UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
________________________
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-11403
SEAGATE TECHNOLOGY, INC.
(Exact name of Registrant as specified in its charter)
________________________
Delaware 94-2612933
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
920 Disc Drive
Scotts Valley, California 95067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (831) 438-6550
________________________
Securities registered pursuant to Section 12 (b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------
Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days: YES X NO _______
----
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant, based upon the closing price of Common Stock on June 30, 2000 as
reported by the New York Stock Exchange, was approximately $11.633 billion.
Shares of Common Stock held by each officer and director and by each person who
owns 5% or more of the outstanding Common Stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
The number of outstanding shares of the registrant's Common Stock on June
30, 2000 was 229,251,994.
Item 10. Directors and Executive Officers of the Registrant
Set forth below is certain information regarding the members of the Board
of Directors:
Director
Name Age Principal Occupation Since
- ---- --- -------------------- -----
Stephen J. Luczo 43 Chief Executive Officer and Director of the Company 1998
and Chairman of the Board of Directors, Seagate
Software, Inc.
Gary B. Filler 59 Co-Chairman of the Board of Directors of the 1985
Company and Financial Consultant
Kenneth E. Haughton 72 Engineering Consultant 1986
Robert A. Kleist 72 President, Chief Executive Officer and a Director 1982
of Printronix, Inc. (computer printer manufacturer)
Lawrence Perlman 62 Co-Chairman of the Board of Directors of the Company 1989
Thomas P. Stafford 70 Vice Chairman of Stafford, Burke and Hecker, Inc. 1988
(a consulting firm)
Laurel L. Wilkening 55 Independent Consultant 1993
Except as set forth below, each of the directors has been engaged in his or
her principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Mr. Luczo joined the Company in October 1993 as Senior Vice President,
Corporate Development. In March 1995, he was appointed Executive Vice President,
Corporate Development and Chief Operating Officer of the Software Group. In July
1997, he was appointed Chairman of the Board of the Software Group. Mr. Luczo
held the position of President of the Company from September 1997 to May 2000.
He held the position of Chief Operating Officer of the Company from September
1997 to August 1998. Mr. Luczo was promoted to Chief Executive Officer and
appointed to the Board of Directors in July 1998. Prior to joining the Company
he was Senior Managing Director of the Global Technology Group of Bear, Stearns
& Co. Inc., an investment banking firm, from February 1992 to October 1993. He
serves as a Director of Veritas Software Corporation, Cobalt Networks and
Gadzoox Networks, Inc.
Mr. Filler was appointed Co-Chairman of the Board of Directors of the
Company in July 1998. Mr. Filler has been a financial consultant since September
1996. He was Senior Vice President and Chief Financial Officer of Diamond
Multimedia Systems, Inc., a multimedia and graphics company from January 1995 to
September 1996. Mr. Filler also serves as a director of Sento Corporation and
Seagate Software.
Dr. Haughton is also a director of Solectron Corporation.
Mr. Perlman was Chairman of the Board of Directors and Chief Executive
Officer of Ceridian Corporation from 1990 to December 31, 1999. Mr. Perlman was
appointed Co-Chairman of the Board of Directors of the Company in July 1998. Mr.
Perlman serves as a director of Computer Network Technology Corporation, Valspar
Corporation, AMDOCS Limited and Seagate Software, Inc., a subsidiary of the
Company. He was a regent of the University of Minnesota from 1992 to 1995.
General Stafford, a former astronaut, also serves as director of CMI, Inc.,
N.L. Industries, Wackenhut, Inc., Timet, Inc. and Tremont, Inc.
Dr. Wilkening served as Chancellor of the University of California, Irvine
from July 1993 to June 1998. From September 1988 to June 1993 she was Provost
and Vice President of Academic Affairs at the University of Washington. From May
1991 to January 1993, Dr. Wilkening also served as Chair of the Space Policy
Advisory Board of the National Space Council.
The information required by this item for executive officers is set forth
in Part I of this report.
Item 11. Executive Compensation
Compensation Committee Interlocks and Insider Participation
The Executive Personnel and Organization Committee currently consists of
directors Wilkening, Stafford and Perlman. During fiscal 2000, there were no
transactions requiring disclosure hereunder.
Executive Compensation
The following Summary Compensation Table sets forth certain information
regarding the compensation of the Chief Executive Officer of the Company and the
four next most highly compensated executive officers of the Company (together
with the Chief Executive Officer, collectively the "Named Officers") whose
compensation each exceeded $100,000 in the fiscal year ended June 30, 2000.
Summary Compensation Table
- ------------------------------------------------------------------------------------------------------------------------
Annual Compensation
- ------------------------------------------------------------------------------------------------------------------------
Other Annual
Fiscal Salary Bonus Compensation
Name and Principal Position Year ($) ($) ($)
- ------------------------------------------------------------------------------------------------------------------------
Stephen J. Luczo (2)................................ 2000 $907,814 $1,100,000(3) $ 20,584
Chief Executive Officer of the Company and 1999 834,434 850,000(4) 247,344 (5)
Chairman of the Board of Directors, Seagate 1998 618,272 - 19,804
Software, Inc.
