SC 13D/A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Rule 13d-102)

(Amendment No. 1)*

WATCHGUARD TECHNOLOGIES, INC.

(Name of Issuer)

COMMON STOCK
$0.001 PAR VALUE

(Title of Class of Securities)

941105 10 8

(CUSIP Number)

Benjamin H. Ball
President
Gladiator Corporation
2882 Sand Hill Road, Suite 280
Menlo Park, California 94025
Telephone: (650) 233-2900

Copy to:
Alan Denenberg
Joy Woeber
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, California 94025
Telephone: (650) 752-2000

(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)

August 16, 2006

(Date of Event which Requires Filing of this Statement)

     If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

     Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

     * The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

     The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 941105 10 8 13D Page 2 of 11 Pages

1	NAME OF REPORTING PERSONS GLADIATOR CORPORATION I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) N/A
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o  (b) o  N/A
3	SEC USE ONLY
4	SOURCE OF FUNDS* N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o  N/A
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 5,286,665
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,286,665
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.0%
14	TYPE OF REPORTING PERSON* CO

¹ An aggregate of 2,039,165 shares (587,500 of which are shares underlying options exercisable within 60 days of July 24, 2006) of WatchGuard Technologies, Inc. (“Issuer”) are subject to a Support Agreement dated July 24, 2006 (the “Support Agreement”) entered into by Gladiator Corporation (“Buyer”) and Edward J. Borey, Bradley E. Sparks, Michael R. Hallman, Michael R. Kourey, Richard A. LaFaivre, Steven N. Moore and William J. Schroeder.

Buyer has also entered into a letter agreement (the “Letter Agreement”) with Francisco Partners II, L.P. and Vector Capital III, L.P. (“Vector”) dated August 16, 2006, pursuant to which Vector and its affiliates have agreed to participate in the equity funding of Buyer immediately prior to the closing of the Merger and have also agreed to vote their shares of Issuer common stock in favor of the Merger, in each case subject to the terms and conditions set forth in the Letter Agreement. According to its most recent Schedule 13D filed with the SEC on June 28, 2006, Vector and its affiliates own 3,247,500 shares of Issuer common stock.

Based on the number of shares of Issuer common stock outstanding as of July 24, 2006 (as represented by Issuer in the Merger Agreement discussed in Items 3 and 4), the number of shares of Issuer common stock covered by the Support Agreement and the number of shares of Issuer common stock held by Vector and its affiliates represent beneficial ownership of approximately 5.8% and 9.4% of the outstanding Issuer common stock, respectively. Both the Support Agreement and the Letter Agreement are discussed in greater detail in Items 3 and 4 below.

Buyer expressly disclaims beneficial ownership of any shares of Issuer common stock covered by the Support Agreement or held by Vector and its affiliates.

CUSIP No. 941105 10 8 13D Page 4 of 11 Pages

1	NAME OF REPORTING PERSONS FRANCISCO PARTNERS II, L.P. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 20-3134319
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o  (b) o  N/A
3	SEC USE ONLY
4	SOURCE OF FUNDS* N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o  N/A
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 5,286,665
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,286,665
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.0%
14	TYPE OF REPORTING PERSON* PN

CUSIP No. 941105 10 8 13D Page 5 of 11 Pages

1	NAME OF REPORTING PERSONS FRANCISCO PARTNERS PARALLEL FUND II, L.P. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 20-4495943
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o  (b) o  N/A
3	SEC USE ONLY
4	SOURCE OF FUNDS* N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o  N/A
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 5,286,665
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,286,665
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.0%
14	TYPE OF REPORTING PERSON* PN

 

CUSIP No. 941105 10 8 13D Page 6 of 11 Pages

1	NAME OF REPORTING PERSONS FRANCISCO PARTNERS GP II, L.P. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 20-3134312
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o  (b) o  N/A
3	SEC USE ONLY
4	SOURCE OF FUNDS* N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o  N/A
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 5,286,665
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,286,665
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.0%
14	TYPE OF REPORTING PERSON* PN

 

CUSIP No. 941105 10 8 13D Page 7 of 11 Pages

1	NAME OF REPORTING PERSONS FRANCISCO PARTNERS GP II MANAGEMENT, LLC I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) 20-3134326
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) o  (b) o  N/A
3	SEC USE ONLY
4	SOURCE OF FUNDS N/A
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o  N/A
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 0
		8	SHARED VOTING POWER 5,286,665
		9	SOLE DISPOSITIVE POWER 0
		10	SHARED DISPOSITIVE POWER 0
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,286,665
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.0%
14	TYPE OF REPORTING PERSON* OO

 

  Item 1. Security and Issuer.

