exerciseable for, or that may
otherwise become, Voting Stock, or any other right to acquire Voting Stock, if
the effect of such acquisition would be that Seagate would then beneficially own
and/or have the right to acquire more than [__] percent (__%) of the Voting
Stock [THIS WILL BE THE PERCENTAGE OF VOTING STOCK HELD BY SEAGATE AS OF THE
EFFECTIVE DATE] (the "STANDSTILL PERCENTAGE");
(ii) make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are defined or used in Regulation 14A under the
Exchange Act, as such Regulation is currently in effect) with respect to the
voting of any Voting Stock if Newco is at the time of such solicitation
publicly-traded and subject to the proxy rules promulgated under the Exchange
Act; or
(iii) otherwise seek, either alone or in concert with others, to
control the Newco Board or the policies of Newco.
Notwithstanding the foregoing, nothing herein shall limit Seagate's ability to
exercise its rights under Section 5 hereof. For purposes of this Section 4, any
shares of Newco Common Stock or options or rights to acquire such Newco Common
Stock acquired by Seagate Affiliates who are also employees or directors of
Newco pursuant to Newco's option and employee stock purchase plans (including
any options to purchase Newco securities issued to such persons under the terms
of the Plan) shall be excluded from the calculation of the number of shares of
Voting Stock held by Seagate.
4.2 EXCEPTIONS TO STANDSTILL. Notwithstanding the restrictions set
forth in Section 4.1 above:
(a) ACQUISITIONS. Seagate may acquire Voting Stock, and the
limitations of Section 4.1 shall be suspended, upon the earlier of: (i) the date
that a third party not affiliated with Seagate commences a tender or exchange
offer that is made and is not withdrawn or terminated to purchase, or to
exchange for cash or other consideration, Voting Stock that, if accepted or if
otherwise successful, would result in such person or group beneficially owning
or having the right to acquire shares of Voting Stock (not counting any shares
of Voting Stock originally acquired by such third party from Seagate or any
Seagate Affiliate) with aggregate Voting Power (as defined below) representing
more than 50% of the Total Voting Power (as defined below) of Newco then in
effect provided, however, that the foregoing standstill limitation will be
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reinstated if any such tender or exchange offer is withdrawn or terminated, (ii)
the public announcement by Newco that it has entered into any agreement with
respect to a merger, consolidation, reorganization or similar transaction
involving Newco in which all the
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stockholders of Newco before such transaction collectively will own less than
50% of the outstanding voting stock of the surviving or acquiring entity
immediately after such transaction provided, however; that the foregoing
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standstill limitation will be reinstated if such transaction is terminated prior
to consummation thereof, or (iii) the sale or disposition of all or
substantially all of Newco's assets.
(b) NO OBLIGATION TO DISPOSE. Seagate will not be obliged to
dispose of any Voting Stock to the extent that the aggregate percentage of the
Total Voting Power represented by shares of Voting Stock beneficially owned by
Seagate or which Seagate has a right to acquire is increased beyond the
Standstill Percentage: (i) as a result of a recapitalization of Newco or a
repurchase or exchange of securities by Newco or any other action taken by Newco
or its affiliates; (ii) as the result of any acquisition of Voting Stock made
during the period when Seagate's "standstill" obligations are suspended pursuant
to Section 4.2(a); (iii) by way of stock dividend or other distribution or
rights or offerings made available to holders of shares of Voting Stock
generally; (iv) with the consent of a simple majority of the [members of Newco's
Board of Directors that have not been designated by Seagate; or (v) as part of a
transaction on behalf of Seagate's Profit Sharing Retirement Plan, 401(k)
Savings Plan, or any successor or additional retirement plans thereto
(collectively, the "RETIREMENT PLANS") where Newco shares in such Retirement
Plans are voted by a trustee for the benefit of Seagate employees or, for those
Retirement Plans where Seagate controls voting, where Seagate agrees that any
shares of Voting Stock in such Retirement Plans will be subject to the Voting
Provisions of Section 3 hereof.
(c) VOTING POWER. As used in this Section 4, (i) the term
"VOTING POWER" means the number of votes such Voting Stock is entitled to cast
with respect to the election of directors of Newco at any meeting of
stockholders of Newco; and (ii) the term "TOTAL VOTING POWER" means the total
number of votes which may be cast in the election of directors of Newco at any
meeting of stockholders of Newco if all Voting Stock was represented and voted
to the fullest extent possible at such meeting, other than votes that may be
cast only upon the happening of a contingency that has not occurred.