William D. Watkins (6).............................. 2000 $676,938 $ 850,000(3) $ 15,085
President and Chief Operating 1999 605,787 575,000(4) 61,505
Officer 1998 500,011 - 13,922
Bernardo A. Carballo(7)............................. 2000 $575,016 $ 400,000(3) $ 23,272
Former Executive Vice President, Worldwide Sales, 1999 560,592 295,000(4) 259,665(8)
Marketing, Product Line Management and Customer 1998 500,011 - 67,735
Service Operations
Donald L. Waite .................................... 2000 $500,011 $ 400,000(3) $ 9,090
Executive Vice President, Chief Administrative 1999 500,011 300,000(4) 233,001(9)
Officer and Assistant Secretary 1998 500,011 - 12,121
Townsend H. Porter, Jr............................... 2000 $500,011 $ 350,000(3) $ 35,204 (10)
Executive Vice President, Product and Technology 1999 415,390 250,000(4) -
Development and Chief Technical Officer 1998 396,138 - -
- ------------------------------------------------------------------------------------------------------------------------
----------------------------------------------
Long -Term Compensation Awards
----------------------------------------------
Securities Underlying
Options Granted (#)(1)
-------------------------
Restricted
Stock
Name and Principal Position Fiscal Awards ($) Company Subsidiary
Year -------------------------
---------------------------------------------------------
Stephen J. Luczo (2)................................ 2000 - - 275,000
Chief Executive Officer of the Company and 1999 - 1,100,000 -
Chairman of the Board of Directors, Seagate 1998 $ 2,974,150(11) 450,000 150,000
Software, Inc.
William D. Watkins (6).............................. 2000 - - -
President and Chief Operating 1999 $ 1,079,600(12) 480,000 -
Officer 1998 - 225,000 -
Bernardo A. Carballo(7)............................. 2000 - - -
Former Executive Vice President, Worldwide Sales, 1999 - 260,000 -
Marketing, Product Line Management and Customer 1998 - 140,000 -
Service Operations
Donald L. Waite .................................... 2000 - - 50,000
Executive Vice President, Chief Administrative 1999 - 260,000 -
Officer and Assistant Secretary 1998 - 120,000 -
Townsend H. Porter, Jr............................... 2000 - - -
Executive Vice President, Product and Technology 1999 - 260,000 -
Development and Chief Technical Officer 1998 - 195,000 -
- -------------------------------------------------------------------------------------------------------------
1. The Stock Options listed in the table include options to purchase our
Common Stock and options to purchase Common Stock of Seagate Software.
2. Mr. Luczo resigned as President of the Company in May 2000.
3. These amounts represent payments under our Performance-Based Executive
Compensation Plan earned in fiscal 2000 and paid in fiscal 2001.
4. These amounts represent payments under our Performance-Based Executive
Compensation Plan earned in fiscal 1999 and paid in fiscal 2000.
5. Includes deferred payments under the Performance-Based Executive
Compensation Plan of $216,672.
6. Mr. Watkins became President of the Company in May 2000.
7. Mr. Carballo resigned as Executive Vice President of the Company effective
July 31, 2000.
8. Includes deferred payments under the Performance-Based Executive
Compensation Plan of $245,650.
9. Includes deferred payments under the Performance-Based Executive
Compensation Plan of $214,075.
10. Includes travel allowance of $22,391 and car allowance/benefit of $12,813.
11. Under our Executive Stock Plan, in September 1997, we granted rights to
purchase 85,000 shares of Common Stock at an exercise price of $0.01 per
share to Mr. Luczo. Mr. Luczo exercised these rights in November 1997. The
amount shown in the table represents the dollar value (net of the
consideration paid) of the award of restricted stock, calculated by
multiplying the closing market price of the Company's Common Stock on the
date of grant by the number of shares awarded. As of September 29, 2000,
Mr. Luczo held 238,000 unvested shares of stock having a value of
$16,422,000 based upon the fair market value of the Common Stock on
September 29, 2000 of $69.00 per share. All of such unvested shares are
subject to repurchase by the Company at the original purchase price in the
event of a termination of employment with the Company. The shares are
released from the Company's repurchase option after seven years from date
of grant. Mr. Luczo will receive the same dividends on all shares of
restricted stock as all other stockholders; however, the Company does not
anticipate paying any cash dividends in the foreseeable future.
12. Under our Executive Stock Plan, we granted rights to purchase 40,000 shares
of Common Stock at an exercise price of $0.01 per share to Mr. Watkins in
August 1998. Mr. Watkins exercised these rights in November 1998. The
amount shown in the table represents the dollar value (net of the
consideration paid) of the award of restricted stock, calculated by
multiplying the closing market price of the Company's Common Stock on the
date of grant by the number of shares awarded. As of September 29, 2000,
Mr. Watkins held 183,724 unvested shares of stock having a value of
$12,676,956 based upon the fair market value of the Common Stock on
September 29, 2000 of $69.00 per share. All of such unvested shares are
subject to repurchase by the Company at the original purchase price in the
event of a termination of employment with the Company. 174,000 of the
shares are released from the Company's repurchase option after seven years
from date of grant. 9,724 of the shares are released from the Company's
repurchase option on October 19, 2000.
Option Grants in Fiscal 2000
The following table provides information concerning each grant of
options to purchase Seagate Software's Common Stock made during fiscal year 2000
to the Named Officers:
Individual Grants (1)
------------------------------------------
% of
Number of Total Options Potential Realizable
Securities Granted to Exercise Value at Assumed
Underlying Employees or Base Expira- Annual Rates of Stock
Options in Fiscal Price tion Price Appreciation for
Name Granted Year ($/Sh)(4) Date Option Term (2)
---------------
(#) (3) 5% 10%
- ---------------------------------------------------------------------------------------------------------------
Stephen J. Luczo 100,000 1.0636 $4.00 11/18/2009 $251,558 $637,497
175,000 1.8613 $4.00 11/18/2009 440,226 1,115,620
Donald L. Waite 50,000 .5318 $4.00 11/18/2009 125,779 318,749
1. No grants of stock options to purchase Common Stock of Seagate Technology,
Inc. were granted to the Named Officers in fiscal 2000.
