Filed by Legato Systems, Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Legato Systems, Inc.
Commission File No: 000-26130
Welcome
Tony Takazawa
Director, EMC Global Investor Relations
© 2003 EMC Corporation. All rights reserved. 1
Agenda
| · | Joe Tucci, EMC President and CEO |
| – | EMC Strategic Rationale |
| · | David B. Wright, Legato Chairman, President and CEO |
| – | Legato Strategic Rationale |
| · | Bill Teuber, EMC Executive Vice President and CFO |
| – | Transaction Summary |
| · | Q&A |
© 2003 EMC Corporation. All rights reserved. 2
Forward-Looking Statements
This presentation contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) risks associated with strategic investments and acquisitions, including the challenges and costs of closing, integration, restructuring and achieving anticipated synergies associated with the acquisition (ii) adverse changes in general economic or market conditions; (iii) delays or reductions in information technology spending; (iv) the transition to new products, the uncertainty of customer acceptance of new product offerings, and rapid technological and market change; (v) insufficient, excess or obsolete inventory; (vi) competitive factors, including but not limited to pricing pressures; (vii) component quality and availability; (viii) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission.
© 2003 EMC Corporation. All rights reserved. 3
For More Information:
In connection with the proposed transaction, EMC and Legato intend to file a proxy statement/prospectus with the U.S. Securities and Exchange Commission (the “SEC”). Investors and security holders of EMC and Legato are advised to read the proxy statement/prospectus when it becomes available, because it will contain important information about EMC, Legato and the proposed transaction. Investors and security holders may obtain a free copy of the proxy statement/prospectus, when available, and other documents filed by EMC and Legato with the SEC at the SEC’s website at www.sec.gov. Free copies of the proxy statement/prospectus, when available, and each company’s other filings with the SEC also may be obtained from the respective companies. Free copies of EMC’s filings may be obtained by directing a request to EMC. You can request this information via the web at www.EMC.com/IR/request or by sending a written request to EMC Investor Relations, 176 South Street, Hopkinton, MA 01748. Free copies of Legato’s filings may be obtained by directing a request to Legato Investor Relations, 2350 West El Camino Real, Mountain View, CA 94040 or via the web at http://portal1.legato.com/corporate_info/investors/.
LEGATO, its directors and executive officers may be deemed to be participants in the solicitation of proxies from LEGATO stockholders in favor of the proposed transaction. A description of the interests of the directors and executive officers of LEGATO is set forth in LEGATO’s proxy statement for its 2003 annual meeting, which was filed with the SEC on April 30, 2003. Investors and security holders may obtain additional information regarding the interests of such potential participants by reading the definitive proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.
© 2003 EMC Corporation. All rights reserved. 4
EMC and Legato
Joe Tucci
EMC President & CEO
© 2003 EMC Corporation. All rights reserved. 5
1. EMC Preliminary 2Q03 Results
| · | Evidence that our focus on automated networked storage is paying off |
| · | Revenues: Previous range $1.425B—$1.475B |
| – | Will be around the high end of range |
| · | EPS: Previously announced target of $0.03 |
| – | Will meet or exceed by one cent |
| · | No additional comments at this time |
| · | Join us on July 16th for full details of 2Q03 results |
© 2003 EMC Corporation. All rights reserved. 6
2. Agreement with BMC Software
Highlights:
EMC
| · | EMC to acquire BMC PATROL Storage Manager assets |
| · | BMC to sell EMC ControlCenter |
| · | Furthers commitment to “openness” |
| – | EMC’s first pure software channel |
| – | Access to BMC’s great customer base |
BMC
| · | Allows BMC to totally focus on their “Business Service Management” |
| · | Customers in great hands with EMC’s customer service and support |
| · | Offers a more integrated Systems/Storage Management Solution |
© 2003 EMC Corporation. All rights reserved. 7
3. EMC’s Acquisition of Legato
[GRAPHIC]
[GRAPHIC]
© 2003 EMC Corporation. All rights reserved. 8
Strategic Acquisition Criteria
Leading Technology
Customer Base
Distribution & Support
© 2003 EMC Corporation. All rights reserved. 9
EMC & Legato: Great Strategic Fit
~450 Software engineers
Leading Technology
Customer Base
~31,000 customers
Distribution & Support
~500 Customer Facing Personnel
~400 Channel Partners
Additional Software “DNA”
© 2003 EMC Corporation. All rights reserved. 10
EMC & Legato: Great Product Fit
| Enterprise SRM |
||
| Storage |
||
| Infrastructure |
||
| Software |
||
| Data |
||
| Management |
||
| Software |
||
© 2003 EMC Corporation. All rights reserved. 11
EMC & Legato: Great Product Fit
| Enterprise SRM |
Storage Resource Management | |
| Storage Infrastructure Software |
Distributed File System
Volume Mgmt. and Virtualization
Application Monitoring and Availability (Clustering)
Network Load Balancing
On-Board Replication
Server-Based Replication | |
| Data Management Software |
Backup and Recovery
Media Management
Replication Management
HSM and Archive
Content Management
Content Distribution | |
© 2003 EMC Corporation. All rights reserved. 12
EMC & Legato: Great Product Fit
| [GRAPHIC] | ||||
| Enterprise SRM |
Storage Resource Management | ControlCenter Family / VisualSAN / VisualSRM | ||
| Storage Infrastructure Software |
Distributed File System Volume Mgmt. and Virtualization |
HighRoad PowerPath Volume Manager | ||
| Application Monitoring and Availability (Clustering) | ||||
| Network Load Balancing | PowerPath | |||
| On-Board Replication |
SRDF / TimeFinder / SnapView / MirrorView / SANCopy | |||
| Server-Based Replication | ||||
| Data Management Software |
Backup and Recovery Media Management Replication Management
HSM and Archive Content Management |
EDM
Replication Manager / Symmetrix Data Mobility Manager Avalon | ||
| Content Distribution | OnCourse | |||
© 2003 EMC Corporation. All rights reserved. 13
EMC & Legato: Great Product Fit
| [GRAPHIC] | ||||
| Enterprise SRM |
Storage Resource Management | ControlCenter Family / VisualSAN / VisualSRM | ||
| Storage Infrastructure Software |
Distributed File System Volume Mgmt. and Virtualization Application Monitoring and Availability (Clustering) Network Load Balancing On-Board Replication |
HighRoad PowerPath Volume Manager Application Availability Manager / Co-Standby Server PowerPath SRDF / TimeFinder / SnapView / MirrorView / SANCopy | ||
| Server-Based Replication | RepliStor | |||
| Data Management Software |
Backup and Recovery Media Management Replication Management
HSM and Archive |
EDM NetWorker AlphaStor Replication Manager / Symmetrix Data Mobility Manager Avalon DiskXtender / EmailXtender / ArchiveXtender | ||
| Content Management | ApplicationXtender | |||
| Content Distribution | OnCourse | |||
© 2003 EMC Corporation. All rights reserved. 14
EMC & Legato: Integration aspects
Leadership
| · | Legato will be a division of EMC |
| · | David Wright joins EMC as President of Legato division and EVP of EMC |
| · | Development brought together under one team matrixed with Mark Lewis |
© 2003 EMC Corporation. All rights reserved. 15
EMC & Legato: Integration aspects
Product
| · | EMC will continue to support EDM |
| · | NetWorker will become our primary backup/recovery offering… we will incorporate key EDM features |
© 2003 EMC Corporation. All rights reserved. 16
EMC & Legato: Integration aspects
Go to market
| · | Legato’s sales/distribution, led by David Wright, to remain independent to maintain the focus on this open software |
| – | Will continue to leverage Legato’s strong channel partners and brand |
| · | We will leverage our enterprise account presence and direct sales organization to accelerate revenue growth |
| · | Over time, the independent selling capability will be leveraged to sell additional Open Software products |
© 2003 EMC Corporation. All rights reserved. 17
The Legato Perspective
David B. Wright
Legato Chairman, President & CEO
© 2003 EMC Corporation. All rights reserved. 18
Why Now for Legato? Why EMC?
Why Now for Legato?
| · | Customers demanding complete solutions to manage all their information |
| – | Lower TCO |
| – | Managing complexity/compliance needs |
| · | Legato well-positioned in core markets and in high-growth opportunities in content and messaging management |
| · | However… the combined opportunity is greater |
| – | Create the most complete ILM software vendor in the industry |
| – | More resources to capture market opportunities |
| – | Accelerate growth and profitability |
© 2003 EMC Corporation. All rights reserved. 19
Why Now for Legato? Why EMC?
Why EMC?
| · | Common approach to Information Lifecycle Management, with focus on delivering protection, availability and access solutions around key customer pain points |
| · | EMC’s scale… |
| – | Extensive R&D resources |
| – | Global distribution and world-class support |
| – | Financial strength |
| · | Highly complementary fit (products, sales) |
| · | Cultural fit—we know the team well |
| · | EMC’s commitment to Open Software |
| – | Legato to operate as a division of EMC to maximize software sales |
© 2003 EMC Corporation. All rights reserved. 20
Transaction Summary
Bill Teuber
Executive Vice President & CFO
© 2003 EMC Corporation. All rights reserved. 21
EMC and Legato: Transaction Summary
| Deal Structure: |
All stock transaction | |
| Exchange Ratio: |
0.9 EMC shares per LGTO share | |
| Expected Closing : |
Early Q4 2003 | |
| Ownership: |
EMC Shareholders: >95% | |
| Current Value : |
Approximately $1.3 Billion | |
© 2003 EMC Corporation. All rights reserved. 22
EMC and Legato: Transaction Summary
| · | Value of transaction will be finalized using the average of the closing price several days pre and post -announcement |
| · | Allocation of purchase price is subject to appraisal |
| · | Based on yesterday’s closing stock price, the transaction would result in approximately: |
| – | $125-$175M of intangible assets |
| – | $30-$60M (primarily) in-process R&D |
| – | $1.0-$1.1B of goodwill |
© 2003 EMC Corporation. All rights reserved. 23
Financial Details – Last 4 Quarters (Q2’02-Q1’03)
| EMC | Legato | Combined | ||||
| $5.5B | $280M | $5.8B | ||||
| Revenues |
Systems—$ 2.996B Software—$1.249B Services—$1.275B | Systems – N/A Software—$138M Services—$142M |
Systems—$2.996B Software $ 1.387B Services—$1.417B | |||
| SW license revenue as % of total |
23% | 49% | 24% | |||
| Assets |
$9.6B | $472M | $ 10.1B | |||
| Employees |
17,200 | 1,500 | 18,700 | |||
Totals may not foot and may not agree to other schedules due to rounding
© 2003 EMC Corporation. All rights reserved. 24
Financial Highlights
| · | Consolidated in financial statements during Q4’03 |
| – | Revenue reported in Multi-platform Software and Services lines |
| – | In-process R&D expensed in Q4’03 |
| · | Continue to expect to be profitable in every quarter of 2003 |
| · | Slightly accretive to 2004 earnings |
| – | Predominantly revenue synergies |
| – | Some cost efficiencies |
| – | Some improvement in consolidated gross margins |
© 2003 EMC Corporation. All rights reserved. 25
Q&A
© 2003 EMC Corporation. All rights reserved. 26
EMC & Legato: Great Strategic Fit
~450 Software engineers
Leading Technology
Customer Base
~31,000 customers
Distribution & Support
~500 Customer Facing Personnel ~400 Channel Partners
Additional Software “DNA”
© 2003 EMC Corporation. All rights reserved. 27