-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UCARChbyQ/NTdxxUWIJ+UhGItffCiHT3eZokemqTzdqDCxGNQMVHNP5+mie/L1r8 85YEFAldT0g5J+tG1yfNFA== 0000950005-03-000766.txt : 20030729 0000950005-03-000766.hdr.sgml : 20030729 20030729162303 ACCESSION NUMBER: 0000950005-03-000766 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VIRAGE INC CENTRAL INDEX KEY: 0001101147 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 383171505 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-30903 FILM NUMBER: 03808936 BUSINESS ADDRESS: STREET 1: 177 BOVET RD STREET 2: STE 520 CITY: SAN MATEO STATE: CA ZIP: 94402-3116 BUSINESS PHONE: 6505733210 MAIL ADDRESS: STREET 1: 177 BOVET RD STREET 2: STE 520 CITY: SAN MATEO STATE: CA ZIP: 94402-3116 10-K/A 1 p17461_10ka.txt AMENDMENT TO ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-K/A ------------------------ AMENDMENT NO. 1 TO [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MARCH 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 0-30903 ------------------------ VIRAGE, INC. (Exact name of registrant as specified in its charter) DELAWARE 38-3171505 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 411 BOREL AVENUE, 100 SOUTH SAN MATEO, CALIFORNIA 94402-3116 (650) 573-3210 (Address, including zip code, and telephone number, including area code, of the registrant's principal executive offices) ------------------------ Securities Registered Pursuant to Section 12(b) of the Act: None Securities Registered Pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value (Title of Class) 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. [ X ] Yes [ ] 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. [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). [ ] Yes [ X ] No As of June 30, 2003, there were approximately 21,239,016 shares of the registrant's Common Stock outstanding. The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the closing sale price of the Common Stock on September 30, 2002 as reported on The Nasdaq National Market was approximately $9,716,000. Shares of Common Stock held by each current executive officer and director have been excluded from this computation in that such persons may be deemed to be affiliates of the Company. This determination of affiliate status is not a conclusive determination for other purposes. Explanatory Note This Annual Report on Form 10-K/A ("Form 10-K/A") is being filed as Amendment No. 1 to the Registrant's Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 16, 2003 ("Form 10-K") for the purpose of amending Items 10, 11, 12 and 13 of Part III of the Registrant's Form 10-K and to include certain exhibits, including Exhibit 99.1, its certifications under Section 906 of the Sarbanes-Oxley Act of 2002. The Company inadvertently attached the certifications required under Section 302 of the Sarbanes- Oxley Act instead of the required Section 906 certifications as Exhibit 99.1 to the Form 10-K. PART III Item 10. Directors and Executive Officers of the Registrant (a) Executive Officers The information with respect to Executive Officers is incorporated by reference to the information set forth in the section entitled "Executive Officers of the Registrant" at the end of Part I of the Company's Form 10-K for the fiscal year ended March 31, 2003. (b) Directors The following table sets forth certain information regarding members of our Board of Directors as of June 30, 2003: Name Age Position with Virage ---- --- -------------------- Paul G. Lego ............... 44 President, Chief Executive Officer and Chairman of the Board of Directors Alar E. Arras .............. 53 Director Ronald E.F. Codd ........... 46 Director Philip W. Halperin ......... 40 Director Randall S. Livingston ...... 49 Director Standish H. O'Grady ........ 43 Director William H. Younger, Jr ..... 53 Director Paul G. Lego, Chairman of the Board of Directors, President and Chief Executive Officer, joined Virage in January 1996 as President and Chief Executive Officer. Mr. Lego also became Chairman of our Board of Directors in December 1999. From January 1995 to January 1996, Mr. Lego was an associate at Sutter Hill Ventures, a venture capital firm. From June 1988 to December 1994, Mr. Lego was the chief operating officer at Digidesign, a manufacturer of digital audio recording and editing systems, which was acquired by Avid Technology in January 1995. Mr. Lego has also held various marketing, manufacturing and engineering positions with Pyramid Technology Corporation, the General Electric Company and Digital Equipment Corporation. Mr. Lego holds a B.S. in electrical engineering from Cornell University and an M.B.A. from Harvard Business School. Alar E. Arras has served as a director of Virage since July 2001. He currently is the Senior Executive Vice President of Audio/Video and ATLINKS, Thomson Inc. and a member of Thomson's Management Board. Mr. Arras had previously been named Executive Vice President for Audio & Communications in July 1997. He was appointed Chief Executive Officer of ATLINKS, a communications product joint venture with Alcatel, formed in January 2000. From October 1995 to July 1997, Mr. Arras served as Vice President for Manufacturing Operations in Asia. Between 1980 and 1995, he held various management positions in the Audio Division. Mr. Arras currently also serves as a director of a private company. Mr. Arras is a graduate of Cornell University. Ronald E.F. Codd has served as a director of Virage since January 2001. Mr. Codd previously served as President, Chief Executive Officer and Director of Momentum Business Applications, Inc. from December 1998 through April 2002. From September 1991 through December 1998, Mr. Codd was Chief Financial Officer of PeopleSoft, Inc., an enterprise application software company. In addition, from March 1992 through December 1998, he was Secretary of PeopleSoft, and from November 1993 through December 1998, he was PeopleSoft's Senior Vice President of Finance and Administration. Prior to joining PeopleSoft, Mr. Codd was Corporate Controller of MIPS Computer Systems, Inc., a microprocessor designer and computer manufacturer, from March 1989 through September 1991. From March 1984 through March 1989, he was Corporate Controller and Chief Accounting Officer for Wyse Technology, Inc., a computer and peripheral manufacturer. Mr. Codd also serves on the Boards of Directors of Adept Technology, Inc. and Interwoven, Inc. He received a B.Sc. in Business Administration from the University of California, Berkeley and an M.M. degree from the J.L. Kellogg Graduate School of Management (Northwestern University). Philip W. Halperin has served as a director of Virage since September 1999. Mr. Halperin has been a general partner of Weston Presidio Capital, a venture capital firm, since October 1993. Mr. Halperin currently serves as a director of several private companies. Mr. Halperin holds an A.B. in political science from Stanford University and an M.B.A. from Harvard Business School. Randall S. Livingston has served as a director of Virage since May 2001. Mr. Livingston has been the Vice President of Business Affairs and Chief Financial Officer of Stanford University since March 2001. From September 1999 to March 2001 he was Executive Vice President, Office of the CEO, Chief Financial Officer and director of OpenTV Corp. From 1996 to 1999 Mr. Livingston was a consultant and part-time executive for multiple Silicon Valley technology companies. Mr. Livingston holds a B.S. in Mechanical Engineering and an M.B.A. from Stanford University. He currently is a director of the Stanford Management Company. Standish H. O'Grady has served as a director of Virage since April 1998. Mr. O'Grady is senior managing director of Granite Ventures, LLC, a venture capital firm that he co-founded in July 1998. Mr. O'Grady previously served in various positions with Hambrecht & Quist Group's venture capital department from 1986 to 1998. Mr. O'Grady currently serves as a director of Tumbleweed Communications, as well as several private companies. Mr. O'Grady holds a B.S.E. in chemical engineering from Princeton University, and an M.B.A. from Tuck Business School at Dartmouth College. William H. Younger, Jr. has served as a director of Virage since April 1995. Mr. Younger is currently a managing director of the general partner of Sutter Hill Ventures, a venture capital management firm, which he joined in 1981. Mr. Younger currently serves as a director of Vitria Technology, Inc. and Omnicell, Inc., as well as several private companies. Mr. Younger holds a B.S.E.E. from the University of Michigan and an M.B.A. from Stanford University. (c) Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 ("Section 16(a)") 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 ("10% Stockholders"), to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. Such executive officers, directors and 10% Stockholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) forms they file. Based solely on its review of copies of such forms received, or written representations from certain reporting persons that no filings on Forms 5 were required for such persons, the Company believes that, during the fiscal year ended March 31, 2003, its executive officers, directors and 10% Stockholders complied with all applicable Section 16(a) filing requirements except that Mr. O'Grady failed to timely file a Form 4 report for a distribution of Granite Ventures LLC to two limited partners for no consideration, and a Form 4 report that was timely filed by Mr. Lego contained an error in the number of shares purchased by Mr. Lego on the open market on August 28, 2002. When such error was discovered, a fully executed amended Form 4 was filed by Mr. Lego in February 2003. Item 11. Executive Compensation Summary Compensation Table The following table sets forth certain information concerning total compensation received by the Chief Executive Officer, each of the four most highly compensated executive officers during the last fiscal year and one individual who was not serving as an executive officer at the end of the last completed fiscal year (collectively, the "Named Executive Officers") for services rendered to Virage in all capacities for the three years ended March 31, 2003:
Long-Term Compensation Annual Compensation Awards ------------------------------ ------- Number of Shares Fiscal Underlying Name and Principal Position Year Salary ($) Bonus ($) Options --------------------------- ---- ---------- --------- ------- Paul G. Lego................................ 2003 $225,000 $ -- 300,000 President, Chief Executive Officer 2002 250,000 -- 200,000 and Chairman of the Board 2001 250,000 75,000 500,000 Stanford S. Au.............................. 2003 210,000 16,400 200,000 Vice President, Engineering (1) 2002 52,500 6,000 400,000 2001 -- -- -- David J. Girouard........................... 2003 220,400 17,200 300,000 Senior Vice President, Marketing and 2002 232,000 24,000 40,000 Corporate Strategy (2) 2001 205,417 40,000 100,000 Michael H. Lock............................. 2003 190,000 125,590 500,000 Senior Vice President, Worldwide 2002 200,000 85,849 20,000 Sales (3) 2001 50,000 43,752 380,000 Frank H. Pao................................ 2003 190,000 14,900 145,000 Vice President, Business Affairs (4) 2002 200,000 20,000 30,000 2001 185,000 40,000 50,000 Joseph A. Hyrkin............................ 2003 166,250 79,654 255,000 Vice President, Strategic Accounts and 2002 189,583 103,963 30,000 Asia-Pacific Sales (5) 2001 160,833 171,611 200,000
- ------------------- (1) Mr. Au began employment with the Company in January 2002. (2) The 100,000 shares granted to Mr. Girouard during the fiscal year ended March 31, 2001 were cancelled pursuant to the Company's Stock Option Exchange Program. The grant of 300,000 shares in the fiscal year ended March 31, 2003 consists of 200,000 shares which were granted to Mr. Girouard in exchange for the same number of shares cancelled pursuant to the Company's Stock Option Exchange Program and the remaining 100,000 shares represent a new grant. (3) Mr. Lock began employment with the Company in January 2001. (4) The 50,000 shares granted to Mr. Pao during the fiscal year ended March 31, 2001 were cancelled pursuant to the Company's Stock Option Exchange Program. The grant of 145,000 shares in the fiscal year ended March 31, 2003 consists of 95,000 shares which were granted to Mr. Pao in exchange for the same number of shares cancelled pursuant to the Company's Stock Option Exchange Program and the remaining 50,000 shares represent a new grant. (5) The 160,000 shares granted to Mr. Hyrkin during the fiscal year ended March 31, 2001 were cancelled pursuant to the Company's Stock Option Exchange Program. The grant of 255,000 shares in the fiscal year ended March 31, 2003 consists of 192,500 shares which were granted to Mr. Hyrkin in exchange for the same number of shares cancelled pursuant to the Company's Stock Option Exchange Program and the remaining 62,500 shares represent a new grant. As of May 31, 2002, Mr. Hyrkin no longer served as an executive officer of the Company, however he remains an employee of the Company. Option Grants in Last Fiscal Year The following table sets forth, as to the Named Executive Officers, information concerning stock options granted during the fiscal year ended March 31, 2003.
Individual Grants ----------------- Potential Realizable Value at Number of % of Total Assumed Annual Rates of Stock Shares Options Price Appreciation for Underlying Granted to Exercise Option Term (4) Options Employees Price Per Expiration ------------------- Name Granted (1) in Year (2) Share Date (3) 5% 10% ---- ----------- ----------- ----- -------- -- --- Paul G. Lego ...................... 300,000 5.83% $1.59 05/03/12 $299,983 $760,215 Stanford S. Au .................... 200,000 3.89% 0.78 09/30/12 98,108 248,624 David J. Girouard ................. 200,000 3.89% 0.59 08/07/12 74,210 188,062 100,000 1.94% 0.78 09/30/12 49,054 124,312 Michael H. Lock ................... 200,000 3.89% 1.59 05/03/12 199,988 506,810 300,000 5.83% 0.67 09/30/12 126,408 320,342 Frank H. Pao ...................... 95,000 1.85% 0.59 08/07/12 35,250 89,329 50,000 0.97% 0.78 09/30/12 24,527 62,156 Joseph A. Hyrkin .................. 192,500 3.74% 0.59 08/07/12 71,427 181,009 62,500 1.22% 0.78 09/30/12 30,659 77,695
- -------------- (1) The options in this table are incentive stock options or nonstatutory stock options granted under the 1997 Stock Option Plan (the "1997 Plan") and have exercise prices equal to the fair market value of the Company's Common Stock on the date of grant, except as otherwise provided. All of the options reflected in this table have ten-year terms and the following vesting schedules. Mr. Lego's option grant vests over a one year period at a rate of 1/12th each month, and immediately ceases vesting in the event Mr. Lego no longer holds the title of Chief Executive Officer. Mr. Au's option grant vests over a two year period at a rate of 1/24th each month. Mr. Girouard's option grants for an aggregate of 200,000 shares were issued pursuant to the Company's Stock Option Exchange Program, of which a total of 110,415 shares were vested on the date of grant (pursuant to the original vesting schedule of each option grant and the terms of the Stock Option Exchange Program), with the remainder of the shares of each option to vest at a rate of 1/48th each month in accordance with their original respective vesting schedules. Mr. Girouard's option grant for 100,000 shares vests over a two year period at a rate of 1/24th each month. Mr. Lock's option grant for 200,000 shares vests over a one year period at a rate of 1/12th each month. Mr. Lock's option grant for 300,000 shares was granted at a price equivalent to 85% of the fair market value of the Company's Common Stock on the date of grant and vests over a two year period at a rate of 1/24th each month. Mr. Pao's option grants for an aggregate of 95,000 shares were issued pursuant to the Company's Stock Option Exchange Program, of which a total of 49,999 shares were vested on the date of grant (pursuant to the original vesting schedule of each option grant and the terms of the Stock Option Exchange Program), with the remainder of the shares of each option to vest at a rate of 1/48th each month in accordance with their original respective vesting schedules. Mr. Pao's option grant for 50,000 shares vests over a two year period at a rate of 1/24th each month. Mr. Hyrkin's option grants for an aggregate of 192,500 shares were issued pursuant to the Company's Stock Option Exchange Program, of which a total of 95,884 shares were vested on the date of grant (pursuant to the original vesting schedule of each option grant and the terms of the Stock Option Exchange Program), with the remainder of the shares of each option to vest at a rate of 1/48th each month in accordance with their original respective vesting schedules. Mr. Hyrkin's option grant for 62,500 shares vests over a two year period at a rate of 1/24th each month. (2) The Company granted options to purchase 5,143,750 shares of Common Stock in the fiscal year ended March 31, 2003. (3) The options in this table may terminate before their expiration upon the termination of the optionee's status as an employee or consultant or upon the optionee's disability or death. (4) Under rules promulgated by the SEC, the amounts in these two columns represent the hypothetical gain or "option spread" that would exist for the options in this table based on assumed stock price appreciation from the date of grant until the end of such options' ten-year term at assumed annual rates of 5% and 10%. Annual compounding results in total appreciation of 63% (at 5% per year) and 159% (at 10% per year). The 5% and 10% assumed annual rates of appreciation are specified in SEC rules and do not represent the Company's estimate or projection of future stock price growth. The Company does not necessarily agree that this method can properly determine the value of an option and there can be no assurance that the potential realizable values shown in this table will be achieved. Option Exercises and Holdings The following table sets forth, as to the Named Executive Officers, certain information concerning the number of shares subject to both exercisable and unexercisable stock options as of March 31, 2003. Also reported are values for "in-the-money" options that represent the positive spread between the respective exercise prices of outstanding stock options and the fair market value of the Company's Common Stock as of March 31, 2003, the last trading day of the 2003 fiscal year. Aggregated Option Exercises in Last Year And Year-End Option Values
Number of Shares Value of Unexercised Underlying Unexercised In-The-Money Options Shares Options at Year-End at Year-End (1) Acquired on Value ----------------------------- -------------------------- Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable ---- -------- -------- ----------- ------------- ----------- ------------- Paul G. Lego .......................... 27,084 $31,959 916,667 -- $ -- $-- Stanford S. Au ........................ -- -- 600,000 -- -- -- David J. Girouard ..................... -- -- 440,000 -- $14,000 -- Michael H. Lock ....................... -- -- 900,000 -- -- -- Frank H. Pao .......................... -- -- 264,271 -- $16,733 -- Joseph A. Hyrkin ...................... -- -- 371,791 -- $13,475 --