2. Potential realizable value is based on the assumption that the Common Stock
of Seagate Software appreciates at the annual rate shown (compounded
annually) from the date of grant until the expiration of the ten year option
term. These numbers are calculated based on the requirements promulgated by
the Securities and Exchange Commission and do not reflect the Company's
estimate of future price growth.
3. Represents options to purchase shares of the Common Stock of Seagate
Software granted in fiscal 2000. Options granted in fiscal 2000 begin to
vest one year after the date of grant, with 25% of the shares covered
thereby vesting at that time with additional monthly vesting from one year
after date of grant up to four years from date of grant.
4. Options were granted to purchase the Common Stock of Seagate Software at an
exercise price per share of not less than the estimated fair market value on
the grant date, as determined by the Board of Directors of Seagate Software.
Aggregated Option Exercises in Last Fiscal Year
And Fiscal Year-End Option Values
The following table sets forth certain information regarding the
exercise of stock options of the Company and Seagate Software in fiscal 2000 by
the Named Officers in the Summary Compensation Table and the value of options
held by such individuals at the end of the fiscal year.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal In-the-Money Options
Year-End(#) at Fiscal Year-End ($)(2)
Shares ---------------------------- -------------------------
Acquired on Value
Exercise (#) Realized($)(1) Exercisable/ Exercisable/ Exercisable/ Exercisable/
Technology/ Technology/ Unexercisable Unexercisable Unexercisable Unexercisable
Name Software Software Technology Software Technology Software
- ---------------- ----------- ------------------- ------------- -------------- -------------- --------------
Stephen J. Luczo 0/ 0/ 672,500/ 0/ $20,226,406/ 0/
145,211 $12,538,278 1,125,000 275,000 35,163,281 $0
William D. Watkins 0/ 0/ 436,884/ 0/ 11,898,029/ 0/
5,000 454,079 480,000 0 15,107,344 0
Bernardo A. Carballo 30,000/ 555,938/ 489,500/ 0/ 18,216,781/ 0/
5,000 454,079 300,000 0 9,716,719 0
Donald L. Waite 0/ 0/ 290,000/ 0/ 7,769,219/ 0/
0 0 300,000 50,000 9,716,719 0
Townsend H. Porter 0/ 0/ 220,000/ 0/ 5,491,563/ 0/
Jr. 12,250 1,080,494 320,000 0 10,312,500 0
(1) Market value of the Company's Common Stock or Seagate Software's Common
Stock, as the case may be, on the exercise date minus the exercise price.
(2) Market value of the Company's Common Stock or Seagate Software's Common
Stock, as the case may be, at fiscal year-end minus the exercise price. No
public market exists for the Common Stock of Seagate Software. The fair
market value of Seagate Software common stock on June 30, 2000 as
determined by the Seagate Software Board of Directors, was $4.00 per share.
Employment Contracts and Change-Of-Control Arrangements
On March 29, 2000 the Company entered into Management Retention
Agreements (the "Retention Agreements") with each of Messrs. Luczo, Watkins,
Carballo, Waite and Porter (each an "Employee" and collectively, the
"Employees"). The Retention Agreements provide that the Company may terminate
the employee's employment at any time with or without cause; provided, however,
that if within 24 months following a Change of Control (as defined below) an
Employee's employment is (i) involuntarily terminated by
the Company other than for cause, (ii) constructively terminated or (iii)
terminated due to the Employee's disability or death, such Employee is entitled
to receive the following severance benefits:
. a cash payment equal to 200% of the Employee's Annual Compensation, other
than Messrs. Luczo and Watkins who are entitled to a payment of 300%, where
Annual Compensation is defined as an amount equal to the sum of the
Employee's (i) annual salary at the highest rate in effect during the
immediately preceding 12 months and (ii) the highest annual bonus including
quarterly bonus amounts and deferred amounts awarded during the past three
fiscal years,
. acceleration of vesting of all the Employee's outstanding stock options,
. acceleration of vesting of a pro rata percentage of the Employee's restricted
stock, which is determined by dividing the number of months that have elapsed
from the restricted stock grant date to the date of employment termination by
the number of months between the grant date and the date when all restricted
shares would otherwise have vested based on the employee's continued
employment with the Company,
. continued coverage in the Company's health, dental and life insurance
coverage at the Company's expense for the employee, and the employee's
dependents if the dependents were covered immediately prior to the employee's
termination, until either three (3) years in the case of Messrs. Luczo and
Watkins, and two (2) years in the case of Messrs. Carballo, Waite and Porter
from the date of termination or the date that the employee and his dependents
become covered under another employer's group health, dental or life
insurance plans that provide comparable coverage and benefits and
. a bonus equal to a pro rata share (based on the number of days elapsed during
the fiscal year in which termination occurs) of the Employee's targeted bonus
under the Company's executive bonus plan for the fiscal year in which
termination occurs.
At the Employee's option, he may also purchase the Company-owned
automobile in such Employee's possession at the vehicle's wholesale Kelly Blue
Book value.
The Retention Agreements further provide that if on the effective date of a
Change of Control a successor to the Company fails to assume any stock option or
restricted stock held by the Employee, 100% of the unvested portion of any stock
option issued by the Company or an affiliate to the Employee will automatically
become fully vested. In addition the Employee's unvested restricted shares will
vest pro rata as of the Change of Control. With respect to the Retention
Agreements, a "Change of Control" would occur if any of the following events
were to occur:
(i) Any person (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly of securities of the Company
representing 40% or more of the total voting power of the Company's then
outstanding voting securities.
