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Case 1 :04-cv-00831-SLR Document 54-3 Filed 07/20/2005 Page 0
CHART OF CONFIDENTIAL WITNESS ALLEGATIONS
In re VERITAS Softwrzre Corp. Sec. Litig.,No. 04-CV—83l (SLR)
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lHSid€ $@65 m¤H&g€Y Y0? S0Utl1€3SY ¤ VRTS strategy was to convince customers to
region employed until the end of Ql purchase upgrades, renew maintenance licenses
2004 ($l23(a)) and buy consulting services (1l¢l5(a))
¤ To obtain new products, VRTS had to buy small
companies who had products that could be used
as upgrades to VRTS software; most ofthe
upgrades were from storage/high availability
products and APM line; most of the revenue
from existing customers came from the sale of
upsredes (1l45(¤))
• ln 2003 and 2004, seven major upgrades were in
. the APM area, but they sold poorly, resulting in _
sales that were only a small traction of what
VRTS had projected internally (1f45(b))
¤ Bloonfs business model depended on an
increase in consulting services, which never
materialized; VRTS instructed the sales people
‘ in 2003 that 10% of sales should be coming from
consulting services; consulting services must
have been part of revenue estimates but was only
a miniscule percentage in 2003 and did not grow
at a meaningful level and there was no
reasonable basis to consider it an important
revenue component (1l45(c))
` • Practically none of the sales people had inet their
quotas at the end of Q1 2004 ('l[45(e))
ciwipaabrrparre1¤psruasmsi_1.noc non;
. Case 1 :04-cv-00831-SLR Document 54-3 Filed 07/20/2005 Page 3 of 4
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#2 Part Of $2068 management during lhfi ¤ Upgrades were largest source of new revenue
Class Period through most of Q2 from existing clients and required VRTS to have
2004 ("ll23(b)) new products and ideas in the pipeline (1l¢i5(a))
¤ VRTS was unsuccessful in attempts to renew
existing business in 2003 and 2004, including
efforts to renew contracts with large customers,
because of poor customer service, lack of
integration of customer service effort into sales
effort, and the fact that large customers were
experiencing fiscal difticulties (‘l[45(d))
Worked in the legal department • Brigden approved contracts although they lacked
throughout 2003 and had contract essential terms, such as price, and, in some
review responsibilities (.'.(c)) cases, were unsigned by the customer; booking
revenue on contracts that had not been signed or
lacked essential terms was standard practice at
least through 2003; revenue results for a quarter
were determined before the quarter ended; when
he/she protested that contracts were incomplete,
Bri gden said it did not matter because they
already knew what the numbers for the quarter
were; Brigden tired highly regarded and honest
employees and brought in employees who would
do whatever he wanted; Bri gden began insisting
on reviewing large contracts, such as IBM,
. himself ('|l4l (b))
¤ Demand for new licenses dropped in 2003 and
" did not recover during the Class Period (1l45(e))
#4 Worked ill tht-> l€S?1l d€P¤Ylm€Hi • The legal department was responsible for
during the Class Period and had deciding when revenue could be recognized and
responsibilities relating to the reported (°[l41(a))
negotiation of licenses and had '
regular interaction with the finance ¤ As a result of the downturn in demand and the
i department throughout the Class " need to cut costs, people who left during Q1
Period until the end of Qi 2004 2004 were not replaced despite the fact that
(l[23(d)) VRTS was understaffed ('ll45(t))
ciwtiamsiiratisiiosru¤m
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Case 1:04-cv-00831-SLR Document 54 3 Fl|6d 07/20/2 9
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#5 Sales staff administrator during the ¤ During the Class Period and at least through
Class Period until the end of 2003 2003, there was great pressure from management
and was involved with new contracts to report revenue sufficient to meet earnings
(1[23(e)) estimates and sales people would “ail the time"
write up and process contracts without essential
terms and customer signatures to meet targets .
and "bolster the nurnbers" (1l41(c))
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