- ------------ (1) Market value of underlying securities is based on the closing price of the Company's Common Stock on March 31, 2003 (the last trading day of the 2003 fiscal year), which was $0.66. For a majority of the options reflected in this table, the exercise price is higher than the fair market value of the stock on March 31, 2003. Director Compensation Directors do not receive cash compensation for service on the Board of Directors. Directors are entitled to receive cash compensation for their services as members of committees of the Board of Directors. These directors are entitled to receive $1,000 to attend a committee meeting in person and $500 to attend a committee meeting by telephone unless the meetings are for a duration of less than one hour, in which case directors receive no compensation for their attendance. As of March 31, 2003, only Audit Committee members have received such cash compensation. The Company also reimburses directors for their reasonable expenses incurred in attending meetings of the Board of Directors and of committees of the Board of Directors. Directors are eligible to receive options to purchase the Company's Common Stock pursuant to the 1997 Plan. Each new non-employee director will receive a nonqualified stock option grant of 30,000 shares of the Company's Common Stock under the 1997 Plan upon his or her initial election to the Board of Directors. These option shares vest over a four-year period as follows: 25% upon the first anniversary of the option grant date with the remainder vesting ratably on a monthly basis for the 36 months beginning one year after the date of grant. Each subsequent year thereafter, each individual who is at the time continuing to serve as a non-employee director is granted an option to purchase 10,000 shares of the Company's Common Stock. These subsequent options vest ratably on a monthly basis for 24 months beginning on the date of grant. All options automatically granted to non-employee directors will have an exercise price equal to 100% of the fair market value on the date of grant. To date, the Company has granted each of the Company's incumbent non-employee directors an option to purchase the Company's Common Stock in the amount of 50,000 shares for recent directors, except for one recent director who received no shares, or 55,000 shares for directors in their positions as of the Company's initial public offering. Audit Committee members have received an additional option grant of 15,000 shares vesting ratably on a monthly basis for 24 months, in connection with their serving on the Company's Audit Committee. The total number of options granted to directors to date total 410,000 shares of Common Stock, of which 55,000 shares have been cancelled upon the resignation of two members of the Board of Directors. Compensation Committee Interlocks And Insider Participation The Company's Compensation Committee is currently composed of Mr. Halperin, Mr. O'Grady and Mr. Younger. No interlocking relationship exists between any member of the Company's Compensation Committee and any member of the compensation committee of any other company, nor has any such interlocking relationship existed in the past. No member of the Compensation Committee is or was formerly an officer or an employee of the Company. The Company has entered into indemnification agreements with each of its directors and officers. Such agreements require the Company to indemnify such individuals to the fullest extent permitted by law. Employment Contracts, Termination Of Employment And Change-In-Control Arrangements The Company routinely delivers written offer letters containing provisions on salary, bonuses, benefits and stock option grants to prospective members of management and other employees. In addition, as of July 9, 2003, the Company has entered into agreements containing employment and change-in-control provisions with our Named Executive Officers as described below. On June 17, 2003, the Company entered into a severance letter agreement with Paul G. Lego, the Company's president and chief executive officer, which provides that in the event Mr. Lego is terminated or constructively terminated following the execution of a definitive agreement for a change-in-control event, the Company will pay to Mr. Lego the greater of (a) twelve (12) months of Mr. Lego's then-current base salary, or (b) $250,000. On July 9, 2003, the Company entered into the Amendment and Restatement to the Severance Letter Agreement with Mr. Lego, which amends and restates in its entirety the foregoing severance letter agreement and provides that in the event Mr. Lego is terminated without cause or resigns for good reason within twelve (12) months following the consummation of the transactions contemplated by that certain Agreement and Plan of Merger by and among Autonomy Corporation plc, a corporation formed under the laws of England and Wales, Violet Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Autonomy, and the Company dated as of July 9, 2003 (the "Merger Agreement"), the Company will pay to Mr. Lego the greater of (a) twelve (12) months of Mr. Lego's then-current base salary, or (b) $250,000. The stock option agreements between the Company and Mr. Lego, in which Mr. Lego was granted options to purchase 1,102,500 shares of Common Stock, of which options for 629,584 shares have been exercised, provide for full acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Lego is terminated or constructively terminated within twelve (12) months after such change-in-control event. The stock option agreement between the Company and Mr. Lego, in which Mr. Lego was granted options to purchase 500,000 shares of Common Stock, of which 83,333 shares have been exercised, provides for 50% acceleration of vesting of all unvested options upon a change-in-control event. The stock option agreements between the Company and Stanford S. Au, the Company's vice president, engineering, provide for 50% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Au is terminated or constructively terminated within twelve (12) months after such change-in-control event. The stock option agreements between the Company and David J. Girouard, the Company's senior vice president, marketing and corporate strategy, which were entered into after Mr. Girouard became an executive officer of the Company, provide for 50% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Girouard is terminated or constructively terminated within twelve (12) months after such change-in-control event. On July 2, 2003, the Company entered into a severance letter agreement with Michael H. Lock, the Company's senior vice president, worldwide sales, which provides that in the event Mr. Lock is terminated or constructively terminated following the execution of a definitive agreement for a change-in-control event, the Company will pay to Mr. Lock the greater of (a) six (6) months of Mr. Lock's then-current base salary, or (b) $100,000. On July 9, 2003, the Company entered into the Amendment and Restatement to the Severance Letter Agreement with Mr. Lock, which amends and restates in its entirety the foregoing severance letter agreement and provides that in the event Mr. Lock is terminated without cause or resigns for good reason within twelve (12) months following the consummation of the transactions contemplated by the Merger Agreement, the Company will pay to Mr. Lock the greater of (a) six (6) months of Mr. Lock's then-current base salary, or (b) $100,000. The stock option agreement between the Company and Mr. Lock, in which Mr. Lock was granted options to purchase 300,000 shares of Common Stock, provides for 100% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Lock is terminated or constructively terminated within twelve (12) months after such change-in-control event. The stock option agreements between the Company and Mr. Lock, in which Mr. Lock was granted options to purchase 600,000 shares of Common Stock, provide for 50% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Lock is terminated or constructively terminated within twelve (12) months after such change-in-control event. On June 17, 2003, the Company entered into a severance letter agreement with Frank H. Pao, the Company's vice president, business affairs, which provides that in the event Mr. Pao is terminated or constructively terminated following the execution of a definitive agreement for a change-in-control event, the Company will pay to Mr. Pao the greater of (a) six (6) months of Mr. Pao's then-current base salary, or (b) $100,000. On July 9, 2003, the Company entered into the Amendment and Restatement to the Severance Letter Agreement with Mr. Pao, which amends and restates in its entirety the foregoing severance letter agreement and provides that in the event Mr. Pao is terminated without cause or resigns for good reason within twelve (12) months following the consummation of the transactions contemplated by the Merger Agreement, the Company will pay to Mr. Pao the greater of (a) six (6) months of Mr. Pao's then-current base salary, or (b) $100,000. The stock option agreements between the Company and Mr. Pao provide for 50% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Pao is terminated or constructively terminated within twelve (12) months after such change-in-control event. The stock option agreements between the Company and Joseph A. Hyrkin, the Company's vice president, strategic accounts and Asia-Pacific sales, which were entered into while Mr. Hyrkin was on officer of the Company, provide for 50% acceleration of vesting of all unvested options upon a change-in-control event in which Mr. Hyrkin is terminated or constructively terminated within twelve (12) months after such change-in-control event. Stock Option Exchange Program In November 2001, the Company's Board of Directors approved a Stock Option Exchange Program. Under this program, all employees (excluding certain executive officers and all members of the Board of Directors) were given the opportunity to cancel one or more stock options previously granted to them in exchange for one or more new stock options to be granted at least six months and one day from the date the old options were cancelled, provided the individual is still employed with the Company on such date. Generally, only options granted pursuant to the Company's 1997 Plan with an exercise price equal to or greater than $5.00 per share were eligible for exchange. In addition, participants in the program were required to also cancel any options granted during the six months prior to the commencement of the program, irrespective of the exercise price of such options. The participation deadline for the program was 9:00 p.m. Pacific Standard Time on February 5, 2002 and the options tendered for exchange were cancelled on February 6, 2002. Each of these cancelled options were replaced with a new stock option on August 7, 2002. The number of shares subject to the new options were equal to the number of shares subject to the old options, and the exercise price of the new options was the fair market value of the Company's Common Stock, as determined by the closing price reported by The Nasdaq National Market on August 7, 2002, the date of grant of the new options. The new options have the same vesting schedule as the old options. Pursuant to the Stock Option Exchange Program, the individuals who were executive officers of the Company on the date of cancellation of the old options cancelled a total of 1,327,500 shares with exercise prices ranging between $2.50 and $12.00, and the individuals who were executive officers of the Company on the date of grant of the new options were granted a total of 375,000 shares with an exercise price of $0.59. Several of the individuals who were executive officers of the Company at the time of cancellation of the old options were no longer executive officers of the Company at the time of grant of the new options, and two such individuals were no longer employed with the Company as of March 31, 2003. In addition, one individual became an executive officer of the Company shortly after the date of grant of the new options. The following table sets forth certain information with respect to the participation of the executive officers of the Company, including the Named Executive Officers, in the Company's Stock Option Exchange Program during the fiscal year ended March 31, 2003: Executive Officer Stock Option Exchange
Termination Number of Market Original Date Securities Price of Exercise Original Underlying Stock at Price at New Option at Date of Options Time of Time of Exercise Date of Name & Position Repricing Repriced Repricing ($) Repricing ($) Price ($) Repricing --------------- --------- -------- ------------- ------------- --------- --------- Paul G. Lego (1) .................................... -- -- -- -- -- -- President, Chief Executive Officer & Chairman of the Board Scott Gawel ......................................... 8/7/02 80,000 $ 0.59 $5.25- $ 0.59 12/17/10- Vice President, Finance and Acting Chief $10.80 1/31/11 Financial Officer David J. Girouard ................................... 8/7/02 200,000 $ 0.59 $6.00- $ 0.59 12/1/09- Senior Vice President, Marketing & $11.00 10/26/10 Corporate Strategy Joseph A. Hyrkin (2) ................................ 8/7/02 192,500 $ 0.59 $10.80- $ 0.59 2/17/10- Vice President, Strategic Accounts and $11.875 10/26/10 Asia-Pacific Sales Michael H. Lock (1) ................................. -- -- -- -- -- -- Senior Vice President, Worldwide Sales Frank H. Pao ........................................ 8/7/02 95,000 $ 0.59 $8.00- $ 0.59 1/10/10- Vice President, Business Affairs $11.00 10/26/10
- ---------------- (1) Paul G. Lego and Michael H. Lock were not eligible to participate in the Stock Option Exchange. (2) Joseph A. Hyrkin is no longer an officer of the Company as of May 31, 2002. Item 12. Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information concerning the beneficial ownership of Virage's Common Stock as of June 30, 2003 for the following: (1) each person or entity who is known by the Company to own beneficially more than 5% of the outstanding shares of the Company's Common Stock, (2) each of the Company's directors; (3) each of the executive officers named in the Summary Compensation Table; and (4) all directors and executive officers of the Company as a group. Percentage of beneficial ownership is based on 21,239,016 shares of common stock outstanding as of June 30, 2003.
Common Stock Percentage Beneficially Beneficially Name Owned (1) Owned - ---- ------------ ------------ 5% STOCKHOLDERS: Entities affiliated with D3 Family Fund, L.P. (2)...................... 3,372,121 15.88% 19605 NE 8th Street Camas, WA 98607 Paul G. Lego (3)....................................................... 2,628,042 11.86% 411 Borel Avenue, 100 South San Mateo, CA 94402 Entities affiliated with Western Presidio Capital (4).................. 1,503,170 7.06% Pier 1, Bay 2 San Francisco, CA 94111 William H. Younger, Jr. (5)............................................ 1,174,087 5.51% 755 Page Mill Road, Suite A-200 Palo Alto, CA 94304 NAMED EXECUTIVE OFFICERS AND DIRECTORS: Paul G. Lego (3) ...................................................... 2,628,042 11.86% Stanford S. Au (6) .................................................... 605,000 2.77% David J. Girouard (7) ................................................. 486,710 2.25% Michael H. Lock (8) ................................................... 902,500 4.08% Frank H. Pao (9) ...................................................... 340,178 1.58% Joseph A. Hyrkin (10) ................................................. 384,545 1.78% Alar E. Arras (11) .................................................... 909,090 4.28% Ronald E. F. Codd (12)................................................. 80,000 * Philip W. Halperin (4)................................................. 1,503,170 7.06% Randall S. Livingston (13)............................................. 80,500 * Standish H. O'Grady (14)............................................... 204,205 * William H. Younger, Jr. (5)............................................ 1,174,087 5.51% All executive officers and directors as a group (12 persons) (15)............................................ 9,048,601 36.42%
- ---------------- * Less than one percent of the outstanding common stock. (1) The number and percentage of shares beneficially owned is determined in accordance with Rule 13d-3 of the Exchange Act and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which the individual or entity has voting power or investment power and any shares that the individual has the right to acquire within 60 days of June 30, 2003 through the exercise of any stock option or other right. Unless otherwise indicated in the footnotes, each person or entity has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares shown as beneficially owned. (2) Includes 2,150,405 shares held by The D3 Family Fund, L.P.; 878,010 shares held by The D3 Family Retirement Fund, L.P.; 142,100 shares held by The D3 Children's Fund, L.P.; 50,606 shares held by Haredale, Ltd.; 32,000 shares held by Olivier Roux; 20,000 shares held by James Henry Hildebrandt; 17,000 shares held by Toxford Corporation; 4,000 shares held by Henry E. Hooper; 30,000 shares held by Bruno Tiphine; and 48,000 shares held by Rita & Bruno Tiphine. Mr. David Nierenberg is president of Nierenberg Investment Management Company, Inc. , the general partner of The D3 Family Fund, L.P., The D3 Family Retirement Fund, L.P. and The D3 Children's Fund, L.P., and disclaims beneficial ownership of the shares held by The D3 Family Fund, L.P., The D3 Family Retirement Fund, L.P. and The D3 Children's Fund, L.P. except to the extent of his proportionate partnership interest therein. Mr. Nierenberg is an investment manager for Haredale, Ltd., Olivier Roux, James Henry Hildebrandt, Toxford Corporation, Bruno Tiphine and Rita & Bruno Tiphine and disclaims beneficial ownership of the shares held by Haredale, Ltd., Olivier Roux, James Henry Hildebrandt, Toxford Corporation, Bruno Tiphine and Rita & Bruno Tiphine. Mr. Nierenberg has sole voting and investment power with respect to the shares held by The D3 Family Fund, L.P., The D3 Family Retirement Fund, L.P., The D3 Children's Fund, L.P., Haredale, Ltd., Olivier Roux, James Henry Hildebrandt, Toxford Corporation, Bruno Tiphine and Rita & Bruno Tiphine. Henry E. Hooper is a general partner of The D3 Family Fund, L.P. and has sole voting and investment power with respect to the shares held by Henry E. Hooper. (3) Includes 916,667 shares subject to options exercisable within 60 days of June 30, 2003. (4) Includes 1,379,502 shares held by Weston Presidio Capital III, L.P.; 68,669 shares held by WPC Entrepreneur Fund, L.P.; and 55,000 shares subject to options exercisable within 60 days of June 30, 2003 held by Philip W. Halperin. Mr. Halperin is a general partner of Weston Presidio Capital and disclaims beneficial ownership of the shares held by Weston Presidio Capital III, L.P. and WPC Entrepreneur Fund, L.P. except to the extent of his proportionate partnership interest therein. (5) Includes 942,724 shares held by Sutter Hill Ventures, A California Limited Partnership; 7,988 shares held by Sutter Hill Entrepreneurs Fund (AI), L.P.; 20,227 shares held by Sutter Hill Entrepreneurs Fund (QP), L.P.; 114,814 