(ii) There is a change in the composition of the Board of Directors of the
Company occurring within a two year period as a result of which fewer than a
majority of the directors are (1) directors as of the date of the
Retention Agreements or (2) nominated or elected by an affirmative vote of at
least a majority of the incumbent directors at the time of such election or
nomination (excluding those directors whose election is in connection with an
actual or threatened proxy contest).
(iii) There is a merger, reorganization, consolidation or other corporate
transaction involving the Company in which the stockholders of the Company
immediately prior to the transaction do not hold at least 50% of the
surviving entities immediately after such transaction.
(iv) All or substantially all of the assets of the Company are sold,
liquidated or otherwise distributed.
With respect to the Retention Agreements, the VERITAS/Silver Lake
transaction would result in a Change of Control. For a description of the
VERITAS/Silver Lake transaction see "Business - Pending Going Private
Transaction and Merger."
The Retention Agreements require the Company to pay the excise tax, as
well as the federal, state and excise tax on the Company's payment for the
excise tax, on any benefit received under the Retention Agreements if that
benefit qualifies as a "parachute payment" within the meaning of the Code.
In consideration of the payments to be made by the Company under the
Retention Agreements, each Employee has agreed not to (i) act as an employee,
agent, consultant, advisor, officer or director of any corporation, partnership,
person or other entity during his employment with the Company and continuing
until 24 months after his employment with the Company terminates, (ii)
participate or engage in the development, production, sale, marketing or
servicing of any business enterprise that is in competition with the Company's
product lines or business activities and (iii) solicit, employ or interfere in
any other manner with the employment relationships with the Company and its
current or prospective employees.
The Company's 1991 Plan provides that in the event of a change of
control of the Company, the Board of Directors may, in its discretion, provide
that (i) all options granted under the 1991 Plan that are outstanding as of the
date of such change of control will become immediately vested and fully
exercisable and (ii) to the extent exercisable and vested, the value of all
outstanding options, unless otherwise determined by the Board prior to any
change of control, will be cashed out at the change of control price reduced by
the exercise price applicable to such options. The Company's 1999 Plan provides
that in the event of a change of control of the Company, except as otherwise
determined by the Board of Directors, any options outstanding on the date of
such change of control that are not yet exercisable and vested on such date
shall become fully vested and exercisable, and such options shall, except as
otherwise determined by the Board of Directors, be terminated in exchange for a
cash payment equal to the "change of control" price as defined in the 1999 Plan.
A change of control is defined in the 1999 plan as (i) the acquisition of at
least 50% of the Company by a "person" (as defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934); (ii) certain changes in the composition
of the Board of Directors of the Company, (iii) a merger or consolidation where
the Company's stockholders do not own at least 50% of the surviving entity's
voting power after the transaction, or (iv) the sale or disposition of
substantially all of the Company's assets. The Company's Executive Stock Plan
provides that in the event of a change of control of the Company, if
constructive termination of an executive occurs within the two-year period
following such change of control, then there shall be released from the
Company's repurchase option that percentage of the executive's unreleased shares
determined by dividing (i) the number of months that
have elapsed from the date of grant to the date of such termination, by (ii) 84
months in the case of awards that vest at the end of 7 years or 60 months in the
case of awards that vest at the end of 5 years.
Under the terms of the 1991 Plan and the 1999 Plan, the VERITAS/Silver
Lake transaction would result in a change of control of the Company. For a
description of the VERITAS/Silver Lake transaction see "Business - Pending Going
Private Transaction and Merger."
Compensation of Non-Employee Directors
Non-employee members of the Board of Directors receive an annual
retainer of $30,000 and a fee of $3,000 per Board meeting attended (excluding
telephonic Board meetings), and $2,000 per Committee meeting attended, if such
meeting is on a day other than the day of a meeting of the Board of Directors.
Each of the Co-Chairmen of the Board of Directors, Messrs. Filler and Perlman,
receive an additional annual retainer of $75,000. Each of the non-employee
Directors serving as the chairmen of the Audit Committee, the Executive
Personnel and Organization Committee and the Technology Committee receives an
additional annual retainer of $8,000. The Company also reimburses the directors
for certain expenses incurred by them in their capacities as directors or in
connection with attendance at Board meetings. Messrs. Filler and Perlman are
members of the Board of Directors of Seagate Software. They do not receive any
additional fees for their service on Seagate Software's Board of Directors.
Non-employee Directors have the option to forfeit some or all of their
$30,000 annual retainer for the right to receive at market stock options to
purchase the Company's Common Stock. These stock options are calculated as
follows: (amount of retainer forfeited X 4)/fair market value as of the
effective date of the grant. Messrs. Filler, Haughton, Kleist, Perlman and
Stafford elected to participate and each converted $30,000 into stock options to
purchase 2,608 shares of Common Stock of the Company at $46.00 per share.
The Company's Directors' Option Plan (the "Directors' Plan") provides
for the grant of non-statutory options to purchase shares of the Company's
Common Stock to non-employee Directors. Under the Directors' Plan the timing of
option grants, amount of the grants, exercise price and restrictions on exercise
of the options are established in the plan. The exercise price of options
granted under the Directors' Plan may not be less than 100% of the fair market
value of the Common Stock on the date of grant. Options granted under the
Directors' Plan become exercisable as to 1/48th of the shares subject to the
option at the end of each full month following the date of grant that the
optionee remains a director of the Company. Options granted under the Directors'
Plan expire ten years from the date of grant and may be exercised while the
optionee is serving as a member of the Company's Board of Directors, within
twelve months after termination by death, within three months after termination
for cause or within five years after termination for any other reason, but
cannot be exercised after the ten year term expires. Pursuant to the Directors'
Plan, each new non-employee Director is granted an option to purchase 50,000
shares of Common Stock upon the date on which such person first becomes a
director (the "Initial Option").
