<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 29, 1996
AMENDMENT NO. 1
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-27130
POLYCOM, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3128324
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2584 JUNCTION AVENUE, SAN JOSE, CALIFORNIA 95134
(Address of Principal Executive Offices, including Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (408) 526-9000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$0.0005 par value per share
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 report), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to the Form 10-K. [ ]
The aggregate market value of voting stock held by non affiliates of the
Registrant, as of April 28, 1997 was approximately $19,678,654 (based upon
the closing price for shares of the Registrant's Common Stock as reported by
the Nasdaq National Market on that date). Shares of Common Stock held by
each officer, director and holder of 5% or more of the outstanding Common
Stock have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.
On April 28, 1997, approximately 19,115,779 shares of the Registrant's
Common Stock, $0.0005 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Not applicable.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
FORM 10-K/A
AMENDMENT NO. 1
THE UNDERSIGNED REGISTRANT HEREBY AMENDS THE INFORMATION SET FORTH ON THE
COVER PAGE IMMEDIATELY FOLLOWING THE HEADING "DOCUMENTS INCORPORATED BY
REFERENCE," TO READ IN FULL AS FOLLOWS:
NOT APPLICABLE.
THE UNDERSIGNED REGISTRANT HEREBY AMENDS THE INFORMATION SET FORTH
IMMEDIATELY FOLLOWING ITEM 4 ENTITLED "SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS," UNDER THE HEADING "PART III" BY DELETING SAME IN ITS
ENTIRETY.
THE UNDERSIGNED REGISTRANT HEREBY AMENDS PART III, TO READ IN FULL AS
FOLLOWS:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The officers and directors of the Company, and their ages as of
April 1, 1997, are as follows:
Name Age Position
- ----------------------- --- ----------------------------------------
Brian L. Hinman . . . . . 35 Chairman of the Board and Chief Executive Officer
Robert C. Hagerty . . . . 45 President, Chief Operating Officer and Director
Michael R. Kourey . . . . 37 Vice President, Finance and Administration, Chief
Financial Officer and Secretary
Ardeshir Falaki . . . . . 38 Vice President, Engineering - Dataconferencing
Gilbert J. Pearson. . . . 48 Vice President, Engineering - Audioconferencing
Alan D. Hagedorn. . . . . 49 Vice President, Manufacturing
Bandel Carano(2). . . . . 35 Director
Stanley J. Meresman(1). . 50 Director
John P. Morgridge(1)(2) . 63 Director
James R. Swartz . . . . . 54 Director
___________________
(1) Member of Audit Committee
(2) Member of Compensation Committee
BRIAN L. HINMAN is a founder of the Company and serves as Chief Executive
Officer and Chairman of the Board of Directors. Mr. Hinman co-founded
PictureTel, a leading manufacturer of videoconferencing equipment, in August
1984. At PictureTel, he served as the Vice President of Engineering from
August 1984 until January 1991 and as a member of the Board of Directors from
August 1984 to December 1989. He is a co-founder and director of the
International Multimedia Teleconferencing Consortium, Inc. which is dedicated
to the International Telecommunications Union standards of H.320 and T.120
for video and dataconferencing. Mr. Hinman holds seven U.S. patents in the
teleconferencing field. Mr. Hinman also holds a B.S.E.E. from the University
of Maryland and an S.M.E.E. from Massachusetts Institute of Technology.
ROBERT C. HAGERTY joined the Company in January 1997 and serves as the
President, Chief Operating Officer and a member of the Board of Directors.
Prior to joining Polycom, Mr. Hagerty served as President, Chief Executive
Officer and Director of Stylus Assets, Ltd., a document management company,
from November
<PAGE>
1995 through December 1996. From July 1993 to October 1995, Mr. Hagerty
served in various executive management positions of Logitech, Inc. Prior to
that time, Mr. Hagerty served in various executive management positions at
Conner Peripherals, Inc. Mr. Hagerty holds a B.S. degree in Operations
Research and Industrial Engineering from the University of Massachusetts,
Amherst and an M.A. in Management from St. Mary's College of California.