shares held by William H. Younger, Jr., Trustee, The Younger Living Trust; 33,334 shares held by the retirement trust of William H. Younger, Jr.; and 55,000 shares subject to options exercisable within 60 days of June 30, 2003 held by Mr. Younger. Mr. Younger is a managing director of the general partner of Sutter Hill Ventures, A California Limited Partnership, Sutter Hill Entrepreneurs Fund (AI), L.P. and Sutter Hill Entrepreneurs Fund (QP), L.P. and disclaims beneficial ownership of the shares held by Sutter Hill Ventures, A California Limited Partnership, Sutter Hill Entrepreneurs Fund (AI), L.P. and Sutter Hill Entrepreneurs Fund (QP), L.P. except to the extent of his proportionate partnership interest therein. (6) Includes 600,000 shares subject to options exercisable within 60 days of June 30, 2003. (7) Includes 440,000 shares subject to options exercisable within 60 days of June 30, 2003. (8) Includes 900,000 shares subject to options exercisable within 60 days of June 30, 2003. (9) Includes 264,271 shares subject to options exercisable within 60 days of June 30, 2003. (10) Includes 371,791 shares subject to options exercisable within 60 days of June 30, 2003. As of May 31, 2002, Mr. Hyrkin was no longer an officer of the Company. (11) Includes 909,090 shares held by Thomson Inc. Mr. Arras currently is the Senior Executive Vice President of Audio/Video and ATLINKS, Thomson Inc. and disclaims beneficial ownership of the shares held by Thomson Inc. (12) Includes 80,000 shares subject to options exercisable within 60 days of June 30, 2003. (13) Includes 80,000 shares subject to options exercisable within 60 days of June 30, 2003. (14) Includes 215 shares held by Granite Ventures LLC; 65,856 shares held by Adobe Ventures II, L.P; 19,177 shares held by H&Q Virage Investors, L.P.; 8,630 shares held by H&Q Adobe Ventures Management II, LLC; and 85,000 shares subject to options exercisable within 60 days of June 30, 2003. Mr. O'Grady is the senior managing director of Granite Ventures LLC and a member of each of the general partners of Adobe Ventures II, L.P., H&Q Virage Investors, L.P. and H&Q Adobe Ventures Management II, LLC. Mr. O'Grady disclaims beneficial ownership of the shares held by Granite Ventures LLC, Adobe Ventures II, L.P., H&Q Virage Investors, L.P. and H&Q Adobe Ventures Management II, LLC except to the extent of his proportionate partnership interest therein. (15) Includes 3,604,687 shares subject to options exercisable within 60 days of June 30, 2003 held by all executive officers and directors as a group. Does not include the shares and shares subject to options exercisable within 60 days of June 30, 2003 held by Mr. Hyrkin, who remains an employee of the Company but, as of May 31, 2002 no longer served as an executive officer of the Company. Item 13. Certain Relationships and Related Transactions There were no transactions from April 1, 2002 through the date of filing to which we have been a party, in which the amount involved in the transaction exceeds $60,000 and in which any director, director nominee, executive officer or holder of more than 5% of our capital stock had or will have a direct or indirect material interest other than compensation arrangements that are otherwise described herein. PART IV Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (3) Exhibits Exhibit Number Description of Document - ------ ----------------------- 10.15 Severance Letter Agreement with Michael H. Lock dated July 2, 2003 10.16 Amendment and Restatement to the Severance Letter Agreement with Michael H. Lock dated July 9, 2003 10.17 Retention Bonus and Severance Agreement with Scott Gawel dated June 23, 2003, as Amended 10.18 Severance Letter Agreement with Paul G. Lego dated June 17, 2003 10.19 Amendment and Restatement to the Severance Letter Agreement with Paul G. Lego dated July 9, 2003 10.20 Severance Letter Agreement with Frank H. Pao dated June 17, 2003 10.21 Amendment and Restatement to the Severance letter Agreement with Frank H. Pao dated July 9, 2003 99.1 Certifications Pursuant to 18 U.S.C. Section 1350 (b) Reports on Form 8-K: No reports on Form 8-K were filed during the fourth quarter ended March 31, 2003. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Amendment No. 1 on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized, on July 29, 2003. Virage, Inc. By: /s/ Paul G. Lego ----------------------------- Paul G. Lego Chairman of the Board of Directors, President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this Amendment No. 1 on Form 10-K/A 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 --------- ----- ---- /s/ Paul G. Lego Chairman, President and July 29, 2003 - ---------------------------------------- Chief Executive Officer Paul G. Lego (Principal Executive Officer) /s/ Scott C. Gawel Vice President, Finance and July 29, 2003 - ---------------------------------------- Acting Chief Financial Officer Scott C. Gawel (Principal Financial and Accounting Officer) * Alar E. Arras Director July 29, 2003 - ---------------------------------------- Alar E. Arras * Ronald E.F. Codd Director July 29, 2003 - ---------------------------------------- Ronald E.F. Codd * Philip W. Halperin Director July 29, 2003 - ---------------------------------------- Philip W. Halperin * Randall S. Livingston Director July 29, 2003 - ---------------------------------------- Randall S. Livingston * Standish H. O'Grady Director July 29, 2003 - ---------------------------------------- Standish H. O'Grady * William H. Younger, Jr. Director July 29, 2003 - ---------------------------------------- William H. Younger, Jr. * By: /s/ Paul G. Lego ---------------- Paul G. Lego, Attorney-in-fact
CERTIFICATIONS I, Paul G. Lego, certify that: 1. I have reviewed this annual report on Form 10-K of Virage, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 29, 2003 /s/ Paul G. Lego ------------------------------------ Paul G. Lego President and Chief Executive Officer (Principal Executive Officer) CERTIFICATIONS I, Scott Gawel, certify that: 1. I have reviewed this annual report on Form 10-K of Virage, Inc.; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 29, 2003 /s/ Scott Gawel ------------------------------------ Scott Gawel Vice President, Finance and Acting Chief Financial Officer (Principal Financial and Accounting Officer) EX-10.15 3 p17461_ex10-15.txt SEVERANCE LETTER AGREEMENT EXHIBIT 10.15 July 2, 2003 Dear Michael, This letter agreement formalizes our prior discussions and agreement on the terms of a severance arrangement, as previously agreed upon by the company's board of directors, in order to incent you to remain with the company. Virage, Inc. and you agree, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as follows: In the event that both (A) Virage, Inc. executes a definitive agreement for an acquisition, merger, consolidation, sale of all or substantially all of its assets, change in control transaction or other similar corporate reorganization, and (B) thereafter you are ever subject to termination or constructive termination by Virage, Inc. or its successor entity(ies), then Virage, Inc. and its successor entity(ies) shall immediately pay you, at a minimum, the greater of (a) six (6) months of your then-current base salary, or (b) One Hundred Thousand Dollars (US $100,000). For purposes of this agreement, "constructive termination" includes, without limitation, (i) a reduction of your duties, title, authority, reporting structure or responsibilities, relative to your duties, title, authority, reporting structure or responsibilities as in effect immediately prior to such reduction, or the assignment to you of such reduced duties, title, authority, reporting structure or responsibilities, or (ii) a reduction in your base salary or bonus plan as in effect immediately prior to such reduction, or (iii) a reduction in the aggregate level of employee benefits to which you were entitled immediately prior to such reduction with the result that your aggregate benefits package is reduced, or (iv) the relocation of you to a facility or a location more than twenty-five (25) miles from your then present location, or (v) any act or set of facts or circumstances which would, under California case law or statute constitute a constructive termination of you. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This letter agreement supercedes and replaces the terms and conditions of any prior agreement, whether written or oral, related to your severance, including, but not limited to, a letter agreement dated August 12, 2002 between you and Virage, Inc which is hereby expressly terminated and rendered null and void and of no further effect. This letter agreement shall be governed by the laws of the state of California and both parties agree to the exclusive jurisdiction in the state and federal courts in San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. Signatures below indicate both parties' assent and agreement to the terms and conditions of this letter agreement, and executes this letter agreement as of the date first set forth above. Sincerely, Virage, Inc. /s/ Paul G. Lego Paul G. Lego C.E.O. & Chairman Virage, Inc. Agreed to and Accepted by: Michael H. Lock /s/ Michael H. Lock July 2, 2003 - ----------------------------- ------------------------ Signature Date EX-10.16 4 p17461_ex10-16.txt AMENDMENT AND RESTATEMENT TO SEVERANCE LETTER EXHIBIT 10.16 AMENDMENT AND RESTATEMENT TO THE SEVERANCE LETTER AGREEMENT THIS AMENDMENT AND RESTATEMENT (this "Agreement") to the Severance Letter Agreement by and between Michael Lock (the "Executive") and Virage, Inc. ("Virage") dated as of July 2, 2003 (the "Severance Agreement"), is made by and among Virage and Michael Lock, effective as of July 9, 2003. WHEREAS, the Company and the Executive were parties to the Severance Agreement attached hereto as Exhibit A. WHEREAS, this Amendment and Restatement is being executed in connection with the Agreement and Plan of Merger by and among Autonomy Corporation plc, a corporation formed under the laws of England and Wales ("Autonomy"), Violet Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Autonomy, ("Merger Sub") and Violet (the "Merger Agreement"), whereunder Merger Sub shall be merged with and into Virage. WHEREAS, Executive, as a shareholder and/or vested optionholder of Company, will obtain consideration as a result of the closing of the Transaction; WHEREAS, Virage and Autonomy desire that Virage enter into an agreement with Executive, and Executive desires to enter into an agreement with Virage, whereby this Amendment and Restatement shall formalize the severance arrangement of Executive with Virage. NOW, THEREFORE, the parties hereto agree the Severance Agreement is hereby amended and modified in its entirety as follows: In the event that both (A) the transactions contemplated by the Merger Agreement are consummated (the "Transaction Closing") and (B) within twelve (12) months following the Transaction Closing the employment of Michael Lock (the "Executive") with Virage is terminated without Cause (as defined below) or the Executive resigns for Good Reason (as defined below), then Virage or its successor entity(ies) shall immediately pay Executive the greater of (a) six (6) months of Executive's then-current base salary, or (b) One Hundred Thousand Dollars ($100,000). For purposes of this agreement, "Cause" shall mean any of the following: (i) the Executive's intentional and material theft, dishonesty, or falsification of any Virage or Autonomy or any subsidiary thereof (Virage and Autonomy collectively or individually with each of its subsidiaries, the "Corporation") documents or records; (ii) the Executive's intentional and material improper use or disclosure of the Corporation's confidential or proprietary information; (iii) the Executive willfully engaging in intentional misconduct that is in bad faith and materially injurious to the Company, including misappropriation of trade secrets, fraud or embezzlement s; (iv) the Executive's intentional and material failure or inability to perform any reasonable assigned material duties after written notice from the Corporation of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach by the Executive of any employment agreement between the Executive and the Corporation, which breach is not cured pursuant to the terms of such agreement; or (vi) the Executive's conviction (including any plea of guilty or nolo contendere) of any criminal act which materially impairs the Executive's ability to perform his or her duties with the Corporation. For purposes of this agreement, "Good Reason" shall mean any of the following: (i) without the Executive's express written consent, the assignment to the Executive of any duties, or any limitation of the Executive's responsibilities, substantially inconsistent with the Executive's positions, duties, responsibilities and status with the Corporation immediately prior to the date of the Transaction Closing, but giving effect to limitations ordinarily contemplated by the Transaction; (ii) without the Executive's express written consent, the relocation of the principal place of the Executive's employment to a location that is more than twenty-five (25) miles from the Executive's principal place of employment immediately prior to the date of the Transaction Closing, or the imposition of travel requirements substantially more demanding of the Executive than such travel requirements existing immediately prior to the date of the Transaction Closing; (iii) any failure by the Corporation to pay, or any material reduction by the Corporation of, (1) the Executive's base salary in effect as of January 1, 2002, or (2) the Executive's bonus compensation percentage, if any, in effect immediately prior to the date of the Transaction Closing (subject to applicable mutually agreed upon performance requirements (negotiated in good faith but in the absence of any such agreement such performance requirements in effect immediately prior to the Transaction Closing) with respect to the actual amount of bonus compensation earned by the Executive); or (iv) any failure by the Corporation to (1) continue to provide the Executive with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive, in any benefit or compensation plans and programs, including, but not limited to, the Corporation's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Executive was participating immediately prior to the date of the Transaction Closing, or their equivalent, or (2) provide the Executive with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive. As a condition to the receipt of any payment by the Corporation to Executive pursuant to the terms and conditions hereof, Executive shall execute a general release of all claims pursuant to Virage's standard form of general release of claims. Other than as expressly set forth herein, the Executive shall not be entitled to any other payment as a result of his termination of employment with the Corporation. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This Agreement supercedes and replaces the terms and conditions of any prior agreement, whether written or oral, related to your severance, including but not limited to the Severance Agreement between Executive and Virage which is hereby expressly terminated and rendered null and void and of no further effect. This Agreement shall be governed by the laws of the State of California and both parties agree to the exclusive jurisdiction in the state and federal courts in the County of San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. VIRAGE, INC. /s/ Paul G. Lego ----------------------------- By: Paul G. Lego Title: Chairman of the Board of Directors, President and Chief Executive Officer Agreed and Accepted by: /s/ Michael Lock - --------------------- Michael Lock EX-10.17 5 p17461_ex10-17.txt RETENTION BONUS AND SEVERANCE AGREEMENT EXHIBIT 10.17 June 23, 2003 Dear Scott, By mutual consent, this letter amendment ("Letter Amendment") amends our prior letter agreement dated August 13, 2002 ("Letter Agreement"), as follows: The fifth paragraph of the Letter Agreement which begins "Should the Company execute a definitive..." shall be deleted in its entirety. Any Change of Control (as defined within the Letter Agreement) shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. including the aforementioned Letter Agreement and Letter Amendment (defined herein), to agree in writing to the assignment of the Letter Agreement, as amended hereby, to it, and to agree to bind any subsequent successor entities to it to these same obligations. The Letter Agreement and Letter Amendment shall be governed by the laws of the state of California and both parties agree to the exclusive jurisdiction in the state and federal courts in San Francisco, California. The prevailing party in any legal action or proceeding related to the Letter Agreement and Letter Amendment shall recover its reasonable attorneys' fees incurred in connection therewith. All other terms and conditions of the Letter Agreement shall remain in full force and effect. Your signature below indicates your assent and agreement to the terms and conditions of this amendment to the Letter Agreement, and executes this amendment as of the date first set forth above. Sincerely, /s/ Paul G. Lego Paul G. Lego C.E.O. & Chairman Virage, Inc. Agreed to and Accepted by: Scott Gawel /s/ Scott Gawel - ------------------------------ Signature June 23, 2003 - ------------------------------ Date EX-10.18 6 p17461_ex10-18.txt SEVERANCE LETTER AGREEMENT EXHIBIT 10.18 June 17, 2003 Dear Paul, This letter agreement formalizes our prior discussions and agreement on the terms of a severance arrangement, as previously agreed upon by the company's board of directors, in order to incent you to remain with the company. Virage, Inc. and you agree, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as follows: In the event that both (A) Virage, Inc. executes a definitive agreement for an acquisition, merger, consolidation, sale of all or substantially all of its assets, change in control transaction or other similar corporate reorganization, and (B) thereafter you are ever subject to termination or constructive termination by Virage, Inc. or its successor entity(ies), then Virage, Inc. and its successor entity(ies) shall immediately pay you, at a minimum, the greater of (a) twelve (12) months of your then-current base salary, or (b) Two Hundred Fifty Thousand Dollars (US $250,000). For purposes of this agreement, "constructive termination" includes, without limitation, (i) a reduction of your duties, title, authority, reporting structure or responsibilities, relative to your duties, title, authority, reporting structure or responsibilities as in effect immediately prior to such reduction, or the assignment to you of such reduced duties, title, authority, reporting structure or responsibilities, or (ii) a reduction in your base salary or bonus plan as in effect immediately prior to such reduction, or (iii) a reduction in the aggregate level of employee benefits to which you were entitled immediately prior to such reduction with the result that your aggregate benefits package is reduced, or (iv) the relocation of you to a facility or a location more than twenty-five (25) miles from your then present location, or (v) any act or set of facts or circumstances which would, under California case law or statute constitute a constructive termination of you. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This letter agreement shall be governed by the laws of the state of California and both parties agree to the exclusive jurisdiction in the state and federal courts in San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. Signatures below indicate both parties' assent and agreement to the terms and conditions of this letter agreement, and executes this letter agreement as of the date first set forth above. Sincerely, Virage, Inc. /s/ Scott Gawel /s/ William H. Younger, Jr. Scott Gawel William H. Younger, Jr. Vice President, Finance Compensation Committee Virage, Inc. Chairman Agreed to and Accepted by: Paul G. Lego /s/ Paul G. Lego - ----------------------- Signature June 17, 2003 - ----------------------- Date EX-10.19 7 p17461_ex10-19.txt AMENDMENT AND RESTATEMENT TO SEVERANCE LETTER EXHIBIT 10.19 AMENDMENT AND RESTATEMENT TO THE SEVERANCE LETTER AGREEMENT THIS AMENDMENT AND RESTATEMENT (this "Agreement") to the Severance Letter Agreement by and between Paul Lego (the "Executive") and Virage, Inc. ("Virage") dated as of June 17, 2003 (the "Severance Agreement"), is made by and among Virage and Paul Lego, effective as of July 9, 2003. WHEREAS, the Company and the Executive were parties to the Severance Agreement attached hereto as Exhibit A. WHEREAS, this Amendment and Restatement is being executed in connection with the Agreement and Plan of Merger by and among Autonomy Corporation plc, a corporation formed under the laws of England and Wales ("Autonomy"), Violet Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Autonomy, ("Merger Sub") and Violet (the "Merger Agreement"), whereunder Merger Sub shall be merged with and into Virage. WHEREAS, Executive, as a shareholder and/or vested optionholder of Company, will obtain consideration as a result of the closing of the Transaction; WHEREAS, Virage and Autonomy desire that Virage enter into an agreement with Executive, and Executive desires to enter into an agreement with Virage, whereby this Amendment and Restatement shall formalize the severance arrangement of Executive with Virage. NOW, THEREFORE, the parties hereto agree the Severance Agreement is hereby amended and modified in its entirety as follows: In the event that both (A) the transactions contemplated by the Merger Agreement are consummated (the "Transaction Closing") and (B) within twelve (12) months following the Transaction Closing the employment of Paul Lego (the "Executive") with Virage is terminated without Cause (as defined below) or the Executive resigns for Good Reason (as defined below), then Virage or its successor entity(ies) shall immediately pay Executive the greater of (a) twelve (12) months of Executive's then-current base salary, or (b) Two Hundred Fifty Thousand Dollars ($250,000). For purposes of this agreement, "Cause" shall mean any of the following: (i) the Executive's intentional and material theft, dishonesty, or falsification of any Virage or Autonomy or any subsidiary thereof (Virage and Autonomy collectively or individually with each of its subsidiaries, the "Corporation") documents or records; (ii) the Executive's intentional and material improper use or disclosure of the Corporation's confidential or proprietary information; (iii) the Executive willfully engaging in intentional misconduct that is in bad faith and materially injurious to the Company, including misappropriation of trade secrets, fraud or embezzlement s; (iv) the Executive's intentional and material failure or inability to perform any reasonable assigned material duties after written notice from the Corporation of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach by the Executive of any employment agreement between the Executive and the Corporation, which breach is not cured pursuant to the terms of such agreement; or (vi) the Executive's conviction (including any plea of guilty or nolo contendere) of any criminal act which materially impairs the Executive's ability to perform his or her duties with the Corporation. For purposes of this agreement, "Good Reason" shall mean any of the following: (i) without the Executive's express written consent, the assignment to the Executive of any duties, or any limitation of the Executive's responsibilities, substantially inconsistent with the Executive's positions, duties, responsibilities and status with the Corporation immediately prior to the date of the Transaction Closing, but giving effect to limitations ordinarily contemplated by the Transaction; (ii) without the Executive's express written consent, the relocation of the principal place of the Executive's employment to a location that is more than twenty-five (25) miles from the Executive's principal place of employment immediately prior to the date of the Transaction Closing, or the imposition of travel requirements substantially more demanding of the Executive than such travel requirements existing immediately prior to the date of the Transaction Closing; (iii) any failure by the Corporation to pay, or any material reduction by the Corporation of, (1) the Executive's base salary in effect immediately prior to the date of the Transaction Closing, or (2) the Executive's bonus compensation percentage, if any, in effect immediately prior to the date of the Transaction Closing (subject to applicable mutually agreed upon performance requirements (negotiated in good faith but in the absence of any such agreement such performance requirements in effect immediately prior to the Transaction Closing) with respect to the actual amount of bonus compensation earned by the Executive); or (iv) any failure by the Corporation to (1) continue to provide the Executive with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive, in any benefit or compensation plans and programs, including, but not limited to, the Corporation's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Executive was participating immediately prior to the date of the Transaction Closing, or their equivalent, or (2) provide the Executive with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive. As a condition to the receipt of any payment by the Corporation to Executive pursuant to the terms and conditions hereof, Executive shall execute a general release of all claims pursuant to Virage's standard form of general release of claims. Other than as expressly set forth herein, the Executive shall not be entitled to any other payment as a result of his termination of employment with the Corporation. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This Agreement supercedes and replaces the terms and conditions of any prior agreement, whether written or oral, related to your severance, including but not limited to the Severance Agreement between Executive and Virage which is hereby expressly terminated and rendered null and void and of no further effect. This Agreement shall be governed by the laws of the State of California and both parties agree to the exclusive jurisdiction in the state and federal courts in the County of San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. VIRAGE, INC. /s/ Scott Gawel ------------------------------- By: Scott Gawel Title: Vice President, Finance Agreed and Accepted by: /s/ Paul G. Lego - -------------------------- Paul Lego EX-10.20 8 p17461_ex10-20.txt SEVERANCE LETTER AGREEMENT EXHIBIT 10.20 June 17, 2003 Dear Frank, This letter agreement formalizes our prior discussions and agreement on the terms of a severance arrangement, as previously agreed upon by the company's board of directors, in order to incent you to remain with the company. Virage, Inc. and you agree, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, as follows: In the event that both (A) Virage, Inc. executes a definitive agreement for an acquisition, merger, consolidation, sale of all or substantially all of its assets, change in control transaction or other similar corporate reorganization, and (B) thereafter you are ever subject to termination or constructive termination by Virage, Inc. or its successor entity(ies), then Virage, Inc. and its successor entity(ies) shall immediately pay you, at a minimum, the greater of (a) six (6) months of your then-current base salary, or (b) One Hundred Thousand Dollars (US $100,000). For purposes of this agreement, "constructive termination" includes, without limitation, (i) a reduction of your duties, title, authority, reporting structure or responsibilities, relative to your duties, title, authority, reporting structure or responsibilities as in effect immediately prior to such reduction, or the assignment to you of such reduced duties, title, authority, reporting structure or responsibilities, or (ii) a reduction in your base salary or bonus plan as in effect immediately prior to such reduction, or (iii) a reduction in the aggregate level of employee benefits to which you were entitled immediately prior to such reduction with the result that your aggregate benefits package is reduced, or (iv) the relocation of you to a facility or a location more than twenty-five (25) miles from your then present location, or (v) any act or set of facts or circumstances which would, under California case law or statute constitute a constructive termination of you. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This letter agreement shall be governed by the laws of the state of California and both parties agree to the exclusive jurisdiction in the state and federal courts in San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. Signatures below indicate both parties' assent and agreement to the terms and conditions of this letter agreement, and executes this letter agreement as of the date first set forth above. Sincerely, Virage, Inc. /s/ Paul G. Lego /s/ William H. Younger, Jr. Paul G. Lego William H. Younger, Jr. C.E.O. & Chairman Compensation Committee Virage, Inc. Chairman Agreed to and Accepted by: Frank Pao /s/ Frank Pao - ----------------------- Signature June 17, 2003 - ----------------------- Date EX-10.21 9 p17461_ex10-21.txt AMENDMENT AND RESTATEMENT TO SEVERANCE LETTER EXHIBIT 10.21 AMENDMENT AND RESTATEMENT TO THE SEVERANCE LETTER AGREEMENT THIS AMENDMENT AND RESTATEMENT (this "Agreement") to the Severance Letter Agreement by and between Frank Pao (the "Executive") and Virage, Inc. ("Virage") dated as of June 17, 2003 (the "Severance Agreement"), is made by and among Virage and Frank Pao, effective as of July 9, 2003. WHEREAS, the Company and the Executive were parties to the Severance Agreement attached hereto as Exhibit A. WHEREAS, this Amendment and Restatement is being executed in connection with the Agreement and Plan of Merger by and among Autonomy Corporation plc, a corporation formed under the laws of England and Wales ("Autonomy"), Violet Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Autonomy, ("Merger Sub") and Violet (the "Merger Agreement"), whereunder Merger Sub shall be merged with and into Virage. WHEREAS, Executive, as a shareholder and/or vested optionholder of Company, will obtain consideration as a result of the closing of the Transaction; WHEREAS, Virage and Autonomy desire that Virage enter into an agreement with Executive, and Executive desires to enter into an agreement with Virage, whereby this Amendment and Restatement shall formalize the severance arrangement of Executive with Virage. NOW, THEREFORE, the parties hereto agree the Severance Agreement is hereby amended and modified in its entirety as follows: In the event that both (A) the transactions contemplated by the Merger Agreement are consummated (the "Transaction Closing") and (B) within twelve (12) months following the Transaction Closing the employment of Frank Pao (the "Executive") with Virage is terminated without Cause (as defined below) or the Executive resigns for Good Reason (as defined below), then Virage or its successor entity(ies) shall immediately pay Executive the greater of (a) six (6) months of Executive's then-current base salary, or (b) One Hundred Thousand Dollars ($100,000). For purposes of this agreement, "Cause" shall mean any of the following: (i) the Executive's intentional and material theft, dishonesty, or falsification of any Virage or Autonomy or any subsidiary thereof (Virage and Autonomy collectively or individually with each of its subsidiaries, the "Corporation") documents or records; (ii) the Executive's intentional and material improper use or disclosure of the Corporation's confidential or proprietary information; (iii) the Executive willfully engaging in intentional misconduct that is in bad faith and materially injurious to the Company, including misappropriation of trade secrets, fraud or embezzlement s; (iv) the Executive's intentional and material failure or inability to perform any reasonable assigned material duties after written notice from the Corporation of, and a reasonable opportunity to cure, such failure or inability; (v) any material breach by the Executive of any employment agreement between the Executive and the Corporation, which breach is not cured pursuant to the terms of such agreement; or (vi) the Executive's conviction (including any plea of guilty or nolo contendere) of any criminal act which materially impairs the Executive's ability to perform his or her duties with the Corporation. For purposes of this agreement, "Good Reason" shall mean any of the following: (i) without the Executive's express written consent, the assignment to the Executive of any duties, or any limitation of the Executive's responsibilities, substantially inconsistent with the Executive's positions, duties, responsibilities and status with the Corporation immediately prior to the date of the Transaction Closing, but giving effect to limitations ordinarily contemplated by the Transaction; (ii) without the Executive's express written consent, the relocation of the principal place of the Executive's employment to a location that is more than twenty-five (25) miles from the Executive's principal place of employment immediately prior to the date of the Transaction Closing, or the imposition of travel requirements substantially more demanding of the Executive than such travel requirements existing immediately prior to the date of the Transaction Closing; (iii) any failure by the Corporation to pay, or any material reduction by the Corporation of, (1) the Executive's base salary in effect as of January 1, 2002, or (2) the Executive's bonus compensation percentage, if any, in effect immediately prior to the date of the Transaction Closing (subject to applicable mutually agreed upon performance requirements (negotiated in good faith but in the absence of any such agreement such performance requirements in effect immediately prior to the Transaction Closing) with respect to the actual amount of bonus compensation earned by the Executive); or (iv) any failure by the Corporation to (1) continue to provide the Executive with the opportunity to participate, on terms no less favorable than those in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive, in any benefit or compensation plans and programs, including, but not limited to, the Corporation's life, disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans, if any, in which the Executive was participating immediately prior to the date of the Transaction Closing, or their equivalent, or (2) provide the Executive with all other fringe benefits (or their equivalent) from time to time in effect for the benefit of any employee group which customarily includes a person holding the employment position or a comparable position with the Corporation then held by the Executive. As a condition to the receipt of any payment by the Corporation to Executive pursuant to the terms and conditions hereof, Executive shall execute a general release of all claims pursuant to Virage's standard form of general release of claims. Other than as expressly set forth herein, the Executive shall not be entitled to any other payment as a result of his termination of employment with the Corporation. Any acquisition, merger, sale of all or substantially all of the assets, change in control transaction or other similar corporate reorganization of Virage, Inc. shall be subject to the successor entity agreeing in writing to assume and be bound by all the obligations of Virage, Inc. herein, to agree in writing to the assignment of this letter agreement to it, and to agree to bind any subsequent successor entities to it to these same obligations. This Agreement supercedes and replaces the terms and conditions of any prior agreement, whether written or oral, related to your severance, including but not limited to the Severance Agreement between Executive and Virage which is hereby expressly terminated and rendered null and void and of no further effect. This Agreement shall be governed by the laws of the State of California and both parties agree to the exclusive jurisdiction in the state and federal courts in the County of San Francisco, California. The prevailing party in any legal action or proceeding related to this letter agreement shall recover its reasonable attorneys' fees incurred in connection therewith. VIRAGE, INC. /s/ Paul G. Lego ------------------------------- By: Paul G. Lego Title: Chairman of the Board of Directors, President and Chief Executive Officer Agreed and Accepted by: /s/ Frank Pao - ---------------------------- Frank Pao EX-99.1 10 p17461_ex99-1.txt CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350 EXHIBIT 99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Based on my knowledge, I, Paul G. Lego, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Virage, Inc. on Form 10-K for the annual period ended March 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Virage, Inc. July 29, 2003 /s/ Paul G. Lego ------------------------------------- Paul G. Lego President and Chief Executive Officer Based on my knowledge, I, Scott Gawel, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Virage, Inc. on Form 10-K for the annual period ended March 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Virage, Inc. July 29, 2003 /s/ Scott Gawel ------------------------------------- Scott Gawel Vice President, Finance and Acting Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to Virage, Inc. and will be retained by Virage, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. EXHIBIT 99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Based on my knowledge, I, Paul G. Lego, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Virage, Inc. on Form 10-K for the annual period ended March 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Virage, Inc. June 16, 2003 /s/ Paul G. Lego ------------------------------------- Paul G. Lego President and Chief Executive Officer Based on my knowledge, I, Scott Gawel, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report of Virage, Inc. on Form 10-K for the annual period ended March 31, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Form 10-K fairly presents in all material respects the financial condition and results of operations of Virage, Inc. June 16, 2003 /s/ Scott Gawel ------------------------------------- Scott Gawel Vice President, Finance and Acting Chief Financial Officer A signed original of this written statement required by Section 906 has been provided to Virage, Inc. and will be retained by Virage, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----