Prior to November 1998, each Outside Director automatically received
an option to purchase 4,000 Shares of Common Stock (the "Quarterly Option") on
each February 1, May 1, August 1 and November 1 following the grant of the
Initial Option; provided, however, that no Quarterly Option was granted to an
Outside Director who received an Initial Option in the preceding six months.
Effective November 1998, the terms of the plan were amended such that
each Outside Director automatically receives an option to purchase 5,000 Shares
of Common Stock on each February 1, May 1, August 1 and November 1 following the
grant of the Initial Option; provided, however, that no Quarterly Option was
granted to an Outside Director who received an Initial Option in the preceding
six months. On August 2, 1999, the non-employee Directors each were granted an
option to purchase 5,000 shares of the Company's Common Stock at an exercise
price of $26.875 per share. On November 1, 1999, each of the non-employee
Directors was granted an option to purchase 5,000 shares of the Company's Common
Stock at an exercise price of $29.4375 per share. On February 1, 2000, each of
the non-employee Directors was granted an option to purchase 5,000 shares of the
Company's Common Stock at an exercise price of $39.75 per share. Since the
privatization announcement in March, normal quarterly grants have been
suspended.
On November 2, 1999, Mr. Perlman received an option to purchase 50,000
shares of the Company's Common Stock at an exercise price of $29.25 per share.
This one-time award of stock options to Mr. Perlman was granted to him in
consideration of Mr. Perlman's ongoing and future activities related to the
Company's transformation from its core business into new strategic directions.
In connection with the VERITAS/Silver Lake transaction, in March of
2000 the Board of Directors of Seagate agreed to pay $100,000 to each of Messrs.
Perlman and Filler, the Co-Chairmen of the Seagate Board of Directors, as
compensation for their additional supervisory efforts in connection with the
VERITAS/Silver Lake transaction. These payments are not contingent upon the
closing of the VERITAS/Silver Lake transaction. In addition, Messrs. Perlman and
Filler also receive payment of $2,000 per week during the pendency of the
VERITAS/Silver Lake transaction.
Seagate Technology Exchange Offer
On October 20, 1999, the Company completed an exchange offer for 3.23
shares of its Common Stock for one share of Seagate Software Holdings, Inc.
Common Stock. All holders of Seagate Software Holdings Common Stock and options
to purchase Common Stock received the right to acquire Seagate Technology Common
Stock. Based on information provided by the exchange agent, approximately
3,991,105 shares of Seagate Software Holdings Common Stock were tendered of
which approximately 2,818,325 were exchanged into approximately 9,124,046 shares
of the Company's Common Stock. The difference between the shares tendered and
the shares exchanged is a result of shares cancelled for the exercise price and
payment of taxes.
The following Directors and Named Officers of the Company exchanged
the number of shares of Common Stock of Seagate Software Holdings set forth
opposite his or her name:
Seagate Software Seagate Technology
Director or Officer Shares Exchanged Shares Issued
Stephen J. Luczo 145,211 246,370
Gary B. Filler 14,063 42,987
Lawrence Perlman 14,063 12,258
Townsend H. Porter 11,999 38,847
Donald L. Waite 8,000 25,900
Robert A. Kleist 5,000 15,504
Laurel L. Wilkening 5,000 15,504
William D. Watkins 5,000 10,007
Bernard A. Carballo 5,000 16,187
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than ten
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the New York Stock Exchange. Executive officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the period from July 3, 1999 to June 30, 2000, its executive
officers and directors complied with all filing requirements.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the
beneficial ownership of Common Stock of the Company as of September 29, 2000 by
(i) each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each of the executive officers named in the table under "Item 11: Executive
Compensation and Other Matters -- Executive Compensation -- Summary Compensation
Table" and (iv) all directors and executive officers as a group:
Common Stock Percent
Name Owned Owned (1)
- ---------------------------------------------------- ----- ---------
Stephen J. Luczo (2)................................ 1,528,867 *
Robert A. Kleist (3)................................ 315,021 *
Lawrence Perlman (4)................................ 296,983 *
Gary B. Filler (5).................................. 211,008 *
Kenneth E. Haughton (3)............................. 133,103 *
Laurel L. Wilkening (6)............................. 95,996 *
Thomas P. Stafford (7).............................. 94,800 *
William D. Watkins (8).............................. 769,007 *
Bernardo A. Carballo (9)............................ 744,172 *
Donald L. Waite (10)................................ 633,644 *
Townsend H. Porter Jr. (11)......................... 427,060 *
All directors and executive officers as a group (16
persons) (12)...................................... 6,253,010 *
* Less than 1%
(1) Applicable percent of ownership is based on 231,173,962 shares of Common
Stock outstanding as of September 29, 2000 together with applicable options
for such stockholder. Beneficial ownership is determined in accordance with
the rules of the Securities and Exchange Commission (the "Commission"), and
includes voting and investment power with respect to shares. Shares of
Common Stock subject to options currently exerciseable or exerciseable
within 60 days after September 29, 2000 are deemed outstanding for
computing the percentage ownership of the person holding such options but
are not deemed outstanding for computing the percentage of any other
person.
(2) Includes 1,025,000 shares of Common Stock which may be acquired within 60
days after September 29,2000 through the exercise of stock options.
(3) Includes 77,223 shares of Common Stock which may be acquired within 60 days
after September 29,2000 through the exercise of stock options.
(4) Includes 271,391 shares of Common Stock which may be acquired within 60
days after September 29,2000 through the exercise of stock options.
(5) Represents shares of Common Stock which may be acquired within 60 days
after September 29, 2000 through the exercise of stock options.
(6) Includes 72,292 shares of Common Stock which may be acquired within 60 days
after September 29,2000 through the exercise of stock options.
(7) Includes 72,320 shares of Common Stock which may be acquired within 60 days
after September 29, 2000 through the exercise of stock options.
(8) Includes 551,884 shares of Common Stock which may be acquired within 60
days after September 29, 2000 through the exercise of stock options.
(9) Includes 549,500 shares of Common Stock which may be acquired within 60
days after September 29, 2000 through the exercise of stock options.
(10) Includes 380,000 shares of Common Stock which may be acquired within 60
days after September 29, 2000 through the exercise of stock options.
(11) Includes 300,000 shares of Common Stock which may be acquired within 60
days after September 29, 2000 through the exercise of stock options.
(12) Includes 4,309,224 shares of Common Stock which may be acquired within 60
days after September 29, 2000 through the exercise of stock options.
Changes in Control
See Part I "Business - Pending Going Private Transaction and Merger" for a
description of the VERITAS/Silver Lake transaction.
Item 13. Certain Relationships and Related Transactions
In August 1998, the Company entered into a Separation Agreement and
Release (the "Separation Agreement") with Alan F. Shugart in connection with the
termination of Mr. Shugart's employment as Chief Executive Officer and Chairman
of the Board of Directors of the Company and his resignation as a member of the
Company's Board of Directors. Pursuant to the Separation Agreement, Mr.
Shugart will receive monthly payments at an annual rate of $750,000 until July
19, 2001. In addition, the Company's right to repurchase 145,000 shares of
unvested restricted Common Stock of the Company held by Mr. Shugart lapsed and
such shares became fully vested. In addition, until July 19, 2001, the Company
will continue to provide Mr. Shugart medical and group insurance benefits
comparable to those provided to its senior executives. Mr. Shugart has agreed,
subject to certain limitations, to render up to 30 hours of consulting services
per fiscal quarter to the Company until July 19, 2001 (the "Consultancy
Period").
Vested options held by Mr. Shugart to purchase 440,000 shares of the
Company's Common Stock at exercise prices ranging from $9.375 to $47.75 will
remain exercisable during the Consultancy Period and for the ninety-day period
thereafter and unvested options to purchase 620,000 shares of the Company's
Common Stock at exercise prices ranging from $11.8125 to $47.75 will continue to
vest during the Consultancy Period. Mr. Shugart exercised vested options to
purchase 270,000 shares of the Company's Common Stock on or prior to October 17,
1998, and no remaining shares subject to vested options that were not exercised
as of that date were canceled. Previously earned deferred bonus amounts of
$1,142,275 will remain available to Mr. Shugart to reduce the exercise price of
options to purchase the Company's Common Stock to the extent such options vest
and are exercised. To date, Mr. Shugart has utilized $642,025 of such deferred
compensation to exercise options for the Company's Common Stock. In addition,
unvested options held by Mr. Shugart to purchase 88,000 shares of Seagate
Software Common Stock at exercise prices ranging from $4.00 to $12.75 became
immediately vested on the effective date of the Separation Agreement and will
remain exercisable during the Consultancy Period and for the ninety-day period
thereafter. On June 9, 1999, Mr. Shugart elected to purchase these shares and
exchange the 88,000 shares for shares of Common Stock of the Company.
Mr. Shugart has also agreed that, until July 19, 2001, he will not (i)
compete with the Company, (ii) solicit employees to leave the Company or
otherwise interfere with the employment relationships existing between the
Company and its employees, (iii) induce any customer, supplier, distributor or
other business relation of the Company to cease doing business with the Company
or interfere with the business relationship between the Company and any such
customer, suppler, distributor or other business relation, or (iv) until January
19, 2002, disparage, defame or slander the Company or any of its officers,
directors or products. During the period ending January 2002, the Company has
agreed that its directors and current officers will refrain from disparagement,
defamation or slander of Mr. Shugart. Finally, the Company and Mr. Shugart
have released each other from, and agreed not to sue each other for, any claim,
duty, obligation or cause of action relating to any matters of any kind that
either of them may possess against the other arising from any omissions, acts or
facts that occurred prior to the effective date of the Separation Agreement.
In September 1998, the Company entered into a Separation Agreement and
Release (the "Hegarty Separation Agreement") with Brendan C. Hegarty in
connection with the termination of Mr. Hegarty's employment as the Company's
Executive Vice President, Recording Heads Group. Mr. Hegarty agreed, subject to
certain limitations, to render consulting services to the Company until February
29, 2000 (the "Hegarty Consultancy Period"). Pursuant to the Hegarty Separation
Agreement, Mr. Hegarty received monthly payments at an annual rate of $500,004
until February 29, 2000. Mr. Hegarty received title to his Company car and
continued use of a Company provided residence until May 31, 1999. In addition,
until February 29, 2000, the Company continued to provide Mr. Hegarty medical
and group insurance benefits comparable to those provided to its senior
executives.
Pursuant to the terms of the Hegarty Separation Agreement, the
Company's right to repurchase 43,350 shares of unvested restricted Common Stock
of the Company held by Mr. Hegarty lapsed and such shares became fully vested.