MICHAEL R. KOUREY joined the Company in July 1991 and has served as the
Company's Vice President, Finance and Operations until January 1995. Mr.
Kourey assumed the offices of Secretary and Treasurer in June 1993. Since
January 1995, he has served as Vice President, Finance and Administration and
Chief Financial Officer of the Company. Prior to joining Polycom, Mr. Kourey
was employed by Verilink Corporation, a supplier of T1 nodal connecting
telecommunications equipment, where he served as the Vice President of
Operations from July 1990 to May 1991 and the Director of Materials from
April 1989 to June 1990. From January 1984 to April 1989, he served in
various manufacturing management positions at David Systems, Inc., a voice
and data communications equipment company. Mr. Kourey holds a B.S. in
Managerial Economics from the University of California, Davis and an M.B.A.
from the University of Santa Clara.
ARDESHIR FALAKI joined the Company in April 1996 as Vice President,
Dataconferencing Engineering. Prior to joining Polycom, Mr. Falaki served in
various engineering management roles at PictureTel Corporation, including the
position of Director, Performance Products, Group Systems Division, from
March 1988 through April 1996. Prior to joining PictureTel, Mr. Falaki held
engineering management positions at Siemens AG. Mr. Falaki holds a B.S.E.E.
in Electrical Engineering from Northeastern University and an M.S.E.E. from
the University of Massachusetts, Dartmouth.
GILBERT J. PEARSON joined the Company in February 1994, and served as the
Company's Manager of Audio Systems until December 1994. In December 1994,
Mr. Pearson was named Director Hardware Development until January 1997. In
January 1997, Mr. Pearson was named Vice President, Audioconferencing
Engineering. From September 1987 to June 1990, Mr. Pearson served as the
Director of Engineering and Vice President/General Manager of Harris
Corporation, Video Systems Operation. From October 1981 to July 1986, Mr.
Pearson was employed by Compression Labs, Inc., a leading videoconferencing
equipment supplier, where he served as Vice President of Engineering. Mr.
Pearson holds a B.S.E.E. from the University of Adelaide, Australia.
ALAN D. HAGEDORN joined the Company in September 1996 as Vice President,
Manufacturing. Prior to joining Polycom, Mr. Hagedorn served as Vice
President of Manufacturing at Amati Communications, Inc. from February 1994
through September 1995. From September 1988 through February 1994, Mr.
Hagedorn served as Vice President of Manufacturing at Network Computing
Devices, Inc. Mr. Hagedorn holds a B.A. in Management from California State
University, Fullerton.
BANDEL CARANO has been a director of the Company since July 1991. Since
1987, Mr. Carano has been a General Partner of Oak Investment Partners
("Oak"), a venture capital investment firm. Mr. Carano is also a director of
Digital Sound Corp., a unified messaging systems company. Prior to joining
Oak, Mr. Carano was employed by Morgan Stanley's Venture Capital Group and
served as a technical advisor to Morgan Stanley's High Technology Investment
Banking Group. Mr. Carano received both his B.S. and M.S. degrees in
Electronic Engineering from Stanford University.
STANLEY J. MERESMAN has been a director of the Company since January
1995. Mr. Meresman served as the Senior Vice President, Finance and Chief
Financial Officer of Silicon Graphics, Inc. ("Silicon Graphics") from May
1989 to May 1997. Prior to joining Silicon Graphics, Mr. Meresman was Vice
President, Finance and Administration, and Chief Financial Officer of Cypress
Semiconductor Corporation. Mr. Meresman has a B.S. degree in Industrial
Engineering and Operations Research from the University of California,
Berkeley and an M.B.A. degree from Stanford University.
3.
<PAGE>
JOHN P. MORGRIDGE has been a director of the Company since April 1992.
In January 1995, Mr. Morgridge became the Chairman of the Board of Cisco
Systems, Inc. ("Cisco"). Prior to this appointment, Mr. Morgridge had served
as President and Chief Executive Officer of Cisco since October 1988. Prior
to Cisco, Mr. Morgridge served two years as President and Chief Operating
Officer of GRiD Systems Corporation. From 1982 and 1986, Mr. Morgridge was
Vice President of Sales, Marketing and Service for Stratus Computers, Inc.