     This Amendment No. 1 (“Amendment No. 1”) amends and supplements the Schedule 13D filed on August 3, 2006 (“Schedule 13D”) by Gladiator Corporation and certain other persons related to the common stock of WatchGuard Technologies, Inc. Unless otherwise indicated, all capitalized terms in this Amendment No. 1 shall have the meanings set forth in the original Schedule 13D for such terms. This Amendment No. 1 amends the Schedule 13D to include the information set forth in each item of this Schedule 13D.

  Item 3. Source and Amount of Funds or Other Consideration.

     Item 3 is hereby amended and supplemented by deleting the fourth paragraph thereof in its entirety and replacing such deleted text with the following:

      Buyer has also entered into a letter agreement (the “Letter Agreement”) with Francisco Partners II, L.P. and Vector Capital III, L.P. (“Vector”) dated August 16, 2006, pursuant to which Vector and its affiliates have agreed to participate in the equity funding of Buyer immediately prior to the closing of the Merger and have also agreed to vote their shares of Issuer common stock in favor of the Merger, in each case subject to the terms and conditions set forth in the Letter Agreement. According to its most recent Schedule 13D filed with the SEC on June 28, 2006, Vector and its affiliates own 3,247,500 shares of Issuer common stock, representing approximately 9.4% of the shares of Issuer common stock outstanding as of July 24, 2006 (as represented by Issuer in the Merger Agreement).

      Buyer may be deemed to have shared voting power with respect to the Shares owned by Vector through execution of the Letter Agreement. Buyer has not expended any funds in connection with the execution of the Letter Agreement.

     The foregoing descriptions of the Merger Agreement, Support Agreement and Letter Agreement do not purport to be complete and are qualified in their entirety by reference to such agreements. A copy of the Merger Agreement and the Support Agreement, listed as Exhibits 1 and 2, respectively, hereto, is incorporated by reference to Exhibits 2.1 and 10.1 to Buyer’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 26, 2006. A copy of the Letter Agreement is attached as Exhibit 3 hereto.

  Item 4. Purpose of Transaction.

     Item 4 is hereby amended and supplemented by deleting the first paragraph thereof in its entirety and replacing such deleted text with the following:

     As described in Item 3 above, this statement is being filed in connection with the Support Agreement between Buyer and the Stockholders party thereto and the Letter Agreement among Buyer, Vector and Francisco Partners II, L.P., both entered in connection with the Merger and the related Merger Agreement.

  Item 5. Interest in Securities of the Issuer.

     Item 5 is hereby amended and supplemented by deleting the first two paragraphs thereof in their entirety and replacing such deleted text with the following:

     (a) and (b) Other than those Shares that may be deemed to be beneficially owned in connection with the Support Agreement and Letter Agreement, the Reporting Persons have acquired and, for the purposes of Rule 13d-4 promulgated under the Exchange Act, beneficially own (with sole right to vote and to dispose of) zero Shares, representing 0% of the outstanding Shares. The Reporting Persons expressly disclaim beneficial ownership of any shares of Issuer common stock covered by the Support Agreement or held by Vector.

     As a result of the Support Agreement, the Reporting Persons may be deemed to have the power to vote up to 2,039,165 Shares (587,500 of which are Shares underlying options exercisable within 60 days of July 24, 2006) in favor of approval of the Merger Agreement. As a result of the Letter Agreement, the Reporting Persons may be deemed to have the power to vote up to 3,247,500 additional Shares in favor of approval of the Merger Agreement. Thus, for the purpose of Rule 13d-3 promulgated under the Exchange Act, the Reporting Persons may be deemed to be the

beneficial owners of an aggregate of 5,286,665 Shares. All Shares that may be deemed to be beneficially owned by the Reporting Persons constitute approximately 15.0% of the issued and outstanding Shares as of July 24, 2006 (as represented by Issuer in the Merger Agreement).

  Item 7. Material to be Filed as Exhibits.