However, the Company repurchased 109,650 shares of unvested restricted Common
Stock of the Company held by Mr. Hegarty at the original purchase price of the
shares, $548.25. Vested options held by Mr. Hegarty to purchase 168,126 shares
of the Company's Common Stock at exercise prices ranging from $6.375 to $47.75
remained exercisable during the Hegarty Consultancy Period and for the ninety-
day period thereafter and unvested options to purchase 440,500 shares of the
Company's Common Stock at exercise prices ranging from $11.8125 to $47.75 will
continue to vest during the Hegarty Consultancy Period. Mr. Hegarty agreed to
exercise and did exercise vested options to purchase 70,626 shares of the
Company's Common Stock on or prior to December 29, 1998, at which time any
vested options with exercise prices on $17.00 per share or less held by Mr.
Hegarty were cancelled. With respect to an option to purchase 95,000 shares of
the Company's Common Stock at $24.375 (the "Performance Grant"), Mr. Hegarty
also is entitled to exercise that option with respect to 30% of the shares
subject to the Performance Grant if the market price of the Company's Common
Stock is $36.00 and an additional 30% if the market price of the Company's
Common Stock is $42.00, or higher for 60 consecutive trading days during the
Hegarty Consultancy Period. Mr. Hegarty is not entitled to exercise the
remaining 40% of the shares subject to the Performance Grant. In addition,
unvested restricted Seagate Software Common Stock held by Mr. Hegarty
immediately vested in full on the effective date of the Hegarty Separation
Agreement.
Mr. Hegarty also agreed that until September 30, 2000 he will not (i) enter
into a competing business or hold any ownership interest in, manage, accept
employment with or provide consulting services to any direct competitor of the
Company and/or its affiliated companies or (ii) solicit employees to leave the
Company or otherwise interfere with the employment relationships existing
between the Company and its employees. Mr. Hegarty also agreed that he would not
disparage, defame or slander the Company or any of its officers, directors or
products. Mr. Hegarty is obligated to give the Chief Executive Officer of the
Company written notice upon acceptance of any other employment during the
Hegarty Consultancy Period. Mr. Hegarty agreed to refrain from disparagement,
defamation or slander of the Company, its current or former directors, officers,
agents or employees or its business, operation or products. Finally, the Company
and Mr. Hegarty released each other from, and agreed not to sue each other for,
any claim, duty, obligation or cause of action relating to any matters of any
kind that either of them may possess against the other arising from any
omissions, acts or facts that occurred prior to the effective date of the
Hegarty Separation Agreement.
In August 2000, the Company entered into a Separation Agreement and
Release (the "Carballo Separation Agreement") with Bernardo A. Carballo in
connection with the termination of Mr. Carballo's employment as the Company's
Executive Vice President, Worldwide Sales, Marketing, Product Line Management
and Customer Service Operations. Mr. Carballo agreed that following his
resignation he will comply with the Company's reasonable requests for
information and assistance with respect to any matter that he worked on or was
responsible for as an Executive Vice President. In addition, Mr. Carballo
agreed to comply with any reasonable request from the Company and its attorneys
to assist in connection with pending and future litigation involving the
Company. Under the terms of the Carballo Separation Agreement, Mr. Carballo
will be entitled to bonus compensation for fiscal year 2000 under the Company's
Executive Bonus Plan. Mr. Carballo also received title to his Company car,
personal computer and cellular telephone.
Mr. Carballo agreed to provide consulting services to the Company
until December 31, 2001 ("Carballo Consultancy Period"). Pursuant to the
Carballo Separation Agreement, Mr. Carballo shall receive monthly payments of
$12,501 until December 31, 2001. In addition, the Company will release its
right to repurchase a percentage (the "Release Percentage") of the 153,000
shares of Common Stock of the Company granted to Mr. Carballo under the
Company's Executive Stock Plan at an exercise price of $0.005 per share (the
"Restricted Shares"). The Release Percentage shall be determined as follows:
(i) if the date of closure of the VERITAS/Silver Lake transaction (the
"Transaction Closure Date") occurs on or before June 30, 2001, then the Release
Percentage shall be determined by dividing (a) the number of whole months that
have elapsed between November 20, 1995 and the Transaction Closure Date by (b)
eighty-four and (ii) if the Transaction Closure Date has not occurred by June
30, 2001, then the Release Percentage shall be 46.7% (71,451 shares of Common
Stock). Those Restricted Shares as to which the Company does not release its
repurchase rights shall be repurchased from Mr. Carballo by the Company at the
original purchase price of the shares, $0.005 per share. Vested options held by
Mr. Carballo to purchase 507,000 shares of the Company's Common Stock at
exercise prices ranging from $4.50 to $47.75 will remain exercisable during the
Carballo Consultancy Period and for the ninety-day period thereafter and
unvested options which are scheduled to vest on or before December 31, 2001 to
purchase 157,500 shares of the Company's Common Stock at exercise prices ranging
from $27.0625 to $47.75 (the "Unvested Options") will continue to vest during
the Carballo Consultancy Period. If the Transaction Closure Date occurs on or
before December 31, 2000, Mr. Carballo shall receive immediate and fully-
accelerated vesting of the Unvested Options. In addition, until December 31,
2001, the Company shall continue to provide Mr. Carballo medical and life
insurance benefits, however other health benefits such as disability and
supplemental life coverage shall terminate on December 31, 2000.