Mr. Morgridge holds a B.B.A. degree in Marketing and Finance from the
University of Wisconsin and an M.B.A. degree in Marketing and Transportation
from Stanford University.
JAMES R. SWARTZ has been a director of the Company since July 1991. Mr.
Swartz co-founded Accel Partners, a venture capital investment firm, and has
been managing partner of Accel Partners, since September 1983. Mr. Swartz is
also a director of PictureTel Corporation, a developer and manufacturer of
video conferencing systems, and Remedy Corporation, a developer of
client/server application software. Mr. Swartz holds an A.B. degree in
Engineering Sciences and Applied Physics from Harvard University and an
M.S.I.A. degree from Carnegie Mellon University.
The Company currently has authorized six directors. Each director holds
office until the next annual meeting of stockholders or until his successor
is duly elected and qualified. The officers serve at the discretion of the
Board of Directors.
The Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee reviews internal auditing
procedures, the adequacy of internal controls and the results and scope of
the audit and other services provided by the Company's independent auditors.
The Audit Committee meets periodically with management and the independent
auditors. The Compensation Committee establishes salaries, incentives and
other forms of compensation for officers and other employees of the Company,
and administers the incentive compensation and benefit plans of the Company.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and any persons holding more than ten
percent of the Company's Common Stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Directors, executive officers and greater than ten percent stockholders are
required by SEC regulations to furnish the Company with copies of all Section
16(a) forms they file. To the Company's knowledge, based solely upon a
review of copies of reports furnished to the Company and written
representations that no other reports were required during the fiscal year
ended December 29, 1996, the Company's officers, directors and greater than
ten percent (10%) stockholders complied with all other Section 16(a) filing
requirements.
Except as otherwise described, the Company has not paid cash or other
compensation to its directors. Non-employee members of the Board of Directors
are eligible to receive periodic option grants under the Automatic Option
Grant program in effect under the Company's 1996 Stock Incentive Plan.
4.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation earned by the Company's
Chief Executive Officer and the four other most highly compensated executive
officers of the Company serving as such as of the end of the last fiscal
year, for services rendered in all capacities to the Company for the 1995 and
1996 fiscal years. Mr. Donnelly and Mr. Day, two officers who would have
otherwise been included in such table on the basis of salary and bonus earned
for the 1996 fiscal year had they not resigned or terminated employment
during fiscal year 1996, are also included in this table. The individuals
included in the table will be collectively referred to as the "Named Officers."
Annual Long-Term
Compensation Compensation
--------------------
Awards
--------------------
Salary Bonus Number of Securities
Name and ------ ----- Underlying
Principal Position Year ($) ($) Options
- ------------------ ---- ------ ----- --------------------
Brian L. Hinman(1),
President and Chief 1996 150,000 -- 6,667
Executive Officer 1995 115,802 -- --
Michael R. Kourey,
Vice President, Finance
and Administration, 1996 135,000 -- 106,667
Chief Financial Officer 1995 130,033 -- --
and Secretary
Evan J. McDowell(2),
Vice President, Sales 1996 100,022 109,000 7,111
and Marketing 1995 100,000 137,474 --
Ardeshir Falaki(3), 1996 81,731 24,997 165,000
Vice President,
Dataconferencing
Engineering
Joseph H. Donnelly(4),
Vice President, 1996 103,698 -- 6,667
Manufacturing 1995 125,000 -- --
Patrick P. Day(5),
Vice President, 1996 136,122 -- 6,667
Engineering 1995 86,538 -- 200,000
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(1) As of January 13, 1997, Mr. Hinman's position at the Company is Chairman of
the Board of Directors and Chief Executive Officer. The current President
and Chief Operating Officer is Robert C. Hagerty, who joined the Company in
January 1997.
(2) Mr. McDowell resigned in January 1997.