Exhibit 1	Agreement and Plan of Merger among Gladiator Corporation, WatchGuard Technologies, Inc. and Warrior Merger Sub, Inc., dated as of July 24, 2006 (incorporated by reference to Exhibit 2.1 to WatchGuard Technologies, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 26, 2006
Exhibit 2	Support Agreement, dated as of July 24, 2006 (incorporated by reference to Exhibit 10.1 to WatchGuard Technologies, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 26, 2006)
Exhibit 3	Letter Agreement among Gladiator Corporation, Francisco Partners II, L.P. and Vector Capital III, L.P., dated August 16, 2006

SIGNATURE

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: August 17, 2006

GLADIATOR CORPORATION
By:	/s/ Benjamin H. Ball
	Name:	Benjamin H. Ball
	Title:	President

FRANCISCO PARTNERS II, L.P.
By:	Francisco Partners GP II, L.P.,
	General Partner
By:	Francisco Partners GP II Management,
	LLC, General Partner
By:	/s/ Benjamin H. Ball
	Name:	Benjamin H. Ball
	Title:	Managing Member

FRANCISCO PARTNERS PARALLEL FUND II, L.P.
By:	Francisco Partners GP II, L.P.,
	General Partner
By:	Francisco Partners GP II Management,
	LLC, General Partner
By:	/s/ Benjamin H. Ball
	Name:	Benjamin H. Ball
	Title:	Managing Member

FRANCISCO PARTNERS GP II, L.P.
By:	Francisco Partners GP II Management,
	LLC, General Partner
By:	/s/ Benjamin H. Ball
	Name:	Benjamin H. Ball
	Title:	Managing Member

FRANCISCO PARTNERS GP II MANAGEMENT, LLC
By:	/s/ Benjamin H. Ball
	Name:	Benjamin H. Ball
	Title:	Managing Member

EX-99.3

Vector Capital III, L.P.
c/o Vector Capital Corporation
456 Montgomery Street, 19th Floor
San Francisco, CA 94104

August 16, 2006

To:	Gladiator Corporation
	c/o Francisco Partners
	2882 Sand Hill Road, Suite 280
	Menlo Park, CA 94025

Re: Equity Commitment

Ladies and Gentlemen:

     Reference is made to that Agreement and Plan of Merger, dated as of July 24, 2006 (as it may be amended from time to time in accordance with this letter, the “Merger Agreement”), by and among Gladiator Corporation, a Delaware corporation (the “Parent” or “Parent”), Warrior Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Parent and Watchguard Technologies, Inc., a Delaware corporation (the “Company”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms under the Merger Agreement. As used herein, the term “Parent” shall include any entity to which Parent shall assign its rights, interests and obligations under the Merger Agreement in accordance with Section 8.7 thereof. The parties listed in Schedule A are collectively referred to herein as the “Investors”.

     Subject only to (i) satisfaction or waiver, at or prior to the Closing Date, of each of the conditions to the obligation of the Parent to effect the Merger as set forth in Sections 6.1 and 6.2 of the Merger Agreement, (ii) the funding by Francisco Partners II, L.P. (and/or one or more of its Affiliates (“FP”)) of one-half of its existing equity commitment to Parent, and (iii) execution and delivery of a stockholders or similar agreement reasonably satisfactory to each of the parties hereto relating to the Investors’ ongoing relationship with Parent, FP and each other with respect to their investment in Parent on terms set forth in Annex A and otherwise in accordance with those previously discussed with FP, Vector Capital III, L.P. (“Vector”) will (and/or will cause one or more of its Affiliates to) contribute, or cause to be contributed, to Parent (and Parent and FP agree that Parent will accept), immediately prior to the Effective Time, shares of Company common stock held by such Investor, free and clear of any Encumbrances, and/or cash in accordance with Schedule A hereto. The contributions by the Investors to Parent shall be equal to the amount contributed by FP to Parent but in no event in excess of one-half of the amount required to satisfy (i) Parent’s obligation under Section 2.1 of the Merger Agreement to deposit funds with the Paying Agent, (ii) required payments under Section 1.7 of the Merger Agreement

August 16, 2006

Page 2 of 6

with respect to the cancellation of Company Stock Options and (iii) all expenses incurred by any of FP, the Investors or Parent (“Expenses”) in connection with this commitment letter, the Merger Agreement and the transactions contemplated thereby (which expenses will, as among the parties, be the responsibility of Parent).