For purposes of this Section 4, "SEAGATE" shall mean not only Seagate, as
defined in the preamble of this Agreement, but also any entity or person
controlling, controlled by or under common control with Seagate (except as set
forth in the last paragraph of Section 4.1).
5. RIGHT TO MAINTAIN.
5.1 GENERAL. If Newco is contemplating the issuance of Dilutive
Securities (as defined in Section 5.2 below) to a third party (including but not
limited to a customer, supplier, developer or reseller) as part of a strategic
business relationship with such third party (a "STRATEGIC CUSTOMER"), SSI will
have the right, pursuant to the terms and conditions of this Section 5, to
purchase from Newco the same Dilutive Securities as are issued by Newco to the
Strategic Customer ("MAINTENANCE SECURITIES") at the Purchase Price (as defined
in Section 5.3) following the issuance by Newco of such securities to the
Strategic Customer, solely in order to maintain SSI's Prior Percentage Interest
(as defined in Section 5.4) in Newco (the "RIGHT OF MAINTENANCE"). Each right
to purchase Maintenance Securities pursuant to this Section 5 shall
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be on the same terms (other than price to the extent provided in Section 5.3
below) as the issuance of securities which gave rise to the right to purchase
such Maintenance Securities.
5.2 DILUTIVE SECURITIES. "DILUTIVE SECURITIES" shall mean any Common
Stock, Preferred Stock or voting capital stock of Newco, whether or not now
authorized, which is issued to a Strategic Customer; provided, however, that the
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term "Dilutive Securities" does not include:
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(a) any Common Stock, Preferred Stock or other capital stock
issued upon exercise of any options or warrants or upon conversion of any
debentures or other convertible securities outstanding as of the date hereof;
(b) any Common Stock, Preferred Stock or other capital stock
issued to employees, directors, consultants or advisors, pursuant to incentive
agreements, plans or arrangements approved by the Newco Board;
(c) any securities (including Common Stock, Preferred Stock,
capital stock or convertible debt securities) issued in connection with a Bona
Fide Public Offering;
(d) any securities issued in connection with any stock split,
stock dividend or similar event in which SSI is entitled to participate on a
proportionate basis; or
(e) any securities issued in connection with any Corporate
Event.
5.3 PURCHASE PRICE.
(a) GENERAL. The per share "PURCHASE PRICE" of the Maintenance
Securities shall equal the per share price at which such Dilutive Securities
were issued, unless the issuance of such other Dilutive Securities occurred upon
the exercise, conversion or exchange of other securities ("EXCHANGEABLE
SECURITIES"), in which case, the per share "Purchase Price" of the Maintenance
Securities shall equal the sum of (i) the per share amounts paid upon each such
exercise, conversion or exchange, and (ii) the per share amount previously paid
for the Exchangeable Securities (adjusted for any stock splits, stock dividends
or other similar events).
(b) CONSIDERATION OTHER THAN CASH. In the event that Dilutive
Securities or Exchangeable Securities were issued for consideration other than
cash, the per share amounts paid for such Dilutive Securities or Exchangeable
Securities shall be determined jointly by Newco and SSI.
(c) APPRAISER. If Newco and SSI are unable to reach agreement
within a reasonable period of time with respect to (i) the fair market value of
unlisted securities (the "MARKET PRICE"); or (ii) the per share amounts paid for
Dilutive Securities or Exchangeable Securities issued for consideration other
than cash, such Market Price or per share amounts paid, as the case may be,
shall be determined by an appraiser jointly selected by Newco and SSI. The
determination of such appraiser shall be final and binding on Newco and SSI. The
fees and expenses of such appraiser shall be paid by Newco, provided that such
fees and expenses shall be paid by SSI in the event that the appraiser's
determination of the Market Price or the per share
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amounts paid, as the case may be, is higher than, or no more than 5% lower than,
the last amount previously offered by Newco.
5.4 PRIOR PERCENTAGE INTEREST. SSI's "PRIOR PERCENTAGE INTEREST" for
purposes of the Right of Maintenance is the ratio of (a) the number of shares of
Common Stock held by SSI as of the date of such Maintenance Notice (as defined
in Section 5.6) (the "NOTICE DATE") that represent shares that SSI purchased
pursuant to (i) the Plan, and (ii) prior exercises of the Right of Maintenance,
to (b) the total number "Common Stock Equivalents" (as defined below) of Newco
outstanding immediately prior to the issuance of the Dilutive Securities. The
total number of Common Stock Equivalents of Newco shall be calculated assuming
the conversion of all outstanding options, warrants and convertible debentures
to Common Stock; provided, however, that the total number of shares subject to
outstanding options (but not the number of shares issuable upon the exercise of
convertible debentures) shall be calculated on the Treasury Method.
5.5 MAINTENANCE AMOUNT. SSI's "MAINTENANCE AMOUNT" with respect to
any Maintenance Notice shall equal such number of Maintenance Securities as is
obtained by multiplying the number of Dilutive Securities specified in such
Maintenance Notice by SSI's Prior Percentage Interest, rounded to the nearest
whole share.
5.6 NOTICE OF ISSUANCE. Within 15 business days of each issuance of
Dilutive Securities, Newco shall give to SSI written notice (the "MAINTENANCE
NOTICE") describing the number of Dilutive Securities issued since such prior
Notice Date and the terms upon which Newco issued such Dilutive Securities, and
the Maintenance Amount of Maintenance Securities that SSI is entitled to
purchase as a result of such issuance.
5.7 PURCHASE OF MAINTENANCE SECURITIES. SSI shall have 15 business
days from the receipt of a Maintenance Notice to elect to purchase up to SSI's
Maintenance Amount of such Maintenance Securities at the Purchase Price as
defined in Section 5.3 and upon the terms and conditions specified in the
Maintenance Notice. The closing of such purchase shall occur within 5 business
days after such election to purchase. If SSI fails to elect to purchase SSI's
full Maintenance Amount of Maintenance Securities within such 15 business day
period, then SSI shall forfeit the right hereunder to purchase that part of
SSI's Maintenance Amount that it did not so elect to purchase.
5.8 TERMINATION. The Right of Maintenance shall terminate upon the
earlier of (i) the third anniversary of the Effective Date; or (ii) such time as
Seagate ceases to own at least ten percent of the outstanding Common Stock of
Newco.
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6. GENERAL PROVISIONS.
6.1 NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) if to Newco, at:
VERITAS Holding Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX
Attention: Vice President, General Counsel
Facsimile: 000-000-0000
with a copy to:
Fenwick & West LLP
Two Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxxxxxx Xxxxx, Esq.
Facsimile: 000-000-0000
(b) If to Seagate:
Seagate Software, Inc.
000 Xxxx Xxxxx
Xxxxxx Xxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: 000-000-0000
with a copy to:
Wilson, Sonsini, Xxxxxxxx & Xxxxxx P.C.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile: 000-000-0000
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or when
deposited in the mail in the manner set forth above.
6.2 ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and
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supersedes any and all prior negotiations, correspondence, agreements,
understandings, duties or obligations between the parties respecting the subject
matter hereof.
6.3 AMENDMENT OF RIGHTS. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Newco, SSI and STI (or any of their permitted successors or
assigns).
6.4 GOVERNING LAW. This Agreement shall be governed by and construed
exclusively in accordance with the internal laws of the State of Delaware as
applied to agreements among Delaware residents entered into and to be performed
entirely within Delaware, excluding that body of law relating to conflict of
laws and choice of law.
6.5 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
6.6 THIRD PARTIES. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.
6.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
inure to the benefit of, and shall be binding upon, the successors and permitted
assigns of the parties hereto.
6.8 CAPTIONS. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
6.9 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
6.10 COSTS AND ATTORNEYS' FEES. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover from
the other party all of such prevailing party's costs and attorneys' fees
incurred in each such action, suit or other proceeding, including any and all
appeals or petitions therefrom.
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholder
Agreement as of the date and year first above written.
SEAGATE SOFTWARE, INC. VERITAS HOLDING CORPORATION
By:__________________________ By:________________________________
Name:________________________ Name:______________________________
Title:_______________________ Title: Vice President and General Counsel
SEAGATE TECHNOLOGY, INC. VERITAS SOFTWARE CORPORATION
By:__________________________ By:________________________________
Name:________________________ Name:______________________________
Title: Title: Vice President and General Counsel
[SIGNATURE PAGE TO STOCKHOLDER AGREEMENT]
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