(3) Mr. Falaki joined the Company in April 1996.
5.
<PAGE>
(4) Mr. Donnelly resigned in September 1996. The current Vice President of
Manufacturing is Alan D. Hagedorn who joined the Company in September 1996.
(5) Mr. Day resigned in November 1996. Effective November 11, 1996, the
Company divided engineering management between dataconferencing and
audioconferencing products. The current Vice President of Dataconferencing
Engineering is Ardeshir Falaki who joined the Company in April 1996.
Gilbert J. Pearson was promoted to Vice President of Audioconferencing
Engineering in January 1997.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to the stock option
grants made during the 1996 fiscal year under the Company's 1996 Stock Incentive
Plan to each of the Named Officers in fiscal year 1996. No stock appreciation
rights were granted to the Named Officers during the fiscal year.
<TABLE>
<CAPTION>
Individual Grant
----------------------------------------------------- Potential Realizable
Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise for Option Term(3)
Options Employees in Price Expiration ------------------
Name Granted(1) Fiscal Year ($/Share)(2) Date 5% 10%
---- ---------- ------------ ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Brian L. Hinman. . . . . . . 6,667 0.6% $ 4.75 01/28/06 $ 19,914 $ 50,469
Michael R. Kourey. . . . . . 6,667 0.6% $ 4.75 01/28/06 $ 19,914 $ 50,469
100,000 9.6% $6.375 07/29/06 $400,900 $1,016,000
Evan J. McDowell . . . . . . 7,111 0.7% $ 4.75 01/28/06 $ 21,241 $ 53,830
Ardeshir Falaki. . . . . . . 100,000 9.6% $9.000 04/28/06 $566,000 $1,434,400
65,000 6.3% $6.125 11/05/06 $250,380 $ 634,530
Joseph H. Donnelly . . . . . 6,667 0.6% $ 4.75 01/28/06 $ 19,914 $ 50,469
Patrick P. Day . . . . . . . 6,667 0.6% $ 4.75 01/28/06 $ 19,914 $ 50,469
</TABLE>
- --------------------
(1) Each option granted on January 29, 1996 is immediately exercisable for all
the option shares. However, any shares purchased under the option will be
subject to repurchase by the Company, at the option exercise price paid per
share, upon the optionee's cessation of service prior to vesting in those
shares. The option shares will vest in a series of twenty-four (24)
successive equal monthly installments upon the optionee's completion of each
month of service over the twenty-four (24)-month period measured from the
grant date. The options granted on April 29, 1996, July 30, 1996 and
November 6, 1996 will each become exercisable for the option shares in a
series of installments over the optionee's period of service with the
Company, with 20% of the option shares to become exercisable upon the
optionee's completion of one year of service measured from the grant date
and the balance to become exercisable in forty-eight (48) successive equal
monthly installments upon the optionee's completion of each additional month
of service. Each option has a maximum term of 10 years, subject to earlier
termination upon the optionee's cessation of service. The shares subject to
each option will immediately vest in full in the event the Company is
acquired by a merger or asset sale (unless the Company's repurchase right
with respect to the unvested shares is to be assigned to the acquiring
entity or the option is to be assumed by such entity).
(2) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a
cashless exercise procedure involving a same-day sale of the purchased
shares. The Company may also finance the option exercise by loaning the
optionee sufficient
6.
<PAGE>
funds to pay the exercise price for the purchased shares, together with
any federal and state income tax liability incurred by the optionee in
connection with such exercise.