     The Investors and the Parent agree to negotiate in good faith the terms of the stockholders agreement prior to the Effective Time. Parent agrees not to amend the Merger Agreement without Vector’s consent; provided that in the event Vector does not consent to any such proposed amendment, Parent shall be permitted to proceed with such amendment so long as it first offers to Vector the option to terminate this commitment letter. Investors agree to vote any shares of Company’s common stock they may own in favor of the Merger and the Merger Agreement; provided, that, the foregoing agreement to vote shall terminate upon termination (or purported termination by Parent or Merger Sub) of the Merger Agreement. Investors agree to make any filings required under the HSR Act at substantially the same time as such filings are made by FP, such that any such approvals are designed to be obtained prior to the Effective Time. Vector (i) represents and warrants to Parent and FP that, as of the date hereof, the Investors hold the number of shares of Company common stock indicated on the Schedule 13D currently on file with the Securities Exchange Commision and that such Schedule 13D reflects all shares held by Investors as of the date hereof and (ii) agrees that all such shares will either be contributed to Parent in accordance with this commitment letter or held by such Investors until the Effective Time or the termination hereof. In the event the Parent or any of its affiliates receives a payment under the second proviso to Section 7.2 (a) of the Merger Agreement or payment of all or a portion of the Company Termination Fee under Section 7.2 (b) of the Merger Agreement, it will pay (the “Payment Obligations”) such amounts to FP and the Investors in accordance with the following: any such amounts shall be distributed (A) first, to satisfy each party’s Expenses (and if the amount is insufficient to pay all of such Expenses, then pro rata with respect to each party’s Expenses; and (B) second, one-half of any remaining amount to each of FP and the Investors; provided that, after payment of all Expenses, there shall be deducted from amounts otherwise payable to the Investors an amount equal to (on a cumulative basis) one-half of the amount of gain (determined as if the cost basis of such shares was $4.25 per share), if any, the Investors collectively shall have achieved upon the sale of the shares referred to in clause (i) above, and such deducted amount shall be paid to FP. In the event that any shares of Company common stock have been contributed by Investors to Parent, and thereafter there is an event that gives rise to a Payment Obligation, prior to calculating the amount of the Payment Obligation, either such shares (or their proceeds, net of taxes) shall be returned to the Investors, or the Payment Obligation will be calculated as if such shares had been so returned such that each party is put in the economic position that it would have been in had the shares not been so contributed.

     All rights and obligations under this commitment letter will expire immediately following the termination of the Merger Agreement, or, if the Merger has not occurred by December 31, 2006, upon written notice given by Vector to Parent on any day after December 31, 2006. From and after such expiration, no party hereto nor any of its directors, officers, partners, employees, investors or affiliates will have any liability or obligation to any person or entity as a result of this commitment letter; provided that the Payment Obligations shall survive any such expiration

August 16, 2006

Page 3 of 6

or termination if and only if the Merger Agreement was terminated prior to the expiration of this commitment letter.

     This commitment letter may be signed in two or more counterparts, any one of which need not contain the signature of more than one party, but all such counterparts taken together shall constitute one and the same agreement. Neither this commitment letter nor any rights or obligations of any party hereunder may be assigned or delegated, in whole or in part, by operation of law or otherwise by any of the parties hereto without prior written consent of the other parties hereto.

     THIS LETTER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS CONFLICT OF LAWS PROVISIONS.

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]

August 16, 2006

Page 4 of 6

Sincerely,
VECTOR CAPITAL III, L.P.
By:	/s/ VECTOR CAPITAL PARTNERS III, LLC
	its general partner
By:	/s/ ALEXANDER R. SLUSKY
Name:	ALEXANDER R. SLUSKY
Title:	Managing Member

Accepted and Agreed to as of
the date first above written.
GLADIATOR CORPORATION
By:	/s/ Benjamin H. Ball
Name:	Benjamin H. Ball
Title:	President
FRANCISCO PARTNERS II, L.P.
By:	FRANCISCO PARTNERS GP II, L.P.,
	its General Partner
By:	FRANCISCO PARTNERS GP II
	MANAGEMENT, LLC
	its General Partner
By:	/s/ Benjamin H. Ball
Name:	Benjamin H. Ball
Title:	Manager

Schedule A

List of Investors

     Vector Capital III, L.P. and/or
one or more of its Affiliates (the “Investors”)

The Investors will contribute a number of shares of common stock of the Company (valued at $4.25 per share) and/or cash, or a combination thereof, in the amount required by this commitment letter, in return for the same package of securities of Parent that FP receives.

Annex A

     Investors would receive the same package of securities of Parent received by FP (as to type, mix, amount, etc.). The stockholders agreement would provide for equal board and committee representation, approval of significant actions (such as debt incurrence, capital expenditures, transactions with affiliates, mergers, etc., all with customary and appropriate baskets and exceptions) and generally equal rights and obligations with respect to public offerings, registration rights, first refusal, pre-emptive rights, and other customary matters. The agreement would have customary termination provisions and provide for the loss of certain rights (such as board representation) in the event a party fell below a specified ownership level.