Mr. Carballo also agreed that until December 31, 2001 he will not (i)
enter into a competing business or hold any ownership interest in, manage,
accept employment with or provide consulting services to any direct competitor
of the Company and/or its affiliated companies or (ii) solicit employees to
leave the Company or otherwise interfere with the employment relationships
existing between the Company and its employees. Mr. Carballo is obligated to
give the Chief Executive Officer of the Company written notice upon acceptance
of any other employment during the Carballo Consultancy Period. Mr. Carballo
agreed to refrain from disparagement, defamation or slander of the Company, its
current or former directors, officers, agents or employees or its business
operation or products. Finally, Mr. Carballo released the Company, and agreed
never to sue for any claim, duty, obligation or cause of action relating to any
matters of any kind.
In July 2000, the Company entered into a Separation Agreement and
Release (the "Colton Separation Agreement") with Donald G. Colton in connection
with the termination of Mr. Colton's employment as the Company's Executive Vice
President, Corporate Quality. Pursuant to the agreement, Mr. Colton resigned as
an Executive Vice President of the Company on June 30, 2000 (the "Resignation
Date"), and Mr. Colton agreed to resign his employment with the Company
effective upon the earlier of (i) the Transaction Closure Date and (ii) December
31, 2000. The period from the Resignation Date to the earlier of (i) the
Transaction Closure Date and (ii) December 31, 2000 is called the "Leave
Period." During the Leave Period, Mr. Colton shall comply with the Company's
reasonable requests for information and assistance with respect to any matter
that he worked on or was responsible for as an Executive Vice President. In
addition during the Leave period and for five years thereafter, Mr. Colton
agreed to comply with any reasonable request from the Company and its attorneys
to assist in connection with pending and future litigation involving the
Company. During the Leave Period, Mr. Colton shall receive (i) his regular base
salary, (ii) his bonus compensation under the Company's Executive Bonus Plan,
(iii) medical and group insurance benefits and (iv) the opportunity to continue
to vest in 94,500 shares of the Company's Common Stock at exercise prices
ranging from $23.875 to $40.75 which were granted to Mr. Colton under the
Company's 1991 Plan and are scheduled to vest on or before December 31, 2000.
On July 31, 2000, Mr. Colton also received title to his Company car, personal
computer, notebook computer and cellular telephone.
Pursuant to the Colton Separation Agreement, in the event that the
Leave Period expires before December 31, 2000 due to the occurrence of the
Transaction Closure Date, Mr. Colton shall receive immediate and fully-
accelerated vesting of all of his unvested options to purchase the Company's
Common Stock. Alternatively, if the Leave Period has not expired before
December 31, 2000 because the Transaction Closure Date has not occurred, Mr.
Colton shall (i) cease receiving his regular base salary but shall receive a
single lump-sum payment equivalent to six months of his base salary, (ii)
receive a single lump payment equal to the cost of continued health and life
insurance through June 30, 2001, (iii) receive immediate and fully-accelerated
vesting of all of his stock options to purchase 334,500 shares of the Company's
Common Stock which would have otherwise vested between December 31, 2000 and May
31, 2000 and (iv) receive immediate and fully-accelerated vesting of his stock
options to purchase 60,000 shares of the Company's Common Stock at an exercise
price of $20.375. Pursuant to the Colton Separation Agreement, the Company
will release its right to repurchase a percentage (the "Release Percentage") of
the 82,000 shares of Common Stock of the Company granted to Mr. Colton under the
Company's Executive Stock Plan at an exercise price of $0.005 per share for
59,500 of such shares and $0.01 per share for 22,500 of such shares (the
"Restricted Shares"). The Release Percentage shall be determined as follows:
(i) if the date of closure of the VERITAS/Silver Lake transaction (the
"Transaction Closure Date") occurs on or before December 31, 2000, then the
Release Percentage shall be determined by dividing (a) the number of whole
months that have elapsed between November 20, 1995 and the Transaction Closure
Date by (b) eighty-four and (ii) if the Transaction Closure Date has not
occurred by December 31, 2000, then the Release Percentage shall be zero. Those
Restricted Shares as to which the Company does not release its repurchase rights
shall be repurchased from Mr. Colton by the Company at the original purchase
price of the shares.
Mr. Colton also agreed to refrain from disparagement, defamation or
slander of the Company, its current or former directors, officers, agents or
employees or its business operation or products. Finally, Mr. Colton released
the Company, and agreed never to sue for any claim, duty, obligation or cause of
action relating to any matters of any kind.
See Part I "Business - Pending Going Private Transaction and Merger" for a
description of the VERITAS/Silver Lake transaction.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SEAGATE TECHNOLOGY, INC.
*
__________________________________
(Stephen J. Luczo, Chief Executive
Officer and a Director)
Dated: October 27, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chief Executive Officer and a Director October 27, 2000
- ----------------------------------------------------- (Principal Executive Officer)
(Stephen J. Luczo)
Executive Vice President and Chief Financial
/s/ CHARLES C. POPE Officer (Principal Financial and Accounting October 27, 2000
- -----------------------------------------------------
(Charles C. Pope) Officer)
* Co-Chairman of the Board October 27, 2000
- -----------------------------------------------------
(Gary B. Filler)
* Co-Chairman of the Board October 27, 2000
- -----------------------------------------------------
(Lawrence Perlman)
* Director October 27, 2000
- -----------------------------------------------------
(Kenneth E. Haughton)
* Director October 27, 2000
- -----------------------------------------------------
(Robert A. Kleist)
* Director October 27, 2000
- -----------------------------------------------------
(Thomas P. Stafford)
* Director October 27, 2000
- -----------------------------------------------------
(Laurel L. Wilkening)
*By: /s/ CHARLES C. POPE
-------------------
Charles C. Pope,
Attorney-in-fact