(3) There can be no assurance provided to the option holder or any other holder
of the Company's securities that the actual stock price appreciation over
the ten (10)-year option term will be at the assumed 5% and 10% annual
rates of compounded stock price appreciation or at any other defined level.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning option exercises
and option holdings for 1996 with respect to each of the Named Officers. No
stock appreciation rights were exercised during such year or were outstanding
at the end of that year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END(1)
ACQUIRED ON VALUE ---------------------- --------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Brian L. Hinman. . . . . 0 -- 6,667 0 -- --
Michael R. Kourey. . . . 0 -- 6,667 100,000 -- --
Evan J. McDowell . . . . 0 -- 0 0 -- --
Ardeshir Falaki. . . . . 0 -- 0 165,000 -- --
Joseph H. Donnelly . . . 0 -- 0 0 -- --
Patrick P. Day . . . . . 0 -- 0 0 -- --
</TABLE>
- -----------------
(1) As of December 29, 1996, Brian L. Hinman and Michael R. Kourey each held
options to purchase 6,667 shares of the Company's Common Stock at an
exercise price of $4.75 per share, and Mr. Kourey held an option to
purchase 100,000 shares at a purchase price of $6.375 per share. Mr.
Falaki was granted 100,000 shares at an exercise price of $9.00 per share
and 65,000 shares at an exercise price of $6.125 per share, both of which
were above the fair market value of the stock as of December 29, 1996.
Each 6,667 share option is immediately exercisable for all the option
shares, but as of December 29, 1996, 3,611 of these option shares were
unvested and subject to repurchase by the Company. Mr. Kourey's 100,000
share option and both of Mr. Falaki's options become exercisable in a series
of installments over Mr. Kourey's and Mr. Falaki's period of service, with
20% of the option shares to become exercisable one year from the grant date
and the balance to become exercisable in forty-eight (48) successive equal
monthly installments. As of December 29, 1996, the option exercise price was
below the fair market value of the Common Stock for all the above options.
Therefore, there were no unexercised in-the-money options as of December 29,
1996.
7.
<PAGE>
OPTION REPRICING
During the 1997 fiscal year, the Company implemented an option
cancellation and regrant program for employees (other than executive
officers) holding stock options with exercise prices per share in excess of
the market price of the Company's Common Stock at the time the cancellation
and regrant occurred. The cancellation and regrant was effected on March 14,
1997, and outstanding options covering an aggregate of 223,200 shares with
exercise prices in excess of $4.50 per share were canceled and new options
for the same number of shares were granted with an exercise price of $4.375
per share. None of the Named Officers participated in the 1997 option
cancellation and regrant program.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Company's Board was formed in January
1995, and the members of the Compensation Committee are Messrs. Carano and
Morgridge. Neither of these individuals was at any time during the year ended
December 29, 1996, or at any other time, an officer or employee of the
Company. No member of the Compensation Committee of the Company serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as a member of the Company's Board
of Directors or Compensation Committee.
EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
The Company does not presently have any employment contracts in effect
with the Chief Executive Officer or any of the other executive officers named
in the Summary Compensation Table.
In connection with an acquisition of the Company by merger or asset sale,
each outstanding option held by the Chief Executive Officer and the other
executive officers the 1996 Plan (and the Company's Predecessor Stock Plan)
will automatically accelerate in full and all unvested shares of Common Stock
purchased or purchaseable by such individuals under such plans will
immediately vest in full, except to the extent such options are to be assumed
by, and the Company's repurchase rights with respect to those shares are to
be assigned to, the successor corporation. In addition, the Compensation
Committee as Plan Administrator of the 1996 Plan will have the authority to
provide for the immediate vesting of the shares of Common Stock subject to
outstanding options held by the Chief Executive Officer or any other
executive officer or the unvested shares of Common Stock subject to direct
issuances held by such individual, in connection with the termination of the
officer's employment following: (i) a merger or asset sale in which those
options are assumed or the Company's repurchase rights with respect to those
shares are assigned or (ii) certain changes in control of the Company.
8.
<PAGE>
ITEM 12. SECURITY OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
April 1, 1997 by (i) all persons who are beneficial owners of five percent
(5%) or more of the Company's Common Stock, (ii) each director, (iii) the
Named Officers, and (iv) all directors and executive officers as a group.
