SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report
(Date of earliest event reported): May 9, 1997
Citrix Systems, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 0-27084 75-2275152
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(State or other jurisdiction of (Commission (IRS Employer
Incorporation) File number) Identification No.)
6400 N.W. 6th Way
Fort Lauderdale, Florida 33309
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (954) 267-3000
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Item 5. Other Events.
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On May 9, 1997, Citrix Systems, Inc., a Delaware corporation (the
"Company"), and Microsoft Corporation, a Washington corporation ("Microsoft"),
entered into a License, Development and Marketing Agreement (the "Development
Agreement") which provides for the licensing to Microsoft of certain of the
Company's multi-user software enhancements to Microsoft's Windows NT Server and
for the cooperation between the parties for the development of future multi-user
versions of Microsoft Windows NT Server, code-named Hydrix 4.x and Hydrix 5.x.
The agreement also provides for each party to develop its own enhancements or
"plug-ins" to the jointly developed products which may provide access to the
Hydrix base platform from a wide variety of computing devices, such as a Company
developed plug-in that implements the ICA protocol on the new platform.
On May 30, 1997, pursuant to the terms of the Development Agreement, the
Company received an aggregate of $75,000,000 as a non-refundable royalty payment
and for engineering and support services to be rendered by the Company. Under
the terms of the Development Agreement, the Company will be eligible to receive
royalty payments of up to an additional $100,000,000 based on Microsoft's
release and shipment of Hydrix 4.x and Hydrix 5.x products. In addition,
Microsoft and the Company have agreed to engage in certain joint marketing
efforts to promote use of Windows NT Server-based multi-user software and the
Company's ICA/(R)/ protocol. Additionally, for a period of at least two and
one-half years, Microsoft has agreed to endorse only the Company's ICA protocol
as the preferred way to provide multi-user Windows access for devices other than
Windows client devices. Further, subject to the terms of the Agreement, the
Company shall be entitled to license versions of its WinFrame technology based
on Windows NT v.3.51 until at least September 30, 2001.
The Company's relationship with Microsoft is subject to certain risks and
uncertainties. First, the Hydrix-based platforms will allow Microsoft to create
plug-in products that could become competitive with at least some of the
Company's current WinFrame products and future Hydrix-related plug-in product
offerings. Second, as stated above, Microsoft has agreed to endorse only the
Company's ICA protocol as the preferred method to provide multi-user Windows
access for devices other than Windows clients for a period of two and one-half
years. After the two and one-half year period expires, it is possible that
Microsoft will market or endorse other methods to provide non-Windows client
devices multi-user Windows access. Finally, the Company's royalties pursuant to
the Development Agreement rely significantly on Microsoft's ability to market
the Hydrix 4.x and 5.x products. Microsoft's distributors and resellers are not
within the control of the Company and, to the Company's knowledge, are not
obligated to purchase products from Microsoft. If Microsoft (1) develops
competitive plug-in products, (2) endorses in the future other methods to
provide non-Windows client devices multi-user Windows access or (3) is unable to
successfully market the Hydrix-based products, the Company's business, results
of operations and financial condition could be adversely affected.
In addition to the factors outlined in the preceding paragraph, there are
other risks and uncertainties pertaining to the Company's relationship with
Microsoft that appear in "Management's Discussion and Analysis of Financial
Condition and Results of Operations --
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Certain Factors Which May Affect Future Results" included in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1997, which are
hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
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Exhibit No. Description
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10* License, Development and Marketing Agreement dated as of May
9, 1997 by and between Citrix Systems, Inc. and Microsoft
Corporation.
99 Press release of the Company dated May 12, 1997.
*Confidential treatment requested as to omitted portions pursuant
to Rule 24b-2 promulgated under the Securities Exchange Act of
1934, as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned authorized officer.
CITRIX SYSTEMS, INC.
June 20, 1997
By:/s/ James J. Felcyn Jr.
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James J. Felcyn, Jr.
Vice President - Finance and
Administration, Chief Financial
Officer, Treasurer and Assistant
Secretary
EXHIBIT INDEX
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Page Number in
Sequentially
Exhibit No. Description Numbered Copy
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10* License, Development and Marketing
Agreement dated as of May 9, 1997
by and between Citrix Systems, Inc.
and Microsoft Corporation.
99 Press release of the Company dated
May 12, 1997.
*Confidential treatment requested as to omitted portions pursuant to
Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.