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS (IF BENEFICIALLY PERCENTAGE OF SHARES
APPLICABLE) BENEFICIAL OWNER OWNED BENEFICIALLY OWNED
- ---------------------------- ------------ --------------------
<S> <C> <C>
Accel III, L.P. and its related entities(2). . . . . . . . . . . . . 2,633,398 13.8%
One Palmer Square
Princeton, NJ 08542
Oak Investment Partners IV, L.P. and its related entities(3) . . . . 2,721,398 14.2%
525 University Avenue, Suite 1300
Palo Alto, CA 94301
Institutional Venture Partners V and its related entities(4) . . . . 2,126,976 11.1%
Building Two, Suite 290
3000 Sand Hill Road
Menlo Park, CA 94025
Brian L. Hinman(5) . . . . . . . . . . . . . . . . . . . . . . . . . 2,003,817 10.5%
2584 Junction Avenue
San Jose, CA 95134
Norwest Capital LLC. . . . . . . . . . . . . . . . . . . . . . . . . 1,159,341 6.1%
Sixth and Marquette
Minneapolis, MN 55479
Brentwood Associates V, L.P. . . . . . . . . . . . . . . . . . . . . 1,012,846 5.3%
2730 Sand Hill Road, Suite 250
Menlo Park, CA 94025
Robert C. Hagerty. . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 *
Michael R. Kourey(6) . . . . . . . . . . . . . . . . . . . . . . . . 211,667 1.1%
Ardeshir Falaki(7) . . . . . . . . . . . . . . . . . . . . . . . . . 35,000 *
Bandel Carano(3) . . . . . . . . . . . . . . . . . . . . . . . . . . 2,737,398 14.3%
Stanley J. Meresman. . . . . . . . . . . . . . . . . . . . . . . . . 30,000 *
John P. Morgridge. . . . . . . . . . . . . . . . . . . . . . . . . . 36,338 *
James R. Swartz(2) . . . . . . . . . . . . . . . . . . . . . . . . . 2,649,398 13.9%
Evan J. McDowell . . . . . . . . . . . . . . . . . . . . . . . . . . 202,723 1.1%
Joseph H. Donnelly . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 *
Patrick P. Day . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,667 *
All directors and officers as a group
(10 persons)(8). . . . . . . . . . . . . . . . . . . . . . . . . 7,764,618 48.0%
</TABLE>
9.
<PAGE>
- --------------
* Less than 1%
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
(2) Represents 2,317,391 shares held by Accel III, L.P. ("Accel III"), 210,671
shares held by Accel Japan, L.P. ("Accel Japan") and 105,336 shares held by
Accel Investors' 91, L.P. ("Accel Investors"). Mr. Swartz, a director of
the Company, is a General Partner of Accel III, Accel Japan and Accel
Investors. Mr. Swartz disclaims beneficial ownership of the shares held by
these entities except to the extent of his pecuniary interest therein
arising from his general partnership interests in Accel III, Accel Japan
and Accel Investors. The shares beneficially owned by Mr. Swartz consist
of options to purchase 16,000 shares granted in April 1996 in the form of
immediately exercisable options, some of which, if exercised and issued,
would be unvested and subject to a repurchase right of the Company that
lapses over time.
(3) Represents 2,611,022 shares held by Oak Investment Partners IV, L.P. ("Oak
IV") and 110,376 shares held by Oak IV Affiliates Fund, L.P. ("Oak IV
Affiliates"). Mr. Carano, a director of the Company, is a General Partner
of Oak IV and Oak IV Affiliates. Mr. Carano disclaims beneficial ownership
of the shares held by these entities except to the extent of his pecuniary
interest therein arising from his general partnership interests in Oak IV
and Oak IV Affiliates. The shares beneficially owned by Mr. Carano consist
of options to purchase 16,000 shares of Common Stock granted in April 1996
in the form of immediately exercisable options, some of which, if exercised
and issued, would be unvested and subject to a repurchase right of the
Company that lapses over time.
(4) Includes 2,093,186 shares held by Institutional Venture Partners V and
33,790 shares held by Institutional Venture Management V. Institutional
Venture Management V is the General Partner of Institutional Venture
Partners V.
(5) Includes 6,667 shares owned by Mr. Hinman in the form of immediately
exercisable options, some of which, if exercised and issued, would be
unvested and subject to a repurchase right of the Company that lapses
over time.
(6) Includes 6,667 shares owned by Mr. Kourey in the form of immediately
exercisable options, some of which, if exercised and issued, would be
unvested and subject to a repurchase right of the Company that lapses over
time.
(7) Includes options to purchase 20,000 shares of Common Stock.
(8) Includes options to purchase 93,876 shares of Common Stock, 71,376 shares
of which are in the form of immediately exercisable options, some of which,
if exercised and issued, would be unvested and subject to a repurchase right
of the Company that lapses over time.
10.
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In private placement financing transactions since April 1, 1993, the
Company has issued and sold shares of Preferred Stock to the executive
officers, directors, and 5% or greater stockholders listed below.
<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
SHARES OF SHARES OF
SERIES C SERIES D
PREFERRED PREFERRED
INVESTOR(1) STOCK(2) STOCK(3)
----------- --------- ---------
<S> <C> <C>
Accel III, L.P. and its related entities(4). . . . . . . . . . 364,912 101,819
Oak Investment Partners IV, L.P.and its related entities(5). . 364,912 101,819
Institutional Venture Partners V and its related entities. . . 294,737 82,239
Brentwood Associates V, L.P.(6). . . . . . . . . . . . . . . . 140,352 39,161
Entities under the direction of Chancellor Capital
Management(7) . . . . . . . . . . . . . . . . . . . . . . . 1,333,334 53,627
Evan J. McDowell(8). . . . . . . . . . . . . . . . . . . . . . 25,000 --
</TABLE>
- ------------
(1) Shares held by all affiliated persons and entities have been aggregated.
See "Principal Stockholders."
(2) In November of 1993, the Company issued and sold shares of Series C
Preferred Stock at a per share purchase price of $2.25.
(3) In May of 1995, the Company issued and sold shares of Series D Preferred
Stock at a per share purchase price of $4.55.
(4) James R. Swartz, an affiliate of Accel III, L.P., is a director of the
Company.
(5) Bandel Carano, an affiliate of Oak Investment Partners IV, L.P., is a
director of the Company.
(6) Brentwood Associates V, L.P. is a greater than 5% stockholder of the
Company.
(7) Entities under the direction of Chancellor Capital Management own greater
than 5% of the outstanding stock of the Company.
(8) Evan J. McDowell was Vice President, Sales and Marketing until his
resignation in January, 1997.
The Company has also granted options to certain of its directors and
executive officers. See "Executive Compensation" and "Security Ownership of
Certain Beneficial Owners and Management."
The Company believes that all of the transactions set forth above were
made on terms no less favorable to the Company than could have been obtained
from unaffiliated third parties. All future transactions, including loans,
between the Company and its officers, directors, principal stockholders and
their affiliates will be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested outside directors
on the Board of Directors, and will continue to be on terms no less favorable
to the Company than could be obtained from unaffiliated third parties.
11.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this
Amendment on Form 10-K/A to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: May 6, 1997 POLYCOM, INC.
By: /s/ Michael R. Kourey
-------------------------------------------
Michael R. Kourey
Vice President, Finance and Administration,
Chief Financial Officer and Secretary
12.
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL PERSONS BY THESE PRESENTS:
Pursuant to the requirements of the Securities Act of 1934, as amended,
this report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
* Chief Executive Officer and May 6, 1997
- ------------------- Chairman of the Board of Directors
Brian L. Hinman (Principal Executive Officer)
* President, Chief Operating May 6, 1997
- ------------------- Officer and Director
Robert C. Hagerty
* Vice President, Finance and Administration, May 6, 1997
- ------------------- Chief Financial Officer and Secretary
Michael R. Kourey
* Director May 6, 1997
- -------------------
Bandel Carano
* Director May 6, 1997
- -------------------
Stanley J. Meresman
* Director May 6, 1997
- -------------------
John P. Morgridge
* Director May 6, 1997
- -------------------
James R. Swartz
</TABLE>
*By: /s/ Michael R. Kourey
-----------------------------------
Michael R. Kourey, Attorney-In-